RES 2014-0312 - Agmt with Council Bluffs for purchase of single-family homes �oi °?, , •t . Planning Department
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City of Omaha James R.Thele
Director
Jean Stothert,Mayor
March 11, 2014
Honorable President
and Members of the City Council,
The attached proposed Resolution approves an Agreement in the amount of $302,220.00 in
Home Investment Partnerships Program (HOME) funds between the City of Omaha and the City
of Council Bluffs, 209 Pearl Street, Council Bluffs, Iowa 51503. The HOME Program funds
consist of$167,220.00 FY 2009 funds and $135,000.00 FY 2010 funds.
FY 2009 HOME funds in the amount of $167,220.00 and the FY 2010 HOME funds in the
amount of$135,000.00 shall be payable from Fund No. 2470, Organization No. 128071.
The Omaha City Council approved a HOME Investments Partnerships Program Consortium
Cooperation Agreement between the City of Omaha and the City of Council Bluffs on June 19,
2012 by Resolution No. 812 as amended by Resolution No. 494 on May 19, 2009 and the HOME
Consortium Cooperation Agreement created the Omaha-Council Bluffs Home Consortium for
the purposes of receiving an increased HOME Fund allocation from the U.S. Department of
Housing and Urban Development (HUD) and administering the HOME Program as a single
grantee.
The City of Council Bluffs will use the FY 2009 and FY 2010 HOME Program funds to provide
twelve (12) loans for down payment assistance toward the purchase of newly constructed single-
family homes to be located on scattered sites throughout the City of Council Bluffs. All loans
shall be provided to qualified low- and moderate-income families whose annual household
incomes are 80% and below the Median Family Income (MFI) as established annually by HUD
to assist them in purchasing of homes to be occupied as their principal place of residence.
Total estimated project cost is $302,220.00 and will be funded with $167,220.00 in 2009 HOME
funds, and $135,000.00 in 2010 HOME funds.
Honorable President
and Members of the City Council
Page 2
FY 2009 HOME funds and FY 2010 HOME funds are included in the FY 2009 Consolidated
Submission for Community Planning and Development Programs (Consolidated Plan) approved
by the City of Omaha City Council on October 10, 2008 by Resolution No. 1492, as amended
April 14, 2009 by Resolution No. 235 and as amended June 9, 2009 by Resolution No. 494 and
FY 2010 Consolidated Submission for Community Planning and Development Programs
(Consolidated Plan) approved by the City of Omaha City Council on November 21, 2009 by
Resolution No. 1347 as amended by Resolution No. 1173 on October 5, 2010, and as amended
July 16, 2013 by Resolution No. 899.
Approval of the attached Resolution will allow the City of Council Bluffs to make affordable
housing opportunities available to low- and moderate-income residents of Council Bluffs, Iowa.
Your favorable consideration of this Resolution will be appreciated.
Sincerely, Referred to City Council for Consideration:
I 1�� ,J ia---e 2 27(F y Z 7=7t es R. Thele Date Mayor's Office Date
Tanning Director
Approved as to Funding: A ved:
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Curtiss 6/yl.j Date Huma Rights and Relations D e
Finance Director .. j
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•
INTER-LOCAL HOME AGREEMENT
BETWEEN THE CITY OF OMAHA, NEBRASKA AND
THE CITY OF COUNCIL BLUFFS, IOWA
FOR
DOWN PAYMENT ASSISTANCE TO
PURCHASE SINGLE-FAMILY HOUSES
ON SCATTERED SITES THROUGHOUT THE
CITY OF COUNCIL BLUFFS
FY 2009 AND FY 2010
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ABBREVIATIONS
SECTION 2 RESPONSIBILITIES OF SUBRECIPIENT
2.01 Overall Project Performance
2.02 Project Budget
2.03 Term of the Agreement
SECTION 3 CONDITIONS FOR RECEIPT OF CITY FINANCING
3.01 Documents Required by City
3.01.1 Property Insurance
3.01.2 Security for DPL
3.01.3 Performance and Labor Material Payment Bond and/or
an Irrevocable Letter of Credit
3.01.4 Contractor's Insurance and Worker's Compensation
SECTION 4 PROJECT RESPONSIBILITIES OF THE SUBRECIPIENT
4.01 Eligible Use of Funds
4.02 Terms and Conditions
4.03 Use Restrictions
4.04 Breach of Agreement
4.05 Ineligible Costs
4.06 Lead-Based Paint Prohibition
4.07 Ongoing Property Restrictions
4.08 Davis-Bacon Labor Standards Checklist
4.09 Property Standards
4.10 Section 504
4.11 Affirmative Marketing Policy
SECTION 5 GENERAL ADMINISTRATION REQUIREMENTS OF
SUBRECIPIENT
5.01 Financial Management
5.02 Documentation and Record-keeping
5.03 Reports
5.04 Financial Status Reports
5.05 Personnel and Participant Conditions
SECTION 6 SUBRECIPIENT'S COMPLIANCE WITH OTHER
FEDERAL REGULATIONS
6.01 Environmental Review
6.02 Uniform Relocation Act
6.03 Fair Housing
6.04 Drug Free Workplace Certification
SECTION 7 RESPONSIBILITIES OF THE CITY OF OMAHA
7.01 Performance Monitoring
7.02 Payments
7.03 Progress Payments
7.04 Inspections
7.05 Technical Assistance
SECTION 8 MUTUAL AGREEMENTS BETWEEN CITY AND
SUBRECIPIENT
8.01 Release of Information Laws
8.02 Applicable Laws
8.03 Interest of the City
8.04 Independent Contractor
8.05 Project Roles
8.06 Captions
8.07 Merger
8.08 Modification
8.09 Assignment
8.10 Strict Compliance
8.11 Termination
8.12 Reversion of Assets
8.13 Indemnification
8.14 Unenforceable Provisions
8.15 Disclosure of Lobbying
8.16 Notices
8.17 Applicability
SECTION 9 DEFAULT PROVISIONS
9.01 Remedies
SCHEDULE OF EXHIBITS AND ATTACHMENTS
INTER-LOCAL HOME AGREEMENT
(HOMEBUYER ASSISTANCE)
THIS AGREEMENT is entered into by and between the City of Omaha, Nebraska and
the City of Council Bluffs, Iowa, a municipal corporation, 209 Pearl Street, Council Bluffs, Iowa
51503 (sometimes hereinafter referred to as the "Subrecipient") based on terms, conditions and
provisions as set forth below.
RECITALS:
WHEREAS, the City of Omaha (hereinafter referred to as "the City") is a municipal
corporation located in Douglas County, Nebraska, and is organized and existing under the laws
of the State of Nebraska, and is authorized and empowered to exercise all powers conferred by
the State constitution, laws, Home Rule Charter of the City of Omaha, 1956, as amended, and
local ordinances, including but not limited to, the power to contract; and,
WHEREAS, the City of Council Bluffs is a municipal corporation located in
Pottawattamie County, Iowa, and is organized and existing under the laws of the State of Iowa,
and is authorized and empowered to exercise all powers conferred by the Iowa State constitution,
laws and local ordinances including, but not limited to, the power to contract; and,
WHEREAS, the City of Omaha annually receives HOME Investment Partnerships
Program (HOME) funds under Title II of the Cranston-Gonzalez National Affordable Housing
Act, as amended, for the purpose of providing affordable housing opportunities for low- and
moderate-income households; and,
WHEREAS, on June 19, 2012, by Resolution No. 812, the Omaha City Council approved
a Home Investment Partnerships Program Consortium Cooperation Agreement (Cooperation
Agreement) between the City of Omaha and the City of Council Bluffs for the purposes of
receiving a HOME Fund allocation from the U.S. Department of Housing and Urban
Development and administering the HOME Program as a single grantee; and,
WHEREAS, the City of Omaha and the City of Council Bluffs are considered
geographically contiguous units of local government; and,
WHEREAS, the Cooperation Agreement provided for the transfer of a portion of the
HOME Funds received by the City of Omaha, as lead member of the consortium, to the City of
Council Bluffs based on the proportion of HOME Funds attributable to the City of Council
Bluffs' participation in the Consortium, less ten percent to be used by the City of Omaha for
administrative purposes; and,
WHEREAS, the City of Omaha has applied for and received HOME Investment
Partnerships Program (hereinafter referred to as "HOME") Funds under Title II of the National
Affordable Housing Act of 1990, for the purpose of benefiting low- and moderate-income
residents; and,
WHEREAS, the Omaha— Council Bluffs Consortium FY 2009 Consolidated Submission
for Community Planning and Development Program (hereinafter referred to as "Consolidated
Plan"), outlining priorities, programs and funding allocations for the FY 2009 program year, was
approved on October 10, 2008 by Resolution No. 1492, as amended April 14, 2009 by
Resolution No. 235, and as amended again on June 9, 2009 by Resolution No. 494; and the FY
2010 Consolidated Plan was approved by the City Council November 21, 2009 by Resolution
No. 1347, as amended by Resolution No. 1173 on October 5, 2010 and as amended July 16, 2013
by Resolution No. 899; and,
WHEREAS, the City of Council Bluffs has submitted applications for financing that
provides for partial financing for down payment assistance loans to qualified low- and moderate-
income homebuyers toward the purchase of newly constructed single-family homes at affordable
rates on scattered sites throughout the city limits of Council Bluffs, and the City of Council
Bluffs will provide down-payment assistance loans for low- and moderate-income households
whereby a total of seven (7) down payment assistance loans will be provided with FY 2009
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HOME Program Funds and five (5) will be provided with FY 2010 HOME Program Funds for a
total of twelve (12) loans to qualified low- and moderate-income households whose annual
household incomes are 80% and below of the Median Income By Family Size (MFI), over the
term of this Agreement, (hereinafter referred to as the "Project"); and,
WHEREAS, the FY 2009 Consolidated Plan allocated $167,220.00 in HOME Program
Funds and the FY 2010 Consolidated Plan allocated $135,000.00 in HOME Program Funds for
homebuyers with annual household incomes at 80% and below the MFI, and,
WHEREAS, the Consolidated Plan identified that the Project provides or improves
housing which is determined to benefit low-and moderate-income persons therefore the Project is
consistent with the Consolidated Plans and is eligible for funding; and,
WHEREAS, the City of Omaha wishes to enter into an Inter-Local Agreement with the
City of Council Bluffs in utilizing such HOME funds; and,
WHEREAS, the City of Council Bluffs has the same program year, January 1 to
December 31 as the City of Omaha; and,
WHEREAS, it is in the best interest of the City of Omaha and the residents thereof that
the City of Omaha enter into an Inter-local Agreement with the City of Council Bluffs to
complete this worthwhile Project.
NOW, THEREFORE, IN CONSIDERATION OF THESE MUTUAL COVENANTS,
the parties do hereby agree as follows:
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SECTION 1. DEFINITIONS AND ABBREVIATIONS
The following terms shall have the following meanings for all purposes in this
Agreement.
1.01 "City" shall mean -the City of Omaha, a Nebraska Municipal Corporation.
1.02 "Subrecipient" shall mean - a public or private non-profit agency, authority or
organization receiving HOME funds to undertake eligible activities. In this
Agreement, the Subrecipient shall be the City of Council Bluffs, an Iowa
municipal corporation, Community Development Department, 209 Pearl Street,
Council Bluffs, Iowa 51503.
1.03 "Director" shall mean—the Planning Director of the City of Omaha.
1.04 "Recipient" shall mean—the City of Omaha.
1.05 "Developer" shall mean — qualified for-profit or non-profit organizations(s) that
the Subrecipient approves to undertake eligible HOME Projects.
1.05.1 "Client" shall mean — a qualified participant making application to the
City of Council Bluffs.
1.06 "HUD" shall mean—the U.S. Department of Housing and Urban Development.
1.07 "HOME Funds" shall mean — that portion of the HOME Investment Partnerships
Program funds awarded to the City, subject to and conditioned upon actual receipt
of same by the City, as may be available to grant during the FY 2009 and FY
2010 program years for the use specified herein in an amount not to exceed
$167,220.00 in FY 2009 funds and $135,000.00 in 2010 funds payable from the
HOME Housing Development Program, Fund No. 2470 Organization No. 128071
subject to the terms, conditions and requirements of said Loan Fund Agreement.
1.08 "Property" or "Project(s)" shall mean — those seven (7) single-family homes
funded with FY 2009 HOME Program Funds and those five (5) single-family
homes funded with FY 2010 HOME Program Funds to be constructed on
scattered sites to be determined at a later date throughout the City of Council
Bluffs, Iowa.
1.9 "HOME Program Down-Payment Assistance Loan for Homebuyer" shall mean —
a HOME Program loan, without interest, of HOME funds for any newly
constructed property, made subject to the terms, conditions and provisions of the
mortgage and promissory note securing said debt.
The outstanding Principal on this Loan is payable on the first day after the
homebuyer conveys, grants, mortgages, assigns or no longer resides in the
property as their principal place of residence, or otherwise transfers their interest
or a portion thereof in the property or improvements without the prior written
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consent of the Subrecipient, in lawful money of the United States at the principal
office of the City of Council Bluffs, Community Development Department, 209
Pearl Street, Council Bluffs, Iowa 51503, or at such other places as shall be
designated by the Subrecipient.
1.10 "Project Completion" shall mean — the date leveraged funds have been received
by the Subrecipient and allocated to the Project, Construction Completion has
been certified and approved by the Subrecipient, all HOME funds have been
disbursed, and all units have been purchased by low- and moderate-income
households.
1.11 "Project Close Out" shall mean — the dates all project HOME funds have been
disbursed and the Subrecipient and the City have completed HUD close out
procedures (24 C.F.R. 92.507 and OMB Circular A-87)) (Exhibit "A"). The
distinction between Project Close Out and Project Completion is that occupancy
requirements are required to be satisfied for Project Completion.
1.12 "Affordability Period" (24 C.F.R. 92.252(e)) shall mean — that time period, five
(5), ten (10) or fifteen (15) years from loan closings for assisted properties, in
which Subrecipient shall keep Properties affordable. During the Affordability
Period, the Subrecipient must ensure that HOME-assisted units continue to meet
occupancy requirements and property standards as described in Section 4.09
herein. For this Agreement, the Affordability Period shall commence at project
close out.
Amount of Homeownership Minimum Affordability
Assistance Per Unit Period in Years
Under 15,000.00 5
$15,000.00 to $40,000.00 10
Over $40,000.00 15
1.12.1 For Down payment Assistance Loans to Homebuyers — the Affordability
Period shall commence at project close out.
1.13 "Low-and Moderate-Income Family or Household" shall mean — a household
whose annual household income does not exceed 80% of the median family
income for the Omaha NE-IA Metropolitan Statistical Area as determined by
HUD (Exhibit"B").
1.14 "HOME" shall mean — that portion of the HOME Investment Partnerships
Program entitlement awarded to the City of Omaha, subject to and conditioned
upon actual receipt of same by the City of Omaha, as may be available to grant
during the FY 2009 and FY 2010 program years for the use specified herein in an
amount not to exceed $167,220.00 in FY 2009 funds and $135,000.00 in FY 2010
funds, subject to the terms, conditions and requirements of said Agreement.
1.15 "Program Income" shall mean — the gross income received by the Subrecipient
directly generated from the use of HOME Funds (24 C.F.R. 92.503). When such
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income is generated by an activity that is only partially assisted with HOME
Funds, the income shall be prorated to reflect the percentage of HOME Funds
used (See Exhibit"C" attached hereto and incorporated herein by this reference as
though fully set forth). Any program income funds received during the term of
this Agreement shall be returned to the City within thirty (30) days prior to any
additional distribution of HOME Funds.
SECTION 2. RESPONSIBILITIES OF SUBRECIPIENT
2.01 Overall Project Performance The Subrecipient shall use FY 2009 HOME funds
in the amount of $167,220.00 and FY 2010 HOME funds in the amount of
$135,000.00 to assist qualified low- and moderate-income homeowners in
purchasing newly constructed homes. Occupants shall be those households
whose annual household incomes are 80% and below the Median Family Income
(Exhibit"B").
2.01.1 FY 2009 and FY 2010 Project Achievements
Total Project
Down Payment Total Assisted Total Low/Moderate
Assistance Units Units Income Units
FY 2009 7 7
FY 2010 5 5
Total Units 12 12
Number of Low/Moderate Maximum Percent of Area
Households Median Income Permitted
12 80%
Number of Households Permitted to
be Above Low/Moderate Maximum Percent of Area
Households Median Income Permitted
0 80%
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2.02 Project Budget. The Subrecipient asserts that the funding sources and amounts
listed below are committed as of this date or will be committed to the Project
during the term of this Agreement.
FY 2009 Estimated Budget
HOME $167,220.00
FY 2010 Estimated Budget
HOME $135,000.00
The Project cost is an estimation of total funding sources. Any change in the
amount or source of funds (except HOME) shall be approved by the Community
Development Department Director for the Subrecipient.
2.03 Term of the Agreement. This Agreement shall be in full force and effect
commencing January 1, 2014 and shall end on December 31, 2024. The Levels of
Overall Project Performance stated in Sections 2.01 and 2.02 herein shall be
completed as of December 31, 2016. This date may be extended by the City of
Omaha Planning Director. If this date is extended, the term of the Agreement will
be extended accordingly.
SECTION 3. CONDITIONS FOR RECEIPT OF CITY FINANCING
3.01 Documents Required by City. Subrecipient shall submit satisfactory written
confirmation of the following documents to limit Subrecipient's and the City's
liability hereunder. The City shall not assume any obligation to make any or all
of the above-referenced funding available, nor shall the City incur any liability
hereunder, unless and until the Subrecipient has received and submitted the
documents listed below.
3.01.1 Property Insurance. The property owner shall procure and maintain, at a
minimum, fire and extended coverage insurance in an amount sufficient to
protect the City and the Subrecipient's interest in the property during the
Term of the Agreement and financing security documents (OMB Circular
A-110) (Exhibit"D"). The insurance policy shall include the Subrecipient
as an additional insured. Written evidence of such insurance shall be
submitted to the Subrecipient for approval. In the event of damage of the
property, any insurance proceeds are to be applied, at the discretion of the
Subrecipient, to the reconstruction of the property or repayment, in full, of
the funding.
3.01.2 Security for Down Payment Assistance. Down payment assistance shall
be secured by a mortgage or deed of trust in no less than a second position
on individual properties and shall be provided in accordance with the City
of Council Bluffs Financing Guidelines approved by the City of Omaha, a
copy of which is attached hereto and incorporated herein by this reference
as though fully set forth (Exhibit"E").
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3.01.3 Performance and Labor Material Payment Bond and/or an Irrevocable
Letter of Credit. Subrecipient's Developer shall acquire and maintain
performance bond and/or letter of credit in force for one year following
the completion of the Construction Work from the Developer/General
Contractor and all subcontractors in an aggregate amount of the contract
bid for the Properties. The Bonds and/or Letters of Credit shall be in favor
of the Subrecipient and shall be submitted to the Subrecipient's
Community Development Department Director for review and approval.
The Community Development Department Director reserves the right to
reject the Letters of Credit and Choice of Surety of the Bonds. Upon prior
written request by the Developer, the City of Council Bluffs Community
Development Department Director may waive this requirement.
3.01.4 Contractors' Insurance and Workers' Compensation. The Subrecipient or
its contractors and subcontractors shall submit Certificates of Insurance in
favor of the City of Council Bluffs for review and approval by the City of
Council Bluffs Community Development Director. The insurance
coverage shall include pollutant liability for lead reduction work, if
applicable, Workers' Compensation and, at a minimum, the following
amount of coverage.
• Contractor's Personal Liability $1,000,000.00
• Combined Bodily Injury and Property Damage $2,000,000.00
($1,000,000.00 each occurrence)
• Produce, Including Completed Operations $1,000,000.00
SECTION 4. PROJECT RESPONSIBILITIES OF THE SUBRECIPIENT
4.01 Eligible Use of Funds. The Subrecipient does hereby certify, contract and agree
that any and all funding obtained or made available hereunder shall be used solely
and exclusively for the purposes described herein.
4.02 Terms and Conditions. The Subrecipient shall abide by all terms and conditions
of this Agreement and shall be responsible for the security and maintenance of the
sites described in Section 1.08 herein.
4.03 Use Restrictions. The Subrecipient agrees that each of the housing units assisted
pursuant to this Agreement shall be a) acquired by a Low- and Moderate-Income
Family; and b) the principal residence of the homeowners from time of purchase
throughout the Affordability Period; and c) subject to Subrecipient's
repayment/recapture provisions of the HOME Loan Real Estate Mortgage and
Promissory Note including the terms requiring payment in accordance with
Section 1.10 of this Agreement.
4.04 Breach of Agreement. If through breach of this Agreement the Subrecipient fails
to apply the occupancy, affordability and use restrictions as described herein,
HOME funds previously provided to the Subrecipient through fulfillment of this
Agreement may be required to be returned to the City.
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4.05 Ineligible Costs. The Subrecipient shall be responsible for payment of any
Project costs that exceed those specified in this Agreement.
4.05.1 Eligible Costs. The Subrecipient shall not request disbursement of funds
under this Agreement until the funds are needed for homebuyer down
payment assistance payment loans as described in Section 1.09 herein.
4.05.2 Luxury Items. Property amenities shall be those amenities reasonably
anticipated in comparable properties. Any items determined by the City as
luxury items shall not be considered an eligible cost for construction.
4.06 Lead-Based Paint Prohibition. Subrecipient or its Developer(s) shall not use lead-
based paint in the performance of this Agreement, including the performance of
any subcontractor (42 USC 4821 et seq., 24 C.F.R. 92.355 and 24 C.F.R. Part 35).
"Lead-Based Paint" means any paint containing more than six one-hundredths of
one (1) per centum of lead by weight (calculated as lead metal) in the total
nonvolatile content of the paint, or the equivalent measure of lead in the dried
film of paint already applied. The Subrecipient further agrees to abide by Federal
requirements regarding lead-based paint poison prevention.
4.07 Ongoing Property Restrictions. During the Term of this Agreement and that of
any grant, deed of trust/mortgage, covenant documents, the Subrecipient or its
Developer shall:
4.07.1 Ensure Property is maintained in a safe and sanitary condition at all times.
4.07.2 Ensure that all real estate taxes and special assessments are paid and kept
current.
4.07.3 Ensure property insurance is maintained against loss or damage to the
Property in an aggregate amount sufficient to protect the Subrecipient's
interest in the Property. Such property insurance policy must be properly
endorsed showing the Subrecipient as an additional insured. In the event
of loss or damage, the Subrecipient shall provide immediate written
notification to the City of any loss. Proceeds from any claim under this
policy may, at the discretion of the Director, be either applied to restore or
replace the improvements damaged or be paid to the Subrecipient to
satisfy the Homebuyer's obligation to the Subrecipient under the terms of
this Agreement.
4.08 Davis-Bacon Labor Standards. See Exemption Checklist (Exhibit "F").
4.09 Property Standards (24 C.F.R. 92.251). The Subrecipient or its Developer(s) shall
ensure that all work performed and the Construction Work meets all state, federal
and local laws, ordinances, regulations and codes, including but not limited to,
Section 8 Housing Quality Standards for Existing Homes (HQS) as established by
HUD, the Subrecipient's Local Property Standards.
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4.09.1 After completion of Construction Work, the Property must comply with
all appropriate Subrecipient codes and ordinances, Federal Section 8
Housing Quality Standards and fire safety codes (24 C.F.R. 570.02), City
of Council Bluffs Property Rehabilitation Standards and accessibility
requirements, where applicable.
4.10 Section 504. This project is exempt from Section 504 Accessibility Requirements
because only down payment assistance is being provided to single-family home
ownership.
4.11 Affirmative Marketing Policy (24 C.F.R. 92-351). The Subrecipient agrees to
comply with the City's Affirmative Marketing Policy, or comparable policy,
attached hereto as Exhibit"G" and incorporated herein by this reference as though
fully set forth. These affirmative marketing procedures must be employed in the
advertising and marketing of this Project for the Affordability Period. In
marketing, the Subrecipient shall also conform to the nondiscrimination
provisions.
SECTION 5. GENERAL ADMINISTRATIVE REQUIREMENTS OF SUBRECIPIENT
Subrecipient agrees to comply with the following requirements:
5.01 Financial Management.
5.01.1 Accounting Standards. The Subrecipient agrees to comply with OMB
Circular A-110 (Exhibit "D") and agrees to adhere to the accounting
principles and procedures required therein, utilize adequate internal
controls, and maintain necessary source documentation for all costs
incurred. (Exhibit "A", attached hereto and incorporated herein as though
fully set forth).
5.01.2 Cost Principles. The Subrecipient shall comply with the requirements and
the standards of OMB Circular No. A-87, "Cost Principles for the States,
Local, and Indian Tribal Governments" (Exhibit "A"), and with the
requirements of OMB Circular A-110 ("D"). Both Exhibits are attached
hereto and incorporated herein as though fully set forth.
5.01.3 Audits. The Subrecipient shall comply with all provisions and regulations
of the Program and have an annual audit completed in compliance with
OMB Circular A-133, attached hereto as Exhibit "H", and incorporated
herein as though fully set forth. A copy of the audit shall be provided to
the Director. The auditor shall determine the appropriate type of audit to
be conducted; i.e., limited scope or full compliance. A single audit is not
an allowable expense unless the Subrecipient expends total federal funds
over $500,000.00 in each fiscal year. A limited-scope audit may be
allowable provided the auditor conducts the audit in accordance with
generally accepted auditing standards and the recipient expends less than
$500,000.00 in each fiscal year.
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5.01.3.1 Any deficiencies noted in audit reports must be fully cleared by
the Subrecipient within 30 days after receipt of audit by the
Subrecipient. Failure of the Subrecipient to comply with the
above audit requirements will constitute a violation of this
Agreement and may result in the withholding of future payments
and may constitute a default subject to default remedies
referenced herein in Section 9.
5.02 Documentation and Record-Keeping (24 C.F.R. 92.508). All Subrecipient's/
Developers' records with respect to any matters covered in this Agreement shall
be made available to the City, its designees or the Federal Government, at any
time during normal business hours, as often as the City deems necessary, to audit,
examine, and make excerpts or transcripts of all relevant data. Any contract
entered into by the Subrecipient, its Developer(s) with any subcontractors shall
include this Section to ensure said access.
5.02.1 Record Retention. The Subrecipient, its Developer(s) and their
subcontractors shall maintain such records and accounts, including
property, personnel and financial records, as are deemed necessary by the
City to assure a proper accounting for all expenses. The Comptroller
General of the United States, or any of their duly authorized
representatives, or any duly authorized representatives of the City, as
approved by the Director, shall have access to any books, documents,
papers, records and accounts of the Subrecipient, its Developer(s) and
their subcontractors which are directly pertinent to this Project for the
purpose of making audit, examination, excerpts and transcriptions. Such
records and accounts shall be retained for five (5) years after expiration of
the Affordability Period. (OMB Circular A-110) (Exhibit"D").
5.03 Reports. The Subrecipient shall submit to the City the following reports in
accordance with 24 C.F.R. 92.505 within 30 days of homebuyers or tenant
occupancy.
5.03.1 Homeowner Compliance Certifications.
5.03.1.1 Citizenship Attestation Form
5.03.1.2 Construction Compliance Letter
5.03.1.3 Demographic Information—Occupancy Report (Exhibit"I")
5.03.1.4 Computing Annual Income Form
5.03.1.5 Maximum Subsidy Limit Determination
5.03.1.6 Proof of Homeowner's Insurance
5.03.1.7 HUD Settlement Statement
5.03.1.8 Income Certification
5.03.1.9 Payment Request
5.04 Financial Status Reports. Financial status reports (OMB Circular A-110) (Exhibit
"J") shall be submitted along with pay requests. In the event pay requests are not
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submitted for ninety (90) days, financial status report shall be due, at a minimum,
15 calendar days from the end of the calendar year quarter. Attached as Exhibit
"J", and incorporated herein by this reference as though fully set forth, is a sample
financial status report.
5.05 Personnel and Participant Conditions.
5.05.1 Contract Compliance. Subrecipient and its Developers shall be exempt
from the Contract Compliance Clause and Section 10-196 of the City of
Omaha Municipal Code as described in Attachment 4 herein.
5.05.2 Workers' Compensation. The Subrecipient and its Developers shall
provide Workers' Compensation Insurance coverage for all employees
involved in the performance in this Agreement.
5.05.3 Minority Business/Women Business Enterprise Plan (MBE/WBE). The
Subrecipient and its Developers shall make its best efforts to ensure that
services, contracts and employment opportunities are affirmatively
marketed to women and members of minority groups (Exhibit "K"). As
used in this Agreement, the term "women and members of minority
groups" means a business at least fifty-one percent (51%) owned and
controlled and actively managed minority ethnic race or women members.
Subrecipient shall submit to the Director for his review and approval a
minority and women business participation plan which discusses
economic development and employment opportunities.
5.05.4 Section 3 - Employment of Low-Income Persons (Section 3 of HUD Act
of 68, as amended, 1 U.S.C. 1701u). The Subrecipient and its
Developer(s) shall make their best efforts to comply with Section 3. The
purpose of Section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects
covered by Section 3 shall, to the greatest extent feasible, be directed to
low and very low-income persons (80% or below if MFI), particularly
persons who are recipients of HUD assistance for housing.
5.05.5 Conflict of Interest. The Subrecipient agrees to abide by the provisions of
24 C.F.R. 92.356 with respect to conflicts of interest, and covenants that it
presently has financial interest and shall not acquire any financial interest,
direct or indirect, which would conflict in any manner or degree with the
performance of services required under this Agreement. The Subrecipient
further covenants that in the performance of this Agreement no person
having such a financial interest shall be employed or retained by the
Subrecipient hereunder. These conflict of interest provisions apply to any
person who is an employee, agent, consultant, officer or elected official or
appointed official of the Subrecipient or any designated public agencies or
Developers which are receiving funds under the HOME entitlement
program.
SECTION 6. SUBRECIPIENT'S COMPLIANCE WITH OTHER FEDERAL REGULATIONS
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6.01 Environmental Review. The Subrecipient and its Developers agree to comply
with the following regulations insofar as they apply to the performance of this
agreement:
6.01.1 Clean Air Act, 42, U.S.C., 1857, et seq.
6.01.2 Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.,
as amended 1318 relating to inspection, monitoring entry, reports and
information as well as other requirements specified in Section 114 and
Section 308, and all regulations and guidelines issued thereunder.
6.01.3 Environmental Protection Agency (EPA) regulations pursuant to 40
C.F.R. Part 50, as amended.
6.01.4 National Environmental Policy Act of 1969.
6.01.5 HUD Environmental Review Procedures (24 C.F.R. Part 58).
6.01.6 Flood Disaster Protection Act of 1973 (24 U.S.C. 4106 and P.L. 2234) in
regard to the sale, lease or other transfer of land acquired, cleared or
improved under the terms of the Agreement as it may apply to provisions
of this Agreement.
6.01.7 Historic Preservation requirements set forth in the National Historic
Preservation Act of 1966, as amended (16 U.S.C. 470) and the procedures
set forth in 36 C.F.R., Part 800, Advisory Council on Historic Preservation
Procedures for Protection of Historic Properties, insofar as they apply to
the performance of this Agreement. In general, this requires concurrence
from the State Historic Preservation Office for all rehabilitation and
demolition of historic properties that are forty-five (45) years old or older
or that are included on a Federal, State or local historic property list.
6.02 Uniform Relocation Act. The Subrecipient shall comply with the applicable
regulations of the Uniform Relocation Act of 1970, as amended (URA) (42
U.S.C. 4601-4655), or Section 104 (d) of the Housing and Community
Development Act of 1974, as amended (Section 104 (d)), which require relocation
assistance be provided to resident owners, tenants, businesses and other occupants
that are displaced as a result of a federally-assisted project. In the event that the
Subrecipient or its agent displaces any tenant-occupant of the property, it shall
immediately notify the City in writing of the circumstances surrounding said
displacement and comply with 24 C.FR. 92.353.
6.03 Fair Housing. Subrecipient and its Developers shall provide fair housing services
designed to further the fair housing objectives of the Fair Housing Act (42 U.S.C.
3601-20) by making all persons, without regard to race, color, religion, sex,
national origin, familial or handicap status, aware of the range of housing
opportunities available to them and provide fair housing enforcement, education
and outreach activities designed to further the housing objective of avoiding
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undue concentrations of assisted persons in areas containing a high proportion of
low- and moderate-income persons.
6.04 Drug Free Workplace. Subrecipient shall continue to provide a drug-free
workplace in accordance with 41 U.S.C. 702 and shall submit a certification of
Drug Free Workplace to the City of Omaha prior to disbursement of funds. See
Exhibit"M" attached hereto herein as though fully set forth.
SECTION 7. RESPONSIBILITIES OF THE CITY OF OMAHA
7.01 Performance Monitoring. The City will monitor the performance standards of the
Subrecipient as stated herein. Substandard performance as determined by the City
will constitute non-compliance with this Agreement. If action to correct such
substandard performance is not taken by the Subrecipient within a reasonable
period of time after being notified by the City, contract suspension or termination
procedures may be initiated.
7.02 Payments. It is expressly agreed and understood that the total amount to be paid
by the City under this Agreement shall not exceed $167,220.00 in FY 2009
HOME funds and $135,000.00 in FY 2010 HOME funds. The payment of these
funds is subject to and conditioned upon actual receipt by the City of the same.
Should adequate funding not be available to the City, the City shall notify the
Subrecipient as soon as reasonably possible and the Agreement will be
terminated.
7.02.1 Funds Allocated to the Subrecipient. Payments will be contingent on
Duties and Conditions specified herein. Drawdowns for the payment of
eligible expenses shall not be made until the funds are needed based upon
the value of the construction, administration, or professional services work
completed at the time the payment request is made.
7.02.2 Obligation for Payment. In no event shall the City become obligated to
make any payments for any work performed, materials furnished, expense
incurred, or any other expenditure of any kind whatsoever, unless same is
expressly included in this Agreement, nor shall the City incur any liability
hereunder, unless and until the Subrecipient has timely and fully complied
with its duties and obligations hereunder. No payments shall be made for
any work, labor, material or expenses incurred the Director deems to be:
7.02.2.1 Not in conformance with applicable state, federal and/or local
laws, including but not limited to, the building, plumbing and/or
electrical codes; or,
7.02.2.2 Unacceptable or substandard; or,
7.02.2.3 Not in accordance with this Agreement or related contracts as
approved for this Project.
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7.03 Progress Payments. Progress payments and final payment, as may be authorized
by the Director or his designated representative, are subject to:
7.03.1 Receipt of Subrecipient's loan determination documents, copies of
executed loan documents and eligibility documentation.
7.03.2 Receipt of documentation that property meets Property Standards in
Section 4.09 herein.
7.04 Inspections. The Subrecipient may request that the City of Omaha perform all
construction progress inspections and final inspections and provide a copy of the
inspection report to certify project completion prior to final disbursement of
HOME proceeds.
7.04.1 Construction Progress Reports. The Subrecipient shall provide access to
the construction site for purposes reporting to the Director (AIA G702
Form or comparable document) describing the progress of construction,
and any significant problems and/or delays in construction on this project.
7.04.2 Payment for Inspections. The City shall submit request for payment to the
Subrecipient for all construction inspections conducted by the City of
Omaha in the amount of$42.00 per hour.
7.05 Technical Assistance. The Director shall assist the Subrecipient in the same
manner the Director provides technical assistance to other Subrecipients during
the construction phase to ensure compliance with such housing quality standards
and property rehabilitation standards.
SECTION 8. MUTUAL AGREEMENTS BETWEEN CITY AND SUBRECIPIENT.
8.01 Release of Information Laws. The Subrecipient specifically hereby states, agrees
and certifies that it is familiar with the limited purpose set forth in the Federal
Laws, Rules and Regulations, and in the laws of the State of Nebraska, for which
personal information requested may be used and that the information received
will be used solely for those limited purposes and not to harass, degrade or
humiliate any person. The information released shall be used for the limited
purposes stated, and the Subrecipient further agrees to indemnify and hold
harmless the City for any liability arising out of the improper use by the
Subrecipient of information provided.
8.02 Applicable Laws. Parties to this Agreement shall conform with all existing and
applicable City ordinances, resolutions, state laws, federal laws, and all existing
and applicable rules and regulations. Iowa law will govern the term and the
performance under this Agreement.
8.03 Interest of City. Pursuant to Section 8.05 of the Home Rule Charter, no elected
official or any officer or employee of the City shall have a financial interest,
direct or indirect, in any City agreement. Any violation of this section with the
- 15 -
knowledge of the person or corporation contracting with the City shall render the
Agreement voidable by the Mayor or Council.
8.04 Independent Contractor. Nothing contained in this Agreement is intended to, or
shall be construed in any manner, as creating or establishing the relationship of
employer/employee between the parties. The Subrecipient shall at all times
remain an independent contractor with respect to the services to be performed
under this Agreement. The City shall be exempt from payment of all
Unemployment Compensation, FICA, retirement, life and/or medical insurance
and Worker's Compensation Insurance as the Subrecipient is an Independent
Contractor.
8.05 Project Roles. The Subrecipient shall ensure that the Project meets the objectives
stated herein. The City has selected the Subrecipient to assist in the Project since
it is consistent with the Consolidated Plan. The City owes no duty to the
Subrecipient or any other persons that shall arise because of any inspection of the
premises by the City's agents or employees.
8.06 Captions. Captions used in this Agreement are for convenience and are not used
in the construction of this Agreement.
8.07 Merger. This Agreement shall not be merged into any other oral or written
agreement, lease or deed of any type.
8.08 Modification. This Agreement and any related documents securing the financing
contain the entire agreement of the parties. No representations were made or
relied upon by either party other than those that are expressly set forth herein. No
agent, employee, or other representative of either party is empowered to alter any
of the terms herein unless done in writing and signed by an authorized officer of
the respective parties, pursuant to Section 10-142 of the Omaha Municipal Code.
8.09 Assignment. The Subrecipient may not assign its rights or obligations under this
Agreement without the express prior written consent of the City.
8.10 Strict Compliance. All provisions of this Agreement and each and every
document that shall be attached shall be strictly complied with as written, and no
substitution or change shall be made without written direction from authorized
representatives of the parties.
8.11 Termination. This Agreement may be suspended or terminated in accordance
with 24 C.F.R. 85.43, Enforcement or C.F.R. 85.44, Termination for Convenience
(Exhibit "L", attached hereto and incorporated herein by this reference as though
fully set forth). Upon termination of this Agreement, all funds and interest in any
account hereunder shall become the property of the City and shall be returned to
the City.
8.12 Reversion of Assets. Upon the expiration of this Agreement, the Subrecipient
shall transfer to the City of Omaha any HOME funds on hand at the time of
- 16-
expiration and any accounts receivable attributable to the use of HOME funds (24
C.F.R. 92.504(c)(2)(vii)).
8.13 Indemnification. The Subrecipient shall indemnify and hold the City harmless
from and against: (1) any and all claims arising from contracts between the
Developer and third parties made to effectuate the purposes of this Agreement;
and, (2) any and all claims, liabilities or damages arising from the preparation or
presentation of any of the work covered by this Agreement.
8.14 Unenforceable Provisions. Any provision of this Agreement, which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be in effect to
the extent of such prohibition or enforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision in
any other jurisdiction.
8.15 Disclosure of Lobbying. The Subrecipient shall certify and disclose, to the best of
its knowledge and belief, that:
8.15.1 No Federal appropriated funds have been paid or will be paid, by or on
behalf of the Subrecipient, to any person for influencing or attempting to
influence an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal
contract, the making of any Federal grant, the making of any Federal loan,
the entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment or modification of any Federal
contract, grant, loan, or cooperative agreement.
8.15.2 If any funds other than Federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an officer
or employee of any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in
connection with this Federal contract, grant, loan, or cooperative
agreement, the Subrecipient shall complete and submit standard Form-
LLL, "Disclosure Form to Report Lobbying", in accordance with its
instructions.
8.15.3 The language of this certification shall be included in the award
documents for all subawards at all tiers, (including subcontracts,
subgrants, and contracts under grants, loans, and cooperative agreements)
and that all subrecipients shall certify and disclose accordingly.
8.16 Notices. The City and the Subrecipient hereby expressly agree that for purposes
of notice, including legal service or process, during the term of this Agreement,
and for the period of any applicable statute of limitations thereafter, the following
named individuals shall be authorized representatives of the parties:
1) City:
City of Omaha,Nebraska
Planning Department
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1819 Farnam Street, Room 1111
Omaha,Nebraska 68183
2) Subrecipient:
City of Council Bluffs, Iowa
Director, Community Development Department
209 Pearl Street
Council Bluffs, Iowa 51503
In the event the authorized representative changes during the term of this
Agreement, prior written notice will be given to the respective party at the address
noted above.
8.17 Applicability. This Agreement shall be binding upon the parties hereto and shall
run with the Property.
SECTION 9. DEFAULT PROVISIONS
9.01 Remedies. If, through any cause, the Subrecipient shall fail to fulfill in a timely
and proper manner any obligations under this Agreement, or violate any of the
covenants, representations or agreements hereof, the City may upon written notice
terminate this Agreement or such parts thereof as to this Agreement, and may
initiate proceedings for any damages caused to the City by reason of such default
and termination.
- 18 -
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
1 date indicated below.
• CITY OF OMAHA, CITY OF COUNCIL BLUFFS,
a Municipal Corporation a Municipal Corporation
_\ 1112"41194Br MAYOR OF THE CITY OF OMAHA, MAYOR,CIT F C%EO LIFFS,IA
ATTEST- - ATTEST:
774e/CCLL /IL 410-0-'(-4-6-4,
CI ERK,CITY OF OMAHA,NE CITY CLERK,CITYAJF COUNCIL BLUFFS;IA .
• Date /Wa,fd/ e407 Date At/ ,,,2e
APPROVED AS TO FORM: " APPROVE TO FORM:
ASSISTANT CITY ATTORNEY DATE CITY ATTO Y DATE
CITY OF OMAHA,NE CITY OF COUNCIL BLUFFS,IA
•
1971 dlh
1
1
1
1
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1
1
SCHEDULE OF EXHIBITS
Agreement
Exhibit Location Description
A 1.12, 5.01.2 OMB Circular A-87
B 1.14, 2.01 and 5.03.1.3 Median Family Income Chart
C 1.16 Definition - Program Income
D 3.01.1, 5.01.1, 5.01.2, 5.02.1, OMB Circular A-110
and, 5.04
E 3.01.2 City of Council Bluffs Financing
Guidelines
F 4.08 Davis Bacon Federal Labor Standards
Exemption Checklist
G 4.11 Affirmative Marketing Policy
H 5.01.3 OMB Circular A-133
I 5.03.1, 5.03.1.3 Occupancy Report and Asset Forms
J 5.04 Financial Status Reports
K 5.05.3 MBE/WBE Policies
L 6.04 Drug Free Workplace Certification
M 8.11 Termination - 24 C.F.R. 85.43 - 85.44
ATTACHMENTS:
1 City of Omaha Definition of Income
2 Equal Opportunity
3 Section 3 Clause
4 Exemption from Municipal Code Section 10-196
5 CPD Notices 00-9, 02-03 and 00-10
6 Council Bluffs Project Funding Commitments
7 Certified Cost Certification from City of Omaha Construction Specialist
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Click to Print r--
this document14,1; Office of Management and Budget -
Exhibit A
August 29, 1997
MEMORANDUM FOR THE RECORD
FROM: Norwood J. Jackson
Deputy Controller •
Office of Federal Financial Management
SUBJECT: Recompilation of OMB Circular A-87
I certify that the attached document constitutes a recompilation of Office of
Management and Budget Circular A-87, "Cost Principles for State, Local, and
Indian Tribal Governments." The recompilation consists of the last complete
revision of the Circular published at 60 FR 26484 (dated May 4, 1995, published
May 17, 1995), as further amended at 62 FR 45934 (August 29, 1997).
Top of Page
OMB CIRCULAR A-87 (REVISED 5/4/95, As Further Amended 8/29/97)
CIRCULAR NO. A-87
Revised
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND
ESTABLISHMENTS
SUBJECT: Cost Principles for State, Local, and Indian Tribal Governments
1. Purpose. This Circular establishes principles and standards for determining
costs for Federal awards carried out through grants, cost reimbursement
contracts, and other agreements with State and Iocal governments and
federally-recognized Indian tribal governments (governmental units).
2. Authority. This Circular is issued under the authority of the Budget and
Accounting Act of 1921, as amended; the Budget and Accounting Procedures
Act of 1950, as amended; the Chief Financial Officers Act of 1990;
Reorganization Plan No. 2 of 1970; and Executive Order No. 11541
("Prescribing the Duties of the Office of Management and Budget and the
Domestic Policy Council in the Executive Office of the President").
3. Background. An interagency task force was established in 1987 to review
existing cost principles for Federal awards to State, local, and Indian tribal
governments. The task force studied Inspector General reports and
recommendations, solicited suggestions for changes to the Circular from
I of53
4/16iO3 1:3
governmental units, and compared for consistency the provisions of other OMB
cost principles circulars covering non-profit organizations and universities. A
,s,_. Mrcular reflecting the results of those efforts was issued on
October 12, 1988, and August 19, 1993. Extensive comments on the proposed
revisions, discussions with interest groups, and related developments were
considered in developing this revision.
4. Rescissions. This Circular rescinds and supersedes Circular A-87, issued
January 15, 1981.
5. Policy. This Circular establishes principles and standards to provide a uniform
approach for determining costs and to promote effective program delivery,
efficiency, and better relationships between governmental units and the Federal
Government. The principles are for determining allowable costs only. They are
not intended to identify the circumstances or to dictate the extent of Federal and
governmental unit participation in the financing of a particular Federal award.
Provision for profit or other increment above cost is outside the scope of this
Circular.
6. Definitions. Definitions of key terms used in this Circular are contained in
Attachment A, Section B.
7. Required Actio u . Agencies responsible for administering programs that
involve cost reimbursement contracts, grants, and other agreements with
governmental units shall issue codified regulations to implement the provisions
of this Circular and its Attachments by September 1, 1995.
8. OMB i"esponsibilities. The Office of Management and Budget (OMB) will
review agency regulations and implementation of this Circular, and will provide
policy interpretations and assistance to insure effective and efficient
implementation. Any exceptions will be subject to approval by OMB. Exceptions
will only be made in particular cases where adequate justification is presented.
9. Information Contact. Further information concerning this Circular may be
obtained by contacting the Office of Federal Financial Management, Financial
Standards and Reporting Branch, Office of Management and Budget,
Washington, DC 20503, telephone 202-395-3993.
10. Policy Review Date. OMB Circular A-87 will have a policy review three
years from the date of issuance.
11. Effective Date. This Circular is effective as follows:
- For costs charged indirectly or otherwise covered by the cost allocation plans
described in Attachments C, D and E, this revision shall be applied to cost
allocation plans and indirect cost proposals submitted or prepared for a
governmental unit's fiscal year that begins on or after September 1, 1995.
- For other costs, this revision shall be applied to all awards or amendments,
including continuation or renewal awards, made on or after September 1, 1995.
of 53 4/16/03 1:39 PM
Attachments
Top of Page
OMB CIRCULAR NO. A-87
COST PRINCIPLES FOR
STATE, LOCAL AND INDIAN TRIBAL GOVERNMENTS
TABLE OF CONTENTS
Attachment A - General Principles for Determining Allowable Costs
Attachment B - Selected Items of Cost
Attachment C - State/Local-Wide Central Service Cost Allocation Plans
Attachment D - Public Assistance Cost Allocation PIans
Attachment E - State and Local Indirect Cost Rate Proposals
Top of Page
ATTACHMENT A
Circular No. A-87
GENERAL PRINCIPLES FOR DETERMINING
ALLOWABLE COSTS
TABLE OF CONTENTS
A. Purpose and Scope
1. Objectives
2. Policy guides
3. Application
B. Definitions
1. Approval or authorization of the awarding or cognizant Federal agency
3 of 53 4/16/03 1.39
2. Award
3. Awarding agency
4. Central service cost allocation plan
5. Claim
6. Cognizant agency
7. Common rule
8. Contract
9. Cost
10. Cost allocation plan
11. Cost objective
12. Federally-recognized Indian tribal government
13. Governmental unit
14. Grantee department or agency
15. Indirect cost rate proposal
16. Local government
17. Public assistance cost allocation plan
18. State
C. Basic Guidelines
1. Factors affecting allowability of costs
2. Reasonable costs
3. Allocable costs
4. Applicable credits
D. Composition of Cost
1. Total cost
2. Classification of costs
4 of 53 4/16/03 1:39 PM
E. Direct Costs
1. General
2. Application
3. Minor items
F. Indirect Costs
1. General
2. Cost allocation plans and indirect cost proposals
3. Limitation on indirect or administrative costs
G. Interagency Services
H. Required Certifications
A. Purpose and Scope
1. Objectives. This Attachment establishes principles for determining the
allowable costs incurred by State, local, and federally-recognized Indian tribal
governments (governmental units) under grants, cost reimbursement contracts,
and other agreements with the Federal Government (collectively referred to in
this Circular as "Federal awards"). The principles are for the purpose of cost
determination and are not intended to identify the circumstances or dictate the
extent of Federal or governmental unit participation in the financing of a
particular program or project. The principles are designed to provide that Federal
awards bear their fair share of cost recognized under these principles except
where restricted or prohibited by law. Provision for profit or other increment
above cost is outside the scope of this Circular.
2. Policy guides.
a. The application of these principles is based on the fundamental premises that:
(1) Governmental units are responsible for the efficient and effective
administration of Federal awards through the application of sound management
practices.
(2) Governmental units assume responsibility for administering Federal funds in
a manner consistent with underlying agreements, program objectives, and the
terms and conditions of the Federal award.
(3) Each governmental unit, in recognition of its own unique combination of
staff, facilities, and experience, will have the primary responsibility for
employing whatever form of organization and management techniques may be
5 of 53 4/16/03 1:39 P
necessary to assure proper and efficient administration of Federal awards.
b. Federal agencies should work with States or localities which wish to test
alternative mechanisms for paying costs for administering Federal programs. The
Office of Management and Budget(OMB) encourages Federal agencies to test
fee-for-service alternatives as a replacement for current cost-reimbursement
payment methods in response to the National Performance Review's (NPR)
recommendation. The NPR recommended the fee-for-service approach to reduce
the burden associated with maintaining systems for charging administrative costs
to Federal programs and preparing and approving cost allocation plans. This
approach should also increase incentives for administrative efficiencies and
improve outcomes.
3. Application.
a. These principles will be applied by all Federal agencies in determining costs
incurred by governmental units under Federal awards (including subawards)
except those with(1) publicly-financed educational institutions subject to OMB
Circular A-21, "Cost Principles for Educational Institutions," and(2) programs
administered by publicly-owned hospitals and other providers of medical care
that are subject to requirements promulgated by the sponsoring Federal agencies.
However, this Circular does apply to all central service and department/agency
costs that are allocated or billed to those educational institutions, hospitals, and
other providers of medical care or services by other State and local government
departments and agencies.
b. All subawards are subject to those Federal cost principles applicable to the
particular organization concerned. Thus, if a subaward is to a governmental unit
(other than a college, university or hospital), this Circular shall apply; if a
subaward is to a commercial organization, the cost principles applicable to
commercial organizations shall apply; if a subaward is to a college or university,
Circular A-21 shall apply; if a subaward is to a hospital, the cost principles used
by the Federal awarding agency for awards to hospitals shall apply, subject to the
provisions of subsection A.3.a. of this Attachment; if a subaward is to some
other non-profit organization, Circular A-122, "Cost Principles for Non-Profit
Organizations," shall apply.
c. These principles shall be used as a guide in the pricing of fixed price
arrangements where costs are used in determining the appropriate price.
d. Where a Federal contract awarded to a governmental unit incorporates a Cost
Accounting Standards (CAS) clause, the requirements of that clause shall apply.
In such cases, the governmental unit and the cognizant Federal agency shall
establish an appropriate advance agreement on how the governmental unit will
comply with applicable CAS requirements when estimating, accumulating and
reporting costs under CAS-covered contracts. The agreement shall indicate that
OMB Circular A-87 requirements will be applied to other Federal awards. In all
cases, only one set of records needs to be maintained by the governmental unit.
e. Conditional exemptions.
6 of53 4/16/03 1:39 PM
(1) 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.
(2) 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.
(3) 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.
B. Definitions
1. "Approval or authorization of the awarding or cognizant Federal agency"
means documentation evidencing consent prior to incurring a specific cost. If
such costs are specifically identified in a Federal award document, approval of
the document constitutes approval of the costs. If the costs are covered by a
State/local-wide cost allocation plan or an indirect cost proposal, approval of the
plan constitutes the approval.
2. "Award" means grants, cost reimbursement contracts and other agreements
between a State, local and Indian tribal government and the Federal Government.
3. "Awarding agency" means (a)with respect to a grant, cooperative agreement,
or cost reimbursement contract, the Federal agency, and (b) with respect to a
7 of 53 4/16/03 1:39 Pr
subaward, the party that awarded the subaward.
4. "Central service cost allocation plan" means the documentation identifying,
accumulating, and allocating or developing billing rates based on the allowable
costs of services provided by a governmental unit on a centralized basis to its
departments and agencies. The costs of these services may be allocated or billed
to users.
5. "Claim" means a written demand or written assertion by the governmental unit
or grantor seeking, as a matter of right, the payment of money in a sum certain,
the adjustment or interpretation of award terms, or other relief arising under or
relating to the award. A voucher, invoice or other routine request for payment
that is not a dispute when submitted is not a claim. Appeals, such as those filed
by a governmental unit in response to questioned audit costs, are not considered
claims until a final management decision is made by the Federal awarding
agency.
6. "Cognizant agency" means the Federal agency responsible for reviewing,
negotiating, and approving cost allocation plans or indirect cost proposals
developed under this Circular on behalf of all Federal agencies. OMB publishes a
listing of cognizant agencies.
7. "Common Rule" means the "Uniform Administrative Requirements for Grants
and Cooperative Agreements to State and Local Governments; Final Rule"
originally issued at 53 FR 8034-8103 (March 11, 1988). Other common rules
will be referred to by their specific titles.
8. "Contract" means a mutually binding legal relationship obligating the seller to
furnish the supplies or services (including construction) and the buyer to pay for
them. It includes all types of commitments that obligate the government to an
expenditure of appropriated funds and that, except as otherwise authorized, are in
writing. In addition to bilateral instruments, contracts include (but are not limited
to): awards and notices of awards;job orders or task orders issued under basic
ordering agreements; letter contracts; orders, such as purchase orders, under
which the contract becomes effective by written acceptance or performance; and,
bilateral contract modifications. Contracts do not include grants and cooperative
agreements covered by 31 U.S.C. 6301 et seq.
9. "Cost" means an amount as determined on a cash, accrual, or other basis
acceptable to the Federal awarding or cognizant agency. It does not include
transfers to a general or similar fund.
10. "Cost allocation plan" means central service cost allocation plan, public
assistance cost allocation plan, and indirect cost rate proposal. Each of these
terms are further defined in this section.
11. "Cost objective" means a function, organizational subdivision, contract,
grant, or other activity for which cost data are needed and for which costs are
incurred.
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12. "Federally-recognized Indian tribal government" means the governing body
or a governmental agency of any Indian tribe, band, nation, or other organized
group or community(including any native village as defined in Section 3 of the
Alaska Native Claims Settlement Act, 85 Stat. 688) certified by the Secretary of
the Interior as eligible for the special programs and services provided through the
Bureau of Indian Affairs.
13. "Governmental unit" means the entire State, local, or federally-recognized
Indian tribal government, including any component thereof. Components of
governmental units may function independently of the governmental unit in
accordance with the term of the award.
14. "Grantee department or agency" means the component of a State, local, or
federally-recognized Indian tribal government which is responsible for the
performance or administration of all or some part of a Federal award.
15. "Indirect cost rate proposal" means the documentation prepared by a
governmental unit or component thereof to substantiate its request for the
establishment of an indirect cost rate as described in Attachment E of this
Circular.
16. "Local government" means a county, municipality, city, town, township,
local public authority, school district, special district, intrastate district, council
of governments (whether or not incorporated as a non-profit corporation under
State law), any other regional or interstate government entity, or any agency or
instrumentality of a local government.
17. "Public assistance cost allocation plan" means a narrative description of the
procedures that will be used in identifying, measuring and allocating all
administrative costs to all of the programs administered or supervised by State
public assistance agencies as described in Attachment D of this Circular.
18. "State" means any of the several States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, any territory or possession of the
United States, or any agency or instrumentality of a State exclusive of local
governments.
C. Basic Guidelines
1. Factors affecting allowability of costs. To be allowable under Federal awards,
costs must meet the following general criteria:
a. Be necessary and reasonable for proper and efficient performance and
administration of Federal awards.
b. Be allocable to Federal awards under the provisions of this Circular.
c. Be authorized or not prohibited under State or local laws or regulations.
d. Conform to any limitations or exclusions set forth in these principles, Federal
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laws, terms and conditions of the Federal award, or other governing regulations
as to types or amounts of cost items.
e. Be consistent with policies,regulations, and procedures that apply uniformly
to both Federal awards and other activities of the governmental unit.
f. Be accorded consistent treatment. A cost may not be assigned to a Federal
award as a direct cost if any other cost incurred for the same purpose in like
circumstances has been allocated to the Federal award as an indirect cost.
g. Except as otherwise provided for in this Circular,be determined in accordance
with generally accepted accounting principles.
h. Not be included as a cost or used to meet cost sharing or matching
requirements of any other Federal award in either the current or a prior period,
except as specifically provided by Federal law or regulation.
i. Be the net of all applicable credits.
j. Be adequately documented.
2. Reasonable costs. A cost is reasonable if, in its nature and amount, it does not
exceed that which would be incurred by a prudent person under the
circumstances prevailing at the time the decision was made to incur the cost. The
question of reasonableness is particularly important when governmental units or
components are predominately federally- funded. In determining reasonableness
of a given cost, consideration shall be given to:
a. Whether the cost is of a type generally recognized as ordinary and necessary
for the operation of the governmental unit or the performance of the Federal
award.
b. The restraints or requirements imposed by such factors as: sound business
practices; arms length bargaining; Federal, State and other laws and regulations;
and, terms and conditions of the Federal award.
c. Market prices for comparable goods or services.
d. Whether the individuals concerned acted with prudence in the circumstances
considering their responsibilities to the governmental unit, its employees, the
public at large, and the Federal Government.
e. Significant deviations from the established practices of the governmental unit
which may unjustifiably increase the Federal award's cost.
3. Allocable costs.
a. A cost is allocable to a particular cost objective if the goods or services
involved are chargeable or assignable to such cost objective in accordance with
relative benefits received.
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b. All activities which benefit from the governmental unit's indirect cost,
including unallowable activities and services donated to the governmental unit
by third parties, will receive an appropriate allocation of indirect costs.
c. Any cost allocable to a particular Federal award or cost objective under the
principles provided for in this Circular may not be charged to other Federal
awards to overcome fund deficiencies, to avoid restrictions imposed by law
or terms of the Federal awards, or for other reasons. However,this prohibition
would not preclude governmental units from shifting costs that are allowable
under two or more awards in accordance with existing program agreements.
d. Where an accumulation of indirect costs will ultimately result in charges to a
Federal award, a cost allocation plan will be required as described in
Attachments C, D, and E.
4. Applicable credits.
a. Applicable credits refer to those receipts or reduction of expenditure-type
transactions that offset or reduce expense items allocable to Federal awards as
direct or indirect costs. Examples of such transactions are: purchase discounts,
rebates or allowances, recoveries or indemnities on losses, insurance refunds or
rebates, and adjustments of overpayments or erroneous charges. To the extent
that such credits accruing to or received by the governmental unit relate to
allowable costs, they shall be credited to the Federal award either as a cost
reduction or cash refund, as appropriate.
b. In some instances, the amounts received from the Federal Government to
finance activities or service operations of the governmental unit should be treated
as applicable credits. Specifically, the concept of netting such credit items
(including any amounts used to meet cost sharing or matching requirements)
should be recognized in determining the rates or
amounts to be charged to Federal awards. (See Attachment B, item 15,
"Depreciation and use allowances," for areas of potential application in the
matter of Federal financing of activities.)
D. Composition of Cost
1. Total cost. The total cost of Federal awards is comprised of the allowable
direct cost of the program, plus its allocable portion of allowable indirect costs,
less applicable credits.
2. Classification of costs. There is no universal rule for classifying certain costs
as either direct or indirect under every accounting system. A cost may be direct
with respect to some specific service or function, but indirect with respect to the
Federal award or other final cost objective. Therefore, it is essential that each
item of cost be treated consistently in like circumstances either as a direct or an
indirect cost. Guidelines for determining direct and indirect costs charged to
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Federal awards are provided in the sections that follow.
E. Direct Costs
1. General. Direct costs are those that can be identified specifically with a
particular final cost objective.
2. Application. Typical direct costs chargeable to Federal awards are:
a. Compensation of employees for the time devoted and identified specifically to
the performance of those awards.
b. Cost of materials acquired, consumed, or expended specifically for the
purpose of those awards.
c. Equipment and other approved capital expenditures.
d. Travel expenses incurred specifically to carry out the award.
3. Minor items. Any direct cost of a minor amount may be treated as an indirect
cost for reasons of practicality where such accounting treatment for that item of
cost is consistently applied to all cost objectives.
F. Indirect Costs
1. General. Indirect costs are those: (a) incurred for a common or joint purpose
benefiting more than one cost objective, and (b) not readily assignable to the cost
objectives specifically benefitted, without effort disproportionate to the results
achieved. The term. "indirect costs," as used herein, applies to costs of this type
originating in the grantee department, as well as those incurred by other
departments in supplying goods, services, and facilities. To facilitate equitable
distribution of indirect expenses to the cost objectives served, it may be
necessary to establish a number of pools of indirect costs within a governmental
unit department or in other agencies providing services to a governmental unit
department. Indirect cost pools should be distributed to benefitted cost objectives
on bases that will produce an equitable result in consideration of relative benefits
derived.
2. Cost allocation plans and indirect cost proposals. Requirements for
development and submission of cost allocation plans and indirect cost rate
proposals are contained in Attachments C, D, and E.
3. Limitation on indirect or administrative costs.
a. In addition to restrictions contained in this Circular, there may be laws that
further limit the amount of administrative or indirect cost allowed.
b. Amounts not recoverable as indirect costs or administrative costs under one
Federal award may not be shifted to another Federal award, unless specifically
authorized by Federal legislation or regulation.
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G. Interagency Services. The cost of services provided by one agency to another
within the governmental unit may include allowable direct costs of the service
plus a pro rate share of indirect costs. A standard indirect cost allowance equal to
ten percent of the direct salary and wage cost of providing the service (excluding
overtime, shift premiums, and fringe benefits) may be used in lieu of determining
the actual indirect costs of the service. These services do not include centralized
services included in central service cost allocation plans as described in
Attachment C.
H. Required Certifications. Each cost allocation plan or indirect cost rate
proposal required by Attachments C and E must comply with the following:
1. No proposal to establish a cost allocation plan or an indirect cost rate, whether
submitted to a Federal cognizant agency or maintained on file by the
governmental unit, shall be acceptable unless such costs have been certified by
the governmental unit using the Certificate of Cost Allocation Plan or Certificate
of Indirect Costs as set forth in Attachments C and E. The certificate must be
signed on behalf of the governmental unit by an individual at a level no lower
than chief financial officer of the governmental unit that submits the proposal or
component covered by the proposal.
2. No cost allocation plan or indirect cost rate shall be approved by the Federal
Government unless the plan or rate proposal has been certified. Where it is
necessary to establish a cost allocation plan or an indirect cost rate and the
governmental unit has not submitted a certified proposal for establishing such a
plan or rate in accordance with the requirements, the Federal Government may
either disallow all indirect costs or unilaterally establish such a plan or rate. Such
a plan or rate may be based upon audited historical data or such other data that
have been furnished to the cognizant Federal agency and for which it can be
demonstrated that all unallowable costs have been excluded. When a cost
allocation plan or indirect cost rate is unilaterally established by the Federal
Government because of failure of the governmental unit to submit a certified
proposal, the plan or rate established will be set to ensure that potentially
unallowable costs will not be reimbursed.
Top of Page
ATTACHMENT B
Circular No. A-87
SELECTED ITEMS OF COST
TABLE OF CONTENTS
1. Accounting •
2. Advertising and public relations costs
3. Advisory councils
4. Alcoholic beverages
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5. Audit services
6. Automatic electronic data processing
7. Bad debts
8. Bonding costs
9. Budgeting
10. Communications
11. Compensation for personnel services
a. General
b. Reasonableness
c. Unallowable costs
d. Fringe benefits
e. Pension plan costs
f. Post-retirement health benefits
g. Severance Pay
h...Support of salaries and wages
i. Donated services
12. Contingencies
13. Contributions and donations
14. Defense and prosecution of criminal and civil proceedings, and claims
15. Depreciation and use allowances
16. Disbursing service
17. Employee morale, health, and welfare costs
18. Entertainment
19. Equipment and other capital expenditures
20. Fines and penalties
21. Fund raising and investment management costs
22. Gains and losses on disposition of depreciable property and other capital
assets and substantial relocation of Federal programs.
23. General government expenses
24. Idle facilities and idle capacity
25. Insurance and indemnification
26. Interest
27. Lobbying
28. Maintenance, operations, and repairs
29. Materials and supplies
30. Memberships, subscriptions, and professional activities
31. Motor pools
32. Pre-award costs
33. Professional service costs
34. Proposal costs
35. Publication and printing costs
36. Rearrangements and alterations
37. Reconversion costs
38. Rental costs
39. Taxes
40. Training
41. Travel costs
42. Underrecovery of costs under Federal agreements
Sections 1 through 42 provide principles to be applied in establishing the
�4 of 53 4/16/03 1:39 PM
allowability or unallowability of certain items of cost. These principles apply
whether a cost is treated as direct or indirect. A cost is allowable for Federal
reimbursement only to the extent of benefits received by Federal awards and its
conformance with the general policies and principles stated in Attachment A to
this Circular. Failure to mention a particular item of cost in these sections is not
intended to imply that it is either allowable or unallowable; rather, determination
of allowability in each case should be based on the treatment or standards
provided for similar or related items of cost.
1. Accounting. The cost of establishing and maintaining accounting and other
information systems is allowable.
2. Advertising and public relations costs.
•
a. The term "advertising costs" means the costs of advertising media and
corollary administrative costs. Advertising media include magazines,
newspapers,radio and television programs, direct mail, exhibits, and the like.
b. The term "public relations" includes community relations and means those
activities dedicated to maintaining the image of the governmental unit or
maintaining or promoting understanding and favorable relations with the
community or public at large or any segment of the public.
c. Advertising costs are allowable only when incurred for the recruitment of
personnel, the procurement of goods and services, the disposal of surplus
materials, and any other specific purposes necessary to meet the requirements of
the Federal award. Advertising costs associated with the disposal of surplus
materials are not allowable where all disposal costs are reimbursed based on a
standard rate as specified in the grants management common rule.
d. Public relations costs are allowable when:
(1) Specifically required by the Federal award and then only as a direct cost;
(2) Incurred to communicate with the public and press pertaining to specific
activities or accomplishments that result from performance of the Federal award
and then only as a direct cost; or
(3)Necessary to conduct general liaison with news media and government public
relations officers, to the extent that such activities are limited to communication
and liaison necessary to keep the public informed on matters of public concern,
such as notices of Federal contract/grant awards, financial matters, etc.
e. Unallowable advertising and public relations costs include the following:
(I) All advertising and public relations costs other than as specified in
subsections c. and d.;
(2) Except as otherwise permitted by these cost principles, costs of conventions,
meetings, or other events related to other activities of the governmental unit
15 of53 4/16/03 1:39 F
including:
(a) Costs of displays, demonstrations, and exhibits;
(b) Costs of meeting rooms, hospitality suites, and other special facilities used in
conjunction with shows and other special events; and
(c) Salaries and wages of employees engaged in setting up and displaying
exhibits, making demonstrations, and providing briefings;
(3) Costs of promotional items and memorabilia, including models, gifts, and
souvenirs; and
(4) Costs of advertising and public relations designed solely to promote the
governmental unit.
3. Advisory councils. Costs incurred by advisory councils or committees are
allowable as a direct cost where authorized by the Federal awarding agency or as
an indirect cost where allocable to Federal awards.
4. Alcoholic beverages. Costs of alcoholic beverages are unallowable.
5. Audit services. The costs of audits are allowable provided that the audits were
performed in accordance with the Single Audit Act, as implemented by Circular
A-128, "Audits of State and Local Governments." [Note: In June 1997, OMB
rescinded Circular A-128 and co-located all audit requirements in a re-titled
Circular A-133, "Audits of States, Local Governments, and Non-Profit
Organizations."] Generally, the percentage of costs charged to Federal awards for
a single audit shall not exceed the percentage derived by dividing Federal funds
expended by total funds expended by the recipient or subrecipient (including
program matching funds) during the fiscal year The percentage may be exceeded
only if appropriate documentation demonstrates higher actual costs.
Other audit costs are allowable if specifically approved by the awarding or
cognizant agency as a direct cost to an award or included as an indirect cost in a
cost allocation plan or rate.
6. Automatic electro.tic data processing. The cost of data processing services is
allowable (but see section 19, Equipment and other capital expenditures).
7. Bad debts. Any losses arising from uncollectible accounts and other claims,
and related costs, are unallowable unless provided for in Federal program award
regulations.
8. Bonding costs. Costs of bonding employees and officials are allowable to the
extent that such bonding is in accordance with sound business practice.
9. Budgeting. Costs incurred for the development, preparation, presentation, and
execution of budgets are allowable.
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10. Communications. Costs of telephone, mail, messenger, and similar
communication services are allowable.
11. Compensation for personnel services.
• a. General. Compensation for personnel services includes all remuneration, paid
currently or accrued, for services rendered during the period of performance
under Federal awards, including but not necessarily limited to wages, salaries,
and fringe benefits. The costs of such compensation are allowable to the extent
that they satisfy the specific requirements of this Circular, and that the total
compensation for individual employees:
(1) Is reasonable for the services rendered and conforms to the established policy
of the governmental unit consistently applied to both Federal and non-Federal
activities; •
(2) Follows an appointment made in accordance with a governmental unit's laws
and rules and meets merit system or other requirements required by Federal law,
where applicable; and
(3) Is determined and supported as provided in subsection h.
b. Reasonableness. Compensation for employees engaged in work on Federal
awards will be considered reasonable to the extent that it is consistent with that
paid for similar work in other activities of the governmental unit. In cases where
the kinds of employees required for Federal awards are not found in the other
activities of the governmental unit, compensation will be considered reasonable
to the extent that it is comparable to that paid for similar work in the labor
market in which the employing government competes for the kind of employees
involved. Compensation surveys providing data representative of the labor
market involved will be an acceptable basis for evaluating reasonableness.
c. Unallowable costs. Costs which are unallowable under other sections of these
principles shall not be allowable under this section solely on the basis that they
constitute personnel compensation.
d. Fringe benefits.
(1) Fringe benefits are allowances and services provided by employers to their
employees as compensation in addition to regular salaries and wages. Fringe
benefits include, but are not limited to, the costs of leave, employee insurance,
pensions, and unemployment benefit plans. Except as provided elsewhere in
these principles, the costs of fringe benefits are allowable to the extent that the
benefits are reasonable and are required by law, governmental unit-employee
agreement, or an established policy of the governmental unit.
(2) The cost of fringe benefits in the form of regular compensation paid to
employees during periods of authorized absences from the job, such as for annual
leave, sick leave, holidays, court leave, military leave, and other similar benefits,
are allowable if: (a) they are provided under established written leave policies;
17 of 53 4/16/03 1:39 PI
(b) the costs are equitably allocated to all related activities, including Federal
awards; and, (c) the accounting basis (cash or accrual) selected for costing each
type of leave is consistently followed by the governmental unit.
(3) When a governmental unit uses the cash basis of accounting, the cost of leave
is recognized in the period that the leave is taken and paid for. Payments for
unused leave when an employee retires or terminates employment are allowable
in the year of payment provided they are allocated as a general administrative
expense to all activities of the governmental unit or component.
(4) The accrual basis may be only used for those types of leave for which a
liability as defined by Generally Accepted Accounting Principles (GAAP) exists
when the leave is earned. When a governmental unit uses the accrual basis of
accounting, in accordance with GAAP, allowable leave costs are the lesser of the
amount accrued or funded.
(5) The cost of fringe benefits in the form of employer contributions or expenses
for social security; employee life, health, unemployment, and worker's
compensation insurance (except as indicated in section 25, Insurance and
indemnification); pension plan costs (see subsection e.); and other similar
benefits are allowable, provided such benefits are granted under established
written policies. Such benefits, whether treated as indirect costs or as direct
costs, shall be allocated to Federal awards and all other activities in a manner
consistent with the pattern of benefits attributable to the individuals or group(s)
of employees whose salaries and wages are chargeable to such Federal awards
and other activities.
e. Pension plan costs. Pension plan costs may be computed using a
pay-as-you-go method or an acceptable actuarial cost method in accordance with
established written policies of the governmental unit.
(1) For pension plans financed on a pay-as-you-go method, allowable costs will
be limited to those representing actual payments to retirees or their beneficiaries.
(2) Pension costs calculated using an actuarial cost-based method recognized by
GAAP are allowable for a given fiscal year if they are funded for that year within
six months after the end of that year. Costs funded after the six month period (or
a later period agreed to by the cognizant agency) are allowable in the year
funded. The cognizant agency may agree to an extension of the six month period
if an appropriate adjustment is made to compensate for the timing of the charges
to the Federal Government and related Federal reimbursement and the
governmental unit's contribution to the pension fund. Adjustments may be made
by cash refund or other equitable procedures to compensate the Federal
Government for the time value of Federal reimbursements in excess of
contributions to the pension fund.
(3) Amounts funded by the governmental unit in excess of the actuarially
determined amount for a fiscal year may be used as the governmental unit's
contribution in future periods.
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(4) When a governmental unit converts to an acceptable actuarial cost method, as
defined by GAAP, and funds pension costs in accordance with this method, the
unfunded liability at the time of conversion shall be allowable if amortized over
a period of years in accordance with GAAP.
(5) The Federal Government shall receive an equitable share of any previously
allowed pension costs (including earnings thereon) which revert or inure to the
governmental unit in the form of a refund, withdrawal, or other credit.
•
f. Post-retirement health benefits. Post-retirement health benefits(PRHB)refers
to costs of health insurance or health services not included in a pension plan
covered by subsection e. for retirees and their spouses, dependents, and
survivors. PRHB costs may be computed using a pay-as-you-go method or an
acceptable actuarial cost method in accordance with established written polices
of the governmental unit.
(1) For PRHB financed on a pay as-you-go method, allowable costs will be
limited to those representing actual payments to retirees or their beneficiaries.
(2)PRHB costs calculated using an actuarial cost method recognized by GAAP
are allowable if they are funded for that year within six months after the end of
that year. Costs funded after the six month period(or a later period agreed to by
the cognizant agency) are allowable in the year funded. The cognizant agency
may agree to an extension of the six month period if an appropriate adjustment is
made to compensate for the timing of the charges to the Federal Government and •
related Federal reimbursements and the governmental unit's contributions to the
PRHB fund. Adjustments may be made by cash refund,reduction in current
year's PRHB costs, or other equitable procedures to compensate the Federal
Government for the time value of Federal reimbursements in excess of
contributions to the PRHB fund.
(3) Amounts funded in excess of the actuarially determined amount for a fiscal
year may be used as the government's contribution in a future period.
(4) When a governmental unit converts to an acceptable actuarial cost method
and funds PRHB costs in accordance with this method,the initial unfunded
liability attributable to prior years shall be allowable if amortized over a period
of years in accordance with GAAP, or, if no such GAAP period exists, over a
period negotiated with the cognizant agency.
(5)To be allowable in the current year, the PRHB costs must be paid either to:
(a) An insurer or other benefit provider as current year costs or premiums, or
(b) An insurer or trustee to maintain a trust fund or reserve for the sole purpose
of providing post-retirement benefits to retirees and other beneficiaries.
(6) The Federal Government shall receive an equitable share of any amounts of
previously allowed post-retirement benefit costs (including earnings thereon)
which revert or inure to the governmental unit in the form of a refund,
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withdrawal, or other credit.
g. Severance pay.
(1) Payments in addition to regular salaries and wages made to workers whose
employment is being terminated are allowable to the extent that, in each case,
they are required by(a) law, (b) employer-employee agreement, or(c)
established written policy.
(2) Severance payments (but not accruals) associated with normal turnover are
allowable. Such payments shall be allocated to all activities of the governmental
unit as an indirect cost.
(3) Abnormal or mass severance pay will be considered on a case-by-case basis
and is allowable only if approved by the cognizant Federal agency.
h. Support of salaries and wages. These standards regarding time distribution are
in addition to the standards for payroll documentation.
(1) Charges to Federal awards for salaries and wages, whether treated as direct or
indirect costs, will be based on payrolls documented in accordance with
generally accepted practice of the governmental unit and approved by a
responsible official(s) of the governmental unit.
(2)No further documentation is required for the salaries and wages of employees
who work in a single indirect cost activity.
(3) Where employees are expected to work solely on a single Federal award or
cost objective, charges for their salaries and wages will be supported by periodic
certifications that the employees worked solely on that program for the period
covered by the certification. These certifications will be prepared at least
semi-annually and will be signed by the employee or supervisory official having
first hand knowledge of the work performed by the employee.
(4) Where employees work on multiple activities or cost objectives, a
distribution of their salaries or wages will be supported by personnel activity
reports or equivalent documentation which meets the standards in subsection(5)
unless a statistical sampling system(see subsection (6)) or other substitute
system has been approved by the cognizant Federal agency. Such documentary
support will be required where employees work on:
(a) More than one Federal award,
(b) A Federal award and a non-Federal award,
(c)An indirect cost activity and a direct cost activity,
(d) Two or more indirect activities which are allocated using different allocation
bases, or
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(e) An unallowable activity and a direct or indirect cost activity.
(5) Personnel activity reports or equivalent documentation must meet the
following standards:
(a) They must reflect an after-the-fact distribution of the actual activity of each
employee,
(b) They must account for the total activity for which each employee is
compensated,
(c) They must be prepared at least monthly and must coincide with one or more
pay periods, and
(d) They must be signed by the employee.
(e)Budget estimates or other distribution percentages determined before the
services are performed do not qualify as support for charges to Federal awards
but may be used for interim accounting purposes,provided that:
(i) The governmental unit's system for establishing the estimates produces
reasonable approximations of the activity actually performed;
(ii) At least quarterly, comparisons of actual costs to budgeted distributions
based on the monthly activity reports are made. Costs charged to Federal awards
to reflect adjustments made as a result of the activity actually performed may be
recorded annually if the quarterly comparisons show the differences between
budgeted and actual costs are less than ten percent; and
(iii) The budget estimates or other distribution percentages are revised at least
quarterly, if necessary, to reflect changed circumstances.
(6) Substitute systems for allocating salaries and wages to Federal awards may be
used in place of activity reports. These systems are subject to approval if required
by the cognizant agency. Such systems may include, but are not limited to,
random moment sampling, case counts, or other quantifiable measures of
employee effort.
(a) Substitute systems which use sampling methods (primarily for Aid to
Families with Dependent Children(AFDC), Medicaid, and other public
assistance programs)must meet acceptable statistical sampling standards
including:
(i) The sampling universe must include all of the employees whose salaries and
wages are to be allocated based on sample results except as provided in
subsection(c);
(ii) The entire time period involved must be covered by the sample; and
(iii) The results must be statistically valid and applied to the period being
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sampled.
(b) Allocating charges for the sampled employees' supervisors, clerical and
support staffs, based on the results of the sampled employees, will be acceptable.
(c) Less than full compliance with the statistical sampling standards noted in
subsection (a) may be accepted by the cognizant agency if it concludes that the
amounts to be allocated to Federal awards will be minimal, or if it concludes that
the system proposed by the governmental unit will result in lower costs to
Federal awards than a system which complies with the standards.
(7) Salaries and wages of employees used in meeting cost sharing or matching
requirements of Federal awards must be supported in the same manner as those
claimed as allowable costs under Federal awards.
i. Donated services.
(1) Donated or volunteer services may be furnished to a governmental unit by
professional and technical personnel, consultants, and other skilled and unskilled
labor. The value of these services is not reimbursable either as a direct or indirect
cost. However, the value of donated services may be used to meet cost sharing or
matching requirements in accordance with the provisions of the Common Rule.
(2) The value of donated services utilized in the performance of a direct cost
activity shall, when material in amount, be considered in the determination of the
governmental unit's indirect costs or rate(s) and, accordingly, shall be allocated a
proportionate share of applicable indirect costs.
(3) To the extent feasible, donated services will be supported by the same
methods used by the governmental unit to support the allocability of regular
personnel services.
12. Contingencies. Contributions to a contingency reserve or any similar
provision made for events the occurrence of which cannot be foretold with
certainty as to time, or intensity, or with an assurance of their happening, are
unallowable. The term "contingency reserve" excludes self-insurance reserves
(see subsection 25.c.), pension plan reserves (see subsection 11.e.), and
post-retirement health and other benefit reserves (see subsection 11.f.) computed
using acceptable actuarial cost methods.
13. Contributions and donations. Contributions and donations, including cash,
property, and services, by governmental units to others, regardless of the
recipient, are unallowable.
14. Defense and prosecution of criminal and civil proceedings, and claims.
a. The following costs are unallowable for contracts covered by 10 U.S.C.
2324(k), "Allowable costs under defense contracts."
?Z of 53 4/16/03 1:39 PM
(I) Costs incurred in defense of any civil or criminal fraud proceeding or similar
proceeding (including filing of false certification brought by the United States
where the contractor is found liable or has pleaded nolo contendere to a charge of
fraud or similar proceeding(including filing of a false certification).
(2) Costs incurred by a contractor in connection with any criminal, civil or
administrative proceedings commenced by the United States or a State to the
extent provided in 10 U.S.C. 2324(k).
b. Legal expenses required in the administration of Federal programs are
allowable. Legal expenses for prosecution of claims against the Federal
Government are unallowable.
15. Depreciation and use allowances.
a. Depreciation and use allowances are means of allocating the cost of fixed
assets to periods benefitting from asset use. Compensation for the use of fixed
assets on hand may be made through depreciation or use allowances. A
combination of the two methods may not be used in connection with a single
class of fixed assets (e.g., buildings, office equipment, computer equipment, etc.)
except as provided in subsection g. Except for enterprise funds and internal
service funds that are included as part of a State/local cost allocation plan,
classes of assets shall be determined on the same basis used for the
government-wide financial statements.
b. The computation of depreciation or use allowances shall be based on the
acquisition cost of the assets involved. Where actual cost records have not been
maintained, a reasonable estimate of the original acquisition cost may be used.
The value of an asset donated to the governmental unit by an unrelated third
party shall be its fair market value at the time of donation. Governmental or
quasi-governmental organizations located within the same State shall not be
considered unrelated third parties for this purpose.
c. The computation of depreciation or use allowances will exclude:
(1) The cost.of land;
(2) Any portion of the cost of buildings and equipment borne by or donated by
the Federal Government irrespective of where title was originally vested or
where it presently resides; and
(3) Any portion of the cost of buildings and equipment contributed by or for the
governmental unit, or a related donor organization, in satisfaction of a matching
requirement.
d. Where the use allowance method is followed,the use allowance for buildings
and improvements (including land improvements, such as paved parking areas,
fences, and sidewalks)will be computed at an annual rate not exceeding two
percent of acquisition costs. The use allowance for equipment will be computed
at an annual rate not exceeding 6 2/3 percent of acquisition cost. When the use
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4/l 6/03 139 1
allowance method is used for buildings, the entire building must be treated as a
single asset; the building's components (e.g., plumbing system,heating and air
condition, etc.) cannot be segregated from the building's shell. The two percent
limitation, however, need not be applied to equipment which is merely attached
or fastened to the building but not permanently fixed to it and which is used as
furnishings or decorations or for specialized purposes (e.g., dentist chairs and
dental treatment units,counters, laboratory benches bolted to the floor,
dishwashers, modular furniture, carpeting, etc.). Such equipment will be
considered as not being permanently fixed to the building if it can be removed
without the destruction of, or need for costly or extensive alterations or repairs,
to the building or the equipment. Equipment that meets these criteria will be
subject to the 6 2/3 percent equipment use allowance limitation.
e. Where the depreciation method is followed, the period of useful service
(useful life) established in each case for usable capital assets must take into
consideration such factors as type of construction, nature of the equipment used,
historical usage patterns, technological developments, and the renewal and
replacement policies of the governmental unit followed for the individual items
or classes of assets involved. In the absence of clear evidence indicating that the
expected consumption of the asset will be significantly greater in the early
portions than in the later portions of its useful life, the straight line method of
depreciation shall be used. Depreciation methods once used shall not be changed
unless approved by the Federal cognizant or awarding agency. When the
depreciation method is introduced for application to an asset previously subject
to a use allowance, the annual depreciation charge thereon may not exceed the
amount that would have resulted had the depreciation method been in effect from
the date of acquisition of the asset. The combination of use allowances and
depreciation applicable to the asset shall not exceed the total acquisition cost of
the asset or fair market value at time of donation.
f. When the depreciation method is used for buildings, a building's shell may be
segregated from the major component of the building (e.g., plumbing system,
heating, and air conditioning system, etc.) and each major component
depreciated over its estimated useful life, or the entire building(i.e., the shell and
all components)may be treated as a single asset and depreciated over a single
useful life.
g. A reasonable use allowance may be negotiated for any assets that are
considered to be fully depreciated, after taking into consideration the amount of
depreciation previously charged to the government, the estimated useful life
remaining at the time of negotiation, the
effect of any increased maintenance charges, decreased efficiency due to age, and
any other factors pertinent to the utilization of the asset for the purpose
contemplated.
h. Charges for use allowances or depreciation must be supported by adequate
property records. Physical inventories must be taken at least once every two years
(a statistical sampling approach is acceptable) to ensure that assets exist, and are
in use. Governmental units will manage equipment in accordance with State laws
24 of 53 4/16/03 1:39 PM
and procedures. When the depreciation method is followed, depreciation records
indicating the amount of depreciation taken each period must also be maintained.
16. Disbursing service. The cost of disbursing funds by the Treasurer or other
designated officer is allowable.
17. Employee morale, health, and welfare costs. The costs of health or first-aid
clinics and/or infirmaries,recreational facilities, employee counseling services,
employee information publications, and any related expenses incurred in
accordance with a governmental unit's policy are allowable. Income generated
from any of these activities will be offset against expenses.
18. Entertainment. Costs of entertainment, including amusement, diversion, and
social activities and any costs directly associated with such costs(such as tickets
to shows or sports events, meals, lodging, rentals, transportation, and gratuities)
are unallowable.
19. Equipment and other capital expenditures.
a. As used in this section the following terms have the meanings as set forth
below:
(1) "Capital expenditure" means the cost of the asset including the cost to put it
in place. Capital expenditure for equipment means the net invoice price of the
equipment, including the cost of any modifications, attachments, accessories, or
auxiliary apparatus necessary to make it usable for the purpose for which it is
acquired. Ancillary charges, such as taxes, duty, protective in transit insurance,
freight, and installation may be included in, or excluded from,capital
expenditure cost in accordance with the governmental unit's regular accounting
practices.
(2) "Equipment" means an article of nonexpendable, tangible personal property
having a useful life of more than one year and an acquisition cost which equals
the lesser of(a) the capitalization level established by the governmental unit for
financial statement purposes, or(b) $5000.
(3) "Other capital assets" mean buildings, land, and improvements to buildings or
land that materially increase their value or useful life.
b. Capital expenditures which are not charged directly to.a Federal award may be
recovered through use allowances or depreciation on buildings, capital
improvements, and equipment (see section 15). See also section 38 for
allowability of rental costs for buildings and equipment.
c. Capital expenditures for equipment, including replacement equipment, other
capital assets, and improvements which materially increase the value or useful
life of equipment or other capital assets are allowable as a direct cost when
approved by the awarding agency. Federal awarding agencies are authorized at
their option to waive or delegate this approval requirement.
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d. Items of equipment with an acquisition cost of less than $5000 are considered
to be supplies and are allowable as direct costs of Federal awards without
specific awarding agency approval.
e. The unamortized portion of any equipment written off as a result of a change
in capitalization levels may be recovered by(1) continuing to claim the otherwise
allowable use allowances or depreciation charges on the equipment or by(2)
amortizing the amount to be written off over a period of years negotiated with
the cognizant agency.
f. When replacing equipment purchased in whole or in part with Federal funds,
the governmental unit may use the equipment to be replaced as a trade-in or sell
the property and use the proceeds to offset the cost of the replacement property.
20. Fines and penalties. Fines, penalties, damages, and other settlements
resulting from violations (or alleged violations)of, or failure of the governmental
unit to comply with, Federal, State, local, or Indian tribal laws and regulations
are unallowable except when incurred as a result of compliance with specific
provisions of the Federal award or written instructions by the awarding agency
authorizing in advance such payments.
21. Fund raising aid investment management costs.
a. Costs of organized fund raising, including financial campaigns, solicitation of
gifts and bequests, and similar expenses incurred to raise capital or obtain
contributions are unallowable, regardless of the purpose for which the funds will
be used.
b. Costs of investment counsel and staff and similar expenses incurred to
enhance income from investments are unallowable. However, such costs
associated with investments covering pension, self-insurance, or other funds
which include Federal participation allowed by this Circular are allowable.
c. Fund raising and investment activities shall be allocated an appropriate share
of indirect costs under the conditions described in subsection C.3.b. of
Attachment A.
22. Gains and losses on disposition of depreciable property and other capital
assets and substantial relocation of Federal programs.
a. (1) Gains and losses on the sale, retirement, or other disposition of depreciable
property shall be included in the year in which they occur as credits or charges to
the asset cost grouping(s) in which the property was included. The amount of the
gain or loss to be included as a credit or charge to the appropriate asset cost
grouping(s) shall be the difference between the amount realized on the property
and the undepreciated basis of the property.
(2) Gains and losses on the disposition of depreciable property shall not be
recognized as a separate credit or charge under the following conditions:
26 of 53 4/16/03 1:39 PM
(a)The gain or loss is processed through a depreciation account and is reflected
in the depreciation allowable under sections 15 and 19.
(b) The property is given in exchange as part of the purchase price of a similar
item and the gain or loss is taken into account in determining the depreciation
cost basis of the new item.
(c) A loss results from the failure to maintain permissible insurance, except as
otherwise provided in subsection 25.d.
(d) Compensation for the use of the property was provided through use
allowances in lieu of depreciation.
b. Substantial relocation of Federal awards from a facility where the Federal
Government participated in the financing to another facility prior to the
expiration of the useful life of the financed facility requires Federal agency
approval. The extent of the relocation, the amount of the Federal participation in
the financing, and the depreciation charged to date may require negotiation of
space charges for Federal awards.
c. Gains or losses of any nature arising from the sale or exchange of property
other than the property covered in subsection a., e.g., land or included in the fair
market value used in any adjustment resulting from a relocation of Federal
awards covered in subsection b. shall be excluded in computing Federal award
costs.
23. General government expenses.
a. The general costs of government are unallowable (except as provided in
section 41). These include:
(1) Salaries and expenses of the Office of the Governor of a State or the chief
executive of a political subdivision or the chief executives of
federally-recognized Indian tribal governments;
(2) Salaries and other expenses of State legislatures, tribal councils, or similar
local governmental bodies, such as county supervisors, city councils, school
boards, etc., whether incurred for purposes of legislation or executive direction;
(3) Cost of the judiciary branch of a government;
(4) Cost of prosecutorial activities unless treated as a direct cost to a specific
program when authorized by program regulations (however, this does not
preclude the allowability of other legal activities of the Attorney General); and
(5) Other general types of government services normally provided to the general
public, such as fire and police, unless provided for as a direct cost in program
regulations.
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b. For federally-recognized Indian tribal governments and Councils Of
Governments (COGs), the portion of salaries and expenses directly attributable
to managing and operating Federal programs by the chief executive and his staff
is allowable.
24. Idle facilities and idle capacity.
a. As used in this section the following terms have the meanings set forth below:
(1) "Facilities" means land and buildings or any portion thereof, equipment
individually or collectively, or any other tangible capital asset,wherever located,
and whether owned or leased by the governmental unit.
(2) "Idle facilities" means completely unused facilities that are excess to the
governmental unit's current needs.
(3) "Idle capacity" means the unused capacity of partially used facilities. It is the
difference between (a) that which a facility could achieve under 100 percent
operating time on a one-shift basis less operating interruptions resulting from
time lost for repairs, setups, unsatisfactory materials, and other normal delays
and (b) the extent to which the facility was actually used to meet demands during
the accounting period. A multi-shift basis should be used if it can be shown that
this amount of usage would normally be expected for the type of facility
involved.
(4) "Cost of idle facilities or idle capacity" means costs such as maintenance,
repair, housing, rent, and other related costs, e.g., insurance, interest, and
depreciation or use allowances.
b. The costs of idle facilities are unallowable except to the extent that.
(1) They are necessary to meet fluctuations in workload; or
(2) Although not necessary to meet fluctuations in workload,they were necessary
when acquired and are now idle because of changes in program requirements,
efforts to achieve more economical operations, reorganization, termination, or
other causes which could not have been reasonably foreseen. Under the
exception stated in this subsection, costs of idle facilities are allowable for a
reasonable period of time, ordinarily not to exceed one year, depending on the
initiative taken to use, lease, or dispose of such facilities.
c. The costs of idle capacity are normal costs of doing business and are a factor
in the normal fluctuations of usage or indirect cost rates from period to period.
Such costs are allowable, provided that the capacity is reasonably anticipated to
be necessary or was originally reasonable and is not subject to reduction or
elimination by use on other Federal awards, subletting, renting, or sale, in
accordance with sound business, economic, or security practices. Widespread
idle capacity throughout an entire facility or among a group of assets having
substantially the same function may be considered idle facilities.
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25. Insurance and indemnification.
a. Costs of insurance required or approved and maintained, pursuant to the
Federal award, are allowable.
b. Costs of other insurance in connection with the general conduct of activities
are allowable subject to the following limitations:
(1) Types and extent and cost of coverage are in accordance with the
governmental unit's policy and sound business practice.
(2) Costs of insurance or of contributions to any reserve covering the risk of loss
of, or damage to, Federal Government property are unallowable except to the
extent that the awarding agency has specifically required or approved such costs.
c. Actual losses which could have been covered by permissible insurance
(through a self-insurance program or otherwise) are unallowable, unless
expressly provided for in the Federal award or as described below. However, the
Federal Government will participate in actual losses of a self insurance fund that
are in excess of reserves. Costs incurred because of losses not covered under
nominal deductible insurance coverage provided in keeping with sound
management practice, and minor losses not covered by insurance, such as
spoilage, breakage, and disappearance of small hand tools, which occur in the
ordinary course of operations, are allowable.
d. Contributions to a reserve for certain self-insurance programs including
workers compensation, unemployment compensation, and severance pay are
allowable subject to the following provisions:
(I) The type of coverage and the extent of coverage and the rates and premiums
would have been allowed had insurance (including reinsurance) been purchased
to cover the risks. However, provision for known or reasonably estimated
self-insured liabilities,which do not become payable for more than one year after
the provision is made, shall not exceed the discounted present value of the
liability. The rate used for discounting the liability must be determined by giving
consideration to such factors as the governmental unit's settlement rate for those
liabilities and its investment rate of return.
(2) Earnings or investment income on reserves must be credited to those
reserves.
(3) Contributions to reserves must be based on sound actuarial principles using
historical experience and reasonable assumptions. Reserve levels must be
analyzed and updated at least bienniall•• for each major risk being insured and
take into account any reinsurance, coinsurance, etc. Reserve levels related to
employee-related coverages will normally be limited to the value of claims (a)
submitted and adjudicated but not paid, (b) submitted but not adjudicated, and
(c) incurred but not submitted. Reserve levels in excess of the amounts based on
the above must be identified and justified in the cost allocation plan or indirect
cost rate proposal.
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(4)Accounting records, actuarial studies, and cost allocations (or billings) must
recognize any significant differences due to types of insured risk and losses
generated by the various insured activities or agencies of the governmental unit.
If individual departments or agencies of the governmental unit experience
significantly different levels of claims for a particular risk, those differences are
to be recognized by the use of separate allocations or other techniques resulting
in an equitable allocation.
(5) Whenever funds are transferred from a self-insurance reserve to other
accounts (e.g., general fund), refunds shall be made to the Federal Government
for its share of funds transferred, including earned or imputed interest from the
date of transfer.
e. Actual claims paid to or on behalf of employees or former employees for
workers' compensation, unemployment compensation, severance pay, and similar
employee benefits (e.g., subsection 11.f. for post retirement health benefits), are
allowable in the year of payment
provided(1) the governmental unit follows a consistent costing policy and (2)
they are allocated as a general administrative expense to all activities of the
governmental unit.
f. Insurance refunds shall be credited against insurance costs in the year the
refund is received.
g. Indemnification includes securing the governmental unit against liabilities to
third persons and other losses not compensated by insurance or otherwise. The
Federal Government is obligated to indemnify the governmental unit only to the
extent expressly provided for in the Federal award, except as provided in
subsection d.
h. Costs of commercial insurance that protects against the costs of the contractor
for correction of the contractor's own defects in materials or workmanship are
unallowable.
26. Interest.
a. Costs incurred for interest on borrowed capital or the use of a governmental
unit's own funds, however represented, are unallowable except as specifically
provided in subsection b. or authorized by Federal legislation.
b. Financing costs (including interest) paid or incurred on or after the effective
date of this Circular associated with the otherwise allowable costs of building
acquisition, construction, or fabrication, reconstruction or remodeling completed
on or after October 1, 1980 is allowable, subject to the conditions in (1)-(4).
Financing costs (including interest)paid or incurred on or after the effective date
of this Circular associated with otherwise allowable costs of equipment is
allowable, subject to the conditions in (1)-(4).
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(1) The financing is provided (from other than tax or user fee sources) by a bona
fide third party external to the governmental unit;
(2)The assets are used in support of Federal awards;
(3) Earnings on debt service reserve funds or interest earned on borrowed funds
pending payment of the construction or acquisition costs are used to offset the
current period's cost or the capitalized interest, as appropriate. Earnings subject
to being reported to the Federal Internal Revenue Service under arbitrage
requirements are excludable.
(4) Governmental units will negotiate the amount of allowable interest whenever
cash payments (interest, depreciation, use allowances, and contributions) exceed
the governmental unit's cash payments and other contributions attributable to that
portion of real property used for Federal awards.
27. Lobbying. The cost of certain influencing activities associated with
obtaining grants, contracts, cooperative agreements, or loans is an unallowable
cost. Lobbying with respect to certain grants, contracts,cooperative agreements,
and loans shall be governed by the common rule, "New Restrictions on
Lobbying" published at 55 FR 6736 (February 26, 1990), including definitions,
and the Office of Management and Budget "Government-wide Guidance for New
Restrictions on Lobbying" and notices published at 54 FR 52306 (December 20,
1989), 55 FR 24540 (June 15, 1990), and 57 FR 1772 (January 15, 1992),
respectively.
28. Maintenance, operations, and repairs. Unless prohibited by law, the cost
of utilities, insurance, security,janitorial services, elevator service, upkeep of
grounds,necessary maintenance,normal repairs and alterations, and the like are
allowable to the extent that they: (1) keep property(including Federal property,
unless otherwise provided for) in an efficient operating condition, (2) do not add
to the permanent value of property or appreciably prolong its intended life, and
(3) are not otherwise included in rental or other charges for space. Costs which
add to the permanent value of property or appreciably prolong its intended life
shall be treated as capital expenditures (see sections 15 and 19).
29. Materials and supplies. The cost of materials and supplies is allowable.
Purchases should be charged at their actual prices after deducting all cash
discounts, trade discounts, rebates, and allowances received. Withdrawals from
general stores or stockrooms should be charged at cost under any recognized
method of pricing, consistently applied. Incoming transportation charges are a
proper part of materials and supply costs.
30. Memberships, subscriptions, and professional activities.
a. Costs of the governmental unit's memberships in business, technical, and
professional organizations are allowable.
b. Costs of the governmental unit's subscriptions to business, professional, and
technical periodicals are allowable.
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c. Costs of meetings and conferences where the primary purpose is the
dissemination of technical information, including meals, transportation, rental of
meeting facilities, and other incidental costs are allowable.
d. Costs of membership in civic and community, social organizations are
allowable as a direct cost with the approval of the Federal awarding agency.
e. Costs of membership in organizations substantially engaged in lobbying are
unallowable.
31. Motor pools. The costs of a service organization which provides
automobiles to user governmental units at a mileage or fixed rate and/or provides
vehicle maintenance, inspection, and repair services are allowable.
32. Pre-award costs. Pre-award costs are those incurred prior to the effective
date of the award directly pursuant to the negotiation and in anticipation of the
award where such costs are necessary to comply with the proposed delivery
schedule or period of performance. Such costs are allowable only to the extent
that they would have been allowable if incurred after the date of the award and
only with the written approval of the awarding agency.
33. Professional service costs.
a. Cost of professional and consultant services rendered by persons or
organizations that are members of a particular profession or possess a special
skill, whether or not officers or employees of the governmental unit, are
allowable, subject to section 14 when reasonable in relation to the services
rendered and when not contingent upon recovery of the costs from the Federal
Government.
b. Retainer fees supported by evidence of bona fide services available or
rendered are allowable.
34. Proposal costs. Costs of preparing proposals for potential Federal awards are
allowable. Proposal costs should normally be treated as indirect costs and should
be allocated to all activities of the governmental unit utilizing the cost allocation
plan and indirect cost rate proposal. However, proposal costs may be charged
directly to Federal awards with the prior approval of the Federal awarding
agency.
35. Publication and printing costs. Publication costs, including the costs of
printing(including the processes of composition, plate-making, press work, and
binding, and the end products produced by such processes), distribution,
promotion, mailing, and general handling are allowable.
36. Rearrangements and alterations. Costs incurred for ordinary and normal
rearrangement and alteration of facilities are allowable. Special arrangements and
alterations costs incurred specifically for a Federal award are allowable with the
prior approval of the Federal awarding agency.
320'-53 4/16/03 1:39 PM
37. Reconversion costs. Costs incurred in the restoration or rehabilitation of the
governmental unit's facilities to approximately the same condition existing
immediately prior to commencement of Federal awards, less costs related to
normal wear and tear, are allowable.
38. Rental costs.
a. Subject to the limitations described in subsections b. through d. of this section,
rental costs are allowable to the extent that the rates are reasonable in light of
such factors as: rental costs of comparable property, if any; market conditions in
the area; alternatives available; and, the type, life expectancy, condition, and
value of the property leased.
b. Rental costs under sale and leaseback arrangements are allowable only up to
the amount that would be allowed had the governmental unit continued to own
the property.
c. Rental costs under less-than-arms-length teases are allowable only up to the
amount that would be allowed had title to the property vested in the
governmental unit. For this purpose, less-than-arms-length leases include,but are
not limited to, those where:
(1) One party to the lease is able to control or substantially influence the actions
of the other;
(2) Both parties are parts of the same governmental unit; or
(3) The governmental unit creates an authority or similar entity to acquire and
lease the facilities to the governmental unit and other parties.
d. Rental costs under leases which are required to be treated as capital leases
under GAAP are allowable only up to the amount that would be allowed had the
governmental unit purchased the property on the date the lease agreement was
executed. This amount would include expenses such as depreciation or use
allowance, maintenance, and insurance. The provisions of Financial Accounting
Standards Board Statement 13 shall be used to determine whether a lease is a
capital lease. Interest costs related to capital leases are allowable to the extent
they meet the criteria in section 26.
39. Taxes.
a. Taxes that a governmental unit is legally required to pay are allowable, except
for self-assessed taxes that disproportionately affect Federal programs or changes
in tax policies that disproportionately affect Federal programs. This provision
becomes effective for taxes paid during the governmental unit's first fiscal year
that begins on or after January 1, 1998, and applies thereafter.
b. Gasoline taxes, motor vehicle fees, and other taxes that are in effect user fees
for benefits provided to the Federal Government are allowable.
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c. This provision does not restrict the authority of Federal agencies to identify
taxes where Federal participation is inappropriate. Where the identification of the
amount of unallowable taxes would require an inordinate amount of effort, the
cognizant agency may accept a reasonable approximation thereof.
40. Training. The cost of training provided for employee development is
allowable.
41. Travel costs.
a. General. Travel costs are allowable for expenses for transportation, lodging,
subsistence, and related items incurred by employees traveling on official
business. Such costs may be charged on an actual cost basis, on a per diem or
mileage basis in lieu of actual costs incurred, or on a combination of the two,
provided the method used is applied to an entire trip, and results in charges
consistent with those normally allowed in like circumstances in
non-federally-sponsored activities. Notwithstanding the provisions of section 23,
travel costs of officials covered by that section, when specifically related to
Federal awards, are allowable with the prior approval of a grantor agency.
b. Lodging and subsistence. Costs incurred by employees and officers for
travel, including costs of lodging, other subsistence, and incidental expenses,
shall be considered reasonable and allowable only to the extent such costs do not
exceed charges normally allowed by the governmental unit in its regular
operations as a result of the governmental unit's policy. In the absence of a
written governmental unit policy regarding travel costs, the rates and amounts
established under subchapter I of Chapter 57 of Title 5, United States Code
"Travel and Subsistence Expenses; Mileage Allowances," or by the
Administrator of General Services, or the President (or his designee) pursuant to
any provisions of such subchapter shall be used as guidance for travel under
Federal awards (41 U.S.C. 420, "Travel Expenses of Government Contractors").
c. Commercial air travel. Airfare costs in excess of the customary standard
(coach or equivalent) airfare, are unallowable except when such accommodations
would: require circuitous routing, require travel during unreasonable hours,
excessively prolong travel, greatly increase the duration of the flight, result in
increased cost that would offset transportation savings, or offer accommodations
not reasonably adequate for the medical needs of the traveler. Where a
governmental unit can reasonably demonstrate to the awarding agency either the
nonavailability of customary standard airfare or Federal Government contract
airfare for individual trips or, on an overall basis, that it is the governmental
unit's practice to make routine use of such airfare, specific determinations of
nonavailability will generally not be questioned by the Federal Government,
unless a pattern of avoidance is detected. However, in order for airfare costs in
excess of the customary standard commercial airfare to be allowable, e.g., use of
first-class airfare, the governmental unit must justify and document on a
case-by-case basis the applicable condition(s) set forth above.
d. Air travel by other than commercial carrier. Cost of travel by governmental
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unit-owned, -Ieased, or-chartered aircraft, as used in this section, includes the
cost of lease, charter, operation (including personnel costs), maintenance,
depreciation, interest, insurance, and other related costs. Costs of travel via
governmental unit-owned, -leased, or-chartered aircraft are unallowable to the
extent they exceed the cost of allowable commercial air travel, as provided for in
subsection c.
42. Underrecovery of costs under Federal agreements. Any excess costs over
the Federal contribution under one award agreement are unallowable under other
award agreements.
Top of Page
ATTACHMENT C
Circular No. A-87
STATE/LOCAL-WIDE CENTRAL SERVICE COST ALLOCATION
PLANS
TABLE OF CONTENTS
A. General
B. Definitions
1. Billed central services
2. Allocated central services
3. Agency or operating agency
C. Scope of the Central Service Cost Allocation Plans
D. Submission Requirements
E. Documentation Requirements for Submitted Plans
1. General
•
2. Allocated central services
3. Billed services
a. General
b. Internal service funds
c. Self-insurance funds
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4/16/03 1.39 PI
d. Fringe benefits
4. Required certification
F. Negotiation and Approval of Central Service Plans
G. Other Policies
1. Billed central service activities
2. Working capital reserves
3. Carry-forward adjustments of allocated central service costs
4. Adjustments of billed central services
5. Records retention
6. Appeals
7. OMB assistance
A. General.
1. Most governmental units provide certain services, such as motor pools,
computer centers, purchasing, accounting, etc.,to operating agencies on a
centralized basis.Since federally-supported awards are performed within the
individual operating agencies, there needs to be a process whereby these central
service costs can be identified and assigned to benefitted activities on a
reasonable and consistent basis. The central service cost allocation plan provides
that process. All costs and other data used to distribute the costs included in the
plan
should be supported by formal accounting and other records that will support the
propriety of the costs assigned to Federal awards.
2. Guidelines and illustrations of central service cost allocation plans are
provided in a brochure published by the Department of Health and Human
Services entitled "A Guide for State and Local Government Agencies: Cost
Principles and Procedures for Establishing Cost Allocation Plans and Indirect
Cost Rates for Grants and Contracts with the Federal Government." A copy of
this brochure may be obtained from the Superintendent of Documents, U.S.
Government Printing Office.
B. Definitions.
1. "Billed central services" means central services that are billed to benefitted
agencies and/or programs on an individual fee-for-service or similar basis.
Typical examples of billed central services include computer services,
36 of 53 4/16/03 1:39 P!v
•
transportation services, insurance, and fringe benefits.
2. "Allocated central services" means central services that benefit operating
agencies but are not billed to the agencies on a fee-for-service or similar basis.
These costs are allocated to benefitted agencies on some reasonable basis.
Examples of such services might include general accounting, personnel
administration, purchasing, etc.
3. "Agency or operating agency" means an organizational unit or sub-division
within a governmental unit that is responsible for the performance or
administration of awards or activities of the governmental unit.
C. Scope of the Central Service Cost Allocation Plans. The central service cost
allocation plan will include all central service costs that will be claimed (either as
a billed or an allocated cost) under Federal awards and will be documented as
described in section E. Costs of central services omitted from the plan will not be
reimbursed.
D. Submission Requirements.
1. Each State will submit a plan to the Department of Health and Human
Services for each year in which it claims central service costs under Federal
awards. The plan should include(a) a projection of the next year's allocated
central service cost (based either on actual costs for the most recently completed
year or the budget projection for the coming year), and (b) a reconciliation of
actual allocated central service costs to the estimated costs used for either the
most recently completed year or the year immediately preceding the most
recently completed year.
2. Each local government that has been designated as a "major local government"
by the Office of Management and Budget (OMB) is also required to submit a
plan to its cognizant agency annually. OMB periodically lists major local
governments in the Federal Register.
3. All other local governments claiming central service costs must develop a plan
in accordance with the requirements described in this Circular and maintain the
plan and related supporting documentation for audit. These local governments
are not required to submit their plans for Federal approval unless they are
specifically requested to do so by the cognizant agency. Where a local
government only receives funds as a sub-recipient, the primary recipient will be
responsible for negotiating indirect cost rates and/or monitoring the
sub-recipient's plan.
4. All central service cost allocation plans will be prepared and, when required,
submitted within six months prior to the beginning of each of the governmental
unit's fiscal years in which it proposes to claim central service costs. Extensions
may be granted by the cognizant agency on a case-by-case basis.
E. Documentation Requirements for Submitted Plans. The documentation
'.7 of 53 4/16/03 1:39 PI
requirements described in this section may be modified, expanded, or reduced by
the cognizant agency on a case-by-case basis. For example, the requirements may
be reduced for those central services which have little or no impact on Federal
awards. Conversely, if a review of a plan indicates that certain additional
information is needed, and will likely be needed in future years, it may be
routinely requested in future plan submissions. Items marked with an asterisk(*)
should be submitted only once; subsequent plans should merely indicate any
changes since the last plan.
1. General. All proposed plans must be accompanied by the following: an
organization chart sufficiently detailed to show operations including the central
service activities of the State/local government whether or not they are shown as
benefiting from central service functions; a copy of the Comprehensive Annual
Financial Report (or a copy of the Executive Budget if budgeted costs are being
proposed) to support the allowable costs of each central service activity included
in the plan; and, a certification (see subsection 4.) that the plan was prepared in
accordance with this Circular, contains only allowable costs, and was prepared in
a manner that treated similar costs consistently among the various Federal
awards and between Federal and non-Federal awards/activities.
2. Allocated central services. For each allocated central service, the plan must
also include the following: a brief description of the service*, an identification of
the unit rendering the service and the operating agencies receiving the service,
the items of expense included in the cost of the service,the method used to
distribute the cost of the service to benefitted agencies, and a summary schedule
showing the allocation of each service to the specific benefitted
agencies. If any self-insurance funds or fringe benefits costs are treated as
allocated(rather than billed) central services, documentation discussed in
subsections 3.b. and c. shall also be included.
3. Billed services.
a. General. The information described below shall be provided for all billed
central services, including internal service funds, self-insurance funds, and fringe
benefit funds.
b. Internal service funds.
(1)For each internal service fund or similar activity with an operating budget of
$5 million or more, the plan shall include: a brief description of each service; a
balance sheet for each fund based on individual accounts contained in the
governmental unit's accounting system; a revenue/expenses statement, with
revenues broken out by source, e.g.,regular billings, interest earned, etc.; a
listing of all non-operating transfers (as defined by Generally Accepted
Accounting Principles (GAAP)) into and out of the fund; a description of the
procedures (methodology) used to charge the costs of each service to users,
including how billing rates are determined; a schedule of current rates; and, a
schedule comparing total revenues (including imputed revenues) generated by
the service to the allowable costs of the service, as determined under this
38 of 53 4/16/03 I:39 PM
Circular, with an explanation of how variances will be handled.
(2) Revenues shall consist of all revenues generated by the service, including
unbilled and uncollected revenues. If some users were not billed for the services
(or were not billed at the full rate for that class of users), a schedule showing the
full imputed revenues associated with these users shall be provided. Expenses
shall be broken out by object cost categories (e.g., salaries, supplies, etc.).
c. Self-insurance funds. For each self-insurance fund,the plan shall include: the
fund balance sheet; a statement of revenue and expenses including a summary of
billings and claims paid by agency; a listing of all non-operating transfers into
and out of the fund; the type(s) of risk(s) covered by the fund (e.g., automobile
liability, workers' compensation, etc.); an explanation of how the level of fund
contributions are determined, including a copy of the current actuarial report
(with the actuarial assumptions used) if the contributions are determined on an
actuarial basis; and, a description of the procedures used to charge or allocate
fund contributions to benefitted activities. Reserve levels in excess of claims (1)
submitted and adjudicated but not paid, (2) submitted but not adjudicated, and
(3) incurred but not submitted must be identified and explained.
d. Fringe benefits. For fringe benefit costs, the plan shall include: a listing of
fringe benefits provided to covered employees, and the overall annual cost of
each type of benefit; current fringe benefit policies*; and procedures used to
charge or allocate the costs of the benefits to benefitted activities. In addition, for
pension and post-retirement health insurance plans, the following information
shall be provided: the governmental unit's funding policies, e.g., legislative bills,
trust agreements, or State-mandated contribution rules,if different from
actuarially determined rates; the pension plan's costs accrued for the year; the
amount funded, and date(s) of funding; a copy of the current actuarial report
(including the actuarial assumptions); the plan trustee's report; and, a schedule
from the activity showing the value of the interest cost associated with late
funding.
4. Required certification. Each central service cost allocation plan will be
accompanied by a certification in the following form:
CERTIFICATE OF COST ALLOCATION PLAN
This is to certify that I have reviewed the cost allocation plan submitted herewith
and to the best of my knowledge and belief:
(1) All costs included in this proposal [identify date] to establish cost allocations
or billings for [identify period covered by plan] are allowable in accordance with
the requirements of OMB Circular A-87, "Cost Principles for State, Local, and
Indian Tribal Governments," and the Federal award(s) to which they apply.
Unallowable costs have been adjusted for in allocating costs as indicated in the
cost allocation plan.
(2)All costs included in this proposal are properly allocable to Federal awards on
the basis of a beneficial or causal relationship between the expenses incurred and
39 of 53 4/16/03 1:39 F
the awards to which they are allocated in accordance with applicable
requirements. Further, the same costs that have been treated as indirect costs
have not been claimed as direct costs. Similar types of costs have been accounted
for consistently.
I declare that the foregoing is true and correct.
Governmental Unit:
Signature:
Name of Official:
Title:
Date of Execution:
F. Negotiation and Approval of Central Service Plans.
1. All proposed central service cost allocation plans that are required to be
submitted will be reviewed,negotiated, and approved by the Federal cognizant
agency on a timely basis. The cognizant agency will review the proposal within
six months of receipt of the proposal and either negotiate/approve the proposal or
advise the governmental unit of the additional documentation needed to
support/evaluate the proposed plan or the changes required to make the proposal
acceptable. Once an agreement with the governmental unit has been reached, the
agreement will be accepted and used by all Federal agencies, unless prohibited or
limited by statute. Where a Federal funding agency has reason to believe that
special,operating factors affecting its awards necessitate special consideration,
the funding agency will, prior to the time the plans are negotiated, notify the
cognizant agency.
2. The results of each negotiation shall be formalized in a written agreement
between the cognizant agency and the governmental unit. This agreement will be
subject to re-opening if the agreement is subsequently found to violate a statute
or the information upon which the plan was negotiated is later found to be
materially incomplete or inaccurate. The results of the negotiation shall be made
available to all Federal agencies for their use.
3. Negotiated cost allocation plans based on a proposal later found to have
included costs that: (a) are unallowable (i) as specified by law or regulation, (ii)
as identified in Attachment B of this Circular, or (iii) by the terms and conditions
of Federal awards, or(b) are unallowable because they are clearly not allocable
to Federal awards, shall be adjusted, or a refund shall be made at the option of
the Federal cognizant agency. These adjustments or refunds are designed to
correct the plans and do not constitute a reopening of the negotiation.
G. Other Policies.
1. Billed central service activities. Each billed central service activity must
40 of 53 4/16/03 1:39 PM
separately account for all revenues (including imputed revenues) generated by
the service, expenses incurred to furnish the service, and profit/loss.
2. Working capital reserves. Internal service funds are dependent upon a
reasonable level of working capital reserve to operate from one billing cycle to
the next. Charges by an internal service activity to provide for the establishment
and maintenance of a reasonable level of working capital reserve, in addition to
the full recovery of costs, are allowable. A working capital reserve as part of
retained earnings of up to 60 days cash expenses for normal operating purposes
is considered reasonable. A working capital reserve exceeding 60 days may be
approved by the cognizant Federal agency in exceptional cases.
3. Carry-forward adjustments of allocated central service costs. Allocated central
service costs are usually negotiated and approved for a future fiscal year on a
"fixed with carry-forward" basis. Under this procedure, the fixed amounts for the
future year covered by agreement are not subject to adjustment for that year.
However, when the actual costs of the year involved become known, the
differences between the fixed amounts previously approved and the actual costs
will be carried forward and used as an adjustment to the fixed amounts
established for a later year. This "carry-forward" procedure applies to all central
services whose costs were fixed in the approved plan. However, a carry-forward
adjustment is not permitted, for a central service activity that was not included in
the approved plan, or for unallowable costs that must be reimbursed
immediately.
4. Adjustments of billed central services. Billing rates used to charge Federal
awards shall be based on the estimated costs of providing the services, including
an estimate of the allocable central service costs. A comparison of the revenue
generated by each billed service(including total revenues whether or not billed
or collected)to the actual allowable costs of the service will be made at least
annually, and an adjustment will be made for the difference between the revenue
and the allowable costs. These adjustments will be made through one of the
following adjustment methods: (a) a cash refund to the Federal Government for
the Federal share of the adjustment, (b) credits to the amounts charged to the
individual programs, (c) adjustments to future billing rates, or(d) adjustments to
allocated central service costs. Adjustments to allocated central services will not
be permitted where the total amount of the adjustment for a particular service
(Federal share and non-Federal) share exceeds $500,000.
5. Records retention. All central service cost allocation plans and related
documentation used as a basis for claiming costs under Federal awards must be
retained for audit in accordance with the records retention requirements
contained in the Common Rule.
6. Appeals. If a dispute arises in the negotiation of a plan between the cognizant
agency and the governmental unit, the dispute shall be resolved in accordance
with the appeals procedures of the cognizant agency.
7. OMB assistance. To the extent that problems are encountered among the
Federal agencies and/or governmental units in connection with the negotiation
41 of53
4/16/03 1:39 PP
and approval process, OMB will lend assistance, as required, to resolve such
problems in a timely manner.
Top of Page
ATTACHMENT D
Circular No. A-87
PUBLIC ASSISTANCE COST ALLOCATION PLANS
TABLE OF CONTENTS
A. General
B. Definitions
1. State public assistance agency
2. State public assistance agency costs
C. Policy
D. Submission, Documentation, and Approval of Public Assistance Cost
Allocation Plans
E. Review of Implementation of Approved Plans
F. Unallowable Costs
A. Gel end. Federally-financed programs administered by State public assistance
agencies are funded predominately by the Department of Health and Human
Services (HHS). In support of its stewardship requirements,HHS has published
requirements for the development, documentation, submission, negotiation, and
approval of public assistance cost allocation plans in Subpart E of 45 CFR Part
95. All administrative costs (direct and indirect) are normally charged to Federal
awards by implementing the public assistance cost allocation plan. This
Attachment extends these requirements to all Federal agencies whose programs
are administered by a State public assistance agency. Major federally-financed
programs typically administered by State public assistance agencies include: Aid
to Families with Dependent Children, Medicaid, Food Stamps, Child Support
Enforcement, Adoption Assistance and Foster Care, and Social Services Block
Grant.
B. Definitions.
1. "State public assistance agency" means a State agency administering or
supervising the administration of one or more public assistance programs
operated by the State as identified in Subpart E of 45 CFR Part 95. For the
purpose of this Attachment, these programs include all programs administered by
==2 of 53 an r,/nz l to ono
the State public assistance agency.
2. "State public assistance agency costs" means all costs incurred by, or allocable
to, the State public assistance agency, except expenditures for financial
assistance, medical vendor
payments, food stamps, and payments for services and goods provided directly to
program recipients.
C. Policy. State public assistance agencies will develop,document and
implement, and the Federal Government will review, negotiate, and approve,
public assistance cost allocation plans in accordance with Subpart E of 45 CFR
Part 95. The plan will include all programs administered by the State public
assistance agency. Where a letter of approval or disapproval is transmitted to a
State public assistance agency in accordance with Subpart E, the Ietter will apply
to all Federal agencies and programs. The remaining sections of this Attachment
(except for the requirement for certification) summarize the provisions of
Subpart E of 45 CFR Part 95.
D. Submission, Documentation, and Approval of Public Assistance Cost
Allocation Plans.
1. State public assistance agencies are required to promptly submit amendments
to the cost allocation plan to HHS for review and approval.
2. Under the coordination process outlined in subsection E, affected Federal
agencies will review all new plans and plan amendments and provide comments,
as appropriate, to HHS. The effective date of the plan or plan amendment will be
the first day of the quarter following the submission of the plan or amendment,
unless another date is specifically approved by HHS. HHS, as the cognizant
agency acting on behalf of all affected Federal agencies, will, as necessary,
conduct negotiations with the State public assistance agency and will inform the
State agency of the action taken on the plan or plan amendment.
E. Review of Implementation of Approved Plans.
1. Since public assistance cost allocation plans are of a narrative nature, the
review during the plan approval process consists of evaluating the
appropriateness of the proposed groupings of costs (cost centers) and the related
allocation bases. As such, the Federal Government needs some assurance that the
cost allocation plan has been implemented as approved. This is accomplished by
reviews by the funding agencies, single audits, or audits conducted by the
cognizant audit agency.
2. Where inappropriate charges affecting more than one funding agency are
identified, the cognizant HHS cost negotiation office will be advised and will
take the lead in resolving the issue(s) as provided for in Subpart E of 45 CFR
Part 95.
3. If a dispute arises in the negotiation of a plan or from a disallowance involving
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4/16/03 1:39 P
two or more funding agencies, the dispute shall be resolved in accordance with
the appeals
procedures set out in 45 CFR Part 75. Disputes involving only one funding
agency will be resolved in accordance with the funding agency's appeal process.
4. To the extent that problems are encountered among the Federal agencies
and/or governmental units in connection with the negotiation and approval
process, the Office of Management and Budget will lend assistance, as required,
to resolve such problems in a timely manner.
F. Unallowable Costs. Claims developed under approved cost allocation plans
will be based on allowable costs as identified in this Circular. Where
unallowable costs have been claimed and reimbursed, they will be refunded to
the program that reimbursed the unallowable cost using one of the following
methods: (a) a cash refund, (b) offset to a subsequent claim, or (c) credits to the
amounts charged to individual awards.
Top of Page
ATTACHMENT E
Circular No. A-87
STATE AND LSCAI. INDIRECT COST RATE PROPOSALS
TABLE OF CONTENTS
A. General
B. Definitions
1. Indirect cost rate proposal
2. Indirect cost rate
3. Indirect cost pool
4. Base
5. Predetermined rate
6. Fixed rate
7. Provisional rate
8. Final rate
9. Base period
wiArnl 1 10 PIN
d4of5�
4 K.
C. Allocation of Indirect Costs and Determination of Indirect Cost Rates
1. General
2. Simplified method
3. Multiple allocation base.method
4. Special indirect cost rates
D. Submission and Documentation of Proposals
1. Submission of indirect cost rate proposals
2. Documentation of proposals
3. Required certification
E. Negotiation and Approval of Rates
F. Other Policies
1. Fringe benefit rates
2. Billed services provided by the grantee agency
3. Indirect cost allocations not using rates
4. Appeals
5. Collections of unallowable costs and erroneous payments
b. OMB assistance
A. General.
1. Indirect costs are those that have been incurred for common or joint purposes.
These costs benefit more than one cost objective and cannot be readily identified
with a particular final cost objective without effort disproportionate to the results
achieved. After direct costs have been determined and assigned directly to
Federal awards and other activities as appropriate, indirect costs are those
remaining to be allocated to benefitted cost objectives. A cost may not be
allocated to a Federal award as an indirect cost if any other cost incurred for the
same purpose, in like circumstances, has been assigned to a Federal award as a
direct cost.
2. Indirect costs include (a) the indirect costs originating in each department or
agency of the governmental unit carrying out Federal awards and (b)the costs of
45 of53 4/16/03 1:39 P.
central governmental services distributed through the central service cost
allocation plan (as described in Attachment C) and not otherwise treated as direct
costs.
3. Indirect costs are normally charged to Federal awards by the use of an indirect
cost rate. A separate indirect cost rate(s) is usually necessary for each department
or agency of the governmental unit claiming indirect costs under Federal awards.
Guidelines and illustrations of indirect cost proposals are provided in a brochure
published by the Department of Health and Human Services entitled "A Guide
for State and Local Government Agencies: Cost Principles and Procedures for
Establishing Cost Allocation Plans and Indirect Cost Rates for Grants and
Contracts with the Federal Government." A copy of this brochure may be
obtained from the Superintendent of Documents, U.S. Government Printing
Office.
4. Because of the diverse characteristics and accounting practices of
governmental units, the types of costs which may be classified as indirect costs
cannot be specified in all situations. However, typical examples of indirect costs
may include certain State/local-wide central service costs, general administration
of the grantee department or agency, accounting and personnel services
performed within the grantee department or agency, depreciation or use
allowances on buildings and equipment, the costs of operating and maintaining
facilities, etc.
5. This Attachment does not apply to State public assistance agencies. These
agencies should refer instead to Attachment D.
B. Defi itions.
•
1. "Indirect cost rate proposal" means the documentation prepared by a
governmental unit or subdivision thereof to substantiate its request for the
establishment of an indirect cost rate.
2. "Indirect cost rate" is a device for determining in a reasonable manner the
proportion of indirect costs each program should bear. It is the ratio (expressed
as a percentage) of the indirect costs to a direct cost base.
3. "Indirect cost pool" is the accumulated costs that jointly benefit two or more
programs or other cost objectives.
4. "Base" means the accumulated direct costs (normally either total direct salaries
and wages or total direct costs exclusive of any extraordinary or distorting
expenditures) used to distribute indirect costs to individual Federal awards. The
direct cost base selected should result in each award bearing a fair share of the
indirect costs in reasonable relation to the benefits received from the costs.
5. "Predetermined rate" means an indirect cost rate, applicable to a specified
current or future period, usually the governmental unit's fiscal year. This rate is
based on an estimate of the costs to be incurred during the period. Except under
very unusual circumstances, a predetermined rate is not subject to adjustment.
"6 of 53 4/16/03 1:39 PM
(Because of legal constraints,predetermined rates are not permitted for Federal
contracts; they may, however,be used for grants or cooperative agreements.)
Predetermined rates may not be used by governmental units that have not
submitted and negotiated the rate with the cognizant agency. In view of the
potential advantages offered by this procedure, negotiation of predetermined
rates for indirect costs for a period of two to four years should be the norm in
those situations where the cost experience and other pertinent facts available are
deemed sufficient to enable the parties involved to reach an informed judgment
as to the probable level of indirect costs during the ensuing accounting periods.
-fa 4a -
6. "Fixed rate" means an indirect cost rate which has theisame characteristics as a
predetermined rate, except that the difference between the estimated costs and
the actual, allowable costs of the period covered by the rate is carried forward as
an adjustment to the rate computation of a subsequent period.
7. "Provisional rate" means a temporary indirect cost rate applicable to a
specified period which is used for funding, interim reimbursement, and reporting
indirect costs on Federal awards pending the establishment of a"final" rate for
that period.
8. "Final rate" means an indirect cost rate applicable to a specified past period
which is based on the actual allowable costs of the period. A final audited rate is
not subject to adjustment.
9. "Base period" for the allocation of indirect costs is the period in which such
costs are incurred and accumulated for allocation to activities performed in that
period. The base period normally should coincide with the governmental unit's
fiscal year,but in any event, shall be so selected as to avoid inequities in the
allocation of costs.
C. Allocation of l:'direct Costs and Determi i ation of I direct Cost Rates.
1. General.
a. Where a governmental unit's department or agency has only one major
function, or where all its major functions benefit from the indirect costs to
approximately the same degree, the allocation of indirect costs and the
computation of an indirect cost rate may be accomplished through simplified
allocation procedures as described in subsection 2.
b. Where a governmental unit's department or agency has several major functions
which benefit from its indirect costs in varying degrees, the allocation of indirect
costs may require the accumulation of such costs into separate cost groupings
which then are allocated individually to benefitted functions by means of a base
which best measures the relative degree of benefit. The indirect costs allocated to
each function are then distributed to individual awards and other activities
included in that function by means of an indirect cost rate(s).
c. Specific methods for allocating indirect costs and computing indirect cost rates
along with the conditions under which each method should be used are described
47 of 53 4/16/03 1:39 PI
in subsections 2, 3 and 4.
2. Simplified method.
a. Where a grantee agency's major functions benefit from its indirect costs to
approximately the same degree,the allocation of indirect costs may be
accomplished by(1) classifying the grantee agency's total costs for the base
period as either direct or indirect, and (2) dividing the total allowable indirect
costs (net of applicable credits) by an equitable distribution base. The result of
this process is an indirect cost rate which is used to distribute indirect costs to
individual Federal awards. The rate should be expressed as the percentage which
the total amount of allowable indirect costs bears to the base selected. This
method should also be used where a governmental unit's department or agency
has only one major function encompassing a number of individual projects or
activities, and may be used where the level of Federal awards to that department
or agency is relatively small.
b. Both the direct costs and the indirect costs shall exclude capital expenditures
and unallowable costs. However, unallowable costs must be included in the
direct costs if they represent activities to which indirect costs are properly
allocable.
c. The distribution base may be (1) total direct costs (excluding capital
expenditures and other distorting items, such as pass-through funds, major
subcontracts, etc.), (2) direct salaries and wages, or (3) another base which
results in an equitable distribution.
3. Multiple allocation base method.
a. Where a grantee agencys indirect costs benefit its major functions in varying
degrees, such costs shall be accumulated into separate cost groupings. Each
grouping shall then be allocated individually to benefitted functions by means of
a base which best measures the relative benefits.
b. The cost groupings should be established so as to permit the allocation of each
grouping on the basis of benefits provided to the major functions. Each grouping
should constitute a pool of expenses that are of like character in terms of the
functions they benefit and in terms of the allocation base which best measures
the relative benefits provided to each function. The number of separate groupings
should be held within practical limits, taking into consideration the materiality of
the amounts involved and the degree of precision needed.
c. Actual conditions must be taken into account in selecting the base to be used
in allocating the expenses in each grouping to benefitted functions. When an
allocation can be made by assignment of a cost grouping directly to the function
benefitted, the allocation shall be made in that manner. When the expenses in a
grouping are more general in nature, the allocation should be made through the
use of a selected base which produces results that are equitable to both the
Federal Government and the governmental unit. In general, any cost element or
related factor associated with the governmental unit's activities is potentially
48 of 53 4/16/03 1:39 PM
adaptable for use as an allocation base provided that: (I) it can readily be
expressed in terms of dollars or other quantitative measures (total direct costs,
direct salaries and wages, staff hours applied, square feet used, hours of usage,
number of documents processed,population served, and the like), and (2) it is
common to the benefitted functions during the base period.
d. Except where a special indirect cost rate(s) is required in accordance with
subsection 4, the separate groupings of indirect costs allocated to each major
function shall be aggregated and treated as a common pool for that function. The
costs in the common pool shall then be distributed to individual Federal awards
included in that function by use of a single indirect cost rate.
e. The distribution base used in computing the indirect cost rate for each function
may be (1) total direct costs (excluding capital expenditures and other distorting
items such as pass-through funds, major subcontracts, etc.), (2) direct salaries
and wages, or (3) another base which results in an equitable distribution. An
indirect cost rate should be developed for each separate indirect cost pool
developed. The rate in each case should be stated as the percentage relationship
between the particular indirect cost pool and the distribution base identified with
that pool.
4. Special indirect cost rates.
a. In some instances, a single indirect cost rate for all activities of a grantee
department or agency or for each major function of the agency may not be
appropriate. It may not take into account those different factors which may
substantially affect the indirect costs applicable to a particular program or group
of programs. The factors may include the physical location of the work, the level
of administrative support required, the nature of the facilities or other resources
employed, the organizational arrangements used, or any combination thereof.
When a particular award is carried out in an environment which appears to
generate a significantly different level of indirect costs, provisions should be
made for a separate indirect cost pool applicable to that award. The separate
indirect cost pool should be developed during the course of the regular allocation
process,and the separate indirect cost rate resulting therefrom should be used,
provided that: (1)the rate differs significantly from the rate which would have
been developed under subsections 2. and 3., and(2) the award to which the rate
would apply is material in amount.
b. Although this Circular adopts the concept of the full allocation of indirect
costs, there are some Federal statutes which restrict the reimbursement of certain
indirect costs. Where such restrictions exist, it may be necessary to develop a
special rate for the affected award. Where a "restricted rate" is required, the
procedure for developing a non-restricted rate will be used except for the
additional step of the elimination from the indirect cost pool those costs for
which the law prohibits reimbursement.
D. Submission and Documentation of Proposals.
1. Submission of indirect cost rate proposals.
a9 of 53 4/16/03 1:39
a. All departments or agencies of the governmental unit desiring to claim indirect
costs under Federal awards must prepare an indirect cost rate proposal and
related documentation to support those costs. The proposal and related
documentation must be retained for audit in accordance with the records
retention requirements contained in the Common Rule.
b. A governmental unit for which a cognizant agency assignment has been
specifically designated must submit its indirect cost rate proposal to its cognizant
agency. The Office of Management and Budget(OMB) will periodically publish
lists of governmental units identifying the appropriate Federal cognizant
agencies. The cognizant agency for all governmental units or agencies not
identified by OMB will be determined based on the Federal agency providing the
largest amount of Federal funds. In these cases, a governmental unit must
develop an indirect cost proposal in accordance with the requirements of this
Circular and maintain the proposal and related supporting documentation for
audit. These governmental units are not required to submit their proposals unless
they are specifically requested to do so by the cognizant agency. Where a local
government only receives funds as a sub-recipient, the primary recipient will be
responsible for negotiating and/or monitoring the sub-recipient's plan.
c. Each Indian tribal government desiring reimbursement of indirect costs must
submit its indirect cost proposal to the Department of the Interior (its cognizant
Federal agency).
d. Indirect cost proposals must be developed (and, when required, submitted)
within six months after the close of the governmental unit's fiscal year, unless an
exception is approved by the cognizant Federal agency. If the proposed central
service cost allocation plan for the same period has not been approved by that
time, the indirect cost proposal may be prepared including an amount for central
services that is based on the latest federally-approved central service cost
allocation plan. The difference between these central service amounts and the
amounts ultimately approved will be compensated for by an adjustment in a
subsequent period.
2. Documentation of proposals. The following shall be included with each
indirect cost proposal:
a. The rates proposed, including subsidiary work sheets and other relevant data,
cross referenced and reconciled to the financial data noted in subsection b.
Allocated central service costs will be supported by the summary table included
in the approved central service cost allocation plan. This summary table is not
required to be submitted with the indirect cost proposal if the central service cost
allocation plan for the same fiscal year has been approved by the cognizant
agency and is available to the funding agency.
b. A copy of the financial data (financial statements, comprehensive annual
financial report, executive budgets, accounting reports, etc.) upon which the rate
is based. Adjustments resulting from the use of unaudited data will be
recognized, where appropriate, by the Federal cognizant agency in a subsequent
i0 of 53 4/16/03 1:39 PM
proposal.
c. The approximate amount of direct base costs incurred under Federal awards.
These costs should be broken out between salaries and wages and other direct
costs.
d. A chart showing the organizational structure of the agency during the period
for which the proposal applies, along with a functional statement(s)noting the
duties and/or responsibilities of all units that comprise the agency. (Once this is
submitted, only revisions need be submitted with subsequent proposals.)
3. Required certification. Each indirect cost rate proposal shall be accompanied
by a certification in the following form:
CERTIFICAITE OF INDIRECT COSTS
This is to certify that I have reviewed the indirect cost rate proposal submitted
herewith and to the best of my knowledge and belief:
(1) All costs included in this proposal [identify date] to establish billing or final
indirect costs rates for [identify period covered by rate] are allowable in
accordance with the requirements of the Federal award(s) to which they apply
and OMB Circular A-87, "Cost Principles for State, Local, and Indian Tribal
Governments." Unallowable costs have been adjusted for in allocating costs as
indicated in the cost allocation plan.
(2) All costs included in this proposal are properly allocable to Federal awards on
the basis of a beneficial or causal relationship between the expenses incurred and
the agreements to which they are allocated in accordance with applicable
requirements. Further, the same costs that have been treated as indirect costs
have not been claimed as direct costs. Similar types of costs have been accounted
for consistently and the Federal Government will be notified of any accounting
changes that would affect the predetermined rate.
I declare that the foregoing is true and correct.
Governmental Unit:
Signature:
Name of Official:
Title:
Date of Execution:
1 n1 53 4/16/03 1:39 F
E. Negotiation and Approval of Rates.
1. Indirect cost rates will be reviewed, negotiated, and approved by the cognizant
Federal agency on a timely basis. Once a rate has been agreed upon, it will be
accepted and used by all Federal agencies unless prohibited or limited by statute.
Where a Federal funding agency has reason to believe that special operating
factors affecting its awards necessitate special indirect cost rates, the funding
agency will, prior to the time the rates are negotiated, notify the cognizant
Federal agency.
2. The use of predetermined rates, if allowed, is encouraged where the cognizant
agency has reasonable assurance based on past experience and reliable projection
of the grantee agency's costs, that the rate is not likely to exceed a rate based on
actual costs. Long-term agreements utilizing predetermined rates extending over
two or more years are encouraged, where appropriate.
3. The results of each negotiation shall be formalized in a written agreement
between the cognizant agency and the governmental unit. This agreement will be
subject to re-opening if the agreement is subsequently found to violate a statute,
or the information upon which the plan was negotiated is later found to be
materially incomplete or inaccurate. The agreed upon rates shall be made
available to all Federal agencies for their use.
4. Refunds shall be made if proposals are later found to have included costs that
(a) are unallowable(i) as specified by law or regulation, (ii) as identified in
Attachment B of this Circular, or(iii) by the terms and conditions of Federal
awards, or (b) are unallowable because they are clearly not allocable to Federal
awards. These adjustments or refunds will be made regardless of the type of rate
negotiated (predetermined, final, fixed, or provisional).
F. Other Policies.
1. Fringe benefit rates. If overall fringe benefit rates are not approved for the
governmental unit as part of the central service cost allocation plan, these rates
will be reviewed, negotiated and approved for individual grantee agencies during
the indirect cost negotiation process. In these cases, a proposed fringe benefit rate
computation should accompany the indirect cost proposal. If fringe benefit rates
are not used at the grantee agency level (i.e., the agency specifically identifies
fringe benefit costs to individual employees), the governmental unit should so
advise the cognizant agency.
2. Billed services provided by the grantee agency. In some cases, governmental
units provide and bill for services similar to those covered by central service cost
allocation plans (e.g., computer centers). Where this occurs, the governmental
unit should be guided by the requirements in Attachment C relating to the
development of billing rates and documentation requirements, and should advise
the cognizant agency of any billed services. Reviews of these types of services
(including reviews of costing/billing methodology, profits or losses, etc.)will be
made on a case-by-case basis as warranted by the circumstances involved.
52 of 53 4/16/03 1:39 PM
:, t n q
3. Indirect cost allocations not using rates. In certain situations, a governmental
unit, because of the nature of its awards,may be required to develop a cost
allocation plan that distributes indirect(and, in some cases, direct) costs to the
specific funding sources. In these cases, a narrative cost allocation methodology
should be developed, documented, maintained for audit, or submitted, as
appropriate, to the cognizant agency for review, negotiation, and approval.
4. AppeaIs. If a dispute arises in a negotiation of an indirect cost rate(or other
rate) between the cognizant agency and the governmental unit, the dispute shall
be resolved in accordance with the appeals procedures of the cognizant agency.
5. Collection of unallowable costs and erroneous payments. Costs specifically
identified as unallowable and charged to Federal awards either directly or
indirectly will be refunded (including interest chargeable in accordance with
applicable Federal agency regulations).
6. OMB assistance. To the extent that problems are encountered among the
Federal agencies and/or governmental units in connection with the negotiation
and approval process, OMB will lend assistance, as required,to resolve such
problems in a timely manner.
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53 of 53 4/16/03 1:39
City of Omaha Planning Department
Housing and Community Development Division
Housing Programs Median Family Income Limits (Revised)
(Effective December 11, 2012)
Family Size 30% 50% 60% 80% 100% 120%
1 $15,300 $25,450 $30,550 $40,750 $50,900 $61,100
2 $17,450 $29,100 $34,950 $46,550 $58,200 $69,850
3 $19,650 $32,750 $39,300 $52,350 $65,500 $78,600
4 $21,800 $36,350 $43,650 $58,150 $72,700 $87,250
5 $23,550 $39,300 $47,200 $62,850 $78,600 $94,350
6 $25,300 $42,200 $50,650 $67,500 $84,400 $101,300
7 $27,050 $45,100 $54,150 $72,150 $90,200 $108,250
8 $28,800 $48,000 $57,600 $76,800 $96,000 $115,200
9 $30,550 $50,900 $61,100 $81,450 $101,800 $122,150
10 $32,300 $53,800 $64,550 $86,100 $107,600 $129,150
11 $34,100 $56,750 $68,100 $90,750 $113,450 $136,150
12 $35,800 $59,650 $71,600 $95,400 $119,250 $143,100
Note: The actual median family income per family size must be calculated to determine eligibility for participation in federally-
assisted programs. To calculate the actual median family income, divide the actual income by the 100% Median Family Income
for the Family Size from the chart.
Example: The actual MFI percentage for a family of 5 with an actual reported income of $57,000.00 is determined by dividing
$57,000.00 by $78,600.00 (100% Median Family Income for Family of 5) - .725 x 100 = 72.50%.
m
x
is
W
Revised and approved 12/18/2012
Exhibit C
DEFINITION OF PROGRAM INCOME
"Program income" means gross income received by the Recipient or a Subrecipient directly generated from the uses of
CDBG/HOME/NSP and other federal funds. When such income is generated by an activity that is only partially assisted
with CDBG/HOME/NSP and other federal funds, the income shall be prorated to reflect the percentage of
CDBG/HOME/NSP and other federal funds used.
(1) Program income includes, but is not limited to the following:
(i) Proceeds from the disposition by sale or long term lease of real property purchased or improved with
CDBG/HOME/NSP and other federal funds;
(ii) Proceeds from the disposition of equipment purchased with CDBG/HOME/NSP and other federal funds;
(iii) Gross income from the use or rental of real or personal property acquired by the Recipient or a
Subrecipient with CDBG/HOME/NSP and other federal funds, less the costs incidental to the generation
of such income;
(iv) Gross income from the use or rental of real property owned by the Recipient or a Subrecipient that was
constructed or improved with CDBG/HOME/NSP and other federal funds, less the costs incidental to the
generation of such income;
(v) Payments of principal and interest on loans made using CDBG/HOME/NSP and other federal funds;
(vi) Proceeds from the sale of loans made with CDBG/HOME/NSP and other federal funds;
(vii) Proceeds from the sale of obligations secured by loans made with CDBG/HOME/NSP and other federal
funds;
(viii) Interest earned on funds held in a revolving fund account;
(ix) Interest earned on program income pending disposition of such income; and
(x) Funds collected through special assessments made against properties owned and occupied by households
not of low- and moderate-income, where such assessments are used to recover all or part of the
CDBG/HOME/NSP and other federal portion of a public improvement.
(2) Program income does not include interest earned (except for interest described in §570.513) on cash advances
from the US Treasury. Such interest shall be remitted to HUD for transmittal to the US Treasury and will not be
reallocated under Section 106(c) or (d) of the Act. Examples of other receipts that are not considered program
income are proceeds from fundraising activities carried out by Subrecipients receiving CDBG/HOME/NSP and
other federal assistance; funds collected through special assessments used to recover the non-CDBG/HOME/NSP
and other federal portion of a public improvement; and proceeds from the disposition of real property acquired or
improved with CDBG/HOME/NSP and other federal funds when such disposition occurs after the applicable time
period specified in §570.503(b)(8) for Subrecipient-controlled property or §570.505 for Recipient-controlled
property for CDBG program funds and §92.503 for HOME/NSP program funds.
(3) Any program income generated by NSP funds through March 31, 2013 shall be used to construct housing units
east of 72nd Street affordable to low-, moderate-, and middle-income (LMMI) households. After March 31, 2013,
all program income generated by NSP funds will be limited to eligible CDBG activities, including the benefit to
low- and moderate-income (LMI) (not LMMI) households during the term of this Agreement, the program
income shall be returned to the City within thirty(30) days.
O
Ua4RTUN TY Revised and approved 12/3/2009
CIRCULAR A-110 REVISED 11/19/93 As Further Amended 9/30/99 I The White House Page 1 of 30
Exhibit D
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ABOUT
Leadership CIRCULAR A-no REVISED n/19/93 As Further Amended
OMB Organization Chart 9/30/99
Open Government Plan TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
RSS Feeds
Intellectual Property SUBJECT: Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher
Education,Hospitals,and Other Non-Profit Organizations
Agency Info
Bulletins 1.Purpose.This Circular sets forth standards for obtaining consistency and uniformity among Federal agencies in the
Circulars administration of grants to and agreements with institutions of higher education,hospitals,and other non-profit
Budget organizations.
State and Local
Governments 2.Authority.Circular A-110 is issued under the authority of 31 U.S.C.503(the Chief Financial Officers Act),31
Educational and Non- U.S.C.1111,41 U.S.C.405(the Office of Federal Procurement Policy Act),Reorganization Plan No.2 of 1970,and
Profit Institutions E.O.11541("Prescribing the Duties of the Office of Management and Budget and the Domestic Policy Council in the
Federal Procurement Executive Office of the President").
Federal Financial
Management 3.Policy.Except as provided herein,the standards set forth in this Circular are applicable to all Federal agencies.If
Federal Information any statute specifically prescribes policies or specific requirements that differ from the standards provided herein,the
Resources!Data provisions of the statute shall govern.
Collection
Other Special Purpose The provisions of the sections of this Circular shall be applied by Federal agencies to recipients.Recipients shall apply
Memoranda the provisions of this Circular to subrecipients performing substantive work under grants and agreements that are
Privacy Guidance passed through or awarded by the primary recipient,if such subrecipients are organizations described in paragraph 1.
Reports
Federal Register This Circular does not apply to grants,contracts,or other agreements between the Federal Government and units of
FOIA State or local governments covered by OMB CircularA-102,"Grants and Cooperative Agreements with State and
NDA 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
No FEAR contracts to State or local govemments are not covered by this Circular.However,this Circular applies to subawards
OMB Locator 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.
4.Definitions.Definitions of key terms used in this Circular are contained in Section .2 in the Attachment.
5.Required Action.The specific requirements and responsibilities of Federal agencies and institutions of higher
education,hospitals,and other non-profit organizations are set forth in this Circular.Federal agencies responsible for
awarding and administering grants to and other agreements with organizations described in paragraph 1 shall adopt
the language in the Circular unless different provisions are required by Federal statute or are approved by OMB.
6.OMB Responsibilities.OMB will review agency regulations and implementation of this Circular,and will provide
interpretations of policy requirements and assistance to insure effective and efficient implementation.Any exceptions
will be subject to approval by OMB,as indicated in Section_.4 in the Attachment.Exceptions will only be made in
particular cases where adequate justification is presented.
7.Information Contact.Further information concerning this Circular may be obtained by contacting the Office of
Federal Financial Management,Office of Management and Budget,Washington,DC 20503,telephone(202)395-
3993.
8.Termination Review Date.This Circular will have a policy review three years from date of issuance.
9.Effective Date.The standards set forth in this Circular which affect Federal agencies will be effective 30 days after
publication of the final revision in the Federal Register.Those standards which Federal agencies impose on grantees
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CIRCULAR A-110 REVISED 11/19/93 As Further Amended 9/30/99 I The White House Page 2 of 3U
will be adopted by agencies in codified regulations within six months after publication in the Federal Register.Earlier
implementation is encouraged.
Attachment
Grants and Agreements with Institutions of Higher Education,
Hospitals,and Other Non-Profit Organizations
SUBPART A-GENERAL
Sec.
—1 Purpose.
.2 Definitions.
.3 Effect on other issuances.
.4 Deviations.
—5 Subawards.
SUBPART B-PRE-AWARD REQUIREMENTS
10 Purpose.
_.11 Pre-award policies.
12 Forms for applying for Federal assistance.
_13 Debarment and suspension.
.14 Special award conditions.
.15 Metric system of measurement.
16 Resource Conservation and Recovery Act.
.17 Certifications and representations.
SUBPART C-POST-AWARD REQUIREMENTS
Financial and Program Management
_.20 Purpose of financial and program management.
_.21 Standards for financial management systems.
_.22 Payment.
.23 Cost sharing or matching.
_24 Program income.
_25 Revision of budget and program plans.
.26 Non-Federal audits.
_27 Allowable costs.
_28 Period of availability of funds.
.29 Conditional exemptions.
Property Standards
.30 Purpose of property standards.
.31 Insurance coverage.
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C IRC U LAR A-11 U REVISED 11/19/93 As Further Amended 9/30/99 I The White House Page 3 of 30
.32 Real property.
33 Federally-owned and exempt property.
34 Equipment.
.35 Supplies and other expendable property.
_.36 Intangible property.
37 Property trust relationship.
Procurement Standards
_40 Purpose of procurement standards.
.41 Recipient responsibilities.
42 Codes of conduct.
_43 Competition.
_44 Procurement procedures.
_.45 Cost and price analysis.
_.46 Procurement records.
.47 Contract administration.
_48 Contract provisions.
Reports and Records
.50 Purpose of reports and records.
_51 Monitoring and reporting program performance.
_52 Financial reporting.
_53 Retention and access requirements for records.
Termination and Enforcement
_60 Purpose of termination and enforcement.
.61 Termination.
_.62 Enforcement.
SUBPART D-AFTER-THE-AWARD REQUIREMENTS
70 Purpose.
.71 Closeout procedures.
_.72 Subsequent adjustments and continuing responsibilities.
.73 Collection of amounts due.
APPENDIX A-CONTRACT PROVISIONS
SUBPART A-General
_1 Purpose.This Circular establishes uniform administrative requirements for Federal grants and agreements
awarded to institutions of higher education,hospitals,and other non-profit organizations.Federal awarding agencies
shall not impose additional or inconsistent requirements,except as provided in Sections—4,and_14 or unless
specifically required by Federal statute or executive order.Non-profit organizations that implement Federal programs
for the States are also subject to State requirements,
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CIRCULAR A-110 REVISED 11/19/93 As Further Amended 9/30/99 I the White House Page 4 or i U
.2 Definitions.
(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.
Q)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.
(I)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.
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CIRCULAR A-11U REVISED 11/19/93 As Further Amended 9/30/99 1 The White House Page 5 of 30
(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).
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CII<L U LAK A-11 U ltU V lSbll 11/19/93 As Further Amended 9/30/99 I The White House Yage o or J U
(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.
(II)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
A 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)govems 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
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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.My 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.
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(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 Govemment.
(d)The Federal awarding agency may require adequate fidelity bond coverage where the recipient lacks sufficient
coverage to protect the Federal Govemment'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.
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(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 cyde.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.
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(I)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.
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(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 maybe 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.
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(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.
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(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).
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(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.
(i)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
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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.
(I)When requesting approval for budget revisions,redpients 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
redpient 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 govemments 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 pm-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
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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 A4),"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 Govemment 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
_.31through .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 wntten 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 Govemment 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.
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(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)Tile 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 dedared 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.
(h)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 projector 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.
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(1)Equipment records shall be maintained accurately and shall include the following infomration.
(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.My 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
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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 recipients
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.
—36Intangible 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.
•
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(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 Govemment 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).
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_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 dearly 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 dear 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.
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(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.
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(1)A recipients 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 contractors obligations under such
contract.
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(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.
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.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
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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 disdosure 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.
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(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 property 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.<
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(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 unretumed 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 Govemment 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 retum 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.
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(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%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
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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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Exhibit E
CITY OF COUNCIL BLUFFS
HOME LOAN DETERMINATION PROCESS
The following must be completed prior to submitting an application for HOME loan
assistance:
1) The applicant or family must have satisfactorily completed the 12 hour Home
Buyer Workshop and have received a Certificate of Achievement, offered by
Family Housing Advisory Services, Inc.
2) The household requesting assistance must have been approved for first mortgage
financing and be able to pay for normal closing costs.
Upon successfully completing requirements 1 and 2 above, the applicant may then make
application for HOME loan assistance.
Upon receiving the applicant's housing assistance application, the City's designated
nonprofit agency will review the completed application for eligibility. The nonprofit
agency will make a preliminary determination for eligibility and then forward their
recommendation to the City for final loan approval.
DAVIS BACON EXEMPTION CHECKLIST Exhibit F
Project Name: Council Bluffs 2009-2010 agreement
Project Address: 12 units single family scattered sites Project No.
It is determined that the above project is exempt from Davis-Bacon Prevailing Wage Rate Provisions because:
Residential rehabilitation or new construction project is funded in whole or in part with
CDBG funds and such residential property contains less than 8 units.
Residential rehabilitation or new construction contract, including construction and non-
x scatter site units construction costs, is funded with HOME funds and such residential property contains
less than 12 assisted units.
Proceeds of award of federal funds are solely for the acquisition of real property(land,
pre-existing buildings and improvements).
The entire project consists of demolitions and no construction is imminent on site.
Funding solely for demolition to be completed by City or its contractor before transfer
of land to developer.
Funding for on-site improvements only. On-site improvements are completed on land
owned by the City and improvements are completed before transfer of land to
developer.
Funding for off-site improvements that are separately owned. Off-site and on-site
construction are provided for in separate construction contracts.
Project funding is for infrastructure improvements owned and operated by utility
company.
The prime construction contract financed in whole or part with CDBG or HOME funds
is incidental and the amount is less than$2,000.
Funding for professional services only (legal/acct/architectural/engineering). These
services are funded under a separate contract from any construction contract.
Funding source is Emergency Shelter Grant (ESG) or Supportive Housing Grant
(SHP),which are exempt from Davis/Bacon.
The project will be done through a force account.
There is no federal money in the construction contract.
Other—Explain:
—?ct171 Xa,t,
Date: ( //
Signature of Responsible Administrator /!!
A description of the scope of the project is attached.
Revised and approved 7/12/2011
CITY OF OMAHA Exhibit G
AFFIRMATIVE MARKETING POLICY
AND MONITORING PROCEDURES
Effective: October 1, 1999
Revised: November 10, 2011
Affirmative Marketing Policy
In furtherance of the City of Omaha's commitment to non-discrimination and equal opportunity in housing, the
City of Omaha establishes procedures to affirmatively market units constructed or rehabilitated under any City-
assisted program or project. These procedures are intended to further the objectives of Title VIII of the Civil
Rights Act of 1968 and Executive Order 11063. It is the affirmative marketing goal of the City of Omaha to
assure that individuals who normally might not apply for vacant rehabilitated or constructed units because of
their race or ethnicity:
• know about the vacancies
• feel welcome to apply
• have the opportunity to rent or purchase the units
This policy will be carried out through the following procedures:
1. Informing the public, potential tenants and owners about federal fair housing laws and affirmative
marketing policies
• The City of Omaha will inform the public, potential tenants, purchasers and owners about its
affirmative marketing policy, Title VIII and Executive Order 11063.
• The City will place public notices in the Omaha World Herald and the community media serving
minority groups to inform owners of the program.
• City representatives will meet with property owners and assist them in preparing program
applications as requested and necessary.
• Owners selected for a rehabilitation program shall notify in-place tenants in writing of their
involvement in the program and provide them with the following options in accordance with
provisions of the Uniform Relocation Act;
1. Remain in the present unit during rehabilitation.
2. Move temporarily to another unit within the project while his/her unit is being rehabilitated.
3. Permanently relocate or voluntarily abandon the unit during the rehabilitation.
• Owners shall post the HUD Equal Housing Opportunity Logo in the project building and display
the Fair Housing Poster in their rental office and on all application and documents/forms.
• Owners shall use media accessible to minorities when advertising the availability of units.
• Owners shall use the Equal Housing Opportunity logo, slogan or statement in all advertising.
• Owners shall maintain a non-discriminatory hiring policy.
1 Reviewed and revised 11/10/2011
■ Owners shall adopt a fair housing policy.
2. Informing low- and moderate-income persons about available units
Property Owners having vacant units may contact the Omaha Housing Authority (OHA) at 402-444-
6900 and place units on OHA's "Available Unit" list. This list is distributed to families who have
received Certificates of Family Participation and are looking for units to rent. The listing will remain on
the "Available" list for 35 calendar days, then be removed. If still vacant, the property may be relisted.
Property Owners must document any conversation/notification regarding posting of vacancies.
If the property is not listed with OHA when rehabilitated or constructed units are available for initial
occupancy, the owner shall inform the following outreach agencies and/or other agencies of this fact in
writing and submit a copy of the letters to the City of Omaha, Planning Department, Housing and
Community Development Division, Loan Section, 1819 Farnam Street, Room 1111, Omaha, Nebraska,
68183.
Chicano Awareness Center, Inc. Urban League of Nebraska
4821 South 24th Street 3022 North 24th Street
Omaha,NE 68107 Omaha,NE 68111
Family Housing Advisory Services Community Alliance
2401 Lake Street 4001 Leavenworth Street
Omaha,NE 68111 Omaha,NE 68105
Eastern Nebraska Human Services Heartland Family Service
900 South 74th Plaza, Suite 200 2101 South 42nd Street
Omaha,NE 68114 Omaha, NE 68105
Greater Omaha Community Action Heartland Family Service
2406 Fowler Avenue 6720 North 30th Street
Omaha,NE 68111 Omaha, NE 68112
Greater Omaha Community Action Heartland Family Service
5002 South 24th Street, Suite 203 2580 South 90th Street
Omaha, NE 68111 Omaha, NE 68124
League of Human Dignity Heartland Family Service
5513 Center Street 11212 Davenport Street
Omaha, NE 68106 Omaha,NE 68154
Heartland Family Service Nebraska Commission for the Deaf
116 E. Mission Avenue 1313 Farnam on the Mall
Bellevue, NE 68005 Omaha, NE 68102
Heartland Family Service Omaha Association for the Blind
302 American Parkway 1024 South 32nd Street
Papillion,NE 68046 Omaha, NE 68105
Holy Name Housing Corporation Great Plains Chapter
3014 North 45th Street Paralyzed Veterans of America
Omaha,NE 68104 7612 Maple Street
Omaha,NE 68134
Mayor's Commission for Citizens
with Disabilities
1819 Farnam Street, Room 304
Omaha,NE 68183
2 Reviewed and revised 1I/10/2011
3. Record Keeping
The Owner shall keep records of the following:
• Local media advertisements of the vacant unit
• Contact dates with outreach agencies and Omaha Housing Authority
• Correspondence informing outreach agencies of vacancies
• Race and other demographic data of occupants and persons inquiring about availability of units
• Tenant Survey, utility allowance and income determination forms signed and dated by Owner
• Name and age of all household members
• Verified income for each household
• Copy of lease
• U.S. Citizenship Attestation Form for Public Benefit
4. Assessment of Actions
The Owner's affirmative marketing efforts will be assessed by the City to:
• determine whether Owners have affirmatively marketed vacant units to individuals who normally
might not apply; and,
• determine whether a sufficient number of racial and ethnic families have applied for vacant units
The City will take corrective action if it is found that property owners are not carrying out established
procedures of the City's Affirmative Marketing Policy and Monitoring Procedures.
Affirmative Marketing Policy Monitoring Procedures
1. Duties and Responsibilities of the Owner
a) The Owner shall post the HUD Equal Housing Opportunity Logo in the project building and in the
rental or sales office.
b) The Owner shall submit to the City a copy of all letters notifying the outreach agencies of
vacancies. Outreach agencies may include, but are not limited to, the agencies listed in Item 2,
Page 2.
c) The Owner shall submit to the City a copy of all advertisements placed in the local newspapers.
All advertisements must include the Equal Housing Opportunity Logo, Slogan or Statement.
d) The Owner shall submit to the City a Demographics Form for Applicants, attached as Exhibit 1,
which includes the name, racial/ethnic characteristics, income and family size for each person
responding to the advertisement.
e) Prior to the start of the project, the Owner shall meet with each in-place tenants of the occupied
units and complete a Tenant Survey, utility allowance, City of Omaha Definition of Income
Affidavit, computing annual income form, and U.S. Citizenship Attestation for Public Benefit
form. Owner shall submit these properly completed forms to the City, as well as a copy of the
dated and signed lease agreement, and retain the original lease for proper record keeping. Forms
must be updated on lease anniversary date and submitted to the City during the period of
affordability. A copy of each form is attached and marked Exhibit 2.
3 Reviewed and revised 11/10/2011
f) The Owner shall provide each in-place tenant in the project with a copy of the City of Omaha's
written Tenant Assistance Policy (TAP) and shall advise said tenant(s) of the impact of the project
on him or her. The Owner shall provide the TAP to the tenant immediately after submission of the
Owner's application for participation in the City's program.
g) After completion of the project, the Owner shall submit a Tenant Survey Form, utility allowance,
Computing Annual Income Form, U.S. Attestation of Citizenship for Public Benefit, and other
reporting forms as required by the teiins of the Agreement, for each occupied unit, as well as a
copy of the lease agreement. All documents must be properly executed and dated.
h) Owner shall insure that the rents, including utilities and Median Family Income, are consistent
with the terms and conditions in the approved Agreement between the Owner and the City of
Omaha
2. Duties and Responsibilities of the City
a) The City shall assess the affirmative marketing procedures to determine whether the Owner has
affirmatively marketed the vacant units by monitoring the Owner's performance in carrying out the
Duties and Responsibilities of the Owner as outlined in Section 1.
b) The City shall assess the affirmative marketing efforts of the Owner to determine whether a
sufficient number of racial and ethnic families have applied for vacant units. This determination
will be made by reviewing the information provided on the Demographics Form for Applicant and
Tenant Survey Form to determine the proportion of racial/gender participation versus overall
participation.
c) The City shall take the following corrective action if it is found that the Owner is not carrying out
established procedures of affirmatively marketing units:
• Notify the Owner in writing of any violations of the Owner's Duties and Responsibilities.
• The Owner will be given thirty(30) days upon receipt of written notification to provide
evidence of compliance. Upon the Owner's request, the City will provide technical assistance.
• If the Owner fails to comply with the Affirmative Marketing Policy and Monitoring
Procedures, the City may declare the loan/grant in default.
4 Reviewed and revised 11/10/2011
EXHIBIT 1
CITY OF OMAHA
DEMOGRAPHICS FORM FOR APPLICANTS
Loan No. Date No. of Vacant Units
Owner Project Address
Person Completing Person's Phone No.
This Report Home: Work
Race/Ethnicity
Family Monthly Of Head of
Applicant Size Income Household
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
NOTE: This form is a list of everyone who inquired about renting or purchasing the unit(s).
5 Reviewed and revised 11/10/2011
AFFIRMATIVE MARKETING POLICY PLAN
The Undersigned does/do hereby agree to comply with all terms and conditions of and adopt the City of
Omaha's Affirmative Marketing Policy (attached hereto and incorporated herein by this reference as though
fully set forth) for the Project located at as approved by on
Date:
Name of Business or Corporation:
(if applicable)
By:
Signature
Printed Name:
6 Reviewed and revised 11/10/2011
Exhibit H
Circular No. A-133
Revised to show changes published in the
Federal Register June 27, 2003 and June 26, 2007
Audits of States,Local Governments,and Non-Profit Organizations
Accompanying Federal Register Materials:
-- Audits of States, Local Governments, and Non-Profit Organizations June 30, 1997
- - Revision published June 27, 2003
This revision: (1) increased the dollar threshold for the audit requirement; and (2) made
changes regarding determination of cognizant and oversight agencies for audit.
- - Revision published June 26, 2007
This revision: (1) replaced the term "reportable conditions"with "significant deficiencies"
to conform with current auditing standards;and (2) updated report submission
requirements. Definition of"significant deficiencies"and "material weaknesses"are as
defined in generally accepted auditing standards issued by the American Institute of
Certified Public Accountants (AICPA) and Government Auditing Standards issued by the
Government Accountability Office.
[Note: The June 27, 2003 revisions: (1) increased the dollar threshold for the audit requirement, and (2)
made changes regarding determination of cognizant and oversight agencies for audit.The June 26, 2007
revisions make changes to(1)to replace the terms"reportable conditions"with "significant deficiencies"to
conform with changes in auditing standards; and (2) reporting submission requirements.
In several places, the Circular includes guidelines for the reporting of"significant deficiencies"and
"material weaknesses."These terms are to be used as defined in generally accepted auditing standards
issued by the American Institute of Certified Public Accountants (AICPA), and Government Auditing
Standards issued by the Government Accountability Office.]
Circular No. A-133
Revised to show changes published in the Federal Registers
of June 27, 2003 and June 26, 2007
Audits of States, Local Governments, and Non-Profit Organizations
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Audits of States, Local Governments, and Non-Profit Organizations
1. Purpose. This Circular is issued pursuant to the Single Audit Act of
1984, P.L. 98-502, and the Single Audit Act Amendments of 1996, P.L. 104-156.
It sets forth standards for obtaining consistency and uniformity among Federal
agencies for the audit of States, local governments, and non-profit
organizations expending Federal awards.
2. Authority. Circular A-133 is issued under the authority of sections
503, 1111, and 7501 et seq. of title 31, United States Code, and Executive
Orders 8248 and 11541.
3. Rescission and Supersession. This Circular rescinds Circular A-128,
"Audits of State and Local Governments, " issued April 12, 1985, and supersedes
the prior Circular A-133, "Audits of Institutions of Higher Education and
Other Non-Profit Institutions, " issued April 22, 1996. For effective dates,
see paragraph 10.
4. Policy. Except as provided herein, the standards set forth in this
Circular shall be applied by all Federal agencies. If any statute
specifically prescribes policies or specific requirements that differ from the
standards provided herein, the provisions of the subsequent statute shall
govern.
Federal agencies shall apply the provisions of the sections of this
Circular to non-Federal entities, whether they are recipients expending
Federal awards received directly from Federal awarding agencies, or are
subrecipients expending Federal awards received from a pass-through entity (a
recipient or another subrecipient) .
This Circular does not apply to non-U.S. based entities expending
Federal awards received either directly as a recipient or indirectly as a
subrecipient.
5. Definitions. The definitions of key terms used in this Circular are
contained in § .105 in the Attachment to this Circular.
6. Required Action. The specific requirements and responsibilities of
Federal agencies and non-Federal entities are set forth in the Attachment to
this Circular. Federal agencies
making awards to non-Federal entities, either directly or indirectly, shall
adopt the language in the Circular in codified regulations as provided in
Section 10 (below) , unless different provisions are required by Federal
statute or are approved by the Office of Management and Budget (OMB) .
7. OMB Responsibilities. OMB will review Federal agency regulations and
implementation of this Circular, and will provide interpretations of policy
requirements and assistance to ensure uniform, effective and efficient
implementation.
8. Information Contact. Further information concerning Circular A-133 may
be obtained by contacting the Financial Standards and Reporting Branch, Office
of Federal Financial Management, Office of Management and Budget, Washington,
DC 20503, telephone (202) 395-3993.
1
9. Review Date. This Circular will have a policy review three years from
the date of issuance.
10. Effective Dates. The standards set forth in § .400 of the Attachment
to this Circular, which apply directly to Federal agencies, shall be effective
July 1, 1996, and shall apply to audits of fiscal years beginning after June
30, 1996, except as otherwise specified in § .400 (a) .
The standards set forth in this Circular that Federal agencies shall
apply to non-Federal entities shall be adopted by Federal agencies in codified
regulations not later than 60 days after publication of this final revision
in the Federal Register, so that they will apply to audits of fiscal years
beginning after June 30, 1996, with the exception that § .305(b) of the
Attachment applies to audits of fiscal years beginning after June 30, 1998.
The requirements of Circular A-128, although the Circular is rescinded, and
the 1990 version of Circular A-133 remain in effect for audits of fiscal years
beginning on or before June 30, 1996.
The revisions published in the Federal Register June 27, 2003, are
effective for fiscal years ending after December 31, 2003, and early
implementation is not permitted with the exception of the definition of
oversight agency for audit which is effective July 28, 2003.
Augustine T. Smythe
Acting Director
The revisions published in the Federal Register June 26, 2007, are
effective for fiscal years ending on or after December 15, 2006.
Rob Portman
Director
Attachment
2
PART_ --AUDITS OF STATES, LOCAL GOVERNMENTS, AND NON-PROFIT
ORGANIZATIONS
Subpart A--General
Sec.
.100 Purpose.
.105 Definitions.
Subpart B--Audits
.200 Audit requirements.
.205 Basis for determining Federal awards expended.
.210 Subrecipient and vendor determinations.
.215 Relation to other audit requirements.
.220 Frequency of audits.
.225 Sanctions.
.230 Audit costs.
.235 Program-specific audits.
Subpart C--Auditees
.300 Auditee responsibilities.
.305 Auditor selection.
.310 Financial statements.
.315 Audit findings follow-up.
.320 Report submission.
Subpart D--Federal Agencies and Pass-Through Entities
.400 Responsibilities.
.405 Management decision.
Subpart E--Auditors
.500 Scope of audit.
.505 Audit reporting.
.510 Audit findings.
.515 Audit working papers.
.520 Major program determination.
.525 Criteria for Federal program risk.
.530 Criteria for a low-risk auditee.
Appendix A to Part - Data Collection Form (Form SF-SAC) .
Appendix B to Part _ - Circular A-133 Compliance Supplement.
3
Subpart A--General
§ .100 Purpose.
This part sets forth standards for obtaining consistency and uniformity
among Federal agencies for the audit of non-Federal entities expending Federal
awards.
§ .105 Definitions.
Auditee means any non-Federal entity that expends Federal awards which
must be audited under this part.
Auditor means an auditor, that is a public accountant or a Federal,
State or local government audit organization, which meets the general
standards specified in generally accepted government auditing standards
(GAGAS) . The term auditor does not include internal auditors of non-profit
organizations.
Audit finding means deficiencies which the auditor is required by
§_.510(a) to report in the schedule of findings and questioned costs.
CFDA number means the number assigned to a Federal program in the
Catalog of Federal Domestic Assistance (CFDA) .
Cluster of programs means a grouping of closely related programs that
share common compliance requirements. The types of clusters of programs are
research and development (R&D) , student financial aid (SFA) , and other
clusters. "Other clusters" are as defined by the Office of Management and
Budget (OMB) in the compliance supplement or as designated by a State for
Federal awards the State provides to its subrecipients that meet the
definition of a cluster of programs. When designating an "other cluster, " a
State shall identify the Federal awards included in the cluster and advise the
subrecipients of compliance requirements applicable to the cluster, consistent
with § .400(d) (1) and § .400(d) (2) , respectively. A cluster of programs
shall be considered as one program for determining major programs, as
described in § .520, and, with the exception of R&D as described in
§ .200(c) , whether a program-specific audit may be elected.
Cognizant agency for audit means the Federal agency designated to carry
out the responsibilities described in § .400(a) .
Compliance supplement refers to the Circular A-133 Compliance
Supplement, included as Appendix B to Circular A-133, or such documents as
OMB or its designee may issue to replace it. This document is available from
the Government Printing Office, Superintendent of Documents, Washington, DC
20402-9325.
Corrective action means action taken by the auditee that:
(1) Corrects identified deficiencies;
(2) Produces recommended improvements; or
(3) Demonstrates that audit findings are either invalid or do not
warrant auditee action.
Federal agency has the same meaning as the term agency in Section 551 (1)
of title 5, United States Code.
Federal award means Federal financial assistance and Federal cost-
reimbursement contracts that non-Federal entities receive directly from
Federal awarding agencies or indirectly from pass-through entities. It does
4
not include procurement contracts, under grants or contracts, used to buy
goods or services from vendors. Any audits of such vendors shall be covered
by the terms and conditions of the contract. Contracts to operate Federal
Government owned, contractor operated facilities (GOCOs) are excluded from the
requirements of this part.
Federal awarding agency means the Federal agency that provides an award
directly to the recipient.
Federal financial assistance means assistance that non-Federal entities
receive or administer in the form of grants, loans, loan guarantees, property
(including donated surplus property) , cooperative agreements, interest
subsidies, insurance, food commodities, direct appropriations, and other
assistance, but does not include amounts received as reimbursement for
services rendered to individuals as described in § .205(h) and S .205(i) .
Federal program means:
(1) All Federal awards to a non-Federal entity assigned a single
number in the CFDA.
(2) When no CFDA number is assigned, all Federal awards from the same
agency made for the same purpose should be combined and considered one
program.
(3) Notwithstanding paragraphs (1) and (2) of this definition, a
cluster of programs. The types of clusters of programs are:
(i) Research and development (R&D) ;
(ii) Student financial aid (SFA) ; and
(iii) "Other clusters, " as described in the definition of cluster
of programs in this section.
GAGAS means generally accepted government auditing standards issued by
the Comptroller General of the United States, which are applicable to
financial audits.
Generally accepted accounting principles has the meaning specified in
generally accepted auditing standards issued by the American Institute of
Certified Public Accountants (AICPA) .
Indian tribe means any Indian tribe, band, nation, or other organized
group or community, including any Alaskan Native village or regional or
village corporation (as defined in, or established under, the Alaskan Native
Claims Settlement Act) that is recognized by the United States as eligible for
the special programs and services provided by the United States to Indians
because of their status as Indians.
Internal control means a process, effected by an entity's management and
other personnel, designed to provide reasonable assurance regarding the
achievement of objectives in the following categories:
(1) Effectiveness and efficiency of operations;
(2) Reliability of financial reporting; and
(3) Compliance with applicable laws and regulations.
Internal control pertaining to the compliance requirements for Federal
programs (Internal control over Federal programs) means a process--effected by
5
an entity's management and other personnel--designed to provide reasonable
assurance regarding the achievement of the following objectives for Federal
programs:
(1) Transactions are properly recorded and accounted for to:
(i) Permit the preparation of reliable financial statements and
Federal reports;
(ii) Maintain accountability over assets; and
(iii) Demonstrate compliance with laws, regulations, and other
compliance requirements;
(2) Transactions are executed in compliance with:
(i) Laws, regulations, and the provisions of contracts or grant
agreements that could have a direct and material effect on a Federal program;
and
(ii) Any other laws and regulations that are identified in the
compliance supplement; and
(3) Funds, property, and other assets are safeguarded against loss
from unauthorized use or disposition.
Loan means a Federal loan or loan guarantee received or administered by
a non-Federal entity.
Local government means any unit of local government within a State,
including a county, borough, municipality, city, town, township, parish, local
public authority, special district, school district, intrastate district,
council of governments, and any other instrumentality of local government.
Major program means a Federal program determined by the auditor to be a
major program in accordance with § .520 or a program identified as a major
program by a Federal agency or pass-through entity in accordance with
§_.215(c) .
Management decision means the evaluation by the Federal awarding agency
or pass-through entity of the audit findings and corrective action plan and
the issuance of a written decision as to what corrective action is necessary.
Non-Federal entity means a State, local government, or non-profit
organization.
Non-profit organization means:
(1) any corporation, trust, association, cooperative, or other
organization that:
(i) Is operated primarily for scientific, educational, service,
charitable, or similar purposes in the public interest;
(ii) Is not organized primarily for profit; and
(iii) Uses its net proceeds to maintain, improve, or expand its
operations; and
(2) The term non-profit organization includes non-profit institutions
of higher education and hospitals.
6
OMB means the Executive Office of the President, Office of Management
and Budget.
Oversight agency for audit means the Federal awarding agency that
provides the predominant amount of direct funding to a recipient not assigned
a cognizant agency for audit. When there is no direct funding, the Federal
agency with the predominant indirect funding shall assume the oversight
responsibilities. The duties of the oversight agency for audit are described
in § .400(b) .
Effective July 28, 2003, the following is added to this definition:
A Federal agency with oversight for an auditee may reassign oversight to
another Federal agency which provides substantial funding and agrees to
be the oversight agency for audit. Within 30 days after any
reassignment, both the old and the new oversight agency for audit shall
notify the auditee, and, if known, the auditor of the reassignment."
Pass-through entity means a non-Federal entity that provides a Federal
award to a subrecipient to carry out a Federal program.
Program-specific audit means an audit of one Federal program as provided
for in § .200(c) and § .235.
Questioned cost means a cost that is questioned by the auditor because
of an audit finding:
(1) Which resulted from a violation or possible violation of a
provision of a law, regulation, contract, grant, cooperative agreement, or
other agreement or document governing the use of Federal funds, including
funds used to match Federal funds;
(2) Where the costs, at the time of the audit, are not supported by
adequate documentation; or
(3) Where the costs incurred appear unreasonable and do not reflect
the actions a prudent person would take in the circumstances.
Recipient means a non-Federal entity that expends Federal awards
received directly from a Federal awarding agency to carry out a Federal
program.
Research and development (R&D) means all research activities, both basic
and applied, and all development activities that are performed by a non-
Federal entity. Research is defined as a systematic study directed toward
fuller scientific knowledge or understanding of the subject studied. 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. 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.
Single audit means an audit which includes both the entity's financial
statements and the Federal awards as described in § .500.
State means any State of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, and the Trust Territory of the
7
Pacific Islands, any instrumentality thereof, any multi-State, regional, or
interstate entity which has governmental functions, and any Indian tribe as
defined in this section.
Student Financial Aid (SFA) includes those programs of general student
assistance, such as those authorized by Title IV of the Higher Education Act
of 1965, as amended, (20 U.S.C. 1070 et seq.) which is administered by the
U.S. Department of Education, and similar programs provided by other Federal
agencies. It does not include programs which provide fellowships or similar
Federal awards to students on a competitive basis, or for specified studies or
research.
Subrecipient means a non-Federal entity that expends Federal awards
received from a pass-through entity to carry out a Federal program, but does
not include an individual that is a beneficiary of such a program. A
subrecipient may also be a recipient of other Federal awards directly from a
Federal awarding agency. Guidance on distinguishing between a subrecipient
and a vendor is provided in § .210.
Types of compliance requirements refers to the types of compliance
requirements listed in the compliance supplement. Examples include:
activities allowed or unallowed; allowable costs/cost principles; cash
management; eligibility; matching, level of effort, earmarking; and,
reporting.
Vendor means a dealer, distributor, merchant, or other seller providing
goods or services that are required for the conduct of a Federal program.
These goods or services may be for an organizations own use or for the use of
beneficiaries of the Federal program. Additional guidance on distinguishing
between a subrecipient and a vendor is provided in § .210.
Subpart B--Audits
§ .200 Audit requirements.
(a) Audit required. Non-Federal entities that expend $300,000
($500, 000 for fiscal years ending after December 31, 2003) or more in a year
in Federal awards shall have a single or program-specific audit conducted for
that year in accordance with the provisions of this part. Guidance on
determining Federal awards expended is provided in § .205.
(b) Single audit. Non-Federal entities that expend $300,000 ($500,000
for fiscal years ending after December 31, 2003) or more in a year in Federal
awards shall have a single audit conducted in accordance with § .500 except
when they elect to have a program-specific audit conducted in accordance with
paragraph (c) of this section.
(c) Program-specific audit election. When an auditee expends Federal
awards under only one Federal program (excluding R&D) and the Federal
programs laws, regulations, or grant agreements do not require a financial
statement audit of the auditee, the auditee may elect to have a program-
specific audit conducted in accordance with §_.235. A program-specific
audit may not be elected for R&D unless all of the Federal awards expended
were received from the same Federal agency, or the same Federal agency and the
same pass-through entity, and that Federal agency, or pass-through entity in
the case of a subrecipient, approves in advance a program-specific audit.
(d) Exemption when Federal awards expended are less than $300,000
($500, 000 for fiscal years ending after December 31, 2003) . Non-Federal
8
entities that expend less than $300,000 ($500, 000 for fiscal years ending
after December 31, 2003) a year in Federal awards are exempt from Federal
audit requirements for that year, except as noted in § .215(a) , but records
must be available for review or audit by appropriate officials of the Federal
agency, pass-through entity, and General Accounting Office (GAO) .
(e) Federally Funded Research and Development Centers (FFRDC) .
Management of an auditee that owns or operates a FFRDC may elect to treat the
FFRDC as a separate entity for purposes of this part.
§ .205 Basis for determining Federal awards expended.
(a) Determining Federal awards expended. The determination of when an
award is expended should be based on when the activity related to the award
occurs. Generally, the activity pertains to events that require the non-
Federal entity to comply with laws, regulations, and the provisions of
contracts or grant agreements, such as: expenditure/expense transactions
associated with grants, cost-reimbursement contracts, cooperative agreements,
and direct appropriations; the disbursement of funds passed through to
subrecipients; the use of loan proceeds under loan and loan guarantee
programs; the receipt of property; the receipt of surplus property; the
receipt or use of program income; the distribution or consumption of food
commodities; the disbursement of amounts entitling the non-Federal entity to
an interest subsidy; and, the period when insurance is in force.
(b) Loan and loan guarantees (loans) . Since the Federal Government is
at risk for loans until the debt is repaid, the following guidelines shall be
used to calculate the value of Federal awards expended under loan programs,
except as noted in paragraphs (c) and (d) of this section:
(1) Value of new loans made or received during the fiscal year;
plus
(2) Balance of loans from previous years for which the Federal
Government imposes continuing compliance requirements; plus
(3) Any interest subsidy, cash, or administrative cost allowance
received.
(c) Loan and loan guarantees (loans) at institutions of higher
education. When loans are made to students of an institution of higher
education but the institution does not make the loans, then only the value of
loans made during the year shall be considered Federal awards expended in that
year. The balance of loans for previous years is not included as Federal
awards expended because the lender accounts for the prior balances.
(d) Prior loan and loan guarantees (loans) . Loans, the proceeds of
which were received and expended in prior-years, are not considered Federal
awards expended under this part when the laws, regulations, and the provisions
of contracts or grant agreements pertaining to such loans impose no continuing
compliance requirements other than to repay the loans.
(e) Endowment funds. The cumulative balance of Federal awards for
endowment funds which are federally restricted are considered awards expended
in each year in which the funds are still restricted.
(f) Free rent. Free rent received by itself is not considered a
Federal award expended under this part. However, free rent received as part
9
of an award to carry out a Federal program shall be included in determining
Federal awards expended and subject to audit under this part.
(g) Valuing non-cash assistance. Federal non-cash assistance, such as
free rent, food stamps, food commodities, donated property, or donated surplus
property, shall be valued at fair market value at the time of receipt or the
assessed value provided by the Federal agency.
(h) Medicare. Medicare payments to a non-Federal entity for providing
patient care services to Medicare eligible individuals are not considered
Federal awards expended under this part.
(i) Medicaid. Medicaid payments to a subrecipient for providing
patient care services to Medicaid eligible individuals are not considered
Federal awards expended under this part unless a State requires the funds to
be treated as Federal awards expended because reimbursement is on a cost-
reimbursement basis.
(j) Certain loans provided by the National Credit Union
Administration. For purposes of this part, loans made from the National
Credit Union Share Insurance Fund and the Central Liquidity Facility that are
funded by contributions from insured institutions are not considered Federal
awards expended.
§_.210 Subrecipient and vendor determinations.
(a) General. An auditee may be a recipient, a subrecipient, and a
vendor. Federal awards expended as a recipient or a subrecipient would be
subject to audit under this part. The payments received for goods or services
provided as a vendor would not be considered Federal awards. The guidance in
paragraphs (b) and (c) of this section should be considered in determining
whether payments constitute a Federal award or a payment for goods and
services.
(b) Federal award. Characteristics indicative of a Federal award
received by a subrecipient are when the organization:
(1) Determines who is eligible to receive what Federal financial
assistance;
(2) Has its performance measured against whether the objectives
of the Federal program are met;
(3) Has responsibility for programmatic decision making;
(4) Has responsibility for adherence to applicable Federal
program compliance requirements; and
(5) Uses the Federal funds to carry out a program of the
organization as compared to providing goods or services for a program of the
pass-through entity.
(c) Payment for goods and services. Characteristics indicative of a
payment for goods and services received by a vendor are when the organization:
(1) Provides the goods and services within normal business
operations;
10
(2) Provides similar goods or services to many different
purchasers;
(3) Operates in a competitive environment;
(4) Provides goods or services that are ancillary to the
operation of the Federal program; and
(5) Is not subject to compliance requirements of the Federal
program.
(d) Use of judgment in making determination. There may be unusual
circumstances or exceptions to the listed characteristics. In making the
determination of whether a subrecipient or vendor relationship exists, the
substance of the relationship is more important than the form of the
agreement. It is not expected that all of the characteristics will be present
and judgment should be used in determining whether an entity is a subrecipient
or vendor.
(e) For-profit subrecipient. Since this part does not apply to for-
profit subrecipients, the pass-through entity is responsible for establishing
requirements, as necessary, to ensure compliance by for-profit subrecipients.
The contract with the for-profit subrecipient should describe applicable
compliance requirements and the for-profit subrecipient's compliance
responsibility. Methods to ensure compliance for Federal awards made to for-
profit subrecipients may include pre-award audits, monitoring during the
contract, and post-award audits.
(f) Compliance responsibility for vendors. In most cases, the
auditee's compliance responsibility for vendors is only to ensure that the
procurement, receipt, and payment for goods and services comply with laws,
regulations, and the provisions of contracts or grant agreements. Program
compliance requirements normally do not pass through to vendors. However, the
auditee is responsible for ensuring compliance for vendor transactions which
are structured such that the vendor is responsible for program compliance or
the vendor's records must be reviewed to determine program compliance. Also,
when these vendor transactions relate to a major program, the scope of the
audit shall include determining whether these transactions are in compliance
with laws, regulations, and the provisions of contracts or grant agreements.
§ .215 Relation to other audit requirements.
(a) Audit under this part in lieu of other audits. An audit made in
accordance with this part shall be in lieu of any financial audit required
under individual Federal awards. To the extent this audit meets a Federal
agency's needs, it shall rely upon and use such audits. The provisions of
this part neither limit the authority of Federal agencies, including their
Inspectors General, or GAO to conduct or arrange for additional audits (e.g. ,
financial audits, performance audits, evaluations, inspections, or reviews)
nor authorize any auditee to constrain Federal agencies from carrying out
additional audits. Any additional audits shall be planned and performed in
such a way as to build upon work performed by other auditors.
(b) Federal agency to pay for additional audits. A Federal agency
that conducts or contracts for additional audits shall, consistent with other
applicable laws and regulations, arrange for funding the full cost of such
additional audits.
11
(c) Request for a program to be audited as a major program. A Federal
agency may request an auditee to have a particular Federal program audited as
a major program in lieu of the Federal agency conducting or arranging for the
additional audits. To allow for planning, such requests should be made at
least 180 days prior to the end of the fiscal year to be audited. The
auditee, after consultation with its auditor, should promptly respond to such
request by informing the Federal agency whether the program would otherwise be
audited as a major program using the risk-based audit approach described in
§ .520 and, if not, the estimated incremental cost. The Federal agency
shall then promptly confirm to the auditee whether it wants the program
audited as a major program. If the program is to be audited as a major
program based upon this Federal agency request, and the Federal agency agrees
to pay the full incremental costs, then the auditee shall have the program
audited as a major program. A pass-through entity may use the provisions of
this paragraph for a subrecipient.
§ .220 Frequency of audits.
Except for the provisions for biennial audits provided in paragraphs (a)
and (b) of this section, audits required by this part shall be performed
annually. Any biennial audit shall cover both years within the biennial
period.
(a) A State or local government that is required by constitution or
statute, in effect on January 1, 1987, to undergo its audits less frequently
than annually, is permitted to undergo its audits pursuant to this part
biennially. This requirement must still be in effect for the biennial period
under audit.
(b) Any non-profit organization that had biennial audits for all
biennial periods ending between July 1, 1992, and January 1, 1995, is
permitted to undergo its audits pursuant to this part biennially.
.225 Sanctions.
No audit costs may be charged to Federal awards when audits required by
this part have not been made or have been made but not in accordance with this
part. In cases of continued inability or unwillingness to have an audit
conducted in accordance with this part, Federal agencies and pass-through
entities shall take appropriate action using sanctions such as:
(a) Withholding a percentage of Federal awards until the audit is
completed satisfactorily;
(b) Withholding or disallowing overhead costs;
(c) Suspending Federal awards until the audit is conducted; or
(d) Terminating the Federal award.
§ .230 Audit costs.
(a) Allowable costs. Unless prohibited by law, the cost of audits
made in accordance with the provisions of this part are allowable charges to
Federal awards. The charges may be considered a direct cost or an allocated
indirect cost, as determined in accordance with the provisions of applicable
OMB cost principles circulars, the Federal Acquisition Regulation (FAR) (48
CFR parts 30 and 31) , or other applicable cost principles or regulations.
12
(b) Unallowable costs. A non-Federal entity shall not charge the
following to a Federal award:
(1) The cost of any audit under the Single Audit Act Amendments
of 1996 (31 U.S.C. 7501 et sea. ) not conducted in accordance with this part.
(2) The cost of auditing a non-Federal entity which has Federal
awards expended of less than $300,000 ($500,000 for fiscal years ending after
December 31, 2003) per year and is thereby exempted under § .200(d) from
having an audit conducted under this part. However, this does not prohibit a
pass-through entity from charging Federal awards for the cost of limited scope
audits to monitor its subrecipients in accordance with §_.400(d) (3) ,
provided the subrecipient does not have a single audit. For purposes of this
part, limited scope audits only include agreed-upon procedures engagements
conducted in accordance with either the AICPA's generally accepted auditing
standards or attestation standards, that are paid for and arranged by a pass-
through entity and address only one or more of the following types of
compliance requirements: activities allowed or unallowed; allowable
costs/cost principles; eligibility; matching, level of effort, earmarking;
and, reporting.
§ .235 Program-specific audits.
(a) Program-specific audit guide available. In many cases, a program-
specific audit guide will be available to provide specific guidance to the
auditor with respect to internal control, compliance requirements, suggested
audit procedures, and audit reporting requirements. The auditor should
contact the Office of Inspector General of the Federal agency to determine
whether such a guide is available. When a current program-specific audit
guide is available, the auditor shall follow GAGAS and the guide when
performing a program-specific audit.
(b) Program-specific audit guide not available. (1) When a program-
specific audit guide is not available, the auditee and auditor shall have
basically the same responsibilities for the Federal program as they would have
for an audit of a major program in a single audit.
(2) The auditee shall prepare the financial statement(s) for the
Federal program that includes, at a minimum, a schedule of expenditures of
Federal awards for the program and notes that describe the significant
accounting policies used in preparing the schedule, a summary schedule of
prior audit findings consistent with the requirements of § .315(b) , and a
corrective action plan consistent with the requirements of § .315 (c) .
(3) The auditor shall :
(i) Perform an audit of the financial statement(s) for the
Federal program in accordance with GAGAS;
(ii) Obtain an understanding of internal control and
perform tests of internal control over the Federal program consistent with the
requirements of § .500(c) for a major program;
(iii) Perform procedures to determine whether the auditee
has complied with laws, regulations, and the provisions of contracts or grant
agreements that could have a direct and material effect on the Federal program
consistent with the requirements of § .500(d) for a major program; and
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(iv) Follow up on prior audit findings, perform procedures
to assess the reasonableness of the summary schedule of prior audit findings
prepared by the auditee, and report, as a current year audit finding, when the
auditor concludes that the summary schedule of prior audit findings materially
misrepresents the status of any prior audit finding in accordance with the
requirements of § .500(e) .
(4) The auditor's report(s) may be in the form of either
combined or separate reports and may be organized differently from the manner
presented in this section. The auditor's report(s) shall state that the audit
was conducted in accordance with this part and include the following:
(i) An opinion (or disclaimer of opinion) as to whether
the financial statement(s) of the Federal program is presented fairly in all
material respects in conformity with the stated accounting policies;
(ii) A report on internal control related to the Federal
program, which shall describe the scope of testing of internal control and the
results of the tests;
(iii) A report on compliance which includes an opinion (or
disclaimer of opinion) as to whether the auditee complied with laws,
regulations, and the provisions of contracts or grant agreements which could
have a direct and material effect on the Federal program; and
(iv) A schedule of findings and questioned costs for the
Federal program that includes a summary of the auditor's results relative to
the Federal program in a format consistent with § .505(d) (1) and findings
and questioned costs consistent with the requirements of § .505(d) (3) .
(c) Report submission for program-specific audits.
(1) The audit shall be completed and the reporting required by paragraph
(c) (2) or (c) (3) of this section submitted within the earlier of 30 days after
receipt of the auditor's report(s) , or nine months after the end of the audit
period, unless a longer period is agreed to in advance by the Federal agency
that provided the funding or a different period is specified in a program-
specific audit guide. (However, for fiscal years beginning on or before June
30, 1998, the audit shall be completed and the required reporting shall be
submitted within the earlier of 30 days after receipt of the auditor's
report(s) , or 13 months after the end of the audit period, unless a different
period is specified in a program-specific audit guide.) Unless restricted by
law or regulation, the auditee shall make report copies available for public
inspection.
(2) When a program-specific audit guide is available, the
auditee shall submit to the Federal clearinghouse designated by OMB the data
collection form prepared in accordance with § .320(b) , as applicable to a
program-specific audit, and the reporting required by the program-specific
audit guide to be retained as an archival copy. Also, the auditee shall
submit to the Federal awarding agency or pass-through entity the reporting
required by the program-specific audit guide.
(3) When a program-specific audit guide is not available, the
reporting package for a program-specific audit shall consist of the financial
statement(s) of the Federal program, a summary schedule of prior audit
findings, and a corrective action plan as described in paragraph (b) (2) of
this section, and the auditor's report(s) described in paragraph (b) (4) of
this section. The data collection form prepared in accordance with
14
§ .320(b) , as applicable to a program-specific audit, and one copy of this
reporting package shall be submitted to the Federal clearinghouse designated
by OMB to be retained as an archival copy. Also, when the schedule of
findings and questioned costs disclosed audit findings or the summary schedule
of prior audit findings reported the status of any audit findings, the auditee
shall submit one copy of the reporting package to the Federal clearinghouse on
behalf of the Federal awarding agency, or directly to the pass-through entity
in the case of a subrecipient. Instead of submitting the reporting package to
the pass-through entity, when a subrecipient is not required to submit a
reporting package to the pass-through entity, the subrecipient shall provide
written notification to the pass-through entity, consistent with the
requirements of §_.320(e) (2) . A subrecipient may submit a copy of the
reporting package to the pass-through entity to comply with this notification
requirement.
(d) Other sections of this part may apply. Program-specific audits
are subject to § .100 through § .215 (b) , §_.220 through § .230,
§ .300 through § .305, § .315, § .320(f) through § .320(j) , § .400
through § .405, § .510 through § .515, and other referenced provisions
of this part unless contrary to the provisions of this section, a program-
specific audit guide, or program laws and regulations.
Subpart C--Auditees
§ .300 Auditee responsibilities.
The auditee shall:
(a) Identify, in its accounts, all Federal awards received and
expended and the Federal programs under which they were received. Federal
program and award identification shall include, as applicable, the CFDA title
and number, award number and year, name of the Federal agency, and name of the
pass-through entity.
(b) Maintain internal control over Federal programs that provides
reasonable assurance that the auditee is managing
Federal awards in compliance with laws, regulations, and the provisions of
contracts or grant agreements that could have a material effect on each of its
Federal programs.
(c) Comply with laws, regulations, and the provisions of contracts or
grant agreements related to each of its Federal programs.
(d) Prepare appropriate financial statements, including the schedule
of expenditures of Federal awards in accordance with § .310.
(e) Ensure that the audits required by this part are properly
performed and submitted when due. When extensions to the report submission
due date required by § .320(a) are granted by the cognizant or oversight
agency for audit, promptly notify the Federal clearinghouse designated by OMB
and each pass-through entity providing Federal awards of the extension.
(f) Follow up and take corrective action on audit findings, including
preparation of a summary schedule of prior audit findings and a corrective
action plan in accordance with § .315 (b) and § .315(c) , respectively.
§ .305 Auditor selection.
15
(a) Auditor procurement. In procuring audit services, auditees shall
follow the procurement standards prescribed by the Grants Management Common
Rule (hereinafter referred to as the "A-102 Common Rule") published March 11,
1988 and amended April 19, 1995 [insert appropriate CFR citation] , Circular
A-110, "Uniform Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals and Other Non-Profit
Organizations, " or the FAR (48 CFR part 42) , as applicable (OMB Circulars are
available from the Office of Administration, Publications Office, room 2200,
New Executive Office Building, Washington, DC 20503) . Whenever possible,
auditees shall make positive efforts to utilize small businesses, minority-
owned firms, and women's business enterprises, in procuring audit services as
stated in the A-102 Common Rule, OMB Circular A-110, or the FAR (48 CFR part
42) , as applicable. In requesting proposals for audit services, the
objectives and scope of the audit should be made clear. Factors to be
considered in evaluating each proposal for audit services include the
responsiveness to the request for proposal, relevant experience, availability
of staff with professional qualifications and technical abilities, the results
of external quality control reviews, and price.
(b) Restriction on auditor preparing indirect cost proposals . An
auditor who prepares the indirect cost proposal or cost allocation plan may
not also be selected to perform the audit required by this part when the
indirect costs recovered by the auditee during the prior year exceeded $1
million. This restriction applies to the base year used in the preparation of
the indirect cost proposal or cost allocation plan and any subsequent years in
which the resulting indirect cost agreement or cost allocation plan is used to
recover costs. To minimize any disruption in existing contracts for audit
services, this paragraph applies to audits of fiscal years beginning after
June 30, 1998.
(c) Use of Federal auditors. Federal auditors may perform all or part
of the work required under this part if they comply fully with the
requirements of this part.
§ .310 Financial statements.
(a) Financial statements . The auditee shall prepare financial
statements that reflect its financial position, results of operations or
changes in net assets, and, where appropriate, cash flows for the fiscal year
audited. The financial statements shall be for the same organizational unit
and fiscal year that is chosen to meet the requirements of this part.
However, organization-wide financial statements may also include departments,
agencies, and other organizational units that have separate audits in
accordance with §_.500(a) and prepare separate financial statements.
(b) Schedule of expenditures of Federal awards . The auditee shall
also prepare a schedule of expenditures of Federal awards for the period
covered by the auditee's financial statements. While not required, the
auditee may choose to provide information requested by Federal awarding
agencies and pass-through entities to make the schedule easier to use. For
example, when a Federal program has multiple award years, the auditee may list
the amount of Federal awards expended for each award year separately. At a
minimum, the schedule shall:
(1) List individual Federal programs by Federal agency. For
Federal programs included in a cluster of programs, list individual Federal
programs within a cluster of programs. For R&D, total Federal awards expended
shall be shown either by individual award or by Federal agency and major
subdivision within the Federal agency. For example, the National Institutes
of Health is a major subdivision in the Department of Health and Human
Services.
16
(2) For Federal awards received as a subrecipient, the name of
the pass-through entity and identifying number assigned by the pass-through
entity shall be included.
(3) Provide total Federal awards expended for each individual
Federal program and the CFDA number or other identifying number when the CFDA
information is not available.
(4) Include notes that describe the significant accounting
policies used in preparing the schedule.
(5) To the extent practical, pass-through entities should
identify in the schedule the total amount provided to subrecipients from each
Federal program.
(6) Include, in either the schedule or a note to the schedule,
the value of the Federal awards expended in the form of non-cash assistance,
the amount of insurance in effect during the year, and loans or loan
guarantees outstanding at year end. While not required, it is preferable to
present this information in the schedule.
§ .315 Audit findings follow-up.
(a) General. The auditee is responsible for follow-up and corrective
action on all audit findings. As part of this responsibility, the auditee
shall prepare a summary schedule of prior audit findings. The auditee shall
also prepare a corrective action plan for current year audit findings. The
summary schedule of prior audit findings and the corrective action plan shall
include the reference numbers the auditor assigns to audit findings under
§ .510(c) . Since the summary schedule may include audit findings from
multiple years, it shall include the fiscal year in which the finding
initially occurred.
(b) Summary schedule of prior audit findings . The summary schedule of
prior audit findings shall report the status of all audit findings included in
the prior audit's schedule of findings and questioned costs relative to
Federal awards. The summary schedule shall also include audit findings
reported in the prior audit's summary schedule of prior audit findings except
audit findings listed as corrected in accordance with paragraph (b) (1) of this
section, or no longer valid or not warranting further action in accordance
with paragraph (b) (4) of this section.
(1) When audit findings were fully corrected, the summary
schedule need only list the audit findings and state that corrective action
was taken.
(2) When audit findings were not corrected or were only
partially corrected, the summary schedule shall describe the planned
corrective action as well as any partial corrective action taken.
(3) When corrective action taken is significantly different from
corrective action previously reported in a corrective action plan or in the
Federal agency's or pass-through entity's management decision, the summary
schedule shall provide an explanation.
(4) When the auditee believes the audit findings are no longer
valid or do not warrant further action, the reasons for this position shall be
described in the summary schedule. A valid reason for considering an audit
finding as not warranting further action is that all of the following have
occurred:
(i) Two years have passed since the audit report in which
17
the finding occurred was submitted to the Federal clearinghouse;
(ii) The Federal agency or pass-through entity is not
currently following up with the auditee on the audit finding; and
(iii) A management decision was not issued.
(c) Corrective action plan. At the completion of the audit, the
auditee shall prepare a corrective action plan to address each audit finding
included in the current year auditor's reports. The corrective action plan
shall provide the name(s) of the contact person(s) responsible for corrective
action, the corrective action planned, and the anticipated completion date.
If the auditee does not agree with the audit findings or believes corrective
action is not required, then the corrective action plan shall include an
explanation and specific reasons.
§ .320 Report submission.
(a) General. The audit shall be completed and the data collection
form described in paragraph (b) of this section and reporting package
described in paragraph (c) of this section shall be submitted within the
earlier of 30 days after receipt of the auditor's report(s) , or nine months
after the end of the audit period, unless a longer period is agreed to in
advance by the cognizant or oversight agency for audit. (However, for fiscal
years beginning on or before June 30, 1998, the audit shall be completed and
the data collection form and reporting package shall be submitted within the
earlier of 30 days after receipt of the auditor's report(s) , or 13 months
after the end of the audit period. ) Unless restricted by law or regulation,
the auditee shall make copies available for public inspection.
(b) Data Collection. (1) The auditee shall submit a data collection
form which states whether the audit was completed in accordance with this part
and provides information about the auditee, its Federal programs, and the
results of the audit. The form shall be approved by OMB, available from the
Federal clearinghouse designated by OMB, and include data elements similar to
those presented in this paragraph. A senior level representative of the
auditee (e.g. , State controller, director of finance, chief executive officer,
or chief financial officer) shall sign a statement to be included as part of
the form certifying that: the auditee complied with the requirements of this
part, the form was prepared in accordance with this part (and the instructions
accompanying the form) , and the information included in the form, in its
entirety, are accurate and complete.
(2) The data collection form shall include the following data
elements:
(i) The type of report the auditor issued on the financial statements of
the auditee (i.e. , unqualified opinion, qualified opinion, adverse
opinion, or disclaimer of opinion) .
(ii) Where applicable, a statement that significant deficiencies in internal
control were disclosed by the audit of the financial statements and
whether any such conditions were material weaknesses.
(iii) A statement as to whether the audit disclosed any noncompliance which
is material to the financial statements of the auditee.
(iv) Where applicable, a statement that significant deficiencies in internal
control over major programs were disclosed by the audit and whether
any such conditions were material weaknesses.
(v) The type of report the auditor issued on compliance for major
18
programs (i.e. , unqualified opinion, qualified opinion, adverse
opinion, or disclaimer of opinion) .
(vi) A list of the Federal awarding agencies which will receive a copy of
the reporting package pursuant to § .320(d) (2) of OMB Circular
A-133.
(vii) A yes or no statement as to whether the auditee qualified as a low-
risk auditee under § .530 of OMB Circular A-133.
(viii) The dollar threshold used to distinguish between Type A and Type B
programs as defined in § .520(b) of OMB Circular A-133 .
(ix) The Catalog of Federal Domestic Assistance (CFDA) number for each
Federal program, as applicable.
(x) The name of each Federal program and identification of each major
program. Individual programs within a cluster of programs should be
listed in the same level of detail as they are listed in the schedule
of expenditures of Federal awards.
(xi) The amount of expenditures in the schedule of expenditures of Federal
awards associated with each Federal program.
(xii) For each Federal program, a yes or no statement as to whether there
are audit findings in each of the following types of compliance
requirements and the total amount of any questioned costs:
(A) Activities allowed or unallowed.
(B) Allowable costs/cost principles.
(C) Cash management.
(D) Davis-Bacon Act.
(E) Eligibility.
(F) Equipment and real property management.
(G) Matching, level of effort, earmarking.
(H) Period of availability of Federal funds.
(I) Procurement and suspension and debarment.
(J) Program income.
(K) Real property acquisition and relocation assistance.
(L) Reporting.
(M) Subrecipient monitoring.
(N) Special tests and provisions.
(xiii) Auditee Name, Employer Identification Number(s) , Name and Title of
Certifying Official, Telephone Number, Signature, and Date.
(xiv) Auditor Name, Name and Title of Contact Person, Auditor Address,
Auditor Telephone Number, Signature, and Date.
(xv) Whether the auditee has either a cognizant or oversight agency for
audit.
(xvi) The name of the cognizant or oversight agency for audit determined in
accordance with § .400(a) and § .400(b) , respectively.
(3) Using the information included in the reporting package
described in paragraph (c) of this section, the auditor shall complete the
applicable sections of the form. The auditor shall sign a statement to be
included as part of the data collection form that indicates, at a minimum, the
source of the information included in the form, the auditor's responsibility
for the information, that the form is not a substitute for the reporting
package described in paragraph (c) of this section, and that the content of
19
the form is limited to the data elements prescribed by OMB.
(c) Reporting package. The reporting package shall include the:
(1) Financial statements and schedule of expenditures of
Federal awards discussed in § .310(a) and § .310(b) , respectively;
(2) Summary schedule of prior audit findings discussed in
§ .315(b) ;
(3) Auditor's report(s) discussed in § .505; and
(4) Corrective action plan discussed in § .315(c) .
(d) Submission to clearinghouse. All auditees shall submit to the Federal
clearinghouse designated by OMB a single copy of the data collection form
described in paragraph (b) of this section and the reporting package described
in paragraph (c) of this section.
(e) Additional submission by subrecipients . (1) In addition to the
requirements discussed in paragraph (d) of this section, auditees that are
also subrecipients shall submit to each pass-through entity one copy of the
reporting package described in paragraph (c) of this section for each pass-
through entity when the schedule of findings and questioned costs disclosed
audit findings relating to Federal awards that the pass-through entity
provided or the summary schedule of prior audit findings reported the status
of any audit findings relating to Federal awards that the pass-through entity
provided.
(2) Instead of submitting the reporting package to a pass
through entity, when a subrecipient is not required to submit a reporting
package to a pass-through entity pursuant to paragraph (e) (1) of this section,
the subrecipient shall provide written notification to the pass-through entity
that: an audit of the subrecipient was conducted in accordance with this part
(including the period covered by the audit and the name, amount, and CFDA
number of the Federal award(s) provided by the pass-through entity) ; the
schedule of findings and questioned costs disclosed no audit findings relating
to the Federal award(s) that the pass-through entity provided; and, the
summary schedule of prior audit findings did not report on the status of any
audit findings relating to the Federal award(s) that the pass-through entity
provided. A subrecipient may submit a copy of the reporting package described
in paragraph (c) of this section to a pass-through entity to comply with this
notification requirement.
(f) Requests for report copies. In response to requests by a Federal
agency or pass-through entity, auditees shall submit the appropriate copies of
the reporting package described in paragraph (c) of this section and, if
requested, a copy of any management letters issued by the auditor.
(g) Report retention requirements . Auditees shall keep one copy of
the data collection form described in paragraph (b) of this section and one
copy of the reporting package described in paragraph (c) of this section on
file for three years from the date of submission to the Federal clearinghouse
20
designated by OMB. Pass-through entities shall keep subrecipients'
submissions on file for three years from date of receipt.
(h) Clearinghouse responsibilities . The Federal clearinghouse
designated by OMB shall distribute the reporting packages received in
accordance with paragraph (d) (2) of this section and § .235(c) (3) to
applicable Federal awarding agencies, maintain a data base of completed
audits, provide appropriate information to Federal agencies, and follow up
with known auditees which have not submitted the required data collection
forms and reporting packages.
(i) Clearinghouse address . The address of the Federal clearinghouse
currently designated by OMB is Federal Audit Clearinghouse, Bureau of the
Census, 1201 E. 10th Street, Jeffersonville, IN 47132.
(j) Electronic filing. Nothing in this part shall preclude electronic
submissions to the Federal clearinghouse in such manner as may be approved by
OMB. With OMB approval, the Federal clearinghouse may pilot test methods of
electronic submissions.
Subpart D--Federal Agencies and Pass-Through Entities
§ .400 Responsibilities.
(a) Cognizant agency for audit responsibilities . Recipients expending
more than $25 million ($50 million for fiscal years ending after December 31,
2003) a year in Federal awards shall have a cognizant agency for audit. The
designated cognizant agency for audit shall be the Federal awarding agency
that provides the predominant amount of direct funding to a recipient unless
OMB makes a specific cognizant agency for audit assignment.
Following is effective for fiscal years ending on or before December 31, 2003:
To provide for continuity of cognizance, the determination of the predominant
amount of direct funding shall be based upon direct Federal awards expended in
the recipient's fiscal years ending in 1995, 2000, 2005, and every fifth year
thereafter. For example, audit cognizance for periods ending in 1997 through
2000 will be determined based on Federal awards expended in 1995. (However,
for States and local governments that expend more than $25 million a year in
Federal awards and have previously assigned cognizant agencies for audit, the
requirements of this paragraph are not effective until fiscal years beginning ,
after June 30, 2000. )
Following is effective for fiscal years ending after December 31, 2003:
The determination of the predominant amount of direct funding shall be based
upon direct Federal awards expended in the recipient's fiscal years ending in
2004, 2009, 2014, and every fifth year thereafter. For example, audit
cognizance for periods ending in 2006 through 2010 will be determined based on
Federal awards expended in 2004. (However, for 2001 through 2005,the
cognizant agency for audit is determined based on the predominant amount of
direct Federal awards expended in the recipient's fiscal year ending in 2000) .
Notwithstanding the manner in which audit cognizance is determined, a Federal
awarding agency with cognizance for an auditee may reassign cognizance to
another Federal awarding agency which provides substantial direct funding and
agrees to be the cognizant agency for audit. Within 30 days after any
reassignment, both the old and the new cognizant agency for audit shall notify
the auditee, and, if known, the auditor of the reassignment. The cognizant
agency for audit shall:
(1) Provide technical audit advice and liaison to auditees and
auditors.
(2) Consider auditee requests for extensions to the report
21
submission due date required by § .320(a) . The cognizant agency for audit
may grant extensions for good cause.
(3) Obtain or conduct quality control reviews of selected
audits made by non-Federal auditors, and provide the results, when
appropriate, to other interested organizations.
(4) Promptly inform other affected Federal agencies and
appropriate Federal law enforcement officials of any direct reporting by the
auditee or its auditor of irregularities or illegal acts, as required by GAGAS
or laws and regulations.
(5) Advise the auditor and, where appropriate, the auditee of
any deficiencies found in the audits when the deficiencies require corrective
action by the auditor. When advised of deficiencies, the auditee shall work
with the auditor to take corrective action. If corrective action is not
taken, the cognizant agency for audit shall notify the auditor, the auditee,
and applicable Federal awarding agencies and pass-through entities of the
facts and make recommendations for follow-up action. Major inadequacies or
repetitive substandard performance by auditors shall be referred to
appropriate State licensing agencies and professional bodies for disciplinary
action.
(6) Coordinate, to the extent practical, audits or reviews
made by or for Federal agencies that are in addition to the audits made
pursuant to this part, so that the additional audits or reviews build upon
audits performed in accordance with this part.
(7) Coordinate a management decision for audit findings that
affect the Federal programs of more than one agency.
(8) Coordinate the audit work and reporting responsibilities
among auditors to achieve the most cost-effective audit.
(9) For biennial audits permitted under § .220, consider
auditee requests to qualify as a low-risk auditee under § .530(a) .
(b) Oversight agency for audit responsibilities . An auditee which
does not have a designated cognizant agency for audit will be under the
general oversight of the Federal agency determined in accordance with
§_.105. The oversight agency for audit:
(1) Shall provide technical advice to auditees and auditors as
requested.
(2) May assume all or some of the responsibilities normally
performed by a cognizant agency for audit.
(c) Federal awarding agency responsibilities . The Federal awarding
agency shall perform the following for the Federal awards it makes:
(1) Identify Federal awards made by informing each recipient
of the CFDA title and number, award name and number, award year, and if the
award is for R&D. When some of this information is not available, the Federal
agency shall provide information necessary to clearly describe the Federal
award.
(2) Advise recipients of requirements imposed on them by
Federal laws, regulations, and the provisions of contracts or grant
agreements.
(3) Ensure that audits are completed and reports are received
22
in a timely manner and in accordance with the requirements of this part.
(4) Provide technical advice and counsel to auditees and
auditors as requested.
(5) Issue a management decision on audit findings within six
months after receipt of the audit report and ensure that the recipient takes
appropriate and timely corrective action.
(6) Assign a person responsible for providing annual updates
of the compliance supplement to OMB.
(d) Pass-through entity responsibilities . A pass-through entity shall
perform the following for the Federal awards it makes:
(1) Identify Federal awards made by informing each
subrecipient of CFDA title and number, award name and number, award year, if
the award is R&D, and name of Federal agency. When some of this information
is not available, the pass-through entity shall provide the best information
available to describe the Federal award.
(2) Advise subrecipients of requirements imposed on them by
Federal laws, regulations, and the provisions of contracts or grant agreements
as well as any supplemental requirements imposed by the pass-through entity.
(3) Monitor the activities of subrecipients as necessary to
ensure that Federal awards are used for authorized purposes in compliance with
laws, regulations, and the provisions of contracts or grant agreements and
that performance goals are achieved.
(4) Ensure that subrecipients expending $300,000 ($500, 000 for
fiscal years ending after December 31, 2003) or more in Federal awards during
the subrecipient's fiscal year have met the audit requirements of this part
for that fiscal year.
(5) Issue a management decision on audit findings within six
months after receipt of the subrecipient's audit report and ensure that the
subrecipient takes appropriate and timely corrective action.
(6) Consider whether subrecipient audits necessitate
adjustment of the pass-through entity's own records.
(7) Require each subrecipient to permit the pass-through
entity and auditors to have access to the records and financial statements as
necessary for the pass-through entity to comply with this part.
§ .405 Management decision.
(a) General. The management decision shall clearly state whether or
not the audit finding is sustained, the reasons for the decision, and the
expected auditee action to repay disallowed costs, make financial adjustments,
or take other action. If the auditee has not completed corrective action, a
timetable for follow-up should be given. Prior to issuing the management
decision, the Federal agency or pass-through entity may request
additional information or documentation from the auditee, including a request
for auditor assurance related to the documentation, as a way of mitigating
disallowed costs. The management decision should describe any appeal process
available to the auditee.
(b) Federal agency. As provided in § .400(a) (7) , the cognizant
agency for audit shall be responsible for coordinating a management decision
for audit findings that affect the programs of more than one Federal agency.
23
As provided in § .400(c) (5) , a Federal awarding agency is responsible for
issuing a management decision for findings that relate to Federal awards it
makes to recipients. Alternate arrangements may be made on a case-by-case
basis by agreement among the Federal agencies concerned.
(c) Pass-through entity. As provided in § .400(d) (5) , the pass-
through entity shall be responsible for making the management decision for
audit findings that relate to Federal awards it makes to subrecipients.
(d) Time requirements. The entity responsible for making the
management decision shall do so within six months of receipt of the audit
report. Corrective action should be initiated within six months after receipt
of the audit report and proceed as rapidly as possible.
(e) Reference numbers. Management decisions shall include the
reference numbers the auditor assigned to each audit finding in accordance
with § .510(c) .
Subpart E--Auditors
§_.500 Scope of audit.
(a) General. The audit shall be conducted in accordance with GAGAS.
The audit shall cover the entire operations of the auditee; or, at the option
of the auditee, such audit shall include a series of audits that cover
departments, agencies, and other organizational units which expended or
otherwise administered Federal awards during such fiscal year, provided that
each such audit shall encompass the financial statements and schedule of
expenditures of Federal awards for each such department, agency, and other
organizational unit, which shall be considered to be a non-Federal entity.
The financial statements and schedule of expenditures of Federal awards shall
be for the same fiscal year.
(b) Financial statements. The auditor shall determine whether the
financial statements of the auditee are presented fairly in all material
respects in conformity with generally accepted accounting principles. The
auditor shall also determine whether the schedule of expenditures of Federal
awards is presented fairly in all material respects in relation to the
auditee's financial statements taken as a whole.
(c) Internal control . (1) In addition to the requirements of GAGAS,
the auditor shall perform procedures to obtain an understanding of internal
control over Federal programs sufficient to plan the audit to support a low
assessed level of control risk for major programs.
(2) Except as provided in paragraph (c) (3) of this section,
the auditor shall:
(i) Plan the testing of internal control over major
programs to support a low assessed level of control risk for the assertions
relevant to the compliance requirements for each major program; and
(ii) Perform testing of internal control as planned in
paragraph (c) (2) (i) of this section.
(3) When internal control over some or all of the compliance
requirements for a major program are likely to be ineffective in preventing or
detecting noncompliance, the planning and performing of testing described in
paragraph (c) (2) of this section are not required for those compliance
requirements. However, the auditor shall report a significant deficiency
(including whether any such condition is a material weakness) in accordance
with § .510, assess the related control risk at the maximum, and consider
whether additional compliance tests are required because of ineffective
24
internal control.
(d) Compliance. (1) In addition to the requirements of GAGAS, the
auditor shall determine whether the auditee has complied with laws,
regulations, and the provisions of contracts or grant agreements that may have
a direct and material effect on each of its major programs.
(2) The principal compliance requirements applicable to most
Federal programs and the compliance requirements of the largest Federal
programs are included in the compliance supplement.
(3) For the compliance requirements related to Federal
programs contained in the compliance supplement, an audit of these compliance
requirements will meet the requirements of this part. Where there have been
changes to the compliance requirements and the changes are not reflected in
the compliance supplement, the auditor shall determine the current compliance
requirements and modify the audit procedures accordingly. For those Federal
programs not covered in the compliance supplement, the auditor should use the
types of compliance requirements contained in the compliance supplement as
guidance for identifying the types of compliance requirements to test, and
determine the requirements governing the Federal program by reviewing the
provisions of contracts and grant agreements and the laws and regulations
referred to in such contracts and grant agreements.
(4) The compliance testing shall include tests of transactions
and such other auditing procedures necessary to provide the auditor sufficient
evidence to support an opinion on compliance.
(e) Audit follow-up. The auditor shall follow-up on prior audit
findings, perform procedures to assess the reasonableness of the summary
schedule of prior audit findings prepared by the auditee in accordance with
§ .315(b) , and report, as a current year audit finding, when the auditor
concludes that the summary schedule of prior audit findings materially
misrepresents the status of any prior audit finding. The auditor shall
perform audit follow-up procedures regardless of whether a prior audit finding
relates to a major program in the current year.
(f) Data Collection Form. As required in § .320(b) (3) , the auditor
shall complete and sign specified sections of the data collection form.
§ .505 Audit reporting.
The auditor's report (s) may be in the form of either combined or
separate reports and may be organized differently from the manner presented in
this section. The auditor's report(s) shall state that the audit was
conducted in accordance with this part and include the following:
(a) An opinion (or disclaimer of opinion) as to whether the financial
statements are presented fairly in all material respects in conformity with
generally accepted accounting principles and an opinion (or disclaimer of
opinion) as to whether the schedule of expenditures of Federal awards is
presented fairly in all material respects in relation to the financial
statements taken as a whole.
(b) A report on internal control related to the financial statements
and major programs. This report shall describe the scope of testing of
internal control and the results of the tests, and, where applicable, refer to
the separate schedule of findings and questioned costs described in paragraph
(d) of this section.
(c) A report on compliance with laws, regulations, and the provisions
of contracts or grant agreements, noncompliance with which could have a
25
material effect on the financial statements. This report shall also include
an opinion (or disclaimer of opinion) as to whether the auditee complied with
laws, regulations, and the provisions of contracts or grant agreements which
could have a direct and material effect on each major program, and, where
applicable, refer to the separate schedule of findings and questioned costs
described in paragraph (d) of this section.
(d) A schedule of findings and questioned costs which shall include
the following three components:
(1) A summary of the auditor's results which shall include:
(i) The type of report the auditor issued on the
financial statements of the auditee (i.e. , unqualified opinion, qualified
opinion, adverse opinion, or disclaimer of opinion) ;
(ii) Where applicable, a statement that significant
deficiencies in internal control were disclosed by the audit of the financial
statements and whether any such conditions were material weaknesses;
(iii) A statement as to whether the audit disclosed any
noncompliance which is material to the financial statements of the auditee;
(iv) Where applicable, a statement that significant
deficiencies in internal control over major programs were disclosed by the audit
and whether any such conditions were material weaknesses;
(v) The type of report the auditor issued on compliance
for major programs (i.e. , unqualified opinion, qualified opinion, adverse
opinion, or disclaimer of opinion) ;
(vi) A statement as to whether the audit disclosed any
audit findings which the auditor is required to report under § .510(a) ;
(vii) An identification of major programs;
(viii)The dollar threshold used to distinguish between
Type A and Type B programs, as described in § .520(b) ; and
(ix) A statement as to whether the auditee qualified as
a low-risk auditee under § .530.
(2) Findings relating to the financial statements which are
required to be reported in accordance with GAGAS.
(3) Findings and questioned costs for Federal awards which
shall include audit findings as defined in § .510(a) .
(i) Audit findings (e.g. , internal control findings,
compliance findings, questioned costs, or fraud) which relate to the same
issue should be presented as a single audit finding. Where practical, audit
findings should be organized by Federal agency or pass-through entity.
(ii) Audit findings which relate to both the financial
statements and Federal awards, as reported under paragraphs (d) (2) and (d) (3)
of this section, respectively, should be reported in both sections of the
schedule. However, the reporting in one section of the schedule may be in
summary form with a reference to a detailed reporting in the other section of
the schedule.
§ .510 Audit findings.
26
(a) Audit findings reported. The auditor shall report the following
as audit findings in a schedule of findings and questioned costs:
(1) Significant deficiencies in internal control over major
programs. The auditor's determination of whether a deficiency in internal
control is a significant deficieicny for the purpose of reporting an audit
finding is in relation to a type of compliance requirement for a major program
or an audit objective identified in the compliance supplement. The auditor
shall identify significant deficiencies which are individually or cumulatively
material weaknesses.
(2) Material noncompliance with the provisions of laws,
regulations, contracts, or grant agreements related to a major program. The
auditor's determination of whether a noncompliance with the provisions of
laws, regulations, contracts, or grant agreements is material for the purpose
of reporting an audit finding is in relation to a type of compliance
requirement for a major program or an audit objective identified in the
compliance supplement.
(3) Known questioned costs which are greater than $10, 000 for
a type of compliance requirement for a major program. Known questioned costs
are those specifically identified by the auditor. In evaluating the effect of
questioned costs on the opinion on compliance, the auditor considers the best
estimate of total costs questioned (likely questioned costs) , not just the
questioned costs specifically identified (known questioned costs) . The
auditor shall also report known questioned costs when likely questioned costs
are greater than $10, 000 for a type of compliance requirement for a major
program. In reporting questioned costs, the auditor shall include information
to provide proper perspective for judging the prevalence and consequences of
the questioned costs.
(4) Known questioned costs which are greater than $10, 000 for
a Federal program which is not audited as a major program. Except for audit
follow-up, the auditor is not required under this part to perform audit
procedures for such a Federal program; therefore, the auditor will normally
not find questioned costs for a program which is not audited as a major
program. However, if the auditor does become aware of questioned costs for a
Federal program which is not audited as a major program (e.g. , as part of
audit follow-up or other audit procedures) and the known questioned costs are
greater than $10,000, then the auditor shall report this as an audit finding.
(5) The circumstances concerning why the auditor's report on
compliance for major programs is other than an unqualified opinion, unless
such circumstances are otherwise reported as audit findings in the schedule of
findings and questioned costs for Federal awards.
(6) Known fraud affecting a Federal award, unless such fraud
is otherwise reported as an audit finding in the schedule of findings and
questioned costs for Federal awards. This paragraph does not require the
auditor to make an additional reporting when the auditor confirms that the
fraud was reported outside of the auditor's reports under the direct reporting
requirements of GAGAS.
(7) Instances where the results of audit follow-up procedures
disclosed that the summary schedule of prior audit findings prepared by the
auditee in accordance with § .315(b) materially misrepresents the status of
any prior audit finding.
(b) Audit finding detail . Audit findings shall be presented in
sufficient detail for the auditee to prepare a corrective action plan and take
corrective action and for Federal agencies and pass-through entities to arrive
at a management decision. The following specific information shall be
27
included, as applicable, in audit findings:
(1) Federal program and specific Federal award identification
including the CFDA title and number, Federal award number and year, name of
Federal agency, and name of the applicable pass-through entity. When
information, such as the CFDA title and number or Federal award number, is not
available, the auditor shall provide the best information available to
describe the Federal award.
(2) The criteria or specific requirement upon which the audit
finding is based, including statutory, regulatory, or other citation.
(3) The condition found, including facts that support the
deficiency identified in the audit finding.
(4) Identification of questioned costs and how they were
computed.
(5) Information to provide proper perspective for judging the
prevalence and consequences of the audit findings, such as whether the audit
findings represent an isolated instance or a systemic problem. Where
appropriate, instances identified shall be related to the universe and the
number of cases examined and be quantified in terms of dollar value.
(6) The possible asserted effect to provide sufficient
information to the auditee and Federal agency, or pass-through entity in the
case of a subrecipient, to permit them to determine the cause and effect to
facilitate prompt and proper corrective action.
(7) Recommendations to prevent future occurrences of the
deficiency identified in the audit finding.
(8) Views of responsible officials of the auditee when there
is disagreement with the audit findings, to the extent practical.
(c) Reference numbers. Each audit finding in the schedule of findings
and questioned costs shall include a reference number to allow for easy
referencing of the audit findings during follow-up.
§ .515 Audit working papers.
(a) Retention of working papers . The auditor shall retain working
papers and reports for a minimum of three years after the date of issuance of
the auditor's report(s) to the auditee, unless the auditor is notified in
writing by the cognizant agency for audit, oversight agency for audit, or
pass-through entity to extend the retention period. When the auditor is aware
that the Federal awarding agency, pass-through entity, or auditee is
contesting an audit finding, the auditor shall contact the parties contesting
the audit finding for guidance prior to destruction of the working papers and
reports.
(b) Access to working papers . Audit working papers shall be made
available upon request to the cognizant or oversight agency for audit or its
designee, a Federal agency providing direct or indirect funding, or GAO at the
completion of the audit, as part of a quality review, to resolve audit
findings, or to carry out oversight responsibilities consistent with the
purposes of this part. Access to working papers includes the right of Federal
agencies to obtain copies of working papers, as is reasonable and necessary.
28
.520 Major program determination.
(a) General. The auditor shall use a risk-based approach to determine
which Federal programs are major programs. This risk-based approach shall
include consideration of: Current and prior audit experience, oversight by
Federal agencies and pass-through entities, and the inherent risk of the
Federal program. The process in paragraphs (b) through (i) of this section
shall be followed.
(b) Step 1. (1) The auditor shall identify the larger Federal
programs, which shall be labeled Type A programs. Type A programs are defined
as Federal programs with Federal awards expended during the audit period
exceeding the larger of:
(i) $300,000 or three percent ( .03) of total Federal
awards expended in the case of an auditee for which total Federal awards
expended equal or exceed $300, 000 but are less than or equal to $100 million.
(ii) $3 million or three-tenths of one percent ( .003) of
total Federal awards expended in the case of an auditee for which total
Federal awards expended exceed $100 million but are less than or equal to $10
billion.
(iii) $30 million or 15 hundredths of one percent ( .0015)
of total Federal awards expended in the case of an auditee for which total
Federal awards expended exceed $10 billion.
(2) Federal programs not labeled Type A under paragraph (b) (1)
of this section shall be labeled Type B programs.
(3) The inclusion of large loan and loan guarantees (loans)
should not result in the exclusion of other programs as Type A programs. When
a Federal program providing loans significantly affects the number or size of
Type A programs, the auditor shall consider this Federal program as a Type A
program and exclude its values in determining other Type A programs.
(4) For biennial audits permitted under § .220, the
determination of Type A and Type B programs shall be based upon the Federal
awards expended during the two-year period.
(c) Step 2 . (1) The auditor shall identify Type A programs which are
low-risk. For a Type A program to be considered low-risk, it shall have been
audited as a major program in at least one of the two most recent audit
periods (in the most recent audit period in the case of a biennial audit) ,
and, in the most recent audit period, it shall have had no audit findings
under § .510(a) . However, the auditor may use judgment and consider that
audit findings from questioned costs under § .510(a) (3) and § .510(a) (4) ,
fraud under § .510(a) (6) , and audit follow-up for the summary schedule of
prior audit findings under § .510(a) (7) do not preclude the Type A program
from being low-risk. The auditor shall consider: the criteria in § .525(c) ,
§ .525(d) (1) , § .525(d) (2) , and § .525(d) (3) ; the results of audit
follow-up; whether any changes in personnel or systems affecting a Type A
program have significantly increased risk; and apply professional judgment in
determining whether a Type A program is low-risk.
(2) Notwithstanding paragraph (c) (1) of this section, OMB may
approve a Federal awarding agency's request that a Type A program at certain
recipients may not be considered low-risk. For example, it may be necessary
for a large Type A program to be audited as major each year at particular
recipients to allow the Federal agency to comply with the Government
Management Reform Act of 1994 (31 U.S.C. 3515) . The Federal agency shall
notify the recipient and, if known, the auditor at least 180 days prior to the
29
end of the fiscal year to be audited of OMB's approval.
(d) Step 3 . (1) The auditor shall identify Type B programs which are
high-risk using professional judgment and the criteria in § .525. However,
should the auditor select Option 2 under Step 4 (paragraph (e) (2) (i) (B) of
this section) , the auditor is not required to identify more high-risk Type B
programs than the number of low-risk Type A programs. Except for known
significant deficiencies in internal control or compliance problems as discussed
in § .525(b) (1) , § .525 (b) (2) , and § .525(c) (1) , a single criteria in
§ .525 would seldom cause a Type B program to be considered high-risk.
(2) The auditor is not expected to perform risk assessments on
relatively small Federal programs.. Therefore, the auditor is only required to
perform risk assessments on Type B programs that exceed the larger of:
(i) $100, 000 or three-tenths of one percent (.003) of
total Federal awards expended when the auditee has less than or equal to $100
million in total Federal awards expended.
(ii) $300,000 or three-hundredths of one percent (.0003)
of total Federal awards expended when the auditee has more than $100 million
in total Federal awards expended.
(e) Step 4. At a minimum, the auditor shall audit all of the
following as major programs:
(1) All Type A programs, except the auditor may exclude any
Type A programs identified as low-risk under Step 2 (paragraph (c) (1) of this
section) .
(2) (i) High-risk Type B programs as identified under
either of the following two options:
(A) Option 1. At least one half of the Type B
programs identified as high-risk under Step 3 (paragraph (d) of this section) ,
except this paragraph (e) (2) (i) (A) does not require the auditor to audit more
high-risk Type B programs than the number of low-risk Type A programs
identified as low-risk under Step 2.
(B) Option 2. One high-risk Type B program for
each Type A program identified as low-risk under Step 2.
(ii) When identifying which high-risk Type B programs to
audit as major under either Option 1 or 2 in paragraph (e) (2) (i) (A) or (B) ,
the auditor is encouraged to use an approach which provides an opportunity for
different high-risk Type B programs to be audited as major over a period of
time.
(3) Such additional programs as may be necessary to comply
with the percentage of coverage rule discussed in paragraph (f) of this
section. This paragraph (e) (3) may require the auditor to audit more programs
as major than the number of Type A programs.
(f) Percentage of coverage rule. The auditor shall audit as major
programs Federal programs with Federal awards expended that, in the aggregate,
encompass at least 50 percent of total Federal awards expended. If the
auditee meets the criteria in § .530 for a low-risk auditee, the auditor
need only audit as major programs Federal programs with Federal awards
expended that, in the aggregate, encompass at least 25 percent of total
Federal awards expended.
(g) Documentation of risk. The auditor shall document in the working
30
papers the risk analysis process used in determining major programs.
(h) Auditor's 1udgment. When the major program determination was
performed and documented in accordance with this part, the auditor's judgment
in applying the risk-based approach to determine major programs shall be
presumed correct. Challenges by Federal agencies and pass-through entities
shall only be for clearly improper use of the guidance in this part. However,
Federal agencies and pass-through entities may provide auditors guidance about
the risk of a particular Federal program and the auditor shall consider this
guidance in determining major programs in audits not yet completed.
(i) Deviation from use of risk criteria. For first-year audits, the
auditor may elect to determine major programs as all Type A programs plus any
Type B programs as necessary to meet the percentage of coverage rule discussed
in paragraph (f) of this section. Under this option, the auditor would not be
required to perform the procedures discussed in paragraphs (c) , (d) , and (e)
of this section.
(1) A first-year audit is the first year the entity is audited
under this part or the first year of a change of auditors.
(2) To ensure that a frequent change of auditors would not
preclude audit of high-risk Type B programs, this election for first-year
audits may not be used by an auditee more than once in every three years.
5 .525 Criteria for Federal program risk.
(a) General. The auditor's determination should be based on an
overall evaluation of the risk of noncompliance occurring which could be
material to the Federal program. The auditor shall use auditor judgment and
consider criteria, such as described in paragraphs (b) , (c) , and (d) of this
section, to identify risk in Federal programs. Also, as part of the risk
analysis, the auditor may wish to discuss a particular Federal program with
auditee management and the Federal agency or pass-through entity.
(b) Current and prior audit experience . (1) Weaknesses in internal
control over Federal programs would indicate higher risk. Consideration
should be given to the control environment over Federal programs and such
factors as the expectation of management's adherence to applicable laws and
regulations and the provisions of contracts and grant agreements and the
competence and experience of personnel who administer the Federal programs.
(i) A Federal program administered under multiple
internal control structures may have higher risk. When assessing risk in a
large single audit, the auditor shall consider whether weaknesses are isolated
in a single operating unit (e.g. , one college campus) or pervasive throughout
the entity.
(ii) When significant parts of a Federal program are
passed through to subrecipients, a weak system for monitoring subrecipients
would indicate higher risk.
(iii) The extent to which computer processing is used to
administer Federal programs, as well as the complexity of that processing,
should be considered by the auditor in assessing risk. New and recently
modified computer systems may also indicate risk.
(2) Prior audit findings would indicate higher risk,
particularly when the situations identified in the audit findings could have a
significant impact on a Federal program or have not been corrected.
(3) Federal programs not recently audited as major programs
31
may be of higher risk than Federal programs recently audited as major programs
without audit findings.
(c) Oversight exercised by Federal agencies and pass-through entities .
(1) Oversight exercised by Federal agencies or pass-through entities could
indicate risk. For example, recent monitoring or other reviews performed by
an oversight entity which disclosed no significant problems would indicate
lower risk. However, monitoring which disclosed significant problems would
indicate higher risk.
(2) Federal agencies, with the concurrence of OMB, may
identify Federal programs which are higher risk. OMB plans to provide this
identification in the compliance supplement.
(d) Inherent risk of the Federal program. (1) The nature of a
Federal program may indicate risk. Consideration should be given to the
complexity of the program and the extent to which the Federal program
contracts for goods and services. For example, Federal programs that disburse
funds through third party contracts or have eligibility criteria may be of
higher risk. Federal programs primarily involving staff payroll costs may
have a high-risk for time and effort reporting, but otherwise be at low-risk.
(2) The phase of a Federal program in its life cycle at the
Federal agency may indicate risk. For example, a new Federal program with new
or interim regulations may have higher risk than an established program with
time-tested regulations. Also, significant changes in Federal programs, laws,
regulations, or the provisions of contracts or grant agreements may increase
risk.
(3) The phase of a Federal program in its life cycle at the
auditee may indicate risk. For example, during the first and last years that
an auditee participates in a Federal program, the risk may be higher due to
start-up or closeout of program activities and staff.
(4) Type B programs with larger Federal awards expended would
be of higher risk than programs with substantially smaller Federal awards
expended.
§ .530 Criteria for a low-risk auditee.
An auditee which meets all of the following conditions for each of the
preceding two years (or, in the case of biennial audits, preceding two audit
periods) shall qualify as a low-risk auditee and be eligible for reduced audit
coverage in accordance with § .520:
(a) Single audits were performed on an annual basis in accordance with
the provisions of this part. A non-Federal entity that has biennial audits
does not qualify as a low-risk auditee, unless agreed to in advance by the
cognizant or oversight agency for audit.
(b) The auditor's opinions on the financial statements and the
schedule of expenditures of Federal awards were unqualified. However, the
cognizant or oversight agency for audit may judge that an opinion
qualification does not affect the management of Federal awards and provide a
waiver.
(c) There were no deficiencies in internal control which were
identified as material weaknesses under the requirements of GAGAS. However,
the cognizant or oversight agency for audit may judge that any identified
material weaknesses do not affect the management of Federal awards and provide
a waiver.
32
(d) None of the Federal programs had audit findings from any of the
following in either of the preceding two years (or, in the case of biennial
audits, preceding two audit periods) in which they were classified as Type A
programs:
(1) Internal control deficiencies which were identified as
material weaknesses;
(2) Noncompliance with the provisions of laws, regulations,
contracts, or grant agreements which have a material effect on the Type A
program; or
(3) Known or likely questioned costs that exceed five percent
of the total Federal awards expended for a Type A program during the year.
Appendix A to Part - Data Collection Form (Form SF-SAC)
[insert SF-SAC after finalized]
Appendix B to Part _ - Circular A-133 Compliance Supplement
Note: Provisional OMB Circular A-133 Compliance Supplement is available
from the Office of Administration, Publications Office, room 2200, New
Executive Office Building, Washington, DC 20503.
33
Exhibit I
CITY OF OMAHA PLANNING DEPARTMENT-HOUSING AND COMMUNITY DEVELOPMENT
OCCUPANCY REPORT
Project Name
Borrower/Head of Household Name DOB SSN
Co-Borrower Name DOB SSN
Address
City Funds Requested $ Fund Source: HOME ❑ CDBG ❑ NAHTF ❑ OTHER❑
Head of Household is: Male ❑ Female ❑ Elderly ❑
Number of Occupants: Total No. Adults No. Children Under 18
Please enter ethnicity and race for each household member in accordance with the attached definitions.
Ethnicity—Choose either H or NH. Enter H for Hispanic or Latino. Enter NH for Not Hispanic or Latino
Race Categories—Choose all that apply for each household member. Enter one or more of the following
abbreviations:
W, B, A, AI, PI, O.
White(W)
Black or African American(B)
Asian (A)
American Indian or Alaska Native (AI)
Native Hawaiian or Other Pacific Islander(PI)
Other(0)(Please specify)
HOUSEHOLD MEMBERS AND DEMOGRAPHICS
(See Above)
Ethnicity
Name of Household Member Relationship to Borrower Age (H or NH) Race Handicap
Borrower/Head of Household *****
Co-Borrower
Notes:
I certify that the above information is accurate.
Borrower Date Co-Borrower Date
Authorized Agency Representative Date
Page 1 of 2
Revised 6-1-06
DEFINITIONS:
Ethnicity:
1. Hispanic or Latino. A person of Cuban, Mexican, Puerto Rican, South or Central American or other
Spanish culture or origin, regardless of race. The term of "Spanish origin" can be used in addition to
"Hispanic" or"Latino".
2. Not Hispanic or Latino. A person not of Cuban, Mexican, Puerto Rican, South or Central American, or
other Spanish culture or origin, regardless of race.
Race:
1. American Indian or Alaska Native. A person having origins in any of the original peoples of North and
South America(including Central America), and who maintains tribal affiliation or community attachment.
2. Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian
subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the
Philippine Islands, Thailand and Vietnam.
3. Black or African American. A person having origins in any of the black racial groups of Africa. Terms
such as "Haitian" or"Negro" can be used in addition to "Black" or "African American".
4. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples of
Hawaii, Guam, Samoa or other Pacific Islands.
5. White. A person having origins in any of the original peoples of Europe, the Middle East or North Africa.
Page 2 of 2
Revised 6-1-06
HOMEOWNERSHIP FINANCIAL STATUS REPORT FORM Exhibit J
(Please attach AIA G702 form and other comparable supporting documentation for expenditures)
Developer Name: Program: CDBG ❑
ESG ❑
Developer's Contractor: HOME ❑
NAHTF ❑
Project Address: NSP ❑
SHP ❑
Project Type: Acquisition ❑
Loan#: New Constr ❑
Rehab ❑
Reporting Period: From: to
DEVELOPMENT PROJECT % BUDGET
COSTS BUDGET COMPLETE REMAINING
Hard costs $ % $
Soft costs:
Developer's overhead * $ % $
Property Taxes $ % $
Property Insurance $ % $
Real Estate Transfer Fees $ % $
Recording Fees $ % $
Appraisal Fee(s) $ % $
Title Insurance $ % $
Omaha 100 Loan Fee $ % $
FHAS Counseling Fee $ % $
Advertising $ % $
Utilities $ % $
Grounds Maintenance $ % $
Other(explain: $ % $
Other(explain: ) $ % $
Other: $ % $
TOTALS $ % $
* Developer's overhead percentage is based on the percent of hard cost work completed in the attached in AIA or comparable document.
TOTAL PAY REQUEST: $
Amount Amount
City Funds Other Funds
$ $
FUNDING SOURCES PROJECT % BUDGET
BUDGET COMPLETE REMAINING
$ % $
$ % $
$ % $
Other: $ % $
Other: $ % $
Other: $ % $
TOTALS: $ % $
I certify to the best of my knowledge that the above information is correct and complete and is for the purpose set forth in the award
documents. Financial records are available for audit or review.
Authorized Certifying Officer Title Date
Printed Name:
ICI
OPPORTUN'ITTY Revised and approved 11/5/2009
NON-HOMEOWNERSHIP FINANCIAL STATUS REPORT FORM
(Please attach AIA G702 form and other comparable supporting documentation for expenditures)
Developer Name: Program: CDBG ❑
ESG ❑
Developer's Contractor: HOME ❑
NAHTF ❑
Project Address: NSP ❑
SHP ❑
Project Type: Acquisition ❑
Loan#: New Constr ❑
Rehab ❑
Reporting Period: From: to
DEVELOPMENT PROJECT % BUDGET
COSTS BUDGET COMPLETE REMAINING
Hard costs $ % $
Soft costs(list):
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
TOTALS S % S
TOTAL PAY REQUEST: $
Amount Amount
City Funds Other Funds
$ $
FUNDING SOURCES PROJECT % BUDGET
BUDGET COMPLETE REMAINING
$ % $
$ % $
$ % $
Other: $ % $
Other: $ % $
Other: $ % $
TOTALS: $ % $
I certify to the best of my knowledge that the above information is correct and complete and is for the purpose set forth in the award
documents. Financial records are available for audit or review.
Authorized Certifying Officer Title Date
Printed Name:
O
OLIAL i+ousir;c
OPPOF ruN ry Revised and approved 6/18/2010
Exhibit K
MINORITY BUSINESS & WOMEN BUSINESS
ENTERPRISE PLAN
March 2011
oMAxAn,N
F44,
4.
�r� �7
''��jj h
111
7:4111 ';'':;'7::‘:7
QTFD FE$4Jr PLANNING• OMAHA
Jean Stothert, Mayor PLANNING DEPARTMENT James R.Thele
City of Omaha CITY OF OMAHA City of Omaha
Planning Department
Omaha/Douglas Civic Center
1819 Farnam Street
Omaha,Nebraska 68183
l Reviewed and approved 3/28/2011
MINORITY BUSINESS/WOMEN BUSINESS ENTERPRISE PLAN
INTRODUCTION
Minority and women business sectors play an important part in Omaha's overall plans for future growth,
progress, and prosperity. It is vital to the City's economic condition and well-being that minority and
women businesses expand, thrive and prosper, generating economic stability and increased job
opportunities. Towards the fulfillment and accomplishment of these important objectives, the City of
Omaha remains committed to minority and women business development.
The City of Omaha's approach to minority/women business development is embedded in its policy of non-
discrimination in the conduct of City business including the procurement of goods, materials and services,
construction and community and economic development projects. The City recognizes its obligations to
each segment of the various communities it serves. It is in recognition of these responsibilities that the
City established the City's Contract Compliance Ordinance.
The Ordinance commits the City to:
1. Require contractors and/or vendors to provide employment opportunities without regard to race,
color, sex, religion, or national origin;
2. Monitor contractor and vendor equal opportunity performance; and
3. Increase the total number and total dollar volume of City contracts awarded to minority-owned and
women-owned firms.
GOALS AND OBJECTIVES
The following represents a summary of the goals and objectives of the Planning Department as they relate
to minority and women-owned businesses:
1. Encourage, increase and promote business and procurement opportunities for women-owned
businesses;
2. Increase and expand the awareness and understanding regarding the concerns, obstacles, and
hindrances preventing increased MBE/WBE participation in Planning Department activities;
3. Assist MBE's/WBE's through the revitalization of business districts;
4. Assist minority and female entrepreneurs in the formation and growth of new small businesses;
and
5. Provide technical assistance to neighborhood organizations, MBE's and WBE's to increase their
participation in the Planning Department programs and activities at all levels.
SCOPE OF WORK
In order to accomplish these objectives, the Planning Department will:
1. Require that recipients of grant awards, consulting contracts, or loans to adopt the City's
MBE/WBE Enterprise Plan.
2. Ensure that Requests for Proposals have the MBE/WBE Enterprise Plan.
3. Ensure that the programs of the Planning Department are advertised in the appropriate new media
whose markets are targeted toward MBE/WBE.
2 Reviewed and approved 3/28/2011
4. Implement an outreach effort informing MBE and WBE firms and capture information on these
firms doing business with the Planning Department.
5. Implement a system to identify MBE and WBE firms and capture information on these firms doing
business with the Planning Department.
6. Require developers, corporations, partnerships and/or sole proprietors to register with the Human
Relations Department and the Purchasing Department. In addition, require these entities to
complete CC-1 (Human Relations Department)
The following information has been developed to assist you in complying with the MBE/WBE
requirements in the agreement with the City of Omaha. If you have any questions or require further
assistance in completing the application package, please contact Mr. Edward Dantzler, at 444-5530.
3 Reviewed and approved 3/28/2011
MBE/WBE FOR GOODS AND SERVICES
Your company must make vendors aware of equal opportunity utilization of minority, disabled and
women-owned businesses. To accomplish this goal, you must provide a copy of the approved MBE/WBE
Participation Plan to all businesses providing goods and/or services to the project.
Your company must provide the opportunity for Minority Business Enterprises and Women Business
Enterprises to provide goods and services through all phases of the project. A concerted effort must be
made to allow these businesses to actively compete for project contracts. This effort will include
utilization of the following resources and documentation of your actions to achieve these objectives.
Douglas County Purchasing Department
1819 Farnam Street, Room 903
Omaha,NE 68183
Eric Carlson, Purchasing Agent
402-444-7155 Fax: 402-444-4992
Housing and Community Development Division
City Planning
1819 Farnam Street, Room 1111
Omaha,NE 68183
Edward Dantzler, Development Section Manager
402-444-5530 Fax: 402-444-5201
Human Rights and Relations Department
Contract Compliance
1819 Farnam Street, Room 502
Omaha, NE 68183
Richard O'Gara, Director
402-444-5050 Fax: 402-444-5058
Minority Economic Development
Greater Omaha Chamber of Commerce
1301 Harney Street
Omaha,NE 68102
Winsley Duran, Director
402-345-5000 Fax: 402-346-7050
Nebraska Department of Economic Development
Small Business (MBE/WBE/DBE) Assistance
301 Centennial Mall South
Lincoln,NE 68509-4666
Steve Williams, Business Assistance Manager
402-471-3111 Fax 402-471-3778
4 Reviewed and approved 3/28/2011
MBE/WBE FOR GOODS AND SERVICES
North Omaha Contractor Alliance
2505 North 24th Street
Omaha, NE 68110
Houston McKell, III, Executive Director
402-714-1205
Omaha Small Business Network, Inc.
2505 North 24th Street
Omaha,NE 68110
Vicki Wilson Tederman, Executive Director
402-453-5336 Fax: 402-451-2876
Small Business Administration
10675 Bedford Avenue, Suite 100
Omaha,NE 68134
Kathleen Piper, ADD/MED
402-221-7205 Fax: 402-221-3680
Urban League of Nebraska, Inc.
3040 Lake Street
Omaha,NE 68110
Thomas H. Warren, President/CEO
402-451-1066
5 Reviewed and approved 3/28/2011
CITY OF OMAHA
CONTRACTOR INFORMATION FORM
Date:
Project Address:
Owner Information
Name:
Address:
City,St.,Zip:
Phone:
General Contractor Information
Name:
Address:
City,St.,Zip:
Phone:
Federal Tax ID or SSN
Contract Amount $
Woman Owned Business ❑ Yes ❑No
BRE(Business Owned Race/Ethnic)Code:
(BRE Code: 1 White American; 2 Black American: 3 Native American; 4 Hispanic American 5 Asian/Pacific American; 6 Hasidic Jews
_Subcontractor Information (Complete for each subcontractor for the project)
Name/Address Fed Tax Contract Woman Own BRE
ID/SSN Amt. Code
Name: $ ❑ Yes ❑ No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑ No
Address:
City,St.,Zip:
Phone:
6 Reviewed and approved 3i28'2011
Date:
Project Address:
Owner Information
Name:
General Contractor Information
Name:
(BRE Code: I White American; 2 Black American; 3 Native American; 4 Hispanic American 5 Asian/Pacific American; 6 Hasidic Jews
Name/Address Fed Tax Contract Woman Own BRE
ID/SSN Amt.
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City, St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑ Yes ❑No
Address:
City,St.,Zip:
Phone:
7 Reviewed and approved 3/28/2011
DEFINITIONS:
1. American Indian or Alaska Native. A person having origins in any of the original peoples of North
and South America (including Central America), and who maintains tribal affiliation or community
attachment.
2. Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the
Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia,
Pakistan, the Philippine Islands, Thailand and Vietnam.
3. Black or African American. A person having origins in any of the black racial groups of Africa.
Terms such as "Haitian" or "Negro" can be used in addition to "Black" or"African American".
4. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples
of Hawaii, Guam, Samoa or other Pacific Islands.
5. White. A person having origins in any of the original peoples of Europe, the Middle East or North
Africa.
;MOM'
UPPOfiTUN1�
8 Reviewed and approved 3/28/2011
Exhibit L
Certification for U.S. Department of Housing
and Urban Development
a Drug-Free Workplace
Applicant Name
City of Council Bluffs, Iowa
Program/Activity Receiving Federal Grant Funding
HOME Investment Partnerships Program
Acting on behalf of the above named Applicant as its Authorized Official, I make the following certifications and agreements to
the Department of Housing and Urban Development (HUD) regarding the sites listed below:
I certify that the above named Applicant will or will continue (1) Abide by the terms of the statement; and
to provide a drug-free workplace by:
(2) Notify the employer in writing of his or her convic-
a. Publishing a statement notifying employees that the un- tion for a violation of a criminal drug statute occurring in the
lawful manufacture,distribution, dispensing,possession, or use workplace no later than five calendar days after such conviction;
of a controlled substance is prohibited in the Applicant's work-
e. Notifying the agency in writing, within ten calendar days
place and specifying the actions that will be taken against after receiving notice under subparagraph d.(2) from an em-
employees for violation of such prohibition.
ployee or otherwise receiving actual notice of such conviction.
b. Establishing an on-going drug-free awareness program to Employers of convicted employees must provide notice, includ-
inform employees --- ing position title, to every grant officer or other designee on
(1) The dangers of drug abuse in the workplace; whose grant activity the convicted employee was working,
unless the Federalagency has designated a central point for the
(2) The Applicant's policy of maintaining a drug-free receipt of such notices. Notice shall include the identification
workplace; number(s) of each affected grant;
(3) Any available drug counseling, rehabilitation, and f. Taking one of the following actions, within 30 calendar
employee assistance programs; and days of receiving notice under subparagraph d.(2), with respect
(4) The penalties that may be imposed upon employees to any employee who is so convicted
for drug abuse violations occurring in the workplace. (1) Taking appropriate personnel action against such an
employee, up to and including termination, consistent with the
c. Making it a requirement that each employee to be engaged
in the performance of the grant be given a copy of the statement requirements of the Rehabilitation Act of 1973, as amended; or
required by paragraph a.; (2) Requiring such employee to participate satisfacto-
d. Notifying the employee in the statement required by para-
graph a. that, as a condition of employment under the grant, the proved for such purposes by a Federal, State,or local health,law
employee will --- enforcement, or other appropriate agency;
g. Making a good faith effort to continue to maintain a drug-
free workplace through implementation of paragraphs a. thru f.
2. Sites for Work Performance. The Applicant shall list(on separate pages)the site(s)for the performance of work done in connection with the
HUD funding of the program/activity shown above: Place of Performance shall include the street address, city, county, State, and zip code.
Identify each sheet with the Applicant name and address and the program/activity receiving grant funding.)
City of Council Bluffs
209 Pearl Street
Council Bluffs, IA 51503
Check here if there are workplaces on file that are not identified on the attached sheets.
I hereby certify that all the information stated herein, as well as any information provided in the accompaniment herewith, is true and accurate.
Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties.
(18 U.S.C. 1001,1010, 1012; 31 U.S.C.3729,3802)
Name of Authorized Official Title
Thomas P. Hanafan Mayor
Signature
C Date
form HUD-50070 /98)
ref.Handbooks 7417.1,7475.13,7485.1 &.3
Exhibit M
24 CFR 85.43 ENFORCEMENT
(a) Remedies for non-compliance. If a grantee or sub-grantee materially fails to comply with any term of
an award, whether stated in a federal statute or regulation, an assurance, in a State plan or application,
a notice of award, or elsewhere, the awarding agency may 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 grantee or
sub-grantee or more severe enforcement action by the awarding agency,
(2) Disallow(that is, deny both use of funds and 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 for the grantee's or sub-grantee's
program,
(4) Withhold further awards for the program, or,
(5) Take other remedies that may be legally available.
(b) Hearings, appeals. In taking an enforcement action, the awarding agency will provide the grantee or
sub-grantee an opportunity for such hearing, appeal or other administrative proceeding to which the
grantee or sub-grantee is entitles under any statute or regulation applicable to the action involved.
(c) Effects of suspension and termination. Costs of grantee or sub-grantee resulting from obligations
incurred by the grantee or sub-grantee 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 grantee or sub-grantee costs during suspension or after
termination which are necessary and not reasonably avoidable are allowable if:
(1) The costs result from obligations which were properly incurred by the grantee or sub-
grantee before the effective date of suspension or termination, are not in anticipation of it,
and, in the case of a termination, are non-cancelable, and,
(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 grantee or sub-grantee from being subject to
"Debarment and Suspension" under EO 12549(see § 85.35).
24 CFR 85.44 TERMINATION FOR CONVENIENCE
Except as provided in § 85.43 awards may be terminated in whole or in part only as follows:
(a) By the awarding agency with the consent of the grantee or sub-grantee 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, or
(b) By the grantee or sub-grantee upon written notification to the awarding agency, setting forth the
reasons for such termination, the effective date, and in the case of partial termination, the portion to
be terminated. However, if, in the case of a partial termination, the awarding agency determines that
the remaining portion of the award will not accomplish the purposes for which the award was made,
the awarding agency may terminate the award in its entirety under either § 85.43 or Paragraph (a) of
this section.
O
OPPORTUNITY Rev. 5/7/08
Attachment: 1
CITY OF OMAHA - DEFINITION OF INCOME
Annual Income Includes:
1. Wages, salaries, tips, commissions, etc.;
2. Self-employment income from owned non-farm business, including proprietorships and partnerships;
3. Farm self-employment income;
4. Interest, dividends, net rental income, or income from estates or trusts
5. Social security or railroad retirement;
6. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance or
public welfare programs;
7. Retirement, survivor or disability pensions;
8. Any other sources of income received regularly including Veterans' (VA) payments, unemployment
compensation, child support and alimony; and
9. Income from assets, as shown below:
a. Amounts in savings certificates, money market funds and other investment accounts.
b. Stocks, bonds, savings certificates, money market funds and other investment accounts.
c. Equity in real property or other capital investments. Equity is the estimated current market value of the
asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker
fees) that would be incurred in selling the asset. Do not include equity in principle residence (home
equity).
d. The cash value of trusts that are available to the household.
e. IRA, Keogh and similar retirement savings accounts, even though withdrawal would result in a penalty.
f. Contributions to company retirement/pension funds that can be withdrawn without retiring or
terminating employment.
g. Assets which, although owned by more than one person, allow unrestricted access by the applicant.
h. Lump sum receipts such as inheritances, capital gains, lottery winnings, insurance settlements and
other claims.
i. Personal property held as an investment such as gems,jewelry, coin collections, antique cars, etc.
j. Cash value of life insurance policies.
k. Assets disposed of for less than fair market value during two years preceding certification or re-
certification.
10. Actual income from assets if total assets are$5,000 or less.
11. If assets are more than $5,000, the greater of (a) actual income from assets, or (b) total assets times
passbook rate.
Annual Income Does Not Include the Following Assets:
1. Necessary personal property, except as noted in 9 (i).
2. Interest in Indian trust lands.
3. Assets that are a part of an active business or farming operation. NOTE: Rental properties are
considered personal assets held as an investment rather than business assets unless real estate is the
applicant's/tenant's main occupation.
4. Assets not accessible to the family and which provide no income for the family.
5. Vehicles especially equipped for the handicapped.
6. Equity in owner-occupied cooperatives and manufactured homes in which the family lives.
7. Equity in principle residence (home equity).
EQUAL HOUSING
OP POR T U NITS'
Revised and approved 7/12/2011
Attachment: 2
EQUAL EMPLOYMENT OPPORTUNITY CLAUSE
During the performance of this Contract, the Contractor agrees as follows:
(1) The Contractor and its subcontractors shall not discriminate against any employee
or applicant for employment because of race, religion, color, sex, age, sexual
orientation, gender identity, national origin, disability or familial status. As used
herein, the work "treated" shall mean and include, without limitation, the
following: Recruited, whether by advertising or by other means; compensated;
selected for training, including apprenticeship; promoted; upgraded; demoted;
downgraded; transferred; laid off; and terminated. The Contractor agrees to and
shall post in conspicuous places, available to employees and applicants for
employment, notices to be provided by the contracting officers setting forth the
provisions of this nondiscrimination clause.
(2) The Contractor and its subcontractors shall, in all solicitations or advertisements
for employees placed by or on behalf of the Contractor, state that all qualified
applicants will receive consideration for employment without regard to race,
religion, color, sexual orientation, gender identity, sex, national origin, age,
disability or familial status.
(3) The Contractor and its subcontractors shall send to each representative of workers
with which he has a collective bargaining agreement or other contract or
understanding a notice advising the labor union or worker's representative of the
Contractor's commitments under the equal employment opportunity clause of the
City and shall post copies of the notice in conspicuous places available to
employees and applicants for employment.
(4) The Contractor and its subcontractors shall furnish to the City's Human Rights
and Relations Contract Compliance Officer all federal forms containing the
information and reports required by the federal government for federal contracts
under federal rules and regulations, including the information required by Omaha
Municipal Code Sections 10-192 to 10-194, inclusive, and shall permit reasonable
access to his records. Records accessible to the Human Rights and Relations
Contract Compliance Officer shall be those which are related to Paragraphs (1)
through (7) of this Exhibit and only after reasonable notice is given to the
Contractor. The purpose for this provision is to provide for investigation to
ascertain compliance with the program provided for herein.
(5) The Contractor and its subcontractors shall take such actions with respect to any
subcontractor as the City may direct as a means of enforcing the provisions of
Paragraphs (1) through (7) herein, including penalties and sanctions for
noncompliance; however, in the event the Contractor becomes involved in or is
threatened with litigation as the result of such directions by the City, the City will
enter into such litigation as is necessary to protect the interests of the City and to
Revised and approved 5/23/2012
effectuate the provisions of this division; and in the case of contracts receiving
federal assistance, the Contractor or the City may request the United States to
enter into such litigation to protect the interests of the United States.
(6) The Contractor shall file and shall cause his subcontractors, if any, to file
compliance reports with the Contractor in the same form and to the same extent as
required by the federal government for federal contracts under federal rules and
regulations. Such compliance reports shall be filed with the Human Rights and
Relations Contract Compliance Officer. Compliance reports filed at such times as
directed shall contain information as to the employment practices, policies,
programs and statistics of the Contractor and his subcontractors.
(7) The Contractor shall include the provisions of Paragraphs (1) through (7) of this
Section, "Equal Employment Opportunity Clause", and Omaha Municipal Code
Section 10-193 in every contract, subcontract or purchase order so that such
provisions will be binding upon each subcontractor or vendor. (Code 1980,
Section 10-192; Ordinance No. 35344, Sections 1, 9-26-00)
Revised and approved 5/23/2012
Attachment: 3
SECTION 3 CLAUSE
All Section 3 covered contracts shall include the following clause (referred to as the Section 3
clause):
A. The work to be performed under this contract is subject to the requirements of Section 3
of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u
(Section 3). The purpose of Section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects covered by Section
3 shall, to the greatest extent feasible, be directed to low- and very low-income persons,
particularly persons who are recipients of HUD assistance for housing.
B. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135,
which implement Section 3. As evidenced by their execution of this contract, the parties
to this contract certify that they are under no contractual or other impediment that would
prevent them from complying with the part 135 regulations.
C. The contractor agrees to send to each labor organization or representative of workers with
which the contractor has a collective bargaining agreement or other understanding, if any,
a notice advising the labor organization or workers' representative of the contractor's
commitments under this Section 3 clause, and will post copies of the notice in
conspicuous places at the work site where both employees and applicants for training and
employment positions can see the notice. The notice shall describe the Section 3
preference, shall set forth minimum number and job titles subject to hire, availability of
apprenticeship and training positions, the qualifications for each; and the name and
location of the person(s) taking applications for each of the positions; and the anticipated
date the work shall begin.
D. The contractor agrees to include this Section 3 clause in every subcontract subject to
compliance with regulations in 24 CFR part 135, and agrees to take appropriate action, as
provided in an applicable provision of the subcontract or in this Section 3 clause, upon a
finding that the subcontractor is in violation of the regulations in 24 CFR part 135. The
contractor will no6t subcontract with any subcontractor where the contractor has notice or
knowledge that the subcontractor has been found in violation of the regulations in 24
CFR part 135.
E. The contractor will certify that any vacant employment positions, including training
positions, that are filled (1) after the contractor is selected but before the contract is
executed, and (2) with persons other than those to whom the regulations of 24 CFR part
135 require employment opportunities to be directed were not filled to circumvent the
contractor's obligations under 24 CFR part 135.
F. Noncompliance with HUD's regulations in 24 CFR part 135 may result in sanctions,
termination of this contract for default, and debarment or suspension from future HUD-
assisted contracts.
G. With respect to work performed in connection with Section 3 covered Indian housing
assistance, Section 7(b) of the Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450e) also applies to the work to be performed under this contract. Section
7(b) requires that to the greatest extent feasible (i) preference and opportunities for
training and employment shall be given to Indians, and (ii) preference in the award of
contracts and subcontracts shall be given to Indian organizations and Indian-owned
Economic Enterprises. Parties to this contract that are subject to the provisions of
Section 8 and Section 7(b) agree to comply with Section 3 to the maximum extent
feasible, but not in derogation of compliance with Section 87 (b).
Providing Other Economic Opportunities.
(a) General. In accordance with the findings of the Congress, as stated in Section 3,
that other economic opportunities offer an effective means of empowering low-
income persons, a recipient is encouraged to undertake efforts to provide to low-
income persons economic opportunities other than training, employment and
contract awards, in connection with Section 3 covered assistance.
(b) Other training and employment-related opportunities. Other economic opportunities
to train and employ Section 3 residents include, but need not be limited to, use of
"upward mobility", "bridge" and trainee positions to fill vacancies; and hiring
Section 3 residents in part-time positions.
(c) Other business-related economic opportunities: (1) A recipient or contractor may
provide economic opportunities to establish, stabilize or expand Section 3 business
concerns, including micro-enterprises. Such opportunities include, but are not
limited to formation of Section 3 joint ventures, financial support for affiliating with
franchise development, use of labor only contracts for building trades, purchase of
supplies and materials from housing authority resident-owned businesses, purchase
of materials and supplies from PHA resident-owned businesses and use of
procedures under 24 CFR part 963 regarding HA contracts to HA resident-owned
businesses. A recipient or contractor may employ these methods directly or may
provide incentives to non-Section 3 businesses to utilize such methods to provide
other economic opportunities to low-income persons. (2) A Section 3 joint venture
means an association of business concerns, one of which qualifies as a Section 3
business concern, formed by written joint venture agreement to engage in and carry
out a specific business venture for which purpose the business concerns combine
their efforts, resources and skills for joint profit, but not necessarily on a continuing
or permanent basis for conducting business generally, and for which the Section 3
business concern:
(i) Is responsible for a clearly defined portion of the work to be performed and
holds management responsibilities in the joint venture; and
(ii) Performs at least 25 percent of the work and is contractually entitled to
compensation proportionate to its work.
•
INTEROFFICE WE :�MORNDUN1 Attachment: 4
Law Department
DATE: July 31, 2002
TO: Reginald Young,Human Relations Director
Daisy Burton, Planning Department
FROM: Paul Kratz, City Attomey
SUBJECT: OMB Circular A-110
....-.._..."_.::li?�^`..L'^.Ci::Cv^T...="'G'u•'OS: -•^vs1.mai:.'I.:'' n^'i^1.li vet:a=crr:wSS::.ii:'f=^-..-_:. ....?:GiL-S::!".3''ii:=ti i-mai S�.".+i4::1:£LiarT'-..L'e=:s.ari aT=ar.r�JL"aS'iELramit2'
In a review of the proposed Interlocal Agreement between the City of Omaha and the •
City of Council Bluffs regarding the allocation of Federal funds received by the City from HUD,
the issue arose of contract compliance. After .discussions with Daisy Burton, Contract
Administration and Compliance Manager, Sharon 0arnek, City Planner and Reginald Young,
Director Human Relations, the Law Department has advised that the provisions of 10-196 will
not apply to this Interlocal Agreement. The Interlocal agreement provides that the City will
receive funds allocated by HUD that will be passed thrall ah to Council Bluffs to use for its Low-
. Moderate income housing projects. The City of Council Bluffs will award the contracts and will
be required to comply with the Federal Regulations but will not be held to the provisions of 10-
196.
PDK:skz
c: Sharon Oamek,.Compliance Officer
P:PAUL-K\GENCORRS\Young-Burton Memo.doc
Attachment: 5
U.S.Department of Housing and Urban Development
COMMUNITY PLANNING AND DEVELOPMENT
Special Attention of: Notice CPD-00-9
All Secretary's Representatives
All State/Area Coordinators Issued: December 26,2000
All CPD Office Directors Expires: December 26,2001
All HOME Coordinators
All HOME Participating Jurisdictions
All CDBG Grantees
All FHEO Field Directors
SUBJECT: Accessibility Notice: Section 504 of the Rehabilitation Act of 1973 and The Fair Housing
Act and their applicability to housing programs funded by the HOME Investment
Partnerships Program and the Community Development Block Grant Program
I. PURPOSE
The purpose of this Notice is to remind recipients of Federal funds in the HOME Investment Partnerships
Program (HOME)or the Community Development Block Grant(CDBG)Program of their obligation to
comply with Section 504 of the Rehabilitation Act of 1973, the Fair Housing Act, and HUD's
implementing Regulations (24 CFR Parts 8 and 100, respectively),which prohibit discrimination based
on disability and establish requirements for program accessibility and physical accessibility in connection
with housing programs. This Notice describes key compliance elements for housing assisted under the
HOME and CDBG programs. However, recipients should review the specific provisions of the Fair
Housing Act, Section 504, and their respective regulations in order to assure that their programs are
administered in full compliance. Note with respect to Section 504,this Notice does not address the
applicability of Section 504's physical accessibility requirements to homeownership programs financed
with HOME/CDBG assistance.
The Notice also recommends that recipients conduct updated self evaluations as a useful tool for
enhancing efforts to comply with accessibility requirements in HOME/CDBG programs,as well as to
document those efforts.
Applicability
This Notice applies to new construction and rehabilitation of housing under the HOME and CDBG
programs. Each primary recipient of Federal funds from the HOME or CDBG program is responsible for
providing this notice to each organization or other entity participating in the construction or rehabilitation
of projects receiving such funding and for establishing policies and practices that it will use to monitor
compliance of all covered programs,activities,or work performed by subrecipients,contractors,
subcontractors,management agents, etc.
Distribution: W-3-1
2
IL SECTION 504 OF THE REHABILITATION ACT OF 1973
Background
The HOME and CDBG programs,through State and local governments, provide assistance that may be
used for the construction or rehabilitation of affordable housing. HOME and CDBG funds may be used
to construct or rehabilitate rental housing,to rehabilitate owner occupied housing, and to finance
homeownership programs.
Section 504 of the Rehabilitation Act of 1973 prohibits discrimination against persons with disabilities in
the operation of programs receiving Federal financial assistance. HUD regulations implementing Section
504 contain accessibility requirements for new construction and rehabilitation of housing as well as
requirements for ensuring that the programs themselves are operated in a manner that is accessible to and
usable by persons with disabilities. (See 24 CFR Part 8)
For the purposes of this Notice,the references to multifamily housing projects covered by Section 504
only apply to multifamily rental housing projects.
The Section 504 regulations define "recipient" as any State or its political subdivision,any
instrumentality of a state or its political subdivision, any public or private agency, institution,
organization, or other entity, or any person to which Federal financial assistance is extended for any
program or activity directly or through another recipient, including any successor,assignee, or transferee
of a recipient, but excluding the ultimate beneficiary of the assistance. (24 CFR§8.3)A family that will
receive CDBG or HOME funds for the rehabilitation of an owner-occupied unit is not subject to the
requirements of Part 8 since it is the ultimate beneficiary of the funds, and not a recipient of Federal
financial assistance.
New construction
HUD regulations implementing Section 504 at 24 CFR §8.22(a)require that new construction of
multifamily projects be designed and constructed to be readily accessible to and usable by persons with
disabilities. Multifamily housing projects are defined at 24 CFR§8.3 as "projects containing five or
more dwelling units". Both the individual units and the common areas in the building must be accessible.
For new construction of multifamily rental projects, a minimum of 5 percent of the dwelling units in the
project(but not less than one unit)must be accessible to individuals with mobility impairments. An
additional 2 percent of the dwelling units(but at a minimum, not less than one unit)must be accessible to
individuals with sensory impairments(i.e. hearing or vision impairments), unless HUD prescribes a
higher number pursuant to 24 CFR §8.22(c).
Rehabilitation
Substantial alterations- Section 504 requires that if alterations are undertaken to a housing project that
has 15 or more units, and the rehabilitation costs wall be 75 percent or more of the replacement cost of
the completed facility,then such developments are considered to have undergone "substantial alterations"
(24 CFR §8.23 (a)). For substantial alterations of multifamily rental housing,the accessibility
3
requirements contained in 24 CFR§8.22 must be followed--a minimum of 5 percent of the dwelling
units in the project(but not less than one unit)must be accessible to individuals with mobility
impairments, and an additional 2 percent,at a minimum(but not less than one unit),must be accessible to
individuals with sensory impairments.
Other alterations--When other alterations that do not meet the regulatory definition of substantial
alterations are undertaken in multifamily rental housing projects of any size,these alterations must, to the
maximum extent feasible,make the dwelling units accessible to and usable by individuals with
disabilities,until a minimum of 5 percent of the dwelling units(but not less than one unit)are accessible
to people with mobility impairments,unless HUD prescribes a higher number pursuant to 24 CFR
8.23(b)(2). If alterations of single elements or spaces of a dwelling unit,when considered together,
amount to an alteration of a dwelling unit,then the entire dwelling unit shall be made accessible. For this
category of rehabilitation the additional 2 percent of the dwelling units requirement for individuals with
sensory impairments does not apply. Alterations to common spaces must,to the maximum extent
feasible,make those areas accessible. A recipient is not required to make a dwelling unit,common area,
facility or element accessible, if doing so would impose undue financial and administrative burdens on
the operation of the multifamily housing project. (24 CFR§8.23(b))Therefore,recipients are required to
provide access in covered alterations up to the point of being infeasible or an undue financial and
administrative burden.
Accessibility Standards
Dwelling units designed and constructed in accordance with the Uniform Federal Accessibility Standards
(UFAS)will be deemed to comply with the Section 504 regulation. For copies of UFAS, contact the
HUD Distribution Center at 1-800-767-7468;hearing or speech-impaired persons may access this
number via TTY by calling the Federal Information Relay Service at 1-800-877-8339. Accessible units
must be,to the maximum extent feasible,distributed throughout the projects and sites, and must be
available in a sufficient range of sizes and amenities so as not to limit choice.
III. FAIR HOUSING ACT
Background
The Fair Housing Act, applies to almost all housing sold or rented in the United States. The Fair
Housing Act prohibits discrimination in housing practices on the basis of race,color,religion, sex, and
national origin. The Fair Housing Act was amended in 1988 to provide protections from discrimination
in any aspect of the sale or rental of housing for families with children and persons with disabilities. The
Fair Housing Act also establishes requirements for the design and construction of new rental or for sale
multifamily housing to ensure a minimum level of accessibility for persons with disabilities. (See 24 CFR
100.200 et. seq.)
Section 804(f)(3)(C)of the Fair Housing Act requires that covered multifamily dwelling units designed
and constructed for first occupancy after March 13, 1991,be designed and constructed in a manner that:
(i) the public and common use portions of such dwellings are readily accessible to and usable by
disabled persons;
4
(ii) all the doors designed to allow passage into and within the premises within such dwellings
are sufficiently wide to allow passage by disabled persons in wheelchairs; and
(iii)all premises within such dwellings contain the following features of adaptive design:
(I) an accessible route into and through the dwelling;
(II) light switches, electrical outlets,thermostats, and other environmental controls in
accessible locations;
(III) reinforcements in bathroom walls to allow later installation of grab bars; and
(IV) usable kitchens and bathrooms such that an individual in a wheelchair can
maneuver about the space.
Covered multifamily dwelling units are:
• dwelling units in buildings consisting of 4 or more units served by one or more elevators, or
• ground floor dwelling units in other buildings with 4 or more units.
Information about housing designs that provide accessible features in compliance with the Fair Housing
Act can be found in the HUD's Fair Housing Accessibility Guidelines which were published in the
Federal Register on March 6, 1991 (56 F.R. 9472) and in HUD's Fair Housing Act Design Manual.
These can be obtained from the HUD Distribution Center at 1-800-767-7468. Deaf, hard of hearing or
speech-impaired individuals also may access this number via TTY by calling the Federal Information
Relay Service at 1-800-877-8339.
The design and construction requirements in the Fair Housing Act apply only to a building designed and
constructed for first occupancy after March 13, 1991. The Fair Housing Act regulations define a building
for first occupancy as a building that has never been used for any purpose. Thus, the design and
construction requirements in the Fair Housing Act will not apply to rehabilitation projects or activities.
Illustrations
It must be noted that, in many cases,new construction of rental projects funded in the HOME/CDBG
Programs must meet both the Fair Housing Act and the Section 504 new construction requirements.
Where two or more accessibility standards apply,the housing provider is required to follow and apply
both standards, so that maximum accessibility is obtained. The following examples illustrate how these
requirements will (or will not)apply.
• A rental building with an elevator constructed with HOME/CDBG funding would be
required to have 5%of its dwelling units meet the Section 504 accessibility requirements at
24 CFR 8.22 and the remaining 95%of the dwelling units would be required to comply with
the Fair Housing Act design and construction requirements at 24 CFR 100.205.Note: An
additional 2%of the dwelling units are required to be accessible for people with vision and
hearing impairments.
• A newly constructed 100 unit two-story garden apartment development with no elevator
constructed with HOME/CDBG assistance with half(50) of its dwelling units on the ground
floor and half(50) on the second floor would be required to have 5 of its ground floor
5
dwelling units built to comply with the Section 504 accessibility requirements at 24 CFR
8.22, and the remaining 45 ground floor dwelling units built to comply with the Fair Housing
Act design and construction requirements at 24 CFR 100.205.Note: An additional 2% of the
dwelling units are required to be accessible for people with vision and hearing impairments
in accordance with Section 504.
• A development consisting entirely of multistory rental townhouses constructed with Federal
financial assistance is not a covered multifamily dwelling for purposes of the design and
construction requirements of the Fair Housing Act at 24 CFR 100.205 since none of the
dwelling units qualify as ground floor units, but would still have to meet the Section 504 5%
+2%accessibility requirements at 24 CFR 8.22. (A townhouse development of 5 or more
single story dwelling units would still have to comply with both Section 504 and the Fair
Housing Act design and construction requirements at 24 CFR 100.200 et. seq.)
IV. Increasing Program Accessibility
HUD's Section 504 regulations require that a recipient of Federal financial assistance ensure that its •
program,when viewed in its entirety, is accessible to persons with disabilities. (24 CFR 8.20)In order to
meet this obligation, participants in the HOME/CDBG program must:
• To the maximum extent feasible, distribute accessible units throughout the projects and
sites, and make them available in a sufficient range of sizes and amenities so as not to limit
choice.
• Adopt suitable means to assure that information regarding the availability of accessible
units reaches eligible individuals with disabilities. They must also take reasonable
nondiscriminatory steps to maximize use of such units by eligible individuals.
• When an accessible unit becomes vacant, before offering the unit to an individual without
a disability, offer the unit: first,to a current occupant of the project requiring the
accessibility feature; and second,to an eligible qualified applicant on the waiting list
requiring the accessibility features.
• When an applicant or tenant requires an accessible feature or policy modification to
accommodate a disability, a federally assisted provider must provide such feature or
policy modification unless doing so would result in a fundamental alternation in the
nature of its program or an undue financial and administrative burden. See 24 CFR 8.4,
8.24, and 8.33 for further requirements and guidance.
• Providers are required to ensure that information about their programs is disseminated in a
manner that is accessible to persons with disabilities. For example, special
communication systems can greatly increase the effectiveness of outreach and ongoing
communication(e.g., Telecommunications Devices for the Deaf(TTY), materials on tape
or in Braille).
• Providers must ensure that activities and meetings are conducted in accessible locations.
6
Participants in the HOME/CDBG program may:
• Ask applicants for information that can demonstrate that they can meet the obligations of
tenancy including financial information,references, prior tenancy history, etc. However,
housing providers may not inquire into the nature and severity of an applicant or tenant's
disability,nor may they ask persons with disabilities questions not asked of all applicants,
apply different types of screening criteria,or assess an applicant's ability to live
independently.
• Ask if the applicant qualifies for a housing program or unit designed for persons with a
disability, when the housing program or unit is designed for such persons.
• Consider including a lease provision that requires a nondisabled family occupying an
accessible unit to move if a family with a disability needing that size unit applies and
there is an appropriately sized nonaccessible unit available for the relocating family.
V. Self-Evaluation
The Section 504 regulations required recipients of Federal financial assistance to conduct a self-
evaluation of their policies and practices to determine if they were consistent with the law's requirements.
This self evaluation was to have been completed no later than July 11, 1989. The regulatory deadlines
are long past. However, self-evaluation continues to be an excellent management tool for ensuring that a
recipient's current policies and procedures comply with the requirements of Section 504.
Involving persons with disabilities in the self-evaluation process is very beneficial. This will assure the
most meaningful result for both the recipient and for persons with disabilities who participate in the
recipients programs and activities. It is important to involve persons and/or organizations representing
persons with disabilities, and agencies or other experts who work regularly with accessibility standards.
Important steps in conducting a self-evaluation and implementing its results include the following:
• Evaluate current policies and practices and analyze them to determine if they adversely affect
the full participation of individuals with disabilities in its programs, activities and services.
Be mindful of the fact that a policy or practice may appear neutral on its face,but may have a
discriminatory effect on individuals with disabilities.
• Modify any policies and practices that are not or may not be in compliance with Section 504
regulations.
• Take appropriate corrective steps to remedy those policies and practices which either are
discriminatory or have a discriminatory effect. Develop policies and procedures by which
persons with disabilities may request a modification of a physical barrier or a rule or practice
that has the effect of limiting or excluding a person with a disability from the benefits of the
program.
• Document the self-evaluation process and activities. The Department recommends that all
recipients keep the self-evaluation file for at least three years, including records of the
• 7
• individuals and organizations consulted, areas examined and problems identified, and
document modifications and remedial steps.
The Department also recommends that recipients periodically update the self-evaluation,particularly, for
example, if there have been changes in recipient owned housing stock, such as demolition of housing
units and construction and/or alteration of housing, or changes in the programs and services of the
agency.
VI. Visitability
Visitability Concept
Although not a requirement, it is recommended that all design, construction and alterations incorporate,
whenever practical,the concept of visitability in addition to the requirements under Section 504 and the Fair
Housing Act.
Visitability is a design concept,which for very little or no additional cost, enables persons with disabilities to
visit relatives, friends, and neighbors in their homes within a community.
Design Considerations
Visitability design incorporates the following in all construction or alterations, in addition to the applicable
requirements of Section 504 and the Fair Housing Act, whenever practical and possible for as many units as
possible within a development:
® Provide a 32" clear opening in all bathroom and interior doorways
• Provide at least one accessible means of egress/ingress for each unit.
Benefits
Visitability also expands the availability of housing options for individuals who may not require full
accessibility. It will assist project owners in making reasonable accommodations and reduce, in some
cases,the need for structural modifications or transfers when individuals become disabled in place.
Visitability will also improve the marketability of units.
HUD Technical Assistance Concerning these Requirements
Further information concerning compliance with any of these requirements may be obtained through the HUD
web page(http://www.hud.gov/fhe/504/sect504.html). Additional assistance and information may be
obtained by contacting the local Department of Housing and Urban Development Offices of Community
Planning and Development(CPD)and Fair Housing and Equal Opportunity(FHEO) listed below:
CPD FHEO
Boston,MA 617 565-5345 617 565-5310
Hartford,CT 806 240-4800 x3059 860 240-4800
New York,NY 212 264-0771 x3422 212 264-1290
8
Buffalo,NY 716 551-5755 x5800 716 551-5755
Newark,NJ 973 622-7900 x3300 973 622-7900
Philadelphia,PA 215 656-0624 x3201 215 656-0661
Pittsburgh,PA 412 644-2999 412 355-3167
Baltimore,MD 410 962-2520 x3071 410 962-2520
Richmond,VA 804 278-4503 x3229 804 278-4504
Washington,DC 202 275-0994 x3163 202 275-0848
Atlanta,GA 404 331-5001 x2449 404 331-1798
Birmingham,AL 205 290-7630 x1027 205 290-7630
South Florida 305 5364431 x2223 305 536-4479
Jacksonville,FL 904 232-1777 x2136 904 232-1777
San Juan,PR 787 766-5400 x2005 787 766-5400
Louisville,KY 502 582-6163 x214 502 582-6163 x230
Jackson,MS 601 965-4700 x3140 601 965-4700 x2435
Knoxville,TN 865 545-4391 x121 865 545-4379
Greensboro,NC 336 547-4005 336 547-4050
Columbia,SC 803 765-5564 803 765-5936
Chicago,IL 312 353-1696 x2702 312 353-7776
Minneapolis,MN 612 370-3019 x2107 612 370-3185
Detroit,MI 313 226-7908 x8055 313 226-6280
Milwaukee,WI 414 297-3214 x8100 414 297-3214
Columbus,OH 614 469-5737 x8240 614 469-5737 x8170
Indianapolis,IN 317 226-6303 x6790 317 226-7654
Little Rock,AK 501 324-6375 501 324-6296
Oklahoma City, OK 405 553-7569 405 553-7426
Kansas City,KS 913 551-5485 913 551-5834
Omaha,NE 402 492-3181 402 492-3109
St. Louis, M 314 539-6524 314 539-6327
New Orleans,LA 504 589-7212 x3047 504 589-7219
Fort Worth,TX 817 978-5934 x5951 817 978-5870
San Antonio,TX 210 475-6820 x2293 210 475-6885
Albuquerque,NM 505 346-7271 x7361 505 346-7327
Denver,CO 303 672-5414 x1326 303 672-5437
San Francisco,CA 415 436-6597 415 436-6569
Los Angeles,CA 213 894-8000 x3300 213 894-8000 x3400
Honolulu,HI 808 522-8180 x264 808 522-8180
Phoenix,AZ 602 379-4754 602 379-6699 x5261
Seattle,WA 206 220-5150 x3606 206 220-5170
Portland,OR 503 326-7018 503 326-3349
Manchester,NH 603 666-7640 x7633
Anchorage,AK 907 271-3669
Houston,TX 713 313-2274
U.S.Department of Housing and Urban Development
COMMUNITY PLANNING AND DEVELOPMENT
Special Attention of: Notice CPD-00-10
All Secretary's Representatives
All State/Area Coordinators Issued: December 26, 2000
All CPD Office Directors Expires: December 26,2001
All FHEO Field Offices
All CDBG Grantees
Subject: Accessibility for Persons with Disabilities to Non-Housing Programs funded by Community
Development Block Grant Funds-- Section 504 of the Rehabilitation Act of 1973,the
Americans With Disabilities Act, and the Architectural Barriers Act
I. Purpose
The purpose of this Notice is to remind recipients of Federal funds under the Community Development
Block Grant(CDBG)Program of their obligation to comply with Section 504 of the Rehabilitation Act of
1973,HUD's implementing regulations(24 CFR Part 8),the Americans with Disabilities Act, (ADA)and
its implementing regulations,(28 CFR Parts 35, 36),and the Architectural Barriers Act(ABA)and its
implementing regulations(24 CFR Parts 40,41)in connection with recipients'non-housing programs.
This Notice describes key compliance elements for non-housing programs and facilities assisted under
the CDBG programs. However,recipients should review the specific provisions of the ADA, Section
504,the ABA, and their implementing regulations in order to assure that their programs are administered
in full compliance.
Applicability
This Notice applies to all non-housing programs and facilities assisted with Community Development
Block Grant Funds(e.g. public facilities and public improvements, commercial buildings, office
buildings, and other non-residential buildings)and facilities in which CDBG activities are undertaken
(e.g., public services). A separate Notice is being issued concerning Federal accessibility requirements
for housing programs assisted by recipients of CDBG and HOME program funds.
II. Section 504 of the Rehabilitation Act of 1973
Section 504 of the Rehabilitation Act of 1973, as amended, provides "No otherwise qualified individual
with a disability in the United States ... shall, solely by reason of his or her disability, be excluded from
the participation in,be denied the benefits of, or be subjected to discrimination under any program or
activity receiving Federal financial assistance...". HUD's regulations implementing the Section 504
requirements can be found at 24 CFR Part 8.
Distribution: W-3-1
2
Part 8 requires that recipients ensure that their programs are accessible to and usable by persons with
disabilities. Part 8 also prohibits recipients from employment discrimination based upon disability.
The Section 504 regulations define "recipient" as any State or its political subdivision, any
instrumentality of a State or its political subdivision,any public or private agency, institution
organization, or other entity or any person to which Federal financial assistance is extended for any
program or activity directly or through another recipient, including any successor, assignee, or transferee
of a recipient, but excluding the ultimate beneficiary of the assistance. (24 CFR§8.3)For the purposes of
Part 8, recipients include States and localities that are grantees and subgrantees under the CDBG
program,their subrecipients, community-based development organizations, businesses,and any other
entity that receives CDBG assistance, but not low and moderate income beneficiaries of the program.
CDBG grantees are responsible for establishing policies and practices that they will use to monitor
compliance of all covered programs, activities, or work performed by their subrecipients, contractors,
subcontractors,management agents, etc.
Non-housing Programs
New Construction--Part 8 requires that new non-housing facilities constructed by recipients of Federal
financial assistance shall be designed and constructed to be readily accessible to and usable by persons
with disabilities. (24 CFR§8.21(a))
Alterations to facilities--Part 8 requires to the maximum extent feasible, that recipients make
alterations to existing non-housing facilities to ensure that such facilities are readily accessible to and
usable by individuals with disabilities. An element of an existing non-housing facility need not be made
accessible, if doing so, would impose undue financial and administrative burdens on the operation of the
recipients program or activity. (24 CFR §8.21 (b))
Existing non-housing facilities -A recipient is obligated to operate each non-housing program or
activity so that,when viewed in its entirety,the program or activity is readily accessible to and usable by
persons with disabilities. (24 CFR §8.21 (c))
Recipients are not necessarily required to make each of their existing non-housing facilities accessible to
and usable by persons with disabilities if when viewed in its entirety,the program or activity is readily
accessible to and usable by persons with disabilities.24 CFR §8.21(c)(1)Recipients are also not required
to take any action that they can demonstrate would result in a fundamental alteration in the nature of its
program or activity or cause an undue administrative and financial burden. However,recipients are still
required to take other actions that would not result in such alterations,but would nevertheless ensure that
persons with disabilities receive the benefits and services of the program. (24 CFR§8.21(c)(iii))
Historic Preservation-Recipients are not required to take any actions that would result in a substantial
impairment of significant historic features of an historic property,However, in such cases where a
physical alteration is not required,the recipient is still obligated to use alternative means to achieve
program accessibility, including using audio-visual materials and devices to depict those portions of
3
an historic property that cannot be made accessible, assigning persons to guide persons with disabilities
into or through portions of historic properties that cannot be made accessible,or otherwise adopting other
innovative methods so that individuals with disabilities can still benefit from the program. (24CFR
§8.21(e)(2)(ii))
Accessibility Standards
Design, construction, or alteration of facilities in conformance with the Uniform Federal Accessibility
Standards(UFAS) is deemed to comply with the accessibility requirements for nonhousing facilities.
Recipients may depart from particular technical and scoping requirements of UFAS where substantially
equivalent or greater accessibility and usability is provided. (24 CFR§8.32) For copies of UFAS,
contact the HUD Distribution Center at 1-800-767-7468; deaf,hard of hearing, or speech-impaired
persons may access this number via TTY by calling the Federal Information Relay Service at 1-800-877-
8339.
Where a property is subject to more than one law or accessibility standard, it is necessary to comply with
all applicable requirements. In some cases, it may be possible to do this by complying with the stricter
requirement,however, it is also important to ensure that meeting the stricter requirement also meets both
the scoping and technical requirements of overlapping laws or standards.
Employment
Section 504 also prohibits discrimination based upon disability in employment. See 24 CFR Part 8,
Subpart B.
Section 504 Self Evaluations
The Section 504 regulations required recipients of Federal financial assistance to conduct a self-
evaluation of their policies and practices to determine if they were consistent with the law's requirements.
This self evaluation was to have been completed no later than July 11, 1989. Title II of the ADA
imposed this requirement on all covered public entities. The ADA regulations required that ADA self
evaluations be completed by January 26, 1993,although those public entities that had already performed
a Section 504 self evaluation were only required to perform a self-evaluation on those policies and
practices that had not been included in the Section 504 review.
The regulatory deadlines are long past. However, self-evaluation continues to be an excellent
management tool for ensuring that a recipient's current policies and procedures comply with the
requirements of Section 504 and the ADA.
Involving persons with disabilities in the self-evaluation process is very beneficial. This will assure the
most meaningful result for both the recipient and for persons with disabilities who participate in the
recipient's programs and activities. It is important to involve persons and/or organizations representing
persons with disabilities, and agencies or other experts who work regularly with accessibility standards.
4
Important steps in conducting a self-evaluation and implementing its results include the following:
® Evaluate current policies and practices and analyze them to determine if they adversely
affect the full participation of individuals with disabilities in its programs,activities and
services. Be mindful of the fact that a policy or practice may appear neutral on its face,but
may have a discriminatory effect on individuals with disabilities.
® Modify any policies and practices that are not or may not be in compliance with Section 504
or Title II and Title III of the ADA regulations. (See 24 CFR Part 8 and 28 CFR Parts 35,
36.)
®. Take appropriate corrective steps to remedy those policies and practices which either are
discriminatory or have a discriminatory effect. Develop policies and procedures by which
persons with disabilities may request a modification of a physical barrier or a rule or
practice that has the effect of limiting or excluding a person with a disability from the
benefits of the program.
m Document the self-evaluation process and activities. The Department recommends that all
recipients keep the self-evaluation on file for at least three years, including records of the
individuals and organizations consulted, areas examined and problems identified, and
document modifications and remedial steps,as an aid to meeting the requirement at 24 CFR
Part 8.55.
The Depai tanent also recommends that recipients periodically update the self-evaluation,particularly, for
example, if there have been changes in the programs and services of the agency. In addition,public
entities covered by Title II of the ADA should review any policies and practices that were not included in
their Section 504 self-evaluation and should modify discriminatory policies and practices accordingly.
III. The Americans With Disabilities Act of 1990
The Americans With Disabilities Act of 1990 (ADA)guarantees equal opportunities for persons with
disabilities in employment,public accommodations,transportation, State and local government services,
and telecommunications. Unlike Section 504 which applies only to programs and activities receiving
Federal financial assistance,the ADA applies even if no Federal financial assistance is given.
The U.S. Department of Justice enforces Titles I, II, and III of the ADA, although the Equal Employment
Opportunity Commission investigates administrative complaints involving Title I.
Title I prohibits discrimination in employment based upon disability. The regulations implementing
Title I are found at 29 CFR Part 1630. The Equal Employment Opportunity Commission(EEOC)offers
technical assistance on the ADA provisions applying to employment.
These can be obtained at the EEOC web site www.eeoc.gov, or by calling 800-669-3362 (voice)and 800-
800-3302 (TTY).
5
Title II prohibits discrimination based on disability by State and local governments. Title II essentially
extended the Section 504 requirements to services, programs, and activities provided by States, local
governments and other entities that do not receive Federal financial assistance from HUD or another
Federal agency. CDBG grantees are covered by both Title II and Section 504. The Department of
Justice Title II regulations are found at 28 CFR Part 35.
Title II also requires that facilities that are newly constructed or altered,by, on behalf of, or for use of a
public entity,be designed and constructed in a manner that makes the facility readily accessible to and
usable by persons with disabilities. (28 CFR§35.151 (a)&(b))Facilities constructed or altered in
conformance with either UFAS or the ADA Accessibility Guidelines for Buildings and Facilities
(ADAAG)(Appendix A to 28 CFR Part 36)shall be deemed to comply with the Title II Accessibility
requirements, except that the elevator exemption contained at section 4.1.3(5)and section 4.1.6(1)(j)of
ADAAG shall not apply. (28CFR§35.151(c))
Title II specifically requires that all newly constructed or altered streets,roads, and highways and
pedestrian walkways must contain curb ramps or other sloped areas at any intersection having curbs or
other barriers to entry from a street level or pedestrian walkway and that all newly constructed or altered
street level pedestrian walkways must have curb ramps at intersections .Newly constructed or altered
street level pedestrian walkways must contain curb ramps or other sloped areas at intersections to streets,
roads, or highways. (28CFR§35.151(e))
The Title II regulations required that by January 26, 1993,public entities(State or local governments)
conduct a self-evaluation to review their current policies and practices to identify and correct any
requirements that were not consistent with the regulation. Public entities that employed more than 50
persons were required to maintain their self-evaluations on file and make it available for three years. If a
public entity had already completed a self-evaluation under Section 504 of the Rehabilitation Act,then
the ADA only required it to do a self-evaluation of those policies and practices that were not included in
the previous self-evaluation. (28 CFR§35.105)
The Department of Justice offers technical assistance on Title IF through its web page at
www.usdoj.gov/crt/ada/taprog.htm,and through its ADA Information Line, at 202 514-0301 (voice
and 202-514-0383 (TTY). The Department of Justice's technical assistance materials include among
others,the Title II Technical Assistance Manual with Yearly Supplements,the ADA guide for Small
Towns, and an ADA Guide entitled The ADA and City Governments: Common Problems.
Title III prohibits discrimination based upon disability in places of public accommodation(businesses
and non-profit agencies that serve the public)and"commercial"facilities(other businesses). It applies
regardless of whether the public accommodation or commercial facility is operated by a private or public
entity, or by a for profit or not for profit business. The Department of Justice Title III regulations are
found at 28 CFR Part 36. The Department of Justice also offers technical assistance concerning Title III
through the web page cited above and the ADA Hotline cited above.
6
Justice also offers technical assistance concerning Title III through the web page cited above and the ADA Hotline
cited above.
IV. The Architectural Barriers Act of 1968
The Architectural Barriers Act of 1968 (ABA)(42 U.S.C. 4151-4157)requires that certain buildings financed with
Federal funds must be designed,constructed, or altered in accordance with standards that ensure accessibility for
persons with physical disabilities. The ABA covers any building or facility financed in whole or in part with
Federal funds,except privately-owned residential structures. Covered buildings and facilities designed,
constructed, or altered with CDBG funds are subject to the ABA and must comply with the Uniform Federal
Accessibility Standards(UFAS). (24 CFR 570.614)In practice,buildings built to meet the requirements of Section
504 and the ADA,will conform to the requirements of the ABA.
V. HUD Resources Available Concerning Section 504
Further information concerning compliance with Section 504 may be obtained through the HUD web page
(http://www.hud.gov/fhe/504/sect504.html).Additional assistance and information may be obtained by
contacting the local Department of Housing and Urban Development Office of Fair Housing and Equal
Opportunity field office. Below is a list of the phone numbers for these offices.
CPI) FIIEO
Boston,MA 617 565-5345 617 565-5310
Hartford,CT 806 240-4800 x3059 860 240-4800
New York,NY 212 264-0771 x3422 212 264-1290
Buffalo,NY 716 551-5755 x5800 716 551-5755
Newark,NJ 973 622-7900 x3300 973 622-7900
Philadelphia,PA 215 656-0624 x3201 215 656-0661
Pittsburgh,PA 412 644-2999 412 355-3167
Baltimore,MD 410 962-2520 x3071 410 962-2520
Richmond,VA 804 278-4503 x3229 804 278-4504
Washington,DC 202 275-0994 x3163 202 275-0848
Atlanta, GA 404 331-5001 x2449 404 331-1798
Birmingham,AL 205 290-7630 x1027 205 290-7630
South Florida 305 536-4431 x2223 305 536-4479
Jacksonville,FL 904 232-1777 x2136 904 232-1777
San Juan,PR 787 766-5400 x2005 787 766-5400
Louisville,KY 502 582-6163 x214 502 582-6163 x230
Jackson,MS 601 965-4700 x3140 601 965-4700 x2435
Knoxville,TN 865 545-4391 x121 865 545-4379
Greensboro,NC 336 547-4005 336 547-4050
Columbia, SC 803 765-5564 803 765-5936
Chicago,IL 312 353-1696 x2702 312 353-7776
Minneapolis,MN 612 370-3019 x2107 612 370-3185
7
Detroit,MI 313 226-7908 x8055 313 226-6280
Milwaukee,WI 414 297-3214 x8100 414 297-3214
Columbus,OH 614 469-5737 x8240 614 469-5737 x8170
Indianapolis,IN 317 226-6303 x6790 317 226-7654
Little Rock,AK 501 324-6375 501 324-6296
Oklahoma City,OK 405 553-7569 405 553-7426
Kansas City,KS 913 551-5485 913 551-5834
Omaha,NE 402 492-3181 402 492-3109
St.Louis,MO 314 539-6524 314 539-6327
New Orleans,LA 504 589-7212 x3047 504 589-7219
Fort Worth,TX 817 978-5934 x5951 817 978-5870
San Antonio,TX 210 475-6820 x2293 210 475-6885
Albuquerque,NM 505 346-7271 x7361 505 346-7327
Denver, CO 303 672-5414 x1326 303 672-5437
San Francisco, CA 415 436-6597 415 436-6569
Los Angeles,CA 213 894-8000 x3300 213 894-8000 x3400
Honolulu,HI 808 522-8180 x264 808 522-8180
Phoenix,AZ 602 379-4754 602 379-6699 5261
Seattle,WA 206 220-5150 x3606 206 220-5170
Portland,OR 503 326-7018 503 326-3349
Manchester,NH 603 666-7640 x7633
Anchorage,AK 907 271-3669
Houston,TX 713 313-2274
Distribution: W-3-1
�tMExr Oo
y° U.S. Department of Housing and Urban Development
*iu*FE
484N OEU DLO
COMMUNITY PLANNING AND DEVELOPMENT
Special Attention of: Notice CPD-02-03
All Secretary's Representatives
All State/Area Coordinators Issued: May 2,2002
All CPD Office Directors Expires: December 26,2003
All HOME Coordinators
All HOME Participating Jurisdictions
All CDBG Grantees
All FHEO Field Directors
SUBJECT: Accessibility Notice: Section 504 of the Rehabilitation Act of 1973 and The Fair Housing
Act and their applicability to housing programs funded by the HOME Investment Partnerships Program
and the Community Development Block Grant Program
This Notice extends the provisions of Notice CPD 00-09 (originally issued December 26, 2000)
through December 26, 2003.
Distribution:W-3-1
Project Name Unit 2009 HOME Funds Low and Mederate Income I Other Public Funds Private funds Total Project Costs Description
Direct Homeownership Assistance 7 167,220 167,220 0 0 167,220 Downpayment asistance to first-time low and n
Single Family New Construction income homebuyers through the provision of si
mortgages to purchase 7 newly constructioned
family homes
Direct Homeownership Assistance 2010 HOME funds
Single Family New Construction 5 135,000 135,000 0 0 135,000 Downpayment assistance to first-time low and
income homebuyers through the provision of si
mortgages to purchase 7 newly constructioned
family homes
Totals 12 302,220.00 302,220.00 0 0 302,220.00
Cu
3
CD
3
cn
Attachment: 7
•
Housing and Community Development Division
City of Omaha Planning Department
Cost Certification Form
Project Name: New House Program
Project Owner: Council Bluffs
Project Address: 12 Scattered Site Houses
Certified amount: $302,220.00
The Rehabilitation Division has reviewed the project cost estimate, work write-up or
plans, specifications, &proposal. In our opinion the project cost proposed is reasonable
given the type of work that is to b completed. (See attached)
•
Construction Specialist: . y
14.10.,
Development Section Manager: �i621 J- Date:
C-25A CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha, Nebraska
RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:
WHEREAS, under Title II of the National Affordable Housing Act of 1990, the
City of Omaha annually receives a HOME Investment Partnerships Program entitlement for the
purpose of providing affordable housing opportunities for low-income households; and,
WHEREAS, on June 19, 2012, by Resolution No. 812, the Omaha City Council
approved a Home Investment Partnerships Program Consortium Cooperation Agreement
(Cooperation Agreement) between the City of Omaha and the City of Council Bluffs for the
purposes of receiving an increased HOME Fund allocation from the U.S. Department of Housing
and Urban Development (HUD) and administering the HOME Program as a single grantee; and,
WHEREAS, the HOME Consortium Cooperation Agreement is in full force and
effect until September 30, 2015; and,
WHEREAS, the Consortium Cooperation Agreement provided for the transfer of
a portion of the HOME Funds received by the City of Omaha to the City of Council Bluffs, less
ten percent to be used by the City of Omaha for administrative purposes; and,
WHEREAS, the Mayor, City of Omaha, recommended various projects in the FY
2009 and FY 2010 Consolidated Submission for Community Planning and Development
Programs (Consolidated Plan); and,
WHEREAS, the City Council, City of Omaha, approved the FY 2009
Consolidated Plan on October 10, 2008 by Resolution No. 1492, as amended April 14, 2009 by
Resolution No. 235, and as amended again June 9, 2009 by Resolution No. 494 and the FY 2010
Consolidated Plan was approved by the City Council, City of Omaha on November 21, 2009 by
Resolution No. 1347 as amended by Resolution No. 1173 on October 5, 2010 and as amended
July 16, 2013 by Resolution No. 899; and,
WHEREAS, the City of Council Bluffs will use the FY 2009 and FY 2010
HOME Program funds in the amount of $302,220.00 to provide twelve (12) loans for down
payment assistance toward the purchase of newly constructed single-family homes. All loans
shall be provided to qualified low- and moderate-income families whose annual household
incomes are 80% and below the.Median Family Income (MFI) as established annually by HUD
to assist them in purchasing of homes to be occupied as their principal place of residence. All
houses purchased will be located on scattered sites throughout the City of Council Bluffs
(hereinafter referred to as the "Project"); and,
By
Councilmember
Adopted
City Clerk
Approved
Mayor
NO.
Resolution by
Presented to City Council
eu5ter grown
City Clerk
C-25A CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha,Nebraska
Page 2
WHEREAS, the total project cost for FY 2009 is estimated at $167,220.00 for the
down-payment assistance for seven (7) houses and will be funded with HOME Program funds.
The total project cost for FY 2010 is estimated at $135,000.00 for the down-payment assistance
for five (5) houses and will be funded with HOME Program funds; and,
WHEREAS, it is in the best interest of the City of Omaha and the residents
thereof to enter into an Agreement with the City of Council Bluffs to make affordable housing
opportunities available to low- and moderate-income residents of Council Bluffs, Iowa.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF OMAHA:
THAT, as recommended by the Mayor, the attached Inter-Local HOME
Agreement between the City of Omaha and the City of Council Bluffs, 209 Pearl Street, Council
Bluffs, Iowa 51503, authorizing the City of Omaha to provide to the City of Council Bluffs a
total of$302,220.00 in HOME funds comprised of $167,220.00 in FY 2009 HOME funds and
$135,000.00 in FY 2010 HOME funds for down payment assistance toward the purchase of
newly constructed single-family homes consisting of seven (7) HOME-assisted units with FY
2009 funds and five (5) HOME-assisted units with FY 2010 funds. These twelve (12) single-
family homes will be available to qualified low- and moderate-income households, whose annual
household incomes are 80% and below the Median Family Income (MFI), and will be located on
sites to be determined at a later date within the City of Council Bluffs, is hereby approved.
Funds in the amount of$167,220.00 shall be payable from the FY 2009 and $135,000.00 shall be
payable from the FY 2010 HOME Housing Development Program, Fund No. 2470, Organization
No. 128071.
APPROVED AS TO FORM:
ASSISTANT CITY ATTORNEY DATE
1971 dlh
By I4 `i -
Councilmember
Adopted ' 1 1 2014
Cit Clerk JAW
Approves
Mayor
>:‘,/,%az-k7
NO. /v ,.....,....,
Resolution by
Res. THAT, as recommended by the Mayor, 2009 and $135,000.00 shall be payable from
the attached Inter-Local HOME Agreement the FY 2010 HOME Housing Development
between the City of Omaha and the City of Program, Fund No. 2470, Organization No.
Council Bluffs, 209 Pearl Street, Council 128071.
Bluffs, Iowa 51503, authorizing the City of
Omaha to provide to the City of Council 1971 dlh
Bluffs a total of$302,220.00 in HOME funds
comprised of$167,220.00 in FY 2009 HOME
funds and $135,000.00 in FY 2010 HOME
funds for down payment assistance toward
the purchase of newly constructed single-
family homes consisting of seven (7) HOME-
assisted units with FY 2009 funds and five (5)
HOME-assisted units with FY 2010 funds.
These twelve (12) single-family homes will
be available to qualified low- and moderate-
income households, whose annual household
incomes are 80% and below the Median
Family Income (MFI), and will be located on
sites to be determined at a later date within
the City of Council Bluffs, is hereby
approved. Funds in the amount of
$167,220.00 shall be payable from the FY
Presented to City Council
WR112014
Adopted
eu��er grown
City Clerk