The provisions
of the sections of this Circular shall be applied by Federal agencies
to recipients. Recipients shall apply the provisions of this Circular
to subrecipients performing substantive work under grants and agreements
that are passed through or awarded by the primary recipient, if
such subrecipients are organizations described in paragraph 1.
This Circular
does not apply to grants, contracts, or other agreements between
the Federal Government and units of State or local governments covered
by OMB Circular A-102, "Grants and Cooperative Agreements with State
and Local Governments," and the Federal agencies' grants management
common rule which standardized and codified the administrative requirements
Federal agencies impose on State and local grantees. In addition,
subawards and contracts to State or local governments are not covered
by this Circular. However, this Circular applies to subawards made
by State and local governments to organizations covered by this
Circular. Federal agencies may apply the provisions of this Circular
to commercial organizations, foreign governments, organizations
under the jurisdiction of foreign governments, and international
organizations.
(a) Accrued
expenditures means the charges incurred by the recipient
during a given period requiring the provision of funds for: (1)
goods and other tangible property received; (2) services performed
by employees, contractors, subrecipients, and other payees; and,
(3) other amounts becoming owed under programs for which no current
services or performance is required.
(b) Accrued
income means the sum of: (1) earnings during a given
period from (i) services performed by the recipient, and (ii)
goods and other tangible property delivered to purchasers, and
(2) amounts becoming owed to the recipient for which no current
services or performance is required by the recipient.
(c) Acquisition
cost of equipment means the net invoice price of the
equipment, including the cost of modifications, attachments, accessories,
or auxiliary apparatus necessary to make the property usable for
the purpose for which it was acquired. Other charges, such as
the cost of installation, transportation, taxes, duty or protective
in-transit insurance, shall be included or excluded from the unit
acquisition cost in accordance with the recipient's regular accounting
practices.
(d) Advance
means a payment made by Treasury check or other appropriate payment
mechanism to a recipient upon its request either before outlays
are made by the recipient or through the use of predetermined
payment schedules.
(e) Award
means financial assistance that provides support or stimulation
to accomplish a public purpose. Awards include grants and other
agreements in the form of money or property in lieu of money,
by the Federal Government to an eligible recipient. The term does
not include: technical assistance, which provides services instead
of money; other assistance in the form of loans, loan guarantees,
interest subsidies, or insurance; direct payments of any kind
to individuals; and, contracts which are required to be entered
into and administered under procurement laws and regulations.
(f) Cash
contributions means the recipient's cash outlay, including
the outlay of money contributed to the recipient by third parties.
(g) Closeout
means the process by which a Federal awarding agency determines
that all applicable administrative actions and all required work
of the award have been completed by the recipient and Federal
awarding agency.
(h) Contract
means a procurement contract under an award or subaward, and a
procurement subcontract under a recipient's or subrecipient's
contract.
(i) Cost
sharing or matching means that portion of project or
program costs not borne by the Federal Government.
(j) Date
of completion means the date on which all work under
an award is completed or the date on the award document, or any
supplement or amendment thereto, on which Federal sponsorship
ends.
(k) Disallowed
costs means those charges to an award that the Federal
awarding agency determines to be unallowable, in accordance with
the applicable Federal cost principles or other terms and conditions
contained in the award.
(l) Equipment
means tangible nonexpendable personal property including exempt
property charged directly to the award having a useful life of
more than one year and an acquisition cost of $5000 or more per
unit. However, consistent with recipient policy, lower limits
may be established.
(m) Excess
property means property under the control of any Federal
awarding agency that, as determined by the head thereof, is no
longer required for its needs or the discharge of its responsibilities.
(n) Exempt
property means tangible personal property acquired in
whole or in part with Federal funds, where the Federal awarding
agency has statutory authority to vest title in the recipient
without further obligation to the Federal Government. An example
of exempt property authority is contained in the Federal Grant
and Cooperative Agreement Act (31 U.S.C. 6306), for property acquired
under an award to conduct basic or applied research by a non-profit
institution of higher education or non-profit organization whose
principal purpose is conducting scientific research.
(o) Federal
awarding agency means the Federal agency that provides
an award to the recipient.
(p) Federal
funds authorized means the total amount of Federal funds
obligated by the Federal Government for use by the recipient.
This amount may include any authorized carryover of unobligated
funds from prior funding periods when permitted by agency regulations
or agency implementing instructions.
(q) Federal
share of real property, equipment, or supplies means
that percentage of the property's acquisition costs and any improvement
expenditures paid with Federal funds.
(r) Funding
period means the period of time when Federal funding
is available for obligation by the recipient.
(s) Intangible
property and debt instruments means, but is not limited
to, trademarks, copyrights, patents and patent applications and
such property as loans, notes and other debt instruments, lease
agreements, stock and other instruments of property ownership,
whether considered tangible or intangible.
(t) Obligations
means the amounts of orders placed, contracts and grants awarded,
services received and similar transactions during a given period
that require payment by the recipient during the same or a future
period.
(u) Outlays
or expenditures means charges made to the project or
program. They may be reported on a cash or accrual basis. For
reports prepared on a cash basis, outlays are the sum of cash
disbursements for direct charges for goods and services, the amount
of indirect expense charged, the value of third party in-kind
contributions applied and the amount of cash advances and payments
made to subrecipients. For reports prepared on an accrual basis,
outlays are the sum of cash disbursements for direct charges for
goods and services, the amount of indirect expense incurred, the
value of in-kind contributions applied, and the net increase (or
decrease) in the amounts owed by the recipient for goods and other
property received, for services performed by employees, contractors,
subrecipients and other payees and other amounts becoming owed
under programs for which no current services or performance are
required.
(v) Personal
property means property of any kind except real property.
It may be tangible, having physical existence, or intangible,
having no physical existence, such as copyrights, patents, or
securities.
(w) Prior
approval means written approval by an authorized official
evidencing prior consent.
(x) Program
income means gross income earned by the recipient that
is directly generated by a supported activity or earned as a result
of the award (see exclusions in paragraphs ___.24 (e) and (h)).
Program income includes, but is not limited to, income from fees
for services performed, the use or rental of real or personal
property acquired under federally-funded projects, the sale of
commodities or items fabricated under an award, license fees and
royalties on patents and copyrights, and interest on loans made
with award funds. Interest earned on advances of Federal funds
is not program income. Except as otherwise provided in Federal
awarding agency regulations or the terms and conditions of the
award, program income does not include the receipt of principal
on loans, rebates, credits, discounts, etc., or interest earned
on any of them.
(y) Project
costs means all allowable costs, as set forth in the
applicable Federal cost principles, incurred by a recipient and
the value of the contributions made by third parties in accomplishing
the objectives of the award during the project period.
(z) Project
period means the period established in the award document
during which Federal sponsorship begins and ends.
(aa) Property
means, unless otherwise stated, real property, equipment, intangible
property and debt instruments.
(bb) Real
property means land, including land improvements, structures
and appurtenances thereto, but excludes movable machinery and
equipment.
(cc) Recipient
means an organization receiving financial assistance directly
from Federal awarding agencies to carry out a project or program.
The term includes public and private institutions of higher education,
public and private hospitals, and other quasi-public and private
non-profit organizations such as, but not limited to, community
action agencies, research institutes, educational associations,
and health centers. The term may include commercial organizations,
foreign or international organizations (such as agencies of the
United Nations) which are recipients, subrecipients, or contractors
or subcontractors of recipients or subrecipients at the discretion
of the Federal awarding agency. The term does not include government-owned
contractor-operated facilities or research centers providing continued
support for mission-oriented, large-scale programs that are government-owned
or controlled, or are designated as federally-funded research
and development centers.
(dd) Research
and development means all research activities, both basic
and applied, and all development activities that are supported
at universities, colleges, and other non-profit institutions.
"Research" is defined as a systematic study directed toward fuller
scientific knowledge or understanding of the subject studied.
"Development" is the systematic use of knowledge and understanding
gained from research directed toward the production of useful
materials, devices, systems, or methods, including design and
development of prototypes and processes. The term research also
includes activities involving the training of individuals in research
techniques where such activities utilize the same facilities as
other research and development activities and where such activities
are not included in the instruction function.
(ee) Small
awards means a grant or cooperative agreement not exceeding
the small purchase threshold fixed at 41 U.S.C. 403(11) (currently
$25,000).
(ff) Subaward
means an award of financial assistance in the form of money, or
property in lieu of money, made under an award by a recipient
to an eligible subrecipient or by a subrecipient to a lower tier
subrecipient. The term includes financial assistance when provided
by any legal agreement, even if the agreement is called a contract,
but does not include procurement of goods and services nor does
it include any form of assistance which is excluded from the definition
of "award" in paragraph (e).
(gg) Subrecipient
means the legal entity to which a subaward is made and which is
accountable to the recipient for the use of the funds provided.
The term may include foreign or international organizations (such
as agencies of the United Nations) at the discretion of the Federal
awarding agency.
(hh) Supplies
means all personal property excluding equipment, intangible property,
and debt instruments as defined in this section, and inventions
of a contractor conceived or first actually reduced to practice
in the performance of work under a funding agreement ("subject
inventions"), as defined in 37 CFR part 401, "Rights to Inventions
Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts, and Cooperative Agreements."
(ii) Suspension
means an action by a Federal awarding agency that temporarily
withdraws Federal sponsorship under an award, pending corrective
action by the recipient or pending a decision to terminate the
award by the Federal awarding agency. Suspension of an award is
a separate action from suspension under Federal agency regulations
implementing E.O.s 12549 and 12689, "Debarment and Suspension."
(jj) Termination
means the cancellation of Federal sponsorship, in whole or in
part, under an agreement at any time prior to the date of completion.
(kk) Third
party in-kind contributions means the value of non-cash
contributions provided by non-Federal third parties. Third party
in-kind contributions may be in the form of real property, equipment,
supplies and other expendable property, and the value of goods
and services directly benefiting and specifically identifiable
to the project or program.
(ll) Unliquidated
obligations, for financial reports prepared on a cash
basis, means the amount of obligations incurred by the recipient
that have not been paid. For reports prepared on an accrued expenditure
basis, they represent the amount of obligations incurred by the
recipient for which an outlay has not been recorded.
(mm) Unobligated
balance means the portion of the funds authorized by
the Federal awarding agency that has not been obligated by the
recipient and is determined by deducting the cumulative obligations
from the cumulative funds authorized.
(nn) Unrecovered
indirect cost means the difference between the amount
awarded and the amount which could have been awarded under the
recipient's approved negotiated indirect cost rate.
(oo) Working
capital advance means a procedure where by funds are
advanced to the recipient to cover its estimated disbursement
needs for a given initial period.
___.3 Effect
on other issuances. For awards subject to this Circular,
all administrative requirements of codified program regulations,
program manuals, handbooks and other nonregulatory materials
which are inconsistent with the requirements of this Circular
shall be superseded, except to the extent they are required
by statute, or authorized in accordance with the deviations
provision in Section ___.4.
___.4 Deviations.
The Office of Management and Budget (OMB) may grant exceptions
for classes of grants or recipients subject to the requirements
of this Circular when exceptions are not prohibited by statute.
However, in the interest of maximum uniformity, exceptions from
the requirements of this Circular shall be permitted only in
unusual circumstances. Federal awarding agencies may apply more
restrictive requirements to a class of recipients when approved
by OMB. Federal awarding agencies may apply less restrictive
requirements when awarding small awards, except for those requirements
which are statutory. Exceptions on a case-by-case basis may
also be made by Federal awarding agencies.
___.5 Subawards.
Unless sections of this Circular specifically exclude subrecipients
from coverage, the provisions of this Circular shall be applied
to subrecipients performing work under awards if such subrecipients
are institutions of higher education, hospitals or other non-profit
organizations. State and local government subrecipients are
subject to the provisions of regulations implementing the grants
management common rule,"Uniform Administrative Requirements
for Grants and Cooperative Agreements to State and Local Governments,"
published at 53 FR 8034 (3/11/88).
SUBPART
B - Pre-Award Requirements
___.10
Purpose. Sections ___.11
through ___.17 prescribes forms and instructions and other pre-award
matters to be used in applying for Federal awards.
___.11
Pre-award policies.
(a) Use
of Grants and Cooperative Agreements, and Contracts. In each instance,
the Federal awarding agency shall decide on the appropriate award
instrument (i.e., grant, cooperative agreement, or contract).
The Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301-08)
governs the use of grants, cooperative agreements and contracts.
A grant or cooperative agreement shall be used only when the principal
purpose of a transaction is to accomplish a public purpose of
support or stimulation authorized by Federal statute. The statutory
criterion for choosing between grants and cooperative agreements
is that for the latter, "substantial involvement is expected between
the executive agency and the State, local government, or other
recipient when carrying out the activity contemplated in the agreement."
Contracts shall be used when the principal purpose is acquisition
of property or services for the direct benefit or use of the Federal
Government.
(b) Public
Notice and Priority Setting. Federal awarding agencies shall notify
the public of its intended funding priorities for discretionary
grant programs, unless funding priorities are established by Federal
statute.
___.12
Forms for applying for Federal
assistance.
(a) Federal
awarding agencies shall comply with the applicable report clearance
requirements of 5 CFR part 1320, "Controlling Paperwork Burdens
on the Public," with regard to all forms used by the Federal awarding
agency in place of or as a supplement to the Standard Form 424
(SF-424) series.
(b) Applicants
shall use the SF-424 series or those forms and instructions prescribed
by the Federal awarding agency.
(c) For
Federal programs covered by E.O. 12372, "Intergovernmental Review
of Federal Programs," the applicant shall complete the appropriate
sections of the SF-424 (Application for Federal Assistance) indicating
whether the application was subject to review by the State Single
Point of Contact (SPOC). The name and address of the SPOC for
a particular State can be obtained from the Federal awarding agency
or the Catalog of Federal Domestic Assistance.
The SPOC shall advise the applicant whether the program for which
application is made has been selected by that State for review.
(d) Federal
awarding agencies that do not use the SF-424 form should indicate
whether the application is subject to review by the State under
E.O. 12372.
___.13
Debarment and suspension.
Federal awarding agencies and recipients shall comply with the
nonprocurement debarment and suspension common rule implementing
E.O.s 12549 and 12689, "Debarment and Suspension." This common
rule restricts subawards and contracts with certain parties
that are debarred, suspended or otherwise excluded from or ineligible
for participation in Federal assistance programs or activities.
___.14
Special award conditions.
If an applicant or recipient: (a) has a history of poor performance,
(b) is not financially stable, (c) has a management system that
does not meet the standards prescribed in this Circular, (d)
has not conformed to the terms and conditions of a previous
award, or (e) is not otherwise responsible, Federal awarding
agencies may impose additional requirements as needed, provided
that such applicant or recipient is notified in writing as to:
the nature of the additional requirements, the reason why the
additional requirements are being imposed, the nature of the
corrective action needed, the time allowed for completing the
corrective actions, and the method for requesting reconsideration
of the additional requirements imposed. Any special conditions
shall be promptly removed once the conditions that prompted
them have been corrected.
___.15
Metric system of measurement.
The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205) declares that the metric
system is the preferred measurement system for U.S. trade and
commerce. The Act requires each Federal agency to establish
a date or dates in consultation with the Secretary of Commerce,
when the metric system of measurement will be used in the agency's
procurements, grants, and other business-related activities.
Metric implementation may take longer where the use of the system
is initially impractical or likely to cause significant inefficiencies
in the accomplishment of federally-funded activities. Federal
awarding agencies shall follow the provisions of E.O. 12770,
"Metric Usage in Federal Government Programs."
___.16
Resource Conservation and Recovery
Act (RCRA) (Pub. L. 94-580 codified at 42 U.S.C. 6962).
Under the Act, any State agency or agency of a political subdivision
of a State which is using appropriated Federal funds must comply
with Section 6002. Section 6002 requires that preference be
given in procurement programs to the purchase of specific products
containing recycled materials identified in guidelines developed
by the Environmental Protection Agency (EPA) (40 CFR parts 247-254).
Accordingly, State and local institutions of higher education,
hospitals, and non-profit organizations that receive direct
Federal awards or other Federal funds shall give preference
in their procurement programs funded with Federal funds to the
purchase of recycled products pursuant to the EPA guidelines.
___.17
Certifications and representations.
Unless prohibited by statute or codified regulation, each Federal
awarding agency is authorized and encouraged to allow recipients
to submit certifications and representations required by statute,
executive order, or regulation on an annual basis, if the recipients
have ongoing and continuing relationships with the agency. Annual
certifications and representations shall be signed by responsible
officials with the authority to ensure recipients' compliance
with the pertinent requirements.
SUBPART
C - Post-Award Requirements
Financial
and Program Management
___.20
Purpose of financial and program
management. Sections ___.21 through ___.28 prescribe standards
for financial management systems, methods for making payments
and rules for: satisfying cost sharing and matching requirements,
accounting for program income, budget revision approvals, making
audits, determining allowability of cost, and establishing fund
availability.
___.21
Standards for financial management
systems.
(a) Federal
awarding agencies shall require recipients to relate financial
data to performance data and develop unit cost information whenever
practical.
(b) Recipients'
financial management systems shall provide for the following.
(1) Accurate,
current and complete disclosure of the financial results of each
federally-sponsored project or program in accordance with the
reporting requirements set forth in Section ___.52. If a Federal
awarding agency requires reporting on an accrual basis from a
recipient that maintains its records on other than an accrual
basis, the recipient shall not be required to establish an accrual
accounting system. These recipients may develop such accrual data
for its reports on the basis of an analysis of the documentation
on hand.
(2) Records
that identify adequately the source and application of funds for
federally-sponsored activities. These records shall contain information
pertaining to Federal awards, authorizations, obligations, unobligated
balances, assets, outlays, income and interest.
(3) Effective
control over and accountability for all funds, property and other
assets. Recipients shall adequately safeguard all such assets
and assure they are used solely for authorized purposes.
(4) Comparison
of outlays with budget amounts for each award. Whenever appropriate,
financial information should be related to performance and unit
cost data.
(5) Written
procedures to minimize the time elapsing between the transfer
of funds to the recipient from the U.S. Treasury and the issuance
or redemption of checks, warrants or payments by other means for
program purposes by the recipient. To the extent that the provisions
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453)
govern, payment methods of State agencies, instrumentalities,
and fiscal agents shall be consistent with CMIA Treasury-State
Agreements or the CMIA default procedures codified at 31 CFR part
205, "Withdrawal of Cash from the Treasury for Advances under
Federal Grant and Other Programs."
(6) Written
procedures for determining the reasonableness, allocability and
allowability of costs in accordance with the provisions of the
applicable Federal cost principles and the terms and conditions
of the award.
(7) Accounting
records including cost accounting records that are supported by
source documentation.
(c) Where
the Federal Government guarantees or insures the repayment of
money borrowed by the recipient, the Federal awarding agency,
at its discretion, may require adequate bonding and insurance
if the bonding and insurance requirements of the recipient are
not deemed adequate to protect the interest of the Federal Government.
(d) The
Federal awarding agency may require adequate fidelity bond coverage
where the recipient lacks sufficient coverage to protect the Federal
Government's interest.
(e) Where
bonds are required in the situations described above, the bonds
shall be obtained from companies holding certificates of authority
as acceptable sureties, as prescribed in 31 CFR part 223, "Surety
Companies Doing Business with the United States."
___.22
Payment.
(a) Payment
methods shall minimize the time elapsing between the transfer
of funds from the United States Treasury and the issuance or redemption
of checks, warrants, or payment by other means by the recipients.
Payment methods of State agencies or instrumentalities shall be
consistent with Treasury-State CMIA agreements or default procedures
codified at 31 CFR part 205.
(b) Recipients
are to be paid in advance, provided they maintain or demonstrate
the willingness to maintain: (1) written procedures that minimize
the time elapsing between the transfer of funds and disbursement
by the recipient, and (2) financial management systems that meet
the standards for fund control and accountability as established
in Section ___.21. Cash advances to a recipient organization shall
be limited to the minimum amounts needed and be timed to be in
accordance with the actual, immediate cash requirements of the
recipient organization in carrying out the purpose of the approved
program or project. The timing and amount of cash advances shall
be as close as is administratively feasible to the actual disbursements
by the recipient organization for direct program or project costs
and the proportionate share of any allowable indirect costs.
(c) Whenever
possible, advances shall be consolidated to cover anticipated
cash needs for all awards made by the Federal awarding agency
to the recipient.
(1) Advance
payment mechanisms include, but are not limited to, Treasury check
and electronic funds transfer.
(2) Advance
payment mechanisms are subject to 31 CFR part 205.
(3) Recipients
shall be authorized to submit requests for advances and reimbursements
at least monthly when electronic fund transfers are not used.
(d) Requests
for Treasury check advance payment shall be submitted on SF-270,
"Request for Advance or Reimbursement," or other forms as may
be authorized by OMB. This form is not to be used when Treasury
check advance payments are made to the recipient automatically
through the use of a predetermined payment schedule or if precluded
by special Federal awarding agency instructions for electronic
funds transfer.
(e) Reimbursement
is the preferred method when the requirements in paragraph (b)
cannot be met. Federal awarding agencies may also use this method
on any construction agreement, or if the major portion of the
construction project is accomplished through private market financing
or Federal loans, and the Federal assistance constitutes a minor
portion of the project.
(1) When
the reimbursement method is used, the Federal awarding agency
shall make payment within 30 days after receipt of the billing,
unless the billing is improper.
(2) Recipients
shall be authorized to submit request for reimbursement at least
monthly when electronic funds transfers are not used.
(f) If a
recipient cannot meet the criteria for advance payments and the
Federal awarding agency has determined that reimbursement is not
feasible because the recipient lacks sufficient working capital,
the Federal awarding agency may provide cash on a working capital
advance basis. Under this procedure, the Federal awarding agency
shall advance cash to the recipient to cover its estimated disbursement
needs for an initial period generally geared to the awardee's
disbursing cycle. Thereafter, the Federal awarding agency shall
reimburse the recipient for its actual cash disbursements. The
working capital advance method of payment shall not be used for
recipients unwilling or unable to provide timely advances to their
subrecipient to meet the subrecipient's actual cash disbursements.
(g) To the
extent available, recipients shall disburse funds available from
repayments to and interest earned on a revolving fund, program
income, rebates, refunds, contract settlements, audit recoveries
and interest earned on such funds before requesting additional
cash payments.
(h) Unless
otherwise required by statute, Federal awarding agencies shall
not withhold payments for proper charges made by recipients at
any time during the project period unless (1) or (2) apply.
(1) A recipient
has failed to comply with the project objectives, the terms and
conditions of the award, or Federal reporting requirements.
(2) The
recipient or subrecipient is delinquent in a debt to the United
States as defined in OMB Circular A-129, "Managing Federal Credit
Programs." Under such conditions, the Federal awarding agency
may, upon reasonable notice, inform the recipient that payments
shall not be made for obligations incurred after a specified date
until the conditions are corrected or the indebtedness to the
Federal Government is liquidated.
(i) Standards
governing the use of banks and other institutions as depositories
of funds advanced under awards are as follows.
(1) Except
for situations described in paragraph (i)(2), Federal awarding
agencies shall not require separate depository accounts for funds
provided to a recipient or establish any eligibility requirements
for depositories for funds provided to a recipient. However, recipients
must be able to account for the receipt, obligation and expenditure
of funds.
(2) Advances
of Federal funds shall be deposited and maintained in insured
accounts whenever possible.
(j) Consistent
with the national goal of expanding the opportunities for women-owned
and minority-owned business enterprises, recipients shall be encouraged
to use women- owned and minority-owned banks (a bank which is
owned at least 50 percent by women or minority group members).
(k) Recipients
shall maintain advances of Federal funds in interest bearing accounts,
unless (1), (2) or (3) apply.
(1) The
recipient receives less than $120,000 in Federal awards per year.
(2) The
best reasonably available interest bearing account would not be
expected to earn interest in excess of $250 per year on Federal
cash balances.
(3) The
depository would require an average or minimum balance so high
that it would not be feasible within the expected Federal and
non-Federal cash resources.
(l) For
those entities where CMIA and its implementing regulations do
not apply, interest earned on Federal advances deposited in interest
bearing accounts shall be remitted annually to Department of Health
and Human Services, Payment Management System, Rockville, MD 20852.
Interest amounts up to $250 per year may be retained by the recipient
for administrative expense. State universities and hospitals shall
comply with CMIA, as it pertains to interest. If an entity subject
to CMIA uses its own funds to pay pre-award costs for discretionary
awards without prior written approval from the Federal awarding
agency, it waives its right to recover the interest under CMIA.
(m) Except
as noted elsewhere in this Circular, only the following forms
shall be authorized for the recipients in requesting advances
and reimbursements. Federal agencies shall not require more than
an original and two copies of these forms.
(1) SF-270,
Request for Advance or Reimbursement. Each Federal awarding agency
shall adopt the SF-270 as a standard form for all nonconstruction
programs when electronic funds transfer or predetermined advance
methods are not used. Federal awarding agencies, however, have
the option of using this form for construction programs in lieu
of the SF-271, "Outlay Report and Request for Reimbursement for
Construction Programs."
(2) SF-271,
Outlay Report and Request for Reimbursement for Construction Programs.
Each Federal awarding agency shall adopt the SF-271 as the standard
form to be used for requesting reimbursement for construction
programs. However, a Federal awarding agency may substitute the
SF-270 when the Federal awarding agency determines that it provides
adequate information to meet Federal needs.
___.23
Cost sharing or matching.
(a) All
contributions, including cash and third party in-kind, shall be
accepted as part of the recipient's cost sharing or matching when
such contributions meet all of the following criteria.
(1) Are
verifiable from the recipient's records.
(2) Are
not included as contributions for any other federally-assisted
project or program.
(3) Are
necessary and reasonable for proper and efficient accomplishment
of project or program objectives.
(4) Are
allowable under the applicable cost principles.
(5) Are
not paid by the Federal Government under another award, except
where authorized by Federal statute to be used for cost sharing
or matching.
(6) Are
provided for in the approved budget when required by the Federal
awarding agency.
(7) Conform
to other provisions of this Circular, as applicable.
(b) Unrecovered
indirect costs may be included as part of cost sharing or matching
only with the prior approval of the Federal awarding agency.
(c) Values
for recipient contributions of services and property shall be
established in accordance with the applicable cost principles.
If a Federal awarding agency authorizes recipients to donate buildings
or land for construction/facilities acquisition projects or long-term
use, the value of the donated property for cost sharing or matching
shall be the lesser of (1) or (2).
(1) The
certified value of the remaining life of the property recorded
in the recipient's accounting records at the time of donation.
(2) The
current fair market value. However, when there is sufficient justification,
the Federal awarding agency may approve the use of the current
fair market value of the donated property, even if it exceeds
the certified value at the time of donation to the project.
(d) Volunteer
services furnished by professional and technical personnel, consultants,
and other skilled and unskilled labor may be counted as cost sharing
or matching if the service is an integral and necessary part of
an approved project or program. Rates for volunteer services shall
be consistent with those paid for similar work in the recipient's
organization. In those instances in which the required skills
are not found in the recipient organization, rates shall be consistent
with those paid for similar work in the labor market in which
the recipient competes for the kind of services involved. In either
case, paid fringe benefits that are reasonable, allowable, and
allocable may be included in the valuation.
(e) When
an employer other than the recipient furnishes the services of
an employee, these services shall be valued at the employee's
regular rate of pay (plus an amount of fringe benefits that are
reasonable, allowable, and allocable, but exclusive of overhead
costs), provided these services are in the same skill for which
the employee is normally paid.
(f) Donated
supplies may include such items as expendable equipment, office
supplies, laboratory supplies or workshop and classroom supplies.
Value assessed to donated supplies included in the cost sharing
or matching share shall be reasonable and shall not exceed the
fair market value of the property at the time of the donation.
(g) The
method used for determining cost sharing or matching for donated
equipment, buildings and land for which title passes to the recipient
may differ according to the purpose of the award, if (1) or (2)
apply.
(1) If the
purpose of the award is to assist the recipient in the acquisition
of equipment, buildings or land, the total value of the donated
property may be claimed as cost sharing or matching.
(2) If the
purpose of the award is to support activities that require the
use of equipment, buildings or land, normally only depreciation
or use charges for equipment and buildings may be made. However,
the full value of equipment or other capital assets and fair rental
charges for land may be allowed, provided that the Federal awarding
agency has approved the charges.
(h) The
value of donated property shall be determined in accordance with
the usual accounting policies of the recipient, with the following
qualifications.
(1) The
value of donated land and buildings shall not exceed its fair
market value at the time of donation to the recipient as established
by an independent appraiser (e.g., certified real property appraiser
or General Services Administration representative) and certified
by a responsible official of the recipient.
(2) The
value of donated equipment shall not exceed the fair market value
of equipment of the same age and condition at the time of donation.
(3) The
value of donated space shall not exceed the fair rental value
of comparable space as established by an independent appraisal
of comparable space and facilities in a privately-owned building
in the same locality.
(4) The
value of loaned equipment shall not exceed its fair rental value.
(5) The
following requirements pertain to the recipient's supporting records
for in-kind contributions from third parties.
(i) Volunteer
services shall be documented and, to the extent feasible, supported
by the same methods used by the recipient for its own employees.
(ii) The
basis for determining the valuation for personal service, material,
equipment, buildings and land shall be documented.
___.24
Program income.
(a) Federal
awarding agencies shall apply the standards set forth in this
section in requiring recipient organizations to account for program
income related to projects financed in whole or in part with Federal
funds.
(b) Except
as provided in paragraph (h) below, program income earned during
the project period shall be retained by the recipient and, in
accordance with Federal awarding agency regulations or the terms
and conditions of the award, shall be used in one or more of the
ways listed in the following.
(1) Added
to funds committed to the project by the Federal awarding agency
and recipient and used to further eligible project or program
objectives.
(2) Used
to finance the non-Federal share of the project or program.
(3) Deducted
from the total project or program allowable cost in determining
the net allowable costs on which the Federal share of costs is
based.
(c) When
an agency authorizes the disposition of program income as described
in paragraphs (b)(1) or (b)(2), program income in excess of any
limits stipulated shall be used in accordance with paragraph (b)(3).
(d) In the
event that the Federal awarding agency does not specify in its
regulations or the terms and conditions of the award how program
income is to be used, paragraph (b)(3) shall apply automatically
to all projects or programs except research. For awards that support
research, paragraph (b)(1) shall apply automatically unless the
awarding agency indicates in the terms and conditions another
alternative on the award or the recipient is subject to special
award conditions, as indicated in Section ___.14.
(e) Unless
Federal awarding agency regulations or the terms and conditions
of the award provide otherwise, recipients shall have no obligation
to the Federal Government regarding program income earned after
the end of the project period.
(f) If authorized
by Federal awarding agency regulations or the terms and conditions
of the award, costs incident to the generation of program income
may be deducted from gross income to determine program income,
provided these costs have not been charged to the award.
(g) Proceeds
from the sale of property shall be handled in accordance with
the requirements of the Property Standards (See Sections ___.30
through ___.37).
(h) Unless
Federal awarding agency regulations or the terms and condition
of the award provide otherwise, recipients shall have no obligation
to the Federal Government with respect to program income earned
from license fees and royalties for copyrighted material, patents,
patent applications, trademarks, and inventions produced under
an award. However, Patent and Trademark Amendments (35 U.S.C.
18) apply to inventions made under an experimental, developmental,
or research award.
___.25
Revision of budget and program
plans.
(a) The
budget plan is the financial expression of the project or program
as approved during the award process. It may include either the
Federal and non-Federal share, or only the Federal share, depending
upon Federal awarding agency requirements. It shall be related
to performance for program evaluation purposes whenever appropriate.
(b) Recipients
are required to report deviations from budget and program plans,
and request prior approvals for budget and program plan revisions,
in accordance with this section.
(c) For
nonconstruction awards, recipients shall request prior approvals
from Federal awarding agencies for one or more of the following
program or budget related reasons.
(1) Change
in the scope or the objective of the project or program (even
if there is no associated budget revision requiring prior written
approval).
(2) Change
in a key person specified in the application or award document.
(3) The
absence for more than three months, or a 25 percent reduction
in time devoted to the project, by the approved project director
or principal investigator.
(4) The
need for additional Federal funding.
(5) The
transfer of amounts budgeted for indirect costs to absorb increases
in direct costs, or vice versa, if approval is required by the
Federal awarding agency.
(6) The
inclusion, unless waived by the Federal awarding agency, of costs
that require prior approval in accordance with OMB Circular A-21,
"Cost Principles for Educational Institutions," OMB Circular A-122,
"Cost Principles for Non-Profit Organizations," or 45 CFR part
74 Appendix E, "Principles for Determining Costs Applicable to
Research and Development under Grants and Contracts with Hospitals,"
or 48 CFR part 31, "Contract Cost Principles and Procedures,"
as applicable.
(7) The
transfer of funds allotted for training allowances (direct payment
to trainees) to other categories of expense.
(8) Unless
described in the application and funded in the approved awards,
the subaward, transfer or contracting out of any work under an
award. This provision does not apply to the purchase of supplies,
material, equipment or general support services.
(d) No other
prior approval requirements for specific items may be imposed
unless a deviation has been approved by OMB.
(e) Except
for requirements listed in paragraphs (c)(1) and (c)(4) of this
section, Federal awarding agencies are authorized, at their option,
to waive cost-related and administrative prior written approvals
required by this Circular and OMB Circulars A-21 and A-122. Such
waivers may include authorizing recipients to do any one or more
of the following.
(1) Incur
pre-award costs 90 calendar days prior to award or more than 90
calendar days with the prior approval of the Federal awarding
agency. All pre-award costs are incurred at the recipient's risk
(i.e., the Federal awarding agency is under no obligation to reimburse
such costs if for any reason the recipient does not receive an
award or if the award is less than anticipated and inadequate
to cover such costs).
(2) Initiate
a one-time extension of the expiration date of the award of up
to 12 months unless one or more of the following conditions apply.
For one-time extensions, the recipient must notify the Federal
awarding agency in writing with the supporting reasons and revised
expiration date at least 10 days before the expiration date specified
in the award. This one-time extension may not be exercised merely
for the purpose of using unobligated balances.
(i) The
terms and conditions of award prohibit the extension.
(ii) The
extension requires additional Federal funds.
(iii) The
extension involves any change in the approved objectives or scope
of the project.
(3) Carry
forward unobligated balances to subsequent funding periods.
(4) For
awards that support research, unless the Federal awarding agency
provides otherwise in the award or in the agency's regulations,
the prior approval requirements described in paragraph (e) are
automatically waived (i.e., recipients need not obtain such prior
approvals) unless one of the conditions included in paragraph
(e)(2) applies.
(f) The
Federal awarding agency may, at its option, restrict the transfer
of funds among direct cost categories or programs, functions and
activities for awards in which the Federal share of the project
exceeds $100,000 and the cumulative amount of such transfers exceeds
or is expected to exceed 10 percent of the total budget as last
approved by the Federal awarding agency. No Federal awarding agency
shall permit a transfer that would cause any Federal appropriation
or part thereof to be used for purposes other than those consistent
with the original intent of the appropriation.
(g) All
other changes to nonconstruction budgets, except for the changes
described in paragraph (j), do not require prior approval.
(h) For
construction awards, recipients shall request prior written approval
promptly from Federal awarding agencies for budget revisions whenever
(1), (2) or (3) apply.
(1) The
revision results from changes in the scope or the objective of
the project or program.
(2) The
need arises for additional Federal funds to complete the project.
(3) A revision
is desired which involves specific costs for which prior written
approval requirements may be imposed consistent with applicable
OMB cost principles listed in Section ___.27.
(i) No other
prior approval requirements for specific items may be imposed
unless a deviation has been approved by OMB.
(j) When
a Federal awarding agency makes an award that provides support
for both construction and nonconstruction work, the Federal awarding
agency may require the recipient to request prior approval from
the Federal awarding agency before making any fund or budget transfers
between the two types of work supported.
(k) For
both construction and nonconstruction awards, Federal awarding
agencies shall require recipients to notify the Federal awarding
agency in writing promptly whenever the amount of Federal authorized
funds is expected to exceed the needs of the recipient for the
project period by more than $5000 or five percent of the Federal
award, whichever is greater. This notification shall not be required
if an application for additional funding is submitted for a continuation
award.
(l) When
requesting approval for budget revisions, recipients shall use
the budget forms that were used in the application unless the
Federal awarding agency indicates a letter of request suffices.
(m) Within
30 calendar days from the date of receipt of the request for budget
revisions, Federal awarding agencies shall review the request
and notify the recipient whether the budget revisions have been
approved. If the revision is still under consideration at the
end of 30 calendar days, the Federal awarding agency shall inform
the recipient in writing of the date when the recipient may expect
the decision.
___.26
Non-Federal audits.
(a) Recipients
and subrecipients that are institutions of higher education or
other non-profit organizations (including hospitals) shall be
subject to the audit requirements contained in the Single Audit
Act Amendments of 1996 (31 USC 7501-7507) and revised OMB Circular
A-133, "Audits of States, Local Governments, and Non-Profit Organizations."
(b) State
and local governments shall be subject to the audit requirements
contained in the Single Audit Act Amendments of 1996 (31 USC 7501-7507)
and revised OMB Circular A-133, "Audits of States, Local Governments,
and Non-Profit Organizations."
(c) For-profit
hospitals not covered by the audit provisions of revised OMB Circular
A-133 shall be subject to the audit requirements of the Federal
awarding agencies.
(d) Commercial
organizations shall be subject to the audit requirements of the
Federal awarding agency or the prime recipient as incorporated
into the award document.
___.27
Allowable costs. For each
kind of recipient, there is a set of Federal principles for
determining allowable costs. Allowability of costs shall be
determined in accordance with the cost principles applicable
to the entity incurring the costs. Thus, allowability of costs
incurred by State, local or federally-recognized Indian tribal
governments is determined in accordance with the provisions
of OMB Circular A-87, "Cost Principles for State, Local, and
Indian Tribal Governments." The allowability of costs incurred
by non-profit organizations is determined in accordance with
the provisions of OMB Circular A-122, "Cost Principles for Non-Profit
Organizations." The allowability of costs incurred by institutions
of higher education is determined in accordance with the provisions
of OMB Circular A-21, "Cost Principles for Educational Institutions."
The allowability of costs incurred by hospitals is determined
in accordance with the provisions of Appendix E of 45 CFR part
74, "Principles for Determining Costs Applicable to Research
and Development Under Grants and Contracts with Hospitals."
The allowability of costs incurred by commercial organizations
and those non-profit organizations listed in Attachment C to
Circular A-122 is determined in accordance with the provisions
of the Federal Acquisition Regulation (FAR) at 48 CFR part 31.
___.28
Period of availability of funds.
Where a funding period is specified, a recipient may charge
to the grant only allowable costs resulting from obligations
incurred during the funding period and any pre-award costs authorized
by the Federal awarding agency.
___.29
Conditional exemptions.
(a) OMB
authorizes conditional exemption from OMB administrative requirements
and cost principles circulars for certain Federal programs with
statutorily-authorized consolidated planning and consolidated
administrative funding, that are identified by a Federal agency
and approved by the head of the Executive department or establishment.
A Federal agency shall consult with OMB during its consideration
of whether to grant such an exemption.
(b) To promote
efficiency in State and local program administration, when Federal
non-entitlement programs with common purposes have specific statutorily-authorized
consolidated planning and consolidated administrative funding
and where most of the State agency's resources come from non-Federal
sources, Federal agencies may exempt these covered State-administered,
non-entitlement grant programs from certain OMB grants management
requirements. The exemptions would be from all but the allocability
of costs provisions of OMB Circulars A-87 (Attachment A, subsection
C.3), "Cost Principles for State, Local, and Indian Tribal Governments,"
A-21 (Section C, subpart 4), "Cost Principles for Educational
Institutions," and A-122 (Attachment A, subsection A.4), "Cost
Principles for Non-Profit Organizations," and from all of the
administrative requirements provisions of OMB Circular A-110,
"Uniform Administrative Requirements for Grants and Agreements
with Institutions of Higher Education, Hospitals, and Other Non-Profit
Organizations," and the agencies' grants management common rule.
(c) When
a Federal agency provides this flexibility, as a prerequisite
to a State's exercising this option, a State must adopt its own
written fiscal and administrative requirements for expending and
accounting for all funds, which are consistent with the provisions
of OMB Circular A-87, and extend such policies to all subrecipients.
These fiscal and administrative requirements must be sufficiently
specific to ensure that: funds are used in compliance with all
applicable Federal statutory and regulatory provisions, costs
are reasonable and necessary for operating these programs, and
funds are not be used for general expenses required to carry out
other responsibilities of a State or its subrecipients.
Property
Standards
___.30
Purpose of property standards.
Sections ___.31 through ___.37 set forth uniform standards governing
management and disposition of property furnished by the Federal
Government whose cost was charged to a project supported by
a Federal award. Federal awarding agencies shall require recipients
to observe these standards under awards and shall not impose
additional requirements, unless specifically required by Federal
statute. The recipient may use its own property management standards
and procedures provided it observes the provisions of Sections
___.31 through ___.37.
___.31
Insurance coverage.
Recipients shall, at a minimum, provide the equivalent insurance
coverage for real property and equipment acquired with Federal
funds as provided to property owned by the recipient. Federally-owned
property need not be insured unless required by the terms and
conditions of the award.
___.32
Real property. Each
Federal awarding agency shall prescribe requirements for recipients
concerning the use and disposition of real property acquired
in whole or in part under awards. Unless otherwise provided
by statute, such requirements, at a minimum, shall contain the
following.
(a) Title
to real property shall vest in the recipient subject to the condition
that the recipient shall use the real property for the authorized
purpose of the project as long as it is needed and shall not encumber
the property without approval of the Federal awarding agency.
(b) The
recipient shall obtain written approval by the Federal awarding
agency for the use of real property in other federally-sponsored
projects when the recipient determines that the property is no
longer needed for the purpose of the original project. Use in
other projects shall be limited to those under federally-sponsored
projects (i.e., awards) or programs that have purposes consistent
with those authorized for support by the Federal awarding agency.
(c) When
the real property is no longer needed as provided in paragraphs
(a) and (b), the recipient shall request disposition instructions
from the Federal awarding agency or its successor Federal awarding
agency. The Federal awarding agency shall observe one or more
of the following disposition instructions.
(1) The
recipient may be permitted to retain title without further obligation
to the Federal Government after it compensates the Federal Government
for that percentage of the current fair market value of the property
attributable to the Federal participation in the project.
(2) The
recipient may be directed to sell the property under guidelines
provided by the Federal awarding agency and pay the Federal Government
for that percentage of the current fair market value of the property
attributable to the Federal participation in the project (after
deducting actual and reasonable selling and fix-up expenses, if
any, from the sales proceeds). When the recipient is authorized
or required to sell the property, proper sales procedures shall
be established that provide for competition to the extent practicable
and result in the highest possible return.
(3) The
recipient may be directed to transfer title to the property to
the Federal Government or to an eligible third party provided
that, in such cases, the recipient shall be entitled to compensation
for its attributable percentage of the current fair market value
of the property.
___.33
Federally-owned and exempt
property.
(a) Federally-owned
property.
(1) Title
to federally-owned property remains vested in the Federal Government.
Recipients shall submit annually an inventory listing of federally-owned
property in their custody to the Federal awarding agency. Upon
completion of the award or when the property is no longer needed,
the recipient shall report the property to the Federal awarding
agency for further Federal agency utilization.
(2) If the
Federal awarding agency has no further need for the property,
it shall be declared excess and reported to the General Services
Administration, unless the Federal awarding agency has statutory
authority to dispose of the property by alternative methods (e.g.,
the authority provided by the Federal Technology Transfer Act
(15 U.S.C. 3710 (I)) to donate research equipment to educational
and non-profit organizations in accordance with E.O. 12821, "Improving
Mathematics and Science Education in Support of the National Education
Goals.") Appropriate instructions shall be issued to the recipient
by the Federal awarding agency.
(b) Exempt
property. When statutory authority exists, the Federal awarding
agency has the option to vest title to property acquired with
Federal funds in the recipient without further obligation to the
Federal Government and under conditions the Federal awarding agency
considers appropriate. Such property is "exempt property." Should
a Federal awarding agency not establish conditions, title to exempt
property upon acquisition shall vest in the recipient without
further obligation to the Federal Government.
___.34
Equipment.
(a) Title
to equipment acquired by a recipient with Federal funds shall
vest in the recipient, subject to conditions of this section.
(b) The
recipient shall not use equipment acquired with Federal funds
to provide services to non-Federal outside organizations for a
fee that is less than private companies charge for equivalent
services, unless specifically authorized by Federal statute, for
as long as the Federal Government retains an interest in the equipment.
(c) The
recipient shall use the equipment in the project or program for
which it was acquired as long as needed, whether or not the project
or program continues to be supported by Federal funds and shall
not encumber the property without approval of the Federal awarding
agency. When no longer needed for the original project or program,
the recipient shall use the equipment in connection with its other
federally-sponsored activities, in the following order of priority:
(i) Activities sponsored by the Federal awarding agency which
funded the original project, then (ii) activities sponsored by
other Federal awarding agencies.
(d) During
the time that equipment is used on the project or program for
which it was acquired, the recipient shall make it available for
use on other projects or programs if such other use will not interfere
with the work on the project or program for which the equipment
was originally acquired. First preference for such other use shall
be given to other projects or programs sponsored by the Federal
awarding agency that financed the equipment; second preference
shall be given to projects or programs sponsored by other Federal
awarding agencies. If the equipment is owned by the Federal Government,
use on other activities not sponsored by the Federal Government
shall be permissible if authorized by the Federal awarding agency.
User charges shall be treated as program income.
(e) When
acquiring replacement equipment, the recipient may use the equipment
to be replaced as trade-in or sell the equipment and use the proceeds
to offset the costs of the replacement equipment subject to the
approval of the Federal awarding agency.
(f) The
recipient's property management standards for equipment acquired
with Federal funds and federally-owned equipment shall include
all of the following.
(1) Equipment
records shall be maintained accurately and shall include the following
information.
(i) A description
of the equipment.
(ii) Manufacturer's
serial number, model number, Federal stock number, national stock
number, or other identification number.
(iii) Source
of the equipment, including the award number.
(iv) Whether
title vests in the recipient or the Federal Government.
(v) Acquisition
date (or date received, if the equipment was furnished by the
Federal Government) and cost.
(vi) Information
from which one can calculate the percentage of Federal participation
in the cost of the equipment (not applicable to equipment furnished
by the Federal Government).
(vii) Location
and condition of the equipment and the date the information was
reported.
(viii) Unit
acquisition cost.
(ix) Ultimate
disposition data, including date of disposal and sales price or
the method used to determine current fair market value where a
recipient compensates the Federal awarding agency for its share.
(2) Equipment
owned by the Federal Government shall be identified to indicate
Federal ownership.
(3) A physical
inventory of equipment shall be taken and the results reconciled
with the equipment records at least once every two years. Any
differences between quantities determined by the physical inspection
and those shown in the accounting records shall be investigated
to determine the causes of the difference. The recipient shall,
in connection with the inventory, verify the existence, current
utilization, and continued need for the equipment.
(4) A control
system shall be in effect to insure adequate safeguards to prevent
loss, damage, or theft of the equipment. Any loss, damage, or
theft of equipment shall be investigated and fully documented;
if the equipment was owned by the Federal Government, the recipient
shall promptly notify the Federal awarding agency.
(5) Adequate
maintenance procedures shall be implemented to keep the equipment
in good condition.
(6) Where
the recipient is authorized or required to sell the equipment,
proper sales procedures shall be established which provide for
competition to the extent practicable and result in the highest
possible return.
(g) When
the recipient no longer needs the equipment, the equipment may
be used for other activities in accordance with the following
standards. For equipment with a current per unit fair market value
of $5000 or more, the recipient may retain the equipment for other
uses provided that compensation is made to the original Federal
awarding agency or its successor. The amount of compensation shall
be computed by applying the percentage of Federal participation
in the cost of the original project or program to the current
fair market value of the equipment. If the recipient has no need
for the equipment, the recipient shall request disposition instructions
from the Federal awarding agency. The Federal awarding agency
shall determine whether the equipment can be used to meet the
agency's requirements. If no requirement exists within that agency,
the availability of the equipment shall be reported to the General
Services Administration by the Federal awarding agency to determine
whether a requirement for the equipment exists in other Federal
agencies. The Federal awarding agency shall issue instructions
to the recipient no later than 120 calendar days after the recipient's
request and the following procedures shall govern.
(1) If so
instructed or if disposition instructions are not issued within
120 calendar days after the recipient's request, the recipient
shall sell the equipment and reimburse the Federal awarding agency
an amount computed by applying to the sales proceeds the percentage
of Federal participation in the cost of the original project or
program. However, the recipient shall be permitted to deduct and
retain from the Federal share $500 or ten percent of the proceeds,
whichever is less, for the recipient's selling and handling expenses.
(2) If the
recipient is instructed to ship the equipment elsewhere, the recipient
shall be reimbursed by the Federal Government by an amount which
is computed by applying the percentage of the recipient's participation
in the cost of the original project or program to the current
fair market value of the equipment, plus any reasonable shipping
or interim storage costs incurred.
(3) If the
recipient is instructed to otherwise dispose of the equipment,
the recipient shall be reimbursed by the Federal awarding agency
for such costs incurred in its disposition.
(4) The
Federal awarding agency may reserve the right to transfer the
title to the Federal Government or to a third party named by the
Federal Government when such third party is otherwise eligible
under existing statutes. Such transfer shall be subject to the
following standards.
(i) The
equipment shall be appropriately identified in the award or otherwise
made known to the recipient in writing.
(ii) The
Federal awarding agency shall issue disposition instructions within
120 calendar days after receipt of a final inventory. The final
inventory shall list all equipment acquired with grant funds and
federally-owned equipment. If the Federal awarding agency fails
to issue disposition instructions within the 120 calendar day
period, the recipient shall apply the standards of this section,
as appropriate.
(iii) When
the Federal awarding agency exercises its right to take title,
the equipment shall be subject to the provisions for federally-owned
equipment.
___.35
Supplies and other expendable
property.
(a) Title
to supplies and other expendable property shall vest in the recipient
upon acquisition. If there is a residual inventory of unused supplies
exceeding $5000 in total aggregate value upon termination or completion
of the project or program and the supplies are not needed for
any other federally-sponsored project or program, the recipient
shall retain the supplies for use on non-Federal sponsored activities
or sell them, but shall, in either case, compensate the Federal
Government for its share. The amount of compensation shall be
computed in the same manner as for equipment.
(b) The
recipient shall not use supplies acquired with Federal funds to
provide services to non-Federal outside organizations for a fee
that is less than private companies charge for equivalent services,
unless specifically authorized by Federal statute as long as the
Federal Government retains an interest in the supplies.
___.36
Intangible property.
(a) The
recipient may copyright any work that is subject to copyright
and was developed, or for which ownership was purchased, under
an award. The Federal awarding agency(ies) reserve a royalty-free,
nonexclusive and irrevocable right to reproduce, publish, or otherwise
use the work for Federal purposes, and to authorize others to
do so.
(b) Recipients
are subject to applicable regulations governing patents and inventions,
including government-wide regulations issued by the Department
of Commerce at 37 CFR part 401, "Rights to Inventions Made by
Nonprofit Organizations and Small Business Firms Under Government
Grants, Contracts and Cooperative Agreements."
(c) The
Federal Government has the right to:
(1) obtain,
reproduce, publish or otherwise use the data first produced under
an award; and
(2) authorize
others to receive, reproduce, publish, or otherwise use such data
for Federal purposes.
(d) (1)
In addition, in response to a Freedom of Information Act (FOIA)
request for research data relating to published research findings
produced under an award that were used by the Federal Government
in developing an agency action that has the force and effect of
law, the Federal awarding agency shall request, and the recipient
shall provide, within a reasonable time, the research data so
that they can be made available to the public through the procedures
established under the FOIA. If the Federal awarding agency obtains
the research data solely in response to a FOIA request, the agency
may charge the requester a reasonable fee equaling the full incremental
cost of obtaining the research data. This fee should reflect costs
incurred by the agency, the recipient, and applicable subrecipients.
This fee is in addition to any fees the agency may assess under
the FOIA (5 U.S.C. 552(a)(4)(A)).
(2) The
following definitions apply for purposes of paragraph (d) of this
section:
(i) Research
data is defined as the recorded factual material commonly
accepted in the scientific community as necessary to validate
research findings, but not any of the following: preliminary analyses,
drafts of scientific papers, plans for future research, peer reviews,
or communications with colleagues. This "recorded" material excludes
physical objects (e.g., laboratory samples). Research data also
do not include:
(A) Trade
secrets, commercial information, materials necessary to be held
confidential by a researcher until they are published, or similar
information which is protected under law; and
(B) Personnel
and medical information and similar information the disclosure
of which would constitute a clearly unwarranted invasion of personal
privacy, such as information that could be used to identify a
particular person in a research study.
(ii) Published
is defined as either when:
(A) Research
findings are published in a peer-reviewed scientific or technical
journal; or
(B) A Federal
agency publicly and officially cites the research findings in
support of an agency action that has the force and effect of law.
(iii) Used
by the Federal Government in developing an agency action that
has the force and effect of law is defined as when an agency
publicly and officially cites the research findings in support
of an agency action that has the force and effect of law.
(e) Title
to intangible property and debt instruments acquired under an
award or subaward vests upon acquisition in the recipient. The
recipient shall use that property for the originally-authorized
purpose, and the recipient shall not encumber the property without
approval of the Federal awarding agency. When no longer needed
for the originally authorized purpose, disposition of the intangible
property shall occur in accordance with the provisions of paragraph
___.34(g).
___.37
Property trust relationship.
Real property, equipment, intangible property and debt instruments
that are acquired or improved with Federal funds shall be held
in trust by the recipient as trustee for the beneficiaries of
the project or program under which the property was acquired
or improved. Agencies may require recipients to record liens
or other appropriate notices of record to indicate that personal
or real property has been acquired or improved with Federal
funds and that use and disposition conditions apply to the property.
Procurement
Standards
___.40
Purpose of procurement
standards. Sections ___.41 through ___.48 set forth standards
for use by recipients in establishing procedures for the procurement
of supplies and other expendable property, equipment, real property
and other services with Federal funds. These standards are furnished
to ensure that such materials and services are obtained in an
effective manner and in compliance with the provisions of applicable
Federal statutes and executive orders. No additional procurement
standards or requirements shall be imposed by the Federal awarding
agencies upon recipients, unless specifically required by Federal
statute or executive order or approved by OMB.
___.41
Recipient responsibilities.
The standards contained in this section do not relieve the recipient
of the contractual responsibilities arising under its contract(s).
The recipient is the responsible authority, without recourse
to the Federal awarding agency, regarding the settlement and
satisfaction of all contractual and administrative issues arising
out of procurements entered into in support of an award or other
agreement. This includes disputes, claims, protests of award,
source evaluation or other matters of a contractual nature.
Matters concerning violation of statute are to be referred to
such Federal, State or local authority as may have proper jurisdiction.
___.42
Codes of conduct.
The recipient shall maintain written standards of conduct governing
the performance of its employees engaged in the award and administration
of contracts. No employee, officer, or agent shall participate
in the selection, award, or administration of a contract supported
by Federal funds if a real or apparent conflict of interest
would be involved. Such a conflict would arise when the employee,
officer, or agent, any member of his or her immediate family,
his or her partner, or an organization which employs or is about
to employ any of the parties indicated herein, has a financial
or other interest in the firm selected for an award. The officers,
employees, and agents of the recipient shall neither solicit
nor accept gratuities, favors, or anything of monetary value
from contractors, or parties to subagreements. However, recipients
may set standards for situations in which the financial interest
is not substantial or the gift is an unsolicited item of nominal
value. The standards of conduct shall provide for disciplinary
actions to be applied for violations of such standards by officers,
employees, or agents of the recipient.
___.43
Competition. All
procurement transactions shall be conducted in a manner to provide,
to the maximum extent practical, open and free competition.
The recipient shall be alert to organizational conflicts of
interest as well as noncompetitive practices among contractors
that may restrict or eliminate competition or otherwise restrain
trade. In order to ensure objective contractor performance and
eliminate unfair competitive advantage, contractors that develop
or draft specifications, requirements, statements of work, invitations
for bids and/or requests for proposals shall be excluded from
competing for such procurements. Awards shall be made to the
bidder or offeror whose bid or offer is responsive to the solicitation
and is most advantageous to the recipient, price, quality and
other factors considered. Solicitations shall clearly set forth
all requirements that the bidder or offeror shall fulfill in
order for the bid or offer to be evaluated by the recipient.
Any and all bids or offers may be rejected when it is in the
recipient's interest to do so.
___.44
Procurement procedures.
(a) All
recipients shall establish written procurement procedures. These
procedures shall provide for, at a minimum, that (1), (2) and
(3) apply.
(1) Recipients
avoid purchasing unnecessary items.
(2) Where
appropriate, an analysis is made of lease and purchase alternatives
to determine which would be the most economical and practical
procurement for the Federal Government.
(3) Solicitations
for goods and services provide for all of the following.
(i) A clear
and accurate description of the technical requirements for the
material, product or service to be procured. In competitive procurements,
such a description shall not contain features which unduly restrict
competition.
(ii) Requirements
which the bidder/offeror must fulfill and all other factors to
be used in evaluating bids or proposals.
(iii) A
description, whenever practicable, of technical requirements in
terms of functions to be performed or performance required, including
the range of acceptable characteristics or minimum acceptable
standards.
(iv) The
specific features of "brand name or equal" descriptions that bidders
are required to meet when such items are included in the solicitation.
(v) The
acceptance, to the extent practicable and economically feasible,
of products and services dimensioned in the metric system of measurement.
(vi) Preference,
to the extent practicable and economically feasible, for products
and services that conserve natural resources and protect the environment
and are energy efficient.
(b) Positive
efforts shall be made by recipients to utilize small businesses,
minority-owned firms, and women's business enterprises, whenever
possible. Recipients of Federal awards shall take all of the following
steps to further this goal.
(1) Ensure
that small businesses, minority-owned firms, and women's business
enterprises are used to the fullest extent practicable.
(2) Make
information on forthcoming opportunities available and arrange
time frames for purchases and contracts to encourage and facilitate
participation by small businesses, minority-owned firms, and women's
business enterprises.
(3) Consider
in the contract process whether firms competing for larger contracts
intend to subcontract with small businesses, minority-owned firms,
and women's business enterprises.
(4) Encourage
contracting with consortiums of small businesses, minority-owned
firms and women's business enterprises when a contract is too
large for one of these firms to handle individually.
(5) Use
the services and assistance, as appropriate, of such organizations
as the Small Business Administration and the Department of Commerce's
Minority Business Development Agency in the solicitation and utilization
of small businesses, minority- owned firms and women's business
enterprises.
(c) The
type of procuring instruments used (e.g., fixed price contracts,
cost reimbursable contracts, purchase orders, and incentive contracts)
shall be determined by the recipient but shall be appropriate
for the particular procurement and for promoting the best interest
of the program or project involved. The "cost-plus-a-percentage-of-cost"
or "percentage of construction cost" methods of contracting shall
not be used.
(d) Contracts
shall be made only with responsible contractors who possess the
potential ability to perform successfully under the terms and
conditions of the proposed procurement. Consideration shall be
given to such matters as contractor integrity, record of past
performance, financial and technical resources or accessibility
to other necessary resources. In certain circumstances, contracts
with certain parties are restricted by agencies' implementation
of E.O.s 12549 and 12689, "Debarment and Suspension."
(e) Recipients
shall, on request, make available for the Federal awarding agency,
pre-award review and procurement documents, such as request for
proposals or invitations for bids, independent cost estimates,
etc., when any of the following conditions apply.
(1) A recipient's
procurement procedures or operation fails to comply with the procurement
standards in the Federal awarding agency's implementation of this
Circular.
(2) The
procurement is expected to exceed the small purchase threshold
fixed at 41 U.S.C. 403 (11) (currently $25,000) and is to be awarded
without competition or only one bid or offer is received in response
to a solicitation.
(3) The
procurement, which is expected to exceed the small purchase threshold,
specifies a "brand name" product.
(4) The
proposed award over the small purchase threshold is to be awarded
to other than the apparent low bidder under a sealed bid procurement.
(5) A proposed
contract modification changes the scope of a contract or increases
the contract amount by more than the amount of the small purchase
threshold.
___.45
Cost and price analysis.
Some form of cost or price analysis shall be made and documented
in the procurement files in connection with every procurement
action. Price analysis may be accomplished in various ways,
including the comparison of price quotations submitted, market
prices and similar indicia, together with discounts. Cost analysis
is the review and evaluation of each element of cost to determine
reasonableness, allocability and allowability.
___.46
Procurement records.
Procurement records and files for purchases in excess of the
small purchase threshold shall include the following at a minimum:
(a) basis for contractor selection, (b) justification for lack
of competition when competitive bids or offers are not obtained,
and (c) basis for award cost or price.
___.47
Contract administration.
A system for contract administration shall be maintained to
ensure contractor conformance with the terms, conditions and
specifications of the contract and to ensure adequate and timely
follow up of all purchases. Recipients shall evaluate contractor
performance and document, as appropriate, whether contractors
have met the terms, conditions and specifications of the contract.
___.48
Contract provisions.
The recipient shall include, in addition to provisions to define
a sound and complete agreement, the following provisions in
all contracts. The following provisions shall also be applied
to subcontracts.
(a) Contracts
in excess of the small purchase threshold shall contain contractual
provisions or conditions that allow for administrative, contractual,
or legal remedies in instances in which a contractor violates
or breaches the contract terms, and provide for such remedial
actions as may be appropriate.
(b) All
contracts in excess of the small purchase threshold shall contain
suitable provisions for termination by the recipient, including
the manner by which termination shall be effected and the basis
for settlement. In addition, such contracts shall describe conditions
under which the contract may be terminated for default as well
as conditions where the contract may be terminated because of
circumstances beyond the control of the contractor.
(c) Except
as otherwise required by statute, an award that requires the contracting
(or subcontracting) for construction or facility improvements
shall provide for the recipient to follow its own requirements
relating to bid guarantees, performance bonds, and payment bonds
unless the construction contract or subcontract exceeds $100,000.
For those contracts or subcontracts exceeding $100,000, the Federal
awarding agency may accept the bonding policy and requirements
of the recipient, provided the Federal awarding agency has made
a determination that the Federal Government's interest is adequately
protected. If such a determination has not been made, the minimum
requirements shall be as follows.
(1) A bid
guarantee from each bidder equivalent to five percent of the bid
price. The "bid guarantee" shall consist of a firm commitment
such as a bid bond, certified check, or other negotiable instrument
accompanying a bid as assurance that the bidder shall, upon acceptance
of his bid, execute such contractual documents as may be required
within the time specified.
(2) A performance
bond on the part of the contractor for 100 percent of the contract
price. A "performance bond" is one executed in connection with
a contract to secure fulfillment of all the contractor's obligations
under such contract.
(3) A payment
bond on the part of the contractor for 100 percent of the contract
price. A "payment bond" is one executed in connection with a contract
to assure payment as required by statute of all persons supplying
labor and material in the execution of the work provided for in
the contract.
(4) Where
bonds are required in the situations described herein, the bonds
shall be obtained from companies holding certificates of authority
as acceptable sureties pursuant to 31 CFR part 223, "Surety Companies
Doing Business with the United States."
(d) All
negotiated contracts (except those for less than the small purchase
threshold) awarded by recipients shall include a provision to
the effect that the recipient, the Federal awarding agency, the
Comptroller General of the United States, or any of their duly
authorized representatives, shall have access to any books, documents,
papers and records of the contractor which are directly pertinent
to a specific program for the purpose of making audits, examinations,
excerpts and transcriptions.
(e) All
contracts, including small purchases, awarded by recipients and
their contractors shall contain the procurement provisions of
Appendix A to this Circular, as applicable.
Reports
and Records
___.50
Purpose of reports and records.
Sections ___.51 through ___.53 set forth the procedures for
monitoring and reporting on the recipient's financial and program
performance and the necessary standard reporting forms. They
also set forth record retention requirements.
___.51
Monitoring and reporting
program performance.
(a) Recipients
are responsible for managing and monitoring each project, program,
subaward, function or activity supported by the award. Recipients
shall monitor subawards to ensure subrecipients have met the audit
requirements as delineated in Section ___.26.
(b) The
Federal awarding agency shall prescribe the frequency with which
the performance reports shall be submitted. Except as provided
in paragraph ___.51(f), performance reports shall not be required
more frequently than quarterly or, less frequently than annually.
Annual reports shall be due 90 calendar days after the grant year;
quarterly or semi-annual reports shall be due 30 days after the
reporting period. The Federal awarding agency may require annual
reports before the anniversary dates of multiple year awards in
lieu of these requirements. The final performance reports are
due 90 calendar days after the expiration or termination of the
award.
(c) If inappropriate,
a final technical or performance report shall not be required
after completion of the project.
(d) When
required, performance reports shall generally contain, for each
award, brief information on each of the following.
(1) A comparison
of actual accomplishments with the goals and objectives established
for the period, the findings of the investigator, or both. Whenever
appropriate and the output of programs or projects can be readily
quantified, such quantitative data should be related to cost data
for computation of unit costs.
(2) Reasons
why established goals were not met, if appropriate.
(3) Other
pertinent information including, when appropriate, analysis and
explanation of cost overruns or high unit costs.
(e) Recipients
shall not be required to submit more than the original and two
copies of performance reports.
(f) Recipients
shall immediately notify the Federal awarding agency of developments
that have a significant impact on the award-supported activities.
Also, notification shall be given in the case of problems, delays,
or adverse conditions which materially impair the ability to meet
the objectives of the award. This notification shall include a
statement of the action taken or contemplated, and any assistance
needed to resolve the situation.
(g) Federal
awarding agencies may make site visits, as needed.
(h) Federal
awarding agencies shall comply with clearance requirements of
5 CFR part 1320 when requesting performance data from recipients.
___.52
Financial reporting.
(a) The
following forms or such other forms as may be approved by OMB
are authorized for obtaining financial information from recipients.
(1) SF-269
or SF-269A, Financial Status Report.
(i) Each
Federal awarding agency shall require recipients to use the SF-269
or SF-269A to report the status of funds for all nonconstruction
projects or programs. A Federal awarding agency may, however,
have the option of not requiring the SF-269 or SF-269A when the
SF-270, Request for Advance or Reimbursement, or SF-272, Report
of Federal Cash Transactions, is determined to provide adequate
information to meet its needs, except that a final SF-269 or SF-269A
shall be required at the completion of the project when the SF-270
is used only for advances.
(ii) The
Federal awarding agency shall prescribe whether the report shall
be on a cash or accrual basis. If the Federal awarding agency
requires accrual information and the recipient's accounting records
are not normally kept on the accrual basis, the recipient shall
not be required to convert its accounting system, but shall develop
such accrual information through best estimates based on an analysis
of the documentation on hand.
(iii) The
Federal awarding agency shall determine the frequency of the Financial
Status Report for each project or program, considering the size
and complexity of the particular project or program. However,
the report shall not be required more frequently than quarterly
or less frequently than annually. A final report shall be required
at the completion of the agreement.
(iv) The
Federal awarding agency shall require recipients to submit the
SF-269 or SF-269A (an original and no more than two copies) no
later than 30 days after the end of each specified reporting period
for quarterly and semi-annual reports, and 90 calendar days for
annual and final reports. Extensions of reporting due dates may
be approved by the Federal awarding agency upon request of the
recipient.
(2) SF-272,
Report of Federal Cash Transactions.
(i) When
funds are advanced to recipients the Federal awarding agency shall
require each recipient to submit the SF-272 and, when necessary,
its continuation sheet, SF-272a. The Federal awarding agency shall
use this report to monitor cash advanced to recipients and to
obtain disbursement information for each agreement with the recipients.
(ii) Federal
awarding agencies may require forecasts of Federal cash requirements
in the "Remarks" section of the report.
(iii) When
practical and deemed necessary, Federal awarding agencies may
require recipients to report in the "Remarks" section the amount
of cash advances received in excess of three days. Recipients
shall provide short narrative explanations of actions taken to
reduce the excess balances.
(iv) Recipients
shall be required to submit not more than the original and two
copies of the SF-272 15 calendar days following the end of each
quarter. The Federal awarding agencies may require a monthly report
from those recipients receiving advances totaling $1 million or
more per year.
(v) Federal
awarding agencies may waive the requirement for submission of
the SF-272 for any one of the following reasons: (1) When monthly
advances do not exceed $25,000 per recipient, provided that such
advances are monitored through other forms contained in this section;
(2) If, in the Federal awarding agency's opinion, the recipient's
accounting controls are adequate to minimize excessive Federal
advances; or, (3) When the electronic payment mechanisms provide
adequate data.
(b) When
the Federal awarding agency needs additional information or more
frequent reports, the following shall be observed.
(1) When
additional information is needed to comply with legislative requirements,
Federal awarding agencies shall issue instructions to require
recipients to submit such information under the "Remarks" section
of the reports.
(2) When
a Federal awarding agency determines that a recipient's accounting
system does not meet the standards in Section ___.21, additional
pertinent information to further monitor awards may be obtained
upon written notice to the recipient until such time as the system
is brought up to standard. The Federal awarding agency, in obtaining
this information, shall comply with report clearance requirements
of 5 CFR part 1320.
(3) Federal
awarding agencies are encouraged to shade out any line item on
any report if not necessary.
(4) Federal
awarding agencies may accept the identical information from the
recipients in machine readable format or computer printouts or
electronic outputs in lieu of prescribed formats.
(5) Federal
awarding agencies may provide computer or electronic outputs to
recipients when such expedites or contributes to the accuracy
of reporting.
___.53
Retention and access requirements
for records.
(a) This
section sets forth requirements for record retention and access
to records for awards to recipients. Federal awarding agencies
shall not impose any other record retention or access requirements
upon recipients.
(b) Financial
records, supporting documents, statistical records, and all other
records pertinent to an award shall be retained for a period of
three years from the date of submission of the final expenditure
report or, for awards that are renewed quarterly or annually,
from the date of the submission of the quarterly or annual financial
report, as authorized by the Federal awarding agency. The only
exceptions are the following.
(1) If any
litigation, claim, or audit is started before the expiration of
the 3-year period, the records shall be retained until all litigation,
claims or audit findings involving the records have been resolved
and final action taken.
(2) Records
for real property and equipment acquired with Federal funds shall
be retained for 3 years after final disposition.
(3) When
records are transferred to or maintained by the Federal awarding
agency, the 3-year retention requirement is not applicable to
the recipient.
(4) Indirect
cost rate proposals, cost allocations plans, etc. as specified
in paragraph ___.53(g).
(c) Copies
of original records may be substituted for the original records
if authorized by the Federal awarding agency.
(d) The
Federal awarding agency shall request transfer of certain records
to its custody from recipients when it determines that the records
possess long term retention value. However, in order to avoid
duplicate recordkeeping, a Federal awarding agency may make arrangements
for recipients to retain any records that are continuously needed
for joint use.
(e) The
Federal awarding agency, the Inspector General, Comptroller General
of the United States, or any of their duly authorized representatives,
have the right of timely and unrestricted access to any books,
documents, papers, or other records of recipients that are pertinent
to the awards, in order to make audits, examinations, excerpts,
transcripts and copies of such documents. This right also includes
timely and reasonable access to a recipient's personnel for the
purpose of interview and discussion related to such documents.
The rights of access in this paragraph are not limited to the
required retention period, but shall last as long as records are
retained.
(f) Unless
required by statute, no Federal awarding agency shall place restrictions
on recipients that limit public access to the records of recipients
that are pertinent to an award, except when the Federal awarding
agency can demonstrate that such records shall be kept confidential
and would have been exempted from disclosure pursuant to the Freedom
of Information Act (5 U.S.C. 552) if the records had belonged
to the Federal awarding agency.
(g) Indirect
cost rate proposals, cost allocations plans, etc. Paragraphs (g)(1)
and (g)(2) apply to the following types of documents, and their
supporting records: indirect cost rate computations or proposals,
cost allocation plans, and any similar accounting computations
of the rate at which a particular group of costs is chargeable
(such as computer usage chargeback rates or composite fringe benefit
rates).
(1) If submitted
for negotiation. If the recipient submits to the Federal awarding
agency or the subrecipient submits to the recipient the proposal,
plan, or other computation to form the basis for negotiation of
the rate, then the 3-year retention period for its supporting
records starts on the date of such submission.
(2) If not
submitted for negotiation. If the recipient is not required to
submit to the Federal awarding agency or the subrecipient is not
required to submit to the recipient the proposal, plan, or other
computation for negotiation purposes, then the 3-year retention
period for the proposal, plan, or other computation and its supporting
records starts at the end of the fiscal year (or other accounting
period) covered by the proposal, plan, or other computation.
Termination
and Enforcement
___.60
Purpose of termination
and enforcement. Sections ___.61 and ___.62 set forth uniform
suspension, termination and enforcement procedures.
___.61
Termination.
(a) Awards
may be terminated in whole or in part only if (1), (2) or (3)
apply.
(1) By the
Federal awarding agency, if a recipient materially fails to comply
with the terms and conditions of an award.
(2) By the
Federal awarding agency with the consent of the recipient, in
which case the two parties shall agree upon the termination conditions,
including the effective date and, in the case of partial termination,
the portion to be terminated.
(3) By the
recipient upon sending to the Federal awarding agency written
notification setting forth the reasons for such termination, the
effective date, and, in the case of partial termination, the portion
to be terminated. However, if the Federal awarding agency determines
in the case of partial termination that the reduced or modified
portion of the grant will not accomplish the purposes for which
the grant was made, it may terminate the grant in its entirety
under either paragraphs (a)(1) or (2).
(b) If costs
are allowed under an award, the responsibilities of the recipient
referred to in paragraph ___.71(a), including those for property
management as applicable, shall be considered in the termination
of the award, and provision shall be made for continuing responsibilities
of the recipient after termination, as appropriate.
___.62
Enforcement.
(a) Remedies
for noncompliance. If a recipient materially fails to comply with
the terms and conditions of an award, whether stated in a Federal
statute, regulation, assurance, application, or notice of award,
the Federal awarding agency may, in addition to imposing any of
the special conditions outlined in Section ___.14, take one or
more of the following actions, as appropriate in the circumstances.
(1) Temporarily
withhold cash payments pending correction of the deficiency by
the recipient or more severe enforcement action by the Federal
awarding agency.
(2) Disallow
(that is, deny both use of funds and any applicable matching credit
for) all or part of the cost of the activity or action not in
compliance.
(3) Wholly
or partly suspend or terminate the current award.
(4) Withhold
further awards for the project or program.
(5) Take
other remedies that may be legally available.
(b) Hearings
and appeals. In taking an enforcement action, the awarding agency
shall provide the recipient an opportunity for hearing, appeal,
or other administrative proceeding to which the recipient is entitled
under any statute or regulation applicable to the action involved.
(c) Effects
of suspension and termination. Costs of a recipient resulting
from obligations incurred by the recipient during a suspension
or after termination of an award are not allowable unless the
awarding agency expressly authorizes them in the notice of suspension
or termination or subsequently. Other recipient costs during suspension
or after termination which are necessary and not reasonably avoidable
are allowable if (1) and (2) apply.
(1) The
costs result from obligations which were properly incurred by
the recipient before the effective date of suspension or termination,
are not in anticipation of it, and in the case of a termination,
are noncancellable.
<
(2) The
costs would be allowable if the award were not suspended or expired
normally at the end of the funding period in which the termination
takes effect.
(d) Relationship
to debarment and suspension. The enforcement remedies identified
in this section, including suspension and termination, do not
preclude a recipient from being subject to debarment and suspension
under E.O.s 12549 and 12689 and the Federal awarding agency implementing
regulations (see Section ___.13).
SUBPART
D - After-the-Award Requirements
___.70
Purpose. Sections ___.71
through ___.73 contain closeout procedures and other procedures
for subsequent disallowances and adjustments.
___.71
Closeout procedures.
(a) Recipients
shall submit, within 90 calendar days after the date of completion
of the award, all financial, performance, and other reports as
required by the terms and conditions of the award. The Federal
awarding agency may approve extensions when requested by the recipient.
(b) Unless
the Federal awarding agency authorizes an extension, a recipient
shall liquidate all obligations incurred under the award not later
than 90 calendar days after the funding period or the date of
completion as specified in the terms and conditions of the award
or in agency implementing instructions.
(c) The
Federal awarding agency shall make prompt payments to a recipient
for allowable reimbursable costs under the award being closed
out.
(d) The
recipient shall promptly refund any balances of unobligated cash
that the Federal awarding agency has advanced or paid and that
is not authorized to be retained by the recipient for use in other
projects. OMB Circular A-129 governs unreturned amounts that become
delinquent debts.
(e) When
authorized by the terms and conditions of the award, the Federal
awarding agency shall make a settlement for any upward or downward
adjustments to the Federal share of costs after closeout reports
are received.
(f) The
recipient shall account for any real and personal property acquired
with Federal funds or received from the Federal Government in
accordance with Sections ___.31 through ___.37.
(g) In the
event a final audit has not been performed prior to the closeout
of an award, the Federal awarding agency shall retain the right
to recover an appropriate amount after fully considering the recommendations
on disallowed costs resulting from the final audit.
___.72
Subsequent adjustments and
continuing responsibilities.
(a) The
closeout of an award does not affect any of the following.
(1) The
right of the Federal awarding agency to disallow costs and recover
funds on the basis of a later audit or other review.
(2) The
obligation of the recipient to return any funds due as a result
of later refunds, corrections, or other transactions.
(3) Audit
requirements in Section ___.26.
(4) Property
management requirements in Sections ___.31 through ___.37.
(5) Records
retention as required in Section ___.53.
(b) After
closeout of an award, a relationship created under an award may
be modified or ended in whole or in part with the consent of the
Federal awarding agency and the recipient, provided the responsibilities
of the recipient referred to in paragraph ___.73(a), including
those for property management as applicable, are considered and
provisions made for continuing responsibilities of the recipient,
as appropriate.
___.73
Collection of amounts due.
(a) Any
funds paid to a recipient in excess of the amount to which the
recipient is finally determined to be entitled under the terms
and conditions of the award constitute a debt to the Federal Government.
If not paid within a reasonable period after the demand for payment,
the Federal awarding agency may reduce the debt by (1), (2) or
(3).
(1) Making
an administrative offset against other requests for reimbursements.
(2) Withholding
advance payments otherwise due to the recipient.
(3) Taking
other action permitted by statute.
(b) Except
as otherwise provided by law, the Federal awarding agency shall
charge interest on an overdue debt in accordance with 4 CFR Chapter
II, "Federal Claims Collection Standards."
Appendix A
Contract Provisions
All contracts,
awarded by a recipient including small purchases, shall contain
the following provisions as applicable:
1.
Equal Employment Opportunity - All contracts shall
contain a provision requiring compliance with E.O. 11246, "Equal
Employment Opportunity," as amended by E.O. 11375, "Amending
Executive Order 11246 Relating to Equal Employment Opportunity,"
and as supplemented by regulations at 41 CFR part 60, "Office
of Federal Contract Compliance Programs, Equal Employment Opportunity,
Department of Labor."
2.
Copeland "Anti-Kickback" Act (18 U.S.C. 874 and 40 U.S.C. 276c)
- All contracts and subgrants in excess of $2000 for construction
or repair awarded by recipients and subrecipients shall include
a provision for compliance with the Copeland "Anti-Kickback"
Act (18 U.S.C. 874), as supplemented by Department of Labor
regulations (29 CFR part 3, "Contractors and Subcontractors
on Public Building or Public Work Financed in Whole or in Part
by Loans or Grants from the United States"). The Act provides
that each contractor or subrecipient shall be prohibited from
inducing, by any means, any person employed in the construction,
completion, or repair of public work, to give up any part of
the compensation to which he is otherwise entitled. The recipient
shall report all suspected or reported violations to the Federal
awarding agency.
3.
Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)
- When required by Federal program legislation, all construction
contracts awarded by the recipients and subrecipients of more
than $2000 shall include a provision for compliance with the
Davis-Bacon Act (40 U.S.C. 276a to a-7) and as supplemented
by Department of Labor regulations (29 CFR part 5, "Labor Standards
Provisions Applicable to Contracts Governing Federally Financed
and Assisted Construction"). Under this Act, contractors shall
be required to pay wages to laborers and mechanics at a rate
not less than the minimum wages specified in a wage determination
made by the Secretary of Labor. In addition, contractors shall
be required to pay wages not less than once a week. The recipient
shall place a copy of the current prevailing wage determination
issued by the Department of Labor in each solicitation and the
award of a contract shall be conditioned upon the acceptance
of the wage determination. The recipient shall report all suspected
or reported violations to the Federal awarding agency.
4.
Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333)
- Where applicable, all contracts awarded by recipients in excess
of $2000 for construction contracts and in excess of $2500 for
other contracts that involve the employment of mechanics or
laborers shall include a provision for compliance with Sections
102 and 107 of the Contract Work Hours and Safety Standards
Act (40 U.S.C. 327-333), as supplemented by Department of Labor
regulations (29 CFR part 5). Under Section 102 of the Act, each
contractor shall be required to compute the wages of every mechanic
and laborer on the basis of a standard work week of 40 hours.
Work in excess of the standard work week is permissible provided
that the worker is compensated at a rate of not less than 1
½ times the basic rate of pay for all hours worked in excess
of 40 hours in the work week. Section 107 of the Act is applicable
to construction work and provides that no laborer or mechanic
shall be required to work in surroundings or under working conditions
which are unsanitary, hazardous or dangerous. These requirements
do not apply to the purchases of supplies or materials or articles
ordinarily available on the open market, or contracts for transportation
or transmission of intelligence.
5.
Rights to Inventions Made Under a Contract or Agreement
- Contracts or agreements for the performance of experimental,
developmental, or research work shall provide for the rights
of the Federal Government and the recipient in any resulting
invention in accordance with 37 CFR part 401, "Rights to Inventions
Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts and Cooperative Agreements," and
any implementing regulations issued by the awarding agency.
6.
Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended
- Contracts and subgrants of amounts in excess of $100,000 shall
contain a provision that requires the recipient to agree to
comply with all applicable standards, orders or regulations
issued pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.)
and the Federal Water Pollution Control Act as amended (33 U.S.C.
1251 et seq.). Violations shall be reported to the Federal awarding
agency and the Regional Office of the Environmental Protection
Agency (EPA).
7.
Byrd Anti-Lobbying Amendment (31 U.S.C. 1352) - Contractors
who apply or bid for an award of $100,000 or more shall file
the required certification. Each tier certifies to the tier
above that it will not and has not used Federal appropriated
funds to pay any person or organization for influencing or attempting
to influence an officer or employee of any agency, a member
of Congress, officer or employee of Congress, or an employee
of a member of Congress in connection with obtaining any Federal
contract, grant or any other award covered by 31 U.S.C. 1352.
Each tier shall also disclose any lobbying with non-Federal
funds that takes place in connection with obtaining any Federal
award. Such disclosures are forwarded from tier to tier up to
the recipient.
8.
Debarment and Suspension (E.O.s 12549 and 12689) -
No contract shall be made to parties listed on the General Services
Administration's List of Parties Excluded from Federal Procurement
or Nonprocurement Programs in accordance with E.O.s 12549 and
12689, "Debarment and Suspension." This list contains the names
of parties debarred, suspended, or otherwise excluded by agencies,
and contractors declared ineligible under statutory or regulatory
authority other than E.O. 12549. Contractors with awards that
exceed the small purchase threshold shall provide the required
certification regarding its exclusion status and that of its
principal employees.
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