RES 2014-0292 - Agmt with Habitat for Humanity for demolishing blighted and physically deteriorated structures Cl
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1819 Farnam Street,Suite 1100
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1'I ' James R.Thele
City of Omaha rq + _ Director
Jean Stothert,Mayor
March 4, 2014
Honorable President
and Members of the City Council,
The attached Resolution approves an Agreement between the City of Omaha and Habitat for
Humanity of Omaha,a Nebraska Non-profit Corporation, 1701 North 24th Street,Omaha,Nebraska
68110, in the amount of $100,000.00 for the demolition of blighted and physically deteriorated
structures. The funds will be paid from the Fiscal Year 2013 Community Development Block Grant
Housing Development Program, Fund No. 12186, Organization No. 128072.
The Omaha-Council Bluffs Consortium Consolidated Submission for Community Development
Programs: 2013 Action Plan was approved by the City Council on January 15,2013,Resolution No.
26, and as amended by City Council on March 19, 2013, Resolution 359 and on July 5, 2013,
Resolution 899. The plan identified the demolition of blighted and physically deteriorated structures
as an important component for improving neighborhood safety and neighborhood revitalization.
As a result of this particular Agreement,Habitat for Humanity of Omaha will demolish blighted and
physically deteriorated structures that it owns in the neighborhoods where it works, primarily the
eastern part of the City.
Habitat for Humanity of Omaha(contractor)has a current Contract Compliance(CC-1)form on file
in the Human Rights and Relations Department. As is City policy,the Human Rights and Relations
Department will review the contractor to ensure compliance with the Contract Compliance
Ordinance.
Honorable President
and Members of the City Council
Page 2
We urge your favorable consideration of this Resolution.
Sincerely, Referred to City Council for Consideration:
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amen R. Thele )� Date Mayor's Office Date
Planning Director
Approved as to Funding: Approved:
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COMMUNITY DEVELOPMENT BLOCK GRANT ("CDBG") PROGRAM:
PROJECT DEMOLITION,
BETWEEN THE CITY OF OMAHA
AND
HABITAT FOR HUMANITY OF OMAHA
FOR
THE DEMOLITION OF DONATED UNITS AND UNSAFE HOUSING UNITS BY
HABITAT FOR HUMANITY OF OMAHA.
1
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ABBREVIATIONS
SECTION 2 RESPONSIBILITIES OF DEVELOPER
2.01 Overall Project Performance
2.02 Project Budget
2.03 Term of Agreement
SECTION 3 CONDITIONS FOR RECEIPT OF CITY FINANCING
3.01 Documents Required by City
3.01.1 Property Insurance
3.01.2 Contractor's Insurance and Workers' Compensation
3.01.3 Contracts
3.01.4 Bonding/Letter of Credit
3.01.5 Plans Submission
3.01.6 Affirmative Marketing Plan
3.01.7 Minority Business and Women Business Enterprise Plan
3.01.8 Eligible Contractors
3.01.9 Section 504
3.01.10 Employment Insurance and Bonding
SECTION 4 PROJECT RESPONSIBILITIES OF THE DEVELOPER
4.01 Eligible Use of Funds
4.02 Terms and Conditions
4.03 Breach of Agreement
4.04 Lien Waivers
4.05 Ineligible/Eligible Costs
4.06 Lead-Based paint Prohibition
4.07 Ongoing Property Restrictions
4.08 Davis-Bacon Requirements
4.09 Property Standards
4.10 Affirmative Marketing Policy
4.11 Maintenance of Property
4.12 National Environment Policy Act of 1969
SECTION 5 GENERAL ADMINISTRATION REQUIREMENTS OF DEVELOPER
5.01 Financial Management
5.02 Documentation and Record-Keeping
5.03 Progress and Participant Records and Reports
5.04 Financial Status Report
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5.05 Record Retention
5.06 Personnel and Participant Conditions
SECTION 6 DEVELOPER'S COMPLIANCE WITH OTHER FEDERAL REGULATIONS
6.01 Environmental Review
6.02 Uniform Relocation act
6.03 Soil Work Policy
SECTION 7 RESPONSIBILITIES OF THE CITY
7.01 Performance Monitoring
7.02 Allocated to Developer
7.03 Payments
7.04 Progress Payments
7.05 Inspections
7.06 Technical Assistance
SECTION 8 MUTUAL AGREEMENTS BETWEEN CITY AND DEVELOPER
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
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HABITAT FOR HUMANITY OF OMAHA AGREEMENT
COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS
(FOR DEMOLITION)
THIS AGREEMENT is entered into by and between the City of Omaha and Habitat for
Humanity of Omaha, a Nebraska non-profit Corporation, 1701 North 24th Street, Omaha,
Nebraska 68110 (sometimes hereinafter referred to as "HFHO") based on terms, conditions and
provisions as set forth below.
RECITALS:
WHEREAS, the City of Omaha (hereinafter referred to as "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 Omaha has applied for and received Community Development
Block Grant (hereinafter referred to as "CDBG") Funds under Title I of the Housing and
Community Development Act of 1974, as amended, which authorizes the use of CDBG funds for
the development of viable urban communities by providing decent housing, a suitable
environment, and creating and expanding economic development opportunities, principally for
the purpose of benefiting low and moderate income persons; and,
WHEREAS, HFHO's demolition project was included in the City's FY 2013
Consolidated Submission for Community Planning and Development Programs(hereinafter
referred to as"Consolidated Plan"), outlining priorities, programs and funding allocations for the
2013 program year, approved on January 15, 2013, by City Council Resolution No. 26,; and,
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WHEREAS, HFHO's Project Demolition is a CDBG-eligible activity in that the Project
Demolition qualifies as the Prevention or Elimination of Slum and Blight on a Spot Basis Project
[24 CFR Part 570.208(b)] by demolition of blighted and physically deteriorated structures; and,
WHEREAS, the City wishes to enter into an Agreement with HFHO to facilitate the
demolition of vacant and dilapidated properties which have been determined to be unfit and
unsafe pursuant to the Omaha Municipal Code Chapter 48; and,
WHEREAS, HFHO has indicated the total Project Demolition cost to be no more than
$200,000.00 comprised of $100,000.00 in 2013 CDBG funds and $100,000 in matching funds
provided by HFHO; and,
WHEREAS, it is in the best interest of the City and the residents thereof that the City
enter into an Agreement with HFHO to complete this worthwhile Project.
NOW, THEREFORE, IN CONSIDERATION OF THESE MUTAL COVENANTS, the
parties do hereby agree as follows:
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 "Developer" shall mean — Habitat for Humanity of Omaha, a Nebraska non-
profit Corporation, 1701 North 24th Street, Omaha,Nebraska 68110 (see Exhibit
«A„
1.02.1 "HFHO" shall mean—Habitat for Humanity of Omaha.
1.03 "Director" shall mean—the Planning Director of the City of Omaha.
1.04 "Recipient" shall mean—the City of Omaha.
1.05 "HUD" shall mean—the U.S. Department of Housing and Urban Development.
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1.06 "CDBG funds" shall mean—that portion of the Community Development Block
Grant Program funds ("CDBG"), awarded to the City, subject to and
conditioned upon actual receipt of same by the City of Omaha, as may be
available to grant during the FY 2013 program year for the use specified herein
in an amount not to exceed $100,000.00 payable from the CDBG Housing
Development Program, Award No. 100061, Project No. 4134 subject to the
terms, conditions and requirements of said CDBG Fund Agreement.
1.06.1 "Grant" shall mean — Community Development Block Grant funds
made subject to terms, conditions and provisions of this Agreement. HFHO
shall perform Project responsibilities as outlined in this Agreement during the
term of this Agreement. In the event there are unencumbered funds at the
expiration of the term of the Agreement, these funds shall be de-obligated by
the City. In the event of default, gross negligence or other substantial non-
compliance, the amount of the grant shall be due and payable immediately from
HFHO to the City, but the amount due shall be limited to the amount previously
disbursed to HFHO by the City.
1.07 "Project" shall mean — HFHO's Project Demolition. This Project includes the
demolition of structures and subsequent site preparation at approximately 20
properties (10 funded by CDBG and 10 funded by HFHO) located in Omaha,
Nebraska, but primarily focusing in areas where Low- and Moderate-Income
Families reside.
1.08 "Properties" shall mean — individual properties where CDBG funds and
matching HFHO funds will be used to demolish vacant and dilapidated
structures.
1.09 "Structures" shall mean — houses, garages, and other structures present at
individual properties.
1.10 "Project Completion" shall mean — the point at which all CDGB funds and
matching HFHO funds are exhausted and all demolition and site preparation
activities are complete.
1.11 "Low- and Moderate-Income Family" shall mean — a family whose annual
household income, as defined in Attachment 1, does not exceed 80 percent of
the median income for the Omaha NE-IA Metropolitan Statistical Area as
determined by HUD for CDBG-assisted projects. (Exhibit"B").
1.12 "Program Income" shall mean — the gross income received by Developer,
directly generated from the use of CDBG funds (24 CFR 570.500). When such
income is generated by an activity that is only partially assisted with CDBG, the
income shall be prorated to reflect the percentage of CDBG 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
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distribution of CDBG to be used by the City to further affordable housing in
Omaha.
SECTION 2. RESPONSIBILITIES OF THE DEVELOPER.
2.01 Overall Project Performance
2.01.1 HFHO shall use the $100,000.00 in 2013 CDBG and $100,000 in
matching HFHO funds ($200,000.00 total) for the demolition of
structures, site grading for proper storm water drainage, and seeding
at individual properties.
2.01.2 HFHO shall document that the properties have been vacant for at
least a year, and that they are unfit and unsafe for habitation. The
City retains the right to verify HFHO self-certification.
Documentation in the form of color pictures must be provided to the
City prior to demolition.
2.01.3 HFHO shall conduct an asbestos survey prior to the demolition of
each structure. Asbestos and asbestos containing materials must be
disposed of in a process prescribed by the most current asbestos
disposal regulations.
2.01.4 Prior to demolition, HFHO shall notify the City in writing of the
intended use of each property (e.g., sold to a neighbor, new housing
construction, etc.). The environmental review for the demolition
activity will also address the proposed future land use.
2.01.5 If a new home is to be constructed, HFHO must provide plans to the
City for review. The plans must show the location of the home on
the lot, the size of the home, and the exterior design of the home, at a
minimum. Please refer to Section 3.01.5, below.
2.01.6 HFHO may not proceed with demolition until an environmental
review is conducted and clearance has been achieved, and an Order
to Proceed is issued by the City.
2.01.7 HFHO must notify the City when demolition is complete so that an
inspection by the City may be conducted. Unsatisfactory site
completion must be remedied by HFHO.
2.01.8 HFHO must submit an invoice to the City for actual costs incurred.
Payment will be made from CDBG funds allocated to Project
Demolition once all conditions under this Agreement have been met.
2.02 Project Budget
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2.02.1 The Developer asserts that the amount of this CDBG Grant and HFHO
matching funds is sufficient to fully fund Project Demolition.
FY 2013 CDBG $100,000.00
HFHO Matching Funds $100,000.00
Total Funds $200,000.00
2.03 Term of the Agreement
2.03.1 This Agreement shall be in full force and effect on the date of
execution and shall end on December 31, 2014. Services of the
Developer will start effective the date of the proceed order issued by
the City and Levels of Project Performance related to demolition stated
in Section 2.01.1 and 2.01.2 herein shall be completed as of December
31, 2014. This date may be extended by the Planning Director, but in
no event shall the date extend beyond March 31, 2015.
SECTION 3. CONDITIONS FOR RECEIPT OF CITY FINANCING.
3.01 Documents Required by City. In no event shall the City 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 Developer has submitted for
and received the prior approval of the Director of all the documents listed
below.
3.01.1 Property Insurance. Developer shall procure and maintain, at a
minimum, general liability insurance in an amount sufficient to protect
the City's interest in the properties during the term of the Agreement
(OMB Circular A-110) (Exhibit "D"). The insurance policy shall
include the City of Omaha as an additional insured. Written evidence
of such insurance shall be submitted to the City for approval.
3.01.2 Contractors' Insurance and Workers' Compensation. During the
continuance of the work under this Agreement, the
Developer/Contractor and all subcontractors (as applicable) shall:
3.01.2.01 Maintain, at a minimum,the applicable following classes of
coverage which will provide, at a minimum, the following
amount of coverage:
No bid bond or performance bond will be required for a
demolition contract in an amount less than the Federal
Government's small purchase threshold under OMB
Circular A-110 (Exhibit "D"), currently at $100,000.00.
On a case-by case basis, the Director of the Planning
8
Department can require a bond if it is in the best interest of
the Federal Government and the City of Omaha.
Contractor's Personal Liability $1,000,000
Combined Bodily Injury and Prop. Damage $2,000,000
($1,000,000 per occurrence)
Product, Including Completed Operations $1,000,000
Workers' Compensation Insurance coverage for all
employees involved in the performance of this Agreement.
These coverages are required to protect the Contractor and
the Developer from any liability or damage from injury to,
or death of, any of their employees, other persons, or
property wherever located, resulting from any action or
operation under this Agreement, or in connection with the
work including liability or damage which may arise by
virtue of any statute or law in force or which may
hereinafter be enacted.
The Developer agrees to provide evidence to the City of
such insurance prior to the commencement of the work.
Failure to provide adequate evidence of insurance, or
failure to maintain the insurance as required by this
paragraph, shall be grounds for terminating this Agreement.
The City of Omaha shall be named insured on all
comprehensive liability insurance policies.
3.01.3 Contracts. The Developer shall submit duly executed contracts for all
Demolition and Site Grading work to the Director for approval prior to
the start of the Demolition and Site Grading work.
3.01.4 Performance and Labor Material Payment Bond and/or an Irrevocable
Letter of Credit. Developer or General Contractor responsible for
Project Construction Work shall acquire and maintain performance
bond and/or an irrevocable 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. The Bonds and/or Letters of Credit shall
be in favor of the City and shall be submitted to the Director for
review and approval. The Director reserves the right to reject the
Letters of Credit and Choice of Surety of the Bonds. Upon written
request by the Developer, the Director may waive this requirement to
provide bonds or letters of credit.
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3.01.5 Plan Submissions. Developer shall submit all plans, working drawings
and/or specifications necessary or incidental to this Project to the
Director for review and approval prior to the commencement of
construction. The City shall not unreasonably deny approval of such
plans.
3.01.6 Affirmative Marketing Plan. A copy of the Developer's and its
subcontractor's affirmative action plan shall be submitted to the City
for review and approval.
3.01.7 Minority Business and Women Business Enterprise Plan. Developer
must adopt the City's MBE/WBE Enterprise Plan (Exhibit "0") or
submit a similar plan to the Director for his review and approval,
which discusses economic development and employment
opportunities. These plans shall ensure that the Developer and its
subcontractors will make their best efforts to ensure that construction
services, contracts and employment opportunities are affirmatively
marketed to women and members of minority groups.
3.01.8 Eligible Contractors. Developer shall obtain a certificate from each
contractor or subcontractor to be used on this Project to the effect that
each contractor or subcontractor has not been disbarred or disqualified
by HUD (24 C.F.R. Part 5). The Director shall approve all contractors
and subcontractors prior to being hired by Developer.
3.01.9 Section 504. This Project does not consist of the construction of
multi-family units; therefore, it is exempt from Section 504
requirements (Exhibit"E").
3.01.10 Employment Insurance and Bonding. Developer shall purchase a
blanket fidelity bond covering all employees, at a minimum, in an
amount equal to cash advances from the City. Developer shall comply
with bonding and insurance requirements of OMB Circular A-122,
Bonding and Insurance (Exhibit"F").
3.01.11 Insurance Waivers. The City reserves the right to waive any of the
insurance requirements referenced in Section 3.01 on a case by case
basis.
SECTION 4. PROJECT RESPONSIBILITIES OF THE DEVELOPER.
4.01 Eligible Use of Funds. Developer 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.
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4.02 Terms and Conditions. Developer shall abide by all terms and conditions of this
Agreement and shall be responsible for the security and maintenance of the sites
described herein.
4.03 Breach of Agreement. If through breach of this Agreement Developer fails to
maintain the occupancy, affordability and use restrictions as described herein,
all CDBG previously provided to Developer through fulfillment of this
Agreement shall promptly be returned to the City.
4.04 Lien Waivers. Developer agrees to obtain the appropriate lien waivers prior to
each construction payment.
4.05 Ineligible Costs. Developer shall be responsible for payment of any Project
costs that exceed those specified in this Agreement.
4.05.1 Eligible Costs. Developer shall not request disbursement of funds
under this Agreement until the funds are needed for payment of
eligible costs as described herein.
4.06 Lead-Based Paint Prohibition. Developer 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. Developer further agrees to abide by federal requirements
regarding lead-based paint poison prevention as applicable.
4.07 Ongoing Property Restrictions. During the construction period of the term of
this Agreement and that part of any grant, deed of trust/mortgage, covenant
documents, between the City and Developer, the Developer shall:
4.07.1 Maintain the properties 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 Maintain insurance against loss or damage to the properties in an
aggregate amount sufficient to protect the City's interest in the
Property. Such Property insurance policy must be properly endorsed
showing the City as an additional insured. In the event of loss or
damage, Developer 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 City to satisfy Developer's
obligation to the City under the terms of this Agreement.
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4.08 Davis-Bacon Labor Standards. See Exemption Checklist(Exhibit"G")
4.09 Property Standards (24 C.F.R. 92.251). During the construction period (i.e.,
demolition and site preparation), Developer 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 City of
Omaha Rehabilitation Standards, accessibility requirements, where applicable,
and the current State Energy Conservation Standards, if applicable.
4.10 Affirmative Marketing Policy (24 C.F.R. 92.351). Developer agrees to comply
with the City's Affirmative Marketing Policy, attached hereto as Exhibit "H"
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. In marketing, Developer shall also conform to the
nondiscrimination provisions hereinafter set forth in Section 5.06.1.2.
4.11 Maintenance of Property. Developer shall maintain the properties in a safe and
sanitary condition to the extent possible during the construction phase of the
Project.
4.12 National Environment Policy Act of 1969. Developer shall not begin any
rehabilitation or construction work on a Property until it receives approval by
the City that all provisions of the National Environmental Policy Act of 1969
(NEPA) and related authorities listed in HUD's implementing regulations at 24
C.F.R. Parts 50 and 58 have been met regarding the Property.
SECTION 5. GENERAL ADMINISTRATIVE REQUIREMENTS OF DEVELOPER.
5.01 Financial Management.
5.01.1 Accounting Standards. Developer agrees to comply with OMB
Circular A-110 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 "D", attached hereto and incorporated herein as though fully
set forth).
5.01.2 Cost Principles. Developer shall comply with the requirements and
the standards of OMB Circular No. A-122, "Cost Principles for
Nonprofit Organizations" (Exhibit "F"), and with the requirements of
OMB Circular A-110 (Exhibit"D"). Both Exhibits are attached hereto
and incorporated herein as though fully set forth.
5.01.3 Audits. Developer shall comply with all provisions and regulations of
the Program and have an annual audit completed in compliance with
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OMB Circular A-133, attached hereto as Exhibit "I", 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.
5.01.3.1 Any deficiencies noted in audit reports must be fully cleared
by Developer within 30 days after receipt of audit by
Developer. Failure of Developer 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 Developer's
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 Developer with any contractor or subcontractors shall include
this Section to ensure said access.
5.03 Progress and Participant Records and Reports. Developer shall submit to the
City the following reports in accordance with 24 C.F.R. 92.505 with the
submission timelines as specified.
5.03.1 Progress Reports. Developer shall provide reports to the Director
describing the progress of demolition and site grading, and any
significant problems and/or delays in the completion of this project.
Reports will be submitted at the time of each pay request, in a financial
status report quarterly if no pay request is made. Developer shall
submit these reports on a financial status report form as more
specifically required in Section 5.04 herein. The progress reports are
required until such time as all project demolition and site grading work
is completed and the City issues the final payment to Developer.
5.03.2 Participant Report. For each homebuyer household initially occupying
the housing units built on the Project properties, the Developer shall
report the following information to the City at the time of transfer:
5.03.2.1 name(s) of homebuyer(s)
5.03.2.2 address of property
5.03.2.3 household income as a percent of Median Family Income
(MFI) as determined by HUD, income verification forms
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used in determining MFI including the City's Asset Form and
the U.S. Citizenship Attestation Form (Exhibit"K")
5.03.2.4 household size
5.03.2.5 gender of head of household member
5.03.2.6 name and age of each household member
5.03.2.7 race/ethnicity of each household member
5.03.2.8 disability status of any household member
5.03.2.9 affirmative marketing documentation
5.03.3 For each household initially occupying the Properties, Developer shall
retain records/documentation of the information specified in 5.03.1 and
5.03.2 for five (5) years after the expiration of the term of this
Agreement. For this Agreement, records shall be retained until
February 28, 2017. In the event the Term of the Agreement would be
changed, the timeframe for record retention would be changed
correspondingly.
5.04 Financial Status Reports. Developer shall submit financial status reports (OMB
Circular A-110) (Exhibit "D") along with pay requests. These reports shall
accompany pay requests. In the event pay requests are not submitted for ninety
(90) days, financial status reports 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 Record Retention. Developer, its contractors and 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 Developer, Contractor, or 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 term of the Agreement, January 1, 2018, (OMB
Circular A-110) (Exhibit"D").
5.06 Personnel and Participant Conditions
5.06.1 Contract Compliance Clause
5.06.1.1 Section 10-192 of the Omaha Municipal Code, Equal
Employment Opportunity Clause. Developer and its
contractor shall not discriminate against any employee or
applicant for employment because of race, religion, color,
sex, gender identity, sexual orientation, age, national origin,
familial or handicap status. As used herein, the word
"treated" shall mean and include, without limitation, the
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following: recruited, whether by advertising or by other
means; compensated; selected for training, including
apprenticeship; promoted; upgraded; demoted; downgraded;
transferred; laid off; and terminated. Developer and its
contractor agree 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.
5.06.1.2 Developer and its contractors 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, sex, age, gender identity, sexual orientation,
national origin, familial or handicap status.
5.06.1.3 Developer and its contractors 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 workers' 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.
5.06.1.4 Developer and its contractors shall furnish to the Human
Rights and Relations Department 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 sections
10-192 to 10-194, inclusive, of the Omaha Municipal Code
and shall permit reasonable access to his records. Records
accessible to the Human Rights and Relations Department
shall be those which related to Paragraphs 5.06.1.1 through
5.06.1.7 of this subsection and only after reasonable notice is
given the contractor. The purpose of this provision is to
provide for investigation to ascertain compliance with the
program provided herein.
5.06.1.5 Developer and its contractors shall take such actions with
respect to any subcontractor as the City may direct as a
means of enforcing the provisions of Paragraphs 5.06.1.1
through 5.06.1.7 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
15
City and to 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.
5.06.1.6 Developer and its contractors shall file and shall cause his
subcontractors, if any, to file compliance reports with
Developer's contractor in the same form and to the extent as
required by the federal government for federal contracts
under federal rules and regulations. Such compliance reports
shall be filed with the City's Human Rights and Relations
Department. Compliance reports filed at such times as
directed shall contain information as to the employment
practices, policies, programs and statistics of Developer,
contractor and his subcontractors.
5.06.1.7 Developer and its contractors or its subcontractors shall
include the provisions of Paragraphs 5.06.1.1 through
5.06.1.7 of this section, "Equal Employment Opportunity
Clause", and 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;
Ord.No. 35344, Sections 1, 9-26-00)
5.06.2 Employment Insurance and Bonding. Developer shall purchase a
blanket fidelity bond covering all employees, at a minimum, in an
amount equal to cash advances from the City. Developer shall comply
with bonding and insurance requirements of OMB Circular A-110
(Exhibit "D"), Bonding and Insurance.
5.06.3 Minority Business/Women Business Enterprise Plan. Developer shall
make its best efforts to ensure that construction services, contracts and
employment opportunities are affirmatively marketed to women and
members of minority groups. As used in this Agreement, the term
"woman and members of minority groups" means a business at least
fifty-one percent (51%) owned and controlled by minority group
members or women. Developer will agree to adopt the City's
MBE/WBE Enterprise Plan attached hereto as Exhibit"O."
5.06.4 Section 3 — Employment of Low-Income Persons (Section 3 of HUD
Act of '68, as amended, 1 U.S.C. 1701u). Developer shall make its
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-
16
income persons, particularly persons who are recipients of HUD
assistance for housing. (Attachment 3)
5.06.5 Conflict of Interest. Developer 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. Developer further covenants that in the performance of
this Agreement no person having such a financial interest shall be
employed or retained by Developer 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 City
or any designated public agencies or subrecipients which are receiving
funds under the CDBG program.
5.06.6 Attestation of Citizenship. To comply with Neb. Rev. Stat. 4-108
through 4-114, the Developer agrees to comply with the requirements
of 5.06.7.1 and 5.06.7.2
5.06.6.1 Developer/Owner/Subrecipient shall include the following
language in all contracts and subcontracts for the physical
performance of services: "The Contractor is required and
hereby agrees to use a federal immigration verification
system to determine the work eligibility status of new
employees physically performing services within the State of
Nebraska. A federal immigration verification system means
the electronic verification of the work authorization program
authorized by the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996, 8 U.S.C. 1324a, known as the E-
Verify Program, or an equivalent federal program designated
by the United States Department of Homeland Security or
other federal agency authorized to verify the work eligibility
status of a newly hired employee. If the Contractor is an
individual or sole proprietorship,the following applies:
a) The Contractor must complete the United States
Citizenship Attestation Form available on the
Department of Administrative Services website
at www.das.state.ne.us.
b) If the Contractor indicates on such attestation form
that he or she is a qualified alien, the Contractor
agrees to provide the U.S. Citizenship and
Immigration Services documentation required to
verify the Contractor's lawful presence in the
17
United States using the Systematic Alien
verification for Entitlements (SAVE)Program.
c) The Contractor understands and agrees that lawful
presence in the United States is required and the
Contractor may be disqualified or the contract
terminated if such lawful presence cannot be
verified as required by Neb. Rev. Stat. 4-108."
5.06.6.2 The Developer/Owner/Subrecipient shall have each adult
member of the household applying for a benefit under this
agreement execute a United States Citizenship Attestation
Form For Public Benefit(Exhibit"K")verifying eligibility
status for the purposes of receiving a public benefit.
5.06.7 Employee Classification Act. To comply with the Nebraska
Employee Classification Act, all general contractors and
subcontractors who perform construction or delivery service
pursuant to this contract shall submit to the City an Affidavit For
Employee Classification Act (Exhibit "L") attesting that (1) each
individual performing services for such contractor is properly
classified under the Nebraska Employee Classification Act, 2010 LB
563 ("the Act"), (2) such contractor has completed a federal I-9
immigration form and has such form on file for each employee
performing services, (3) such contractor has complied with Neb.
Rev. Stat. section 4-114 (federal immigration verification system),
(4) such contractor has no reasonable basis to believe that any
individual performing services for such contractor is an
undocumented worker, and (5) as of the time of the contract, such
contractor is not barred from contracting with the state or any
political subdivision pursuant to the Act. The contractor shall follow
the provisions of the Act. A violation of the Act by a contractor is
grounds for rescission of the contract by the City.
SECTION 6. DEVELOPER'S COMPLIANCE WITH OTHER FEDERAL REGULATIONS
6.01 Environmental Review. Developer agrees 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.
18
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 45 years old or older or that are included on a Federal, State or
local historic property list.
6.02 Uniform Relocation Act. Developer 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 Developer or its agent displaces any occupant of the property, it
shall immediately notify the City in writing of the circumstances surrounding
said displacement and comply with 24 C.F.R. 92.353.
6.03 Soil Work Policy. Developer and its contractors and subcontractors shall
comply with the Soil Work Policy, if applicable, see Exhibit "M", which is
incorporated herein by this reference as though fully set forth.
SECTION 7. RESPONSIBILITIES OF THE CITY.
7.01 Performance Monitoring. The City will monitor the performance standards of
Developer 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 Developer within a reasonable period
of time after being notified by the City, contract suspension or termination
procedures may be initiated.
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7.02 Allocated to Developer. Funds allocated to the Developer shall be in the form
of a grant for the purposes set forth in this Agreement. The City will record a
covenant filed against each Property with the Douglas County Register of Deeds
restricting the use of the Property upon which the demolition and site grading
work was completed. Payments will be contingent on Duties and Conditions
specified herein. The City will release a Covenant upon presentation of a notice
to proceed for housing construction or, if the Property is unsuited for housing
construction, documentation acceptable to the City of other City-approved use.
7.03 Payments. It is expressly agreed and understood that the total amount to be paid
by the City under this Agreement shall not exceed $100,000.00 in funding from
the CDBG Program 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 Developer as soon as
reasonably possible and the Agreement will be terminated.
7.03.2 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 Developer 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:
7.03.2.1 Not in conformance with applicable state, federal and/or local
laws, including but not limited to, the building, plumbing
and/or electrical codes; or,
7.03.2.2 Not in conformance with all plans, working drawings and/or
specifications as approved.
7.03.2.3 Unacceptable or substandard; or,
7.03.2.4 Not in accordance with this Agreement or related contracts as
approved for this Project.
7.04 Progress Payments. Progress payments and final payment, as may be
authorized by the Director or his designated representative, are subject to:
7.04.1 Receipt, verification and approval of pay request by Developer before
being submitted to the Director or his designee for payment. All
documents for a pay request submission must be forwarded directly to
the Planning Department Construction Specialist assigned to the
Project. A financial status report (Exhibit "J") and lien waivers shall
be submitted with all requests for payment; and,
20
7.04.2 Receipt of requisite financial status reports shall be submitted in
accordance with Section 5.04 herein.
7.05 Inspections. The City may perform periodic inspections at any reasonable time
to ensure compliance with this Agreement. The City shall perform final
inspection to certify Project Completion prior to final disbursement of CDBG
proceeds.
7.06 Technical Assistance. The Director shall assist Developer in the same manner
the Director provides technical assistance to other developers to ensure
compliance with the terms of this Agreement.
SECTION 8. MUTUAL AGREEMENTS BETWEEN CITY AND DEVELOPER
8.01 Release of Information Laws. Developer 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 Developer further agrees to indemnify and hold harmless
the City of Omaha for any liability arising out of the improper use by Developer
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. Nebraska law will govern the term and the
performance under this Agreement.
8.03 Interest of the 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 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. Developer 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 Workers'
Compensation Insurance as Developer is an Independent Contractor.
8.05 Project Roles. Developer shall ensure that the Project meets the objectives
stated herein. The City has selected Developer to assist in the Project since it is
consistent with the Consolidated Plan. With respect to this Project, the City is
not acting as Developer's architect or engineer. The City makes no warranties,
21
express or implied, as to the Construction Work. The City owes no duty to
Developer 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. Developer 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 upon 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 "N", 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, Developer shall
transfer to the City of Omaha any CDBG on hand at the time of expiration and
any accounts receivable attributable to the use of CDBG
8.13 Indemnification. Developer shall indemnify and hold the City harmless from
and against: (1) any and all claims arising from contracts between 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
22
the remaining provisions hereof or affecting the validity or enforceability of
such provision in any other jurisdiction.
8.15 Disclosure of Lobbying. Developer 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 Developer, 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
of employee of Congress, or an employee of a Member of Congress in
connection with this Federal contract, grant, loan, or cooperative
agreement, the Developer 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 Developer 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
Planning Department
1819 Farnam Street, Room 1111
Omaha,Nebraska 68183
2) Developer:
Dan Brewer
Director of Property Acquisition
Habitat for Humanity of Omaha,
1701 North 24th Street
Omaha,Nebraska 68110
23
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, Developer 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 foreclosure proceedings for any damages caused to the City by
reasons of such default and termination.
24
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
indicated below:
WITNESS: HABITAT FOR HUMANITY OF OMAHA,
a Nebraska Non-profit Corporation:
By: 'rc'U// / �4 /1 �cY�f By: , ,r ° .2..r. ,ti
Date Dan Brewer,Director of Property Acquisition
P 9
Print Name DATE
__ APPROVED BY:6 -11 '13 RI-11 - 1//`� CITY OF OMAHA, a Municipal Corporation
Jean Stothert, Mayor Date
ATTEST:
fq
David Thomas DATE
0 Acting Assistant Planning Director
ster Brown, City Clerk �'
STATE OF NEBRASKA )
)§
COUNTY OF DOUGLAS )
On this (( day of tifi,l.aAll , 20IL- A.D., before me, the undersigned, a Notary
Public in and for said County, personally Jame David Thomas, Acting Assistant Planning Director for the
City of Omaha, who executed the above instrument and acknowledged the execution thereof to be a
voluntary act and deed as such official and the voluntary act and deed of the City of Omaha, a Municipal
Corporation.
In testimony whereof, I have hereunto set my hand and affixed by my Notary Seal at Omaha in
Douglas County,Nebraska on the date last above written.
194_j
ltel&--
4 PATRICIA J NOVACEK I ititka ( t i a
W.
General Notary 1 NOTARY PUBLIC
State of Nebraska I
My Commission Expires Aug 21,2017 I.
APPROVED AS TO FORM:
V7'''r/ ,
ASSISTANT CITY ATTORNEY . DATE
1977 dlh
25
SCHEDULE OF EXHIBITS
Exhibit Agreement Location Description
A 1.02 Habitat for Humanity of Omaha
Article of Incorporation, Bylaws,
Corporate Resolution, Board
Members
B 1.09, and 5.03.2.3 Median Family Income Chart
C 1.10 Definition—Program Income
D 3.01.1, 3.01.2, 5.01.1, 5.01.2, OMB Circular A-110
5.04, 5.05, and 5.06.2
E 3.01.9 Section 504 Exemption
F 3.01.10 and 5.01.2 OMB Circular A-122
G 4.08 Davis-Bacon Exemption Checklist
H 4.10 Affirmative Marketing Policy
I 5.01.3 OMB Circular A-133
J 5.04, 7.04.1 Financial Status Reports
K 5.06.6.2 U.S. Citizenship Attestation Form
For Public Benefit
L 5.06.7 Affidavit For Employee
Classification Act
M 6.03 Soil Work Policy
N 8.11 Termination—24 C.F.R. 85.43 — 85-44
0 3.01.7 Minority Business and Women
Business Enterprise Plan
ATTACHMENTS:
1 City of Omaha Definition of Income
2 Equal Employment Opportunity Clause
3 Section 3 Clause
26
Exhibit A
EXHIBIT A
AMENDED AND RESTATED BYLAWS
OF
HABITAT FOR HUMANITY OF OMAHA,INC.
Restated as of January 29,2011
Mission Statement: Building homes and building lives through the partnership of our
community's spiritual and material resources.
ARTICLE I. BOARD OF DIRECTORS
Section 1. General Powers. The affairs of the corporation shall be managed under the
direction of its Board of Directors.
Section 2. Number,Election,Tenure, and Qualifications.
(a) In no event shall the corporation have less than twelve(12)nor more than twenty-five
(25)Directors.
(b) Directors shall be elected by the Board of Directors at each annual meeting of the
Board of Directors by majority vote. At such meeting, the Board of Directors may consider
recommendations for new Directors made by the Nomination Committee. Notwithstanding the
foregoing, (i) one (1) of the Directors shall at all times be the President of the Friends Board of
Habitat for Humanity of Omaha, Inc. for as long as he or she holds such office, and(ii)one(1)of
the Directors shall at all times be the President of the Habitat for Humanity of Omaha Young
Professionals group.
(c) Each Director (except for the President of the Friends Board and the Young
Professionals group) shall serve a two (2) year term, commencing on January 1st of the year
following the election. Despite the expiration of the term of office of a Director, he or she shall
continue to serve until the election of his or her successor.Directors may be elected for successive
terms but shall not serve more than three(3) consecutive terms.Notwithstanding the foregoing, in
the event the Chairperson of the Board serves in that capacity during his or her sixth(6th)year on the
Board,then he or she shall serve for one additional year on the Board thereafter.
(d) Directors must be individuals but need not be residents of Nebraska.
Section 3. Resignation.A Director may resign at any time by delivering written notice of his
or her resignation to the Board of Directors or to the President or Secretary. The resignation of a
Director is effective when the notice is effective under the Nebraska Nonprofit Corporation Act(the
1
"Act")unless the notice specifies a later effective date. If a resignation is made effective
at a later date,the Board of Directors may fill the pending vacancy before the effective date if the
Board of Directors provides that the successor Director does not take office until the effective
date.
Section 4. Removal. A Director may be removed from office without cause by the vote of
two-thirds of the Directors then in office.
Section 5. Vacancies. If a vacancy occurs on the Board of Directors,the Board of Directors
may fill the vacancy by majority vote. If the Directors remaining in office constitute less than a
quorum of the Board of Directors,such remaining Directors may fill the vacancy by the affirmative
vote of a majority of all the Directors remaining in office. The term of a Director elected to fill a
vacancy expires at the end of the unexpired term that such Director is filling.
Section 6. Annual Meeting. An annual meeting of the Board of Directors shall be held
between November 1st and December 15th of each year at such time and place as may be determined
by the Board of Directors for the purposes of electing officers and Directors of the corporation and
transacting such other business as properly may come before the meeting. If the election of Directors
is not held on the day designated in this bylaw for any annual meeting of Directors, or at any
adjournment of such meeting, then the Board of Directors shall cause such election to be held as
soon as practicable at a special meeting of the Board of Directors.
Section 7. Regular Meetings. The Board of Directors shall hold at least four (4) regular
meetings annually as determined by the Board of Directors.The Board of Directors may provide,by
resolution, the time and place for the holding of such meetings without notice other than such
resolution.
Section 8. Special Meetings. Special meetings of the Board of Directors may be called by the
Chairperson of the Board,the President,or a majority of the Directors.The person or persons calling
a special meeting of the Board of Directors shall designate the place for such special meeting.If no
such designation is made,then the place for the special meeting shall be the registered office of the
corporation in Nebraska.
Section 9. Notice of Meeting;Waiver.Notice of the date,time,and place of an annual or a
special meeting of the Board of Directors shall be given to each Director by or at the direction of the
person or persons calling such annual or special meeting at least two(2)days prior to such annual or
special meeting. Notice of an annual or special meeting may be communicated in any manner
permitted by the Act(including,without limitation,electronic mail);however,if mailed,notice shall
be given at least five(5)days prior to such annual or special meeting.Notice shall be effective as
provided in the Act.A Director may waive notice of any meeting,either before or after such meeting,
or any other notice required by the Act or these bylaws;such waiver shall be in writing,signed by the
Director entitled to the notice,and filed with the minutes of the meeting or other corporate records.
The attendance of a Director at or the participation of a Director in a meeting waives any required
notice of such meeting unless the Director, upon arriving at the meeting or prior to the vote on a
2
matter not noticed in conformity with the Act or these bylaws,objects to lack of notice and does not
thereafter vote for or assent to the action to which objection is made. Neither the business to be
transacted at, nor the purpose of, any meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
Section 10. Quorum. A majority of the Directors in office immediately before a meeting
begins shall constitute a quorum for the transaction of business at any meeting of the Board of
Directors.If less than such majority is present at a meeting,then a majority of the Directors present
may adjourn the meeting from time to time without further notice until a quorum is present.
Section 11. Manner of Acting. If a quorum is present when a vote is taken, then the
affirmative vote of a majority of the Directors present at a meeting of the Board of Directors shall be
the act of the Board of Directors, except as otherwise specifically provided in these bylaws.
Section 12. Attendance by Means of Communication. Members of the Board of Directors
may participate in a meeting of the Board of Directors or conduct the meeting through the use of any
means of communication by which all Directors participating in the meeting may simultaneously
hear each other during the meeting.A Director participating in a meeting of the Board of Directors
by such means is deemed to be present in person at such meeting.
Section 13.Informal Action by Directors.Any action required or permitted by the Act to be
taken at any meeting of the Board of Directors may be taken without a meeting if the action is
taken by all members of the Board of Directors. The action must be evidenced by one or more
written consents describing the action taken, signed by each Director, and included in the minutes
filed with the corporate records reflecting the action taken.Action taken under this bylaw is effective
when the last Director signs the consent unless the consent specifies a different effective time. A
consent signed under this bylaw has the effect of a meeting vote and may be described as such in any
document.
Section 14. No Loans or Guaranties.The corporation shall not lend money to or guaranty the
obligations of any Director of the corporation.
Section 15. Compensation. The Board of Directors shall not permit compensation of
Directors for their services as such.
ARTICLE II. COMMITTEES
Section 1. Board Committees in General.
(a) Committees of the corporation shall be standing or special. Standing committees
shall be the Executive Committee, the Finance Committee, the Personnel Committee, the
Nominating Committee and the Development Committee, and such other standing committees as
may be authorized by the Board of Directors. Unless otherwise specifically provided in these
bylaws,the Chairperson,with the approval of the Board of Directors,shall appoint all members of
3
the standing and special committees.
(b) Unless otherwise specifically provided in these bylaws, the term of service of
members on all committees shall be until the end of the current calendar year of appointment. The
chairperson of each standing committee shall be a member of the Board of Directors and other
members of the committee may either be Directors or other persons appointed by the Chairperson,
with approval of the Board of Directors. Unless otherwise specifically provided in these bylaws,
committee Chairpersons shall serve until the end of the current calendar year of appointment. At the
request of the Chairperson of the Board, the chairperson of a committee shall attend the next
Executive Committee meeting to provide a report on the activities of such committee.
(c) To the extent specified or authorized by the Board of Directors or in these bylaws,
each committee of the Board of Directors may exercise the authority of the Board of Directors. A
committee of the Board of Directors may not,however: (a)authorize distributions; (b) approve or
recommend dissolution, merger or the sale, pledge or transfer of all or substantially all of the
corporation's assets;(c)elect,appoint or remove directors or fill vacancies on the Board of Directors
or on any committee of the Board of Directors; or (d) adopt, amend or repeal the articles of
incorporation or any bylaws. The Board of Directors shall have the following committees of the
Board of Directors,in addition to any other committees,which the Board of Directors may hereafter
create:
Section 2. Executive Committee. The Executive Committee shall consist of the
Chairperson,Vice Chairperson,Secretary and Treasurer of the Board of Directors.The President of
the corporation shall also serve on the Executive Committee as an ex officio member.Members of
the Executive Committee shall serve in such capacity until the next annual meeting of the Board of
Directors.The Chairperson of the Board shall serve as the chairperson of the Executive Committee
and shall preside at all of its meetings.Except to the extent prohibited or limited by this Section 6.1
or by resolution of the Board of Directors,the Executive Committee may exercise the authority of
the Board of Directors at such times as the Board of Directors is not in session.
Section 3. Finance Committee.The Finance Committee shall consist of at least two(2)
members, all of whom shall serve in such capacity until the next annual meeting of the Board of
Directors.The members of the Finance Committee shall elect one of its members(recognizing that
such member shall be a member of the Board)to serve as the chairperson of the Finance Committee
and the chairperson shall preside at all of its meetings.The Finance Committee shall(i)prepare an
annual revenue and expense budget for submission to the full Board of Directors; (ii)work closely
with the Development Committee to coordinate development of the resources needed to meet the
revenue goals of the budget;(iii)monitor the implementation of the budget;and(iv)when necessary,
make recommendations to the Board of Directors regarding adjustments to the budget.
Section 4. Personnel Committee.The Personnel Committee shall consist of two(2)or
more members,all of whom shall serve in such capacity until the next annual meeting of the Board
of Directors.The members of the Personnel Committee shall elect one of its members(recognizing
that such member shall be a member of the Board) to serve as the chairperson for the Personnel
4
Committee and the chairperson shall preside at all of its meetings.The Personnel Committee shall(i)
review and recommend approval to the Board of Directors of the total compensation package of the
corporation's President and shall also review the President's recommendations for the total
compensation of other senior management personnel;(ii)recommend objective evaluation criteria to
the Board of Directors for the President of the corporation and perform such evaluation on an annual
basis; (iii) oversee the implementation and administration of policies and procedures relating to
volunteers and employees of the corporation; and(iv) advise the President on personnel matters.
Section 5. Nominating Committee. The Nominating Committee shall consist of two(2)
or more members,one of which shall be the Vice-Chairperson of the Board of Directors,and all of
whom shall serve in such capacity until the next annual meeting of the Board of Directors.The Vice-
Chairperson of the Board of Directors shall serve as the chairperson for the Nominating Committee
and the chairperson shall preside at all of its meetings. The Nominating Committee shall (i) be
responsible for identifying and recruiting prospective Directors of the corporation and shall present a
slate of nominees for election as Directors at the annual meeting;and(ii)present a slate of nominees
for appointment as principal officers of the corporation and may make such recommendations for
chairpersons of the operating committees.
Section 6. Development Committee. The Development Committee shall consist of two
(2)or more members,all of whom shall serve in such capacity until the next annual meeting of the
Board of Directors. The members of the Development Committee shall elect one of its members
(recognizing that such member shall be a member of the Board)to serve as the chairperson for the
Development Committee and the chairperson shall preside at all of its meetings.The Development
Committee shall be responsible for coordinating the raising of funds needed to conduct the business
of the corporation. The tasks to be coordinated by the Development Committee shall include fund-
raising campaigns, grant proposal writing, special fundraising events, and cultivation of major
donors.
Section 7. Special Committees.
Special committees maybe appointed by the Chairperson with the concurrence of the Board
of Directors for such special tasks as circumstances warrant. Members shall be selected by the
Chairperson, with approval from the Board of Directors. A special committee shall limit its
activities to the accomplishment of the task for which it is appointed and shall have no power to act
except as specifically conferred by action of the Board of Directors. Upon completion of the task for
which appointed, such special committee shall stand discharged.
Section 8. Board of Directors Oversight.
Reports of committee meetings shall be submitted to the Board of Directors and actions and
recommendations of committees,other than the Executive Committee,shall be subject to approval or
disapproval at the next regular Board meeting.
ARTICLE III. OFFICERS
5
Section 1. Officers. The officers of the corporation shall consist of a Chairperson of the
Board, a Vice Chairperson of the Board, a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Directors),a Secretary of the Board,and a Treasurer of the
Board. The Board of Directors also may appoint such other officers and assistant officers as the
Board of Directors may deem necessary.No more than one(1)of the six(6)principal offices maybe
held by the same person.The Chairperson of the Board and Vice Chairperson of the Board shall be
appointed from among the members of the Board of Directors and shall have such duties as maybe
assigned to him or her from time to time by the Board of Directors.
Section 2. Appointment and Term of Office. The Board of Directors shall appoint the
required officers of the corporation at the annual meeting of the Board of Directors. If the
appointment of such officers is not made at such meeting,then such appointment shall be made as
soon thereafter as may be convenient. The Board of Directors may appoint other officers and
assistant officers at any time. Each officer shall hold office until the next annual meeting of the
Board of Directors and until his or her successor shall have been appointed and qualified or until
his or her earlier resignation or removal.
Section 3. Removal. The Board of Directors may remove any officer of the corporation at
any time with or without cause,but such removal shall not affect the officer's contract rights,if any,
with the corporation.
Section 4. Resignation.An officer may resign at any time by delivering notice of his or her
resignation to the corporation.An officer's resignation shall be effective when the notice is effective
under the Act unless the notice specifies a future effective date. If an officer's resignation is made
effective at a future date and the corporation accepts the future effective date,
then the Board of Directors may fill the pending vacancy before such effective date if the Board of
Directors provides that the successor shall not take office until such effective date. An officer's
resignation shall not affect the corporation's contract rights,if any,with the officer.
Section 5. Vacancies. A vacancy in an office for any reason maybe filled by the Board of
Directors for the unexpired portion of the term of such office.
Section 6. Chairperson of the Board. Unless otherwise provided by the Board of Directors,
the Chairperson of the Board shall generally have all powers and perform all duties incident to that
position.The Chairperson of the Board shall,when present,preside at all meetings of the Board of
Directors.The Chairperson of the Board may sign any document or instrument which the Board of
Directors has authorized to be executed, unless such action has been expressly delegated by the
Board of Directors or these bylaws to some other officer or agent of the corporation or is required by
law to be done otherwise.The Chairperson of the Board shall have such other powers and perform
such other duties as the Board of Directors may assign to him or her from time to time. Unless
otherwise provided by the Board of Directors, whenever the President is unable to serve or the
position of President is vacant,the Chairperson of the Board also may perform all duties and exercise
all powers of the President.
6
Section 7. Vice Chairperson of the Board. Unless otherwise provided by the Board of
Directors,the Vice Chairperson of the Board shall generally have all powers and perform all duties
incident to that position. The Vice Chairperson of the Board shall, when present, preside at all
meetings of the Board of Directors when the Chairperson of the Board is absent. In the absence of
the Chairperson of the Board, the Vice Chairperson of the Board may sign any document or
instrument which the Board of Directors has authorized to be executed,unless such
action has been expressly delegated by the Board of Directors or these bylaws to some other officer
or agent of the corporation or is required by law to be done otherwise. The Vice Chairperson of the
Board shall have such other powers and perform such other duties as the Board of Directors may
assign to him or her from time to time. Unless otherwise provided by the Board of Directors,
whenever the President is unable to serve or the position of President is vacant,the Vice Chairperson
of the Board also may perform all duties and exercise all powers of
the President if the Chairperson of the Board is unable to do so.
Section 8. President. Unless otherwise provided by the Board of Directors, the President
shall be the chief executive officer of the corporation and, subject to the direction of the Board of
Directors, generally shall supervise and manage the affairs of the corporation. The President may
sign on behalf of the corporation any document or instrument which the Board of Directors has
authorized to be executed,unless such action has been expressly delegated by the Board of Directors
or by these bylaws to some other officer or agent of the corporation or is required by law to be done
otherwise.The President generally shall have all powers and perform all duties incident to the office
of President and shall have such other powers and perform such other duties as the Board of
Directors may assign to him or her from time to time.
Section 9.Vice President.A Vice President shall assist the President in the administration of
the corporation's affairs with respect to such matters and with such powers and duties as the
President or the Board of Directors may assign to him or her from time to time. Unless otherwise
provided by the Board of Directors, whenever the President is unable to serve or the office of
President is vacant, the Vice President(or, if there is more than one Vice President,then the Vice
Presidents in the order designated at the time of their appointment or, in the absence of any such
designation,in the order of their appointment)shall perform the duties of the President and,when so
acting, shall have all powers of the President.
Section 10. Secretary of the Board. The Secretary of the Board shall (a)prepare and keep
minutes of meetings of the Board of Directors,(b)give or cause to be given all notices in accordance
with the provisions of these bylaws or as required by law,except that notices of special meetings of
Directors called by two Directors may be given by such Directors,(c)be custodian of the corporate
records and the seal (if any) of the corporation, (d) authenticate records of the Corporation, (e)
generally have all powers and perform all duties incident to the office of Secretary,and(f)have such
other powers and perform such other duties as the President or the Board of Directors may assign to
him or her from time to time.
Section 11. Treasurer of the Board.If required by the Board of Directors,the Treasurer of the
7
Board shall give a bond for the faithful discharge of his or her duties in such amount and with such
sureties as the Board of Directors shall specify.The Treasurer of the Board shall have oversight over
the financial affairs of the corporation,which includes(a)responsibility for all moneys and securities
of the corporation, (b)receiving and giving receipts for moneys due and payable to the corporation
from any source,(c)depositing all moneys of the corporation in the name of the corporation in such
banks,trust companies,or other depositaries or accounts as shall be selected by or at the direction of
the Board of Directors, (d) keeping or causing to be kept regular books of account for the
corporation,(e)generally having all powers and perform all duties incident to the office of Treasurer,
and (f) having such other powers and perform such other duties as the President or the Board of
Directors may assign to him or her from time to time.
Section 12. Compensation.The compensation of the President and Vice President(s)of the
corporation shall be fixed from time to time by or at the direction of the Board of Directors. Such
salaries shall be reasonable in light of the services actually rendered to the corporation by the
respective officers.
ARTICLE IV. AMENDMENTS
Except as otherwise provided by law,these bylaws may be amended,in a manner consistent
with the Articles of Incorporation of the corporation and applicable law,by the Board
of Directors at any regular or special meeting of the Board of Directors. The corporation shall
provide notice of any meeting of the Board of Directors at which an amendment of these bylaws is to
be approved. Such notice shall comply with the Act and these bylaws,shall state that the purpose,or
one of the purposes,of the meeting is to consider a proposed amendment of these bylaws,and shall
contain or be accompanied by a copy or summary of the proposed amendment or state the general
nature of the proposed amendment.To be effective,an amendment of these bylaws must be approved
by a majority of the Directors in office at the time the amendment is adopted.
ARTICLE V. CONFLICT OF INTEREST
A conflict of interest transaction is a transaction with the corporation in which a Director has
a direct or indirect interest. A Director of the corporation has an indirect interest in a transaction if:
(1) Another entity in which the Director has a material interest or in which the Director is
a general partner is a party to the transaction; or
(2) Another entity of which the Director is a director, officer or trustee is a party to the
transaction.
A transaction in which a director has a conflict of interest maybe approved In advance by affirmative
vote of a majority of the Board of Directors,or a committee of the Board of Directors,who have no
direct or indirect interest in the transaction if the material facts of the transaction and the Director's
interests are disclosed or known to the Board of Directors or committee of the board and the
Directors approving the transaction in good faith reasonably believe that the transaction is fair to the
8
corporation,or as otherwise provided by the Act as amended from time to time.
These Amended and Restated Bylaws were approved and adopted by the Board of Directors
on January 29,2011.
Lisa Lacko c,Chairperson
Attest:
1
Travis . Tyler, Secretary
9
CERTIFICATE OF RESOLUTION OF
THE BOARD OF DIRECTORS OF
HABITAT FOR HUMANITY OF OMAHA,INC.
The undersigned hereby certify that the following is a true and correct copy of resolutions duly
adopted by the Board of Directors on January 29,2011,which resolutions remain in full force and effect
-without modification and do not contravene or conflict with the Bylaws,Articles of Incorporation,or
any contractual undertaking of the corporation.
RESOLVED, that Sections 2(b) and (c) of the corporation's bylaws shall be amended as
follows:
(b) Directors shall be elected by the Board of Directors at each annual meeting of the
Board of Directors by majority vote. At such meeting, the Board of Directors may
consider recommendations for new Directors made by the Nomination Committee.
Notwithstanding the foregoing, (i) one (1) of the Directors shall at all times be the
President of the Friends Board of Habitat for Humanity of Omaha,Inc. for as long as he
or she holds such office, and (ii) one (1) of the Directors shall at all times be the
President of the Habitat for Humanity of Omaha Young Professionals group.
(c) Each Director (except for the President of the Friends Board and the Young
Professionals group)shall serve a two(2)year term,commencing on January 1st of the
year following the election.Despite the expiration of the term of office of a Director,he
or she shall continue to serve until the election of his or her successor.Directors may be
elected for successive terms but shall not serve more than three(3)consecutive terms.
Notwithstanding the foregoing,in the event the Chairperson of the Board serves in that
capacity during his or her sixth(6th)year on the Board,then he or she shall serve for one
additional year on the Board thereafter.
RESOLVED,that the Amended and Restated Bylaws of Habitat for Humanity of Omaha,Inc.
attached hereto as Exhibit A, incorporating amendments described above and all previously
adopted amendments,is hereby approved.
Dated this 29th day of January,2011.
Travi . Tyler
Secretary of Habitat for Humanity of Omaha,Inc.
I,Lisa Lackovic,hereby certify that I am the duly elected,qualified,and acting Chairperson of
the Board of Directors of Habitat for Humanity of Omaha,Inc.,that Travis Tyler is the duly elected,
qualified, and acting Secretary of the corporation, and that the si e of Travis Tyler, appearing
above his name is the genuine signature of such perso
/i/0 ite",
isa ackov
Chairperson of Habitat for Humanity of Omaha,Inc.
•
•
internal Revenue Service Department of the Treasury
District
Director
Person to Contact: l-� �/), -
,f4HA HAaITAT FOR HUMAN I TY I:NC
:551 S'HLER STREET Telephone Number: jJ� s 'S�.'/ y'
:hpHA• -A!E 681'04
Refer Reply to: .% /
•
Date: APR 0 4 t9U
Employer Identification Number
Advance Ruling Period Ends:
•
Dear Applicant:
Based on information supplied, and assuming your operations will be as stated in your application for recognition of exemption, we have deter-
mined you are exempt from Federal income:tax• under Section 501(c) (3) of
the Internal Revenue Code.
Because you are a newly created organization, we are not now making a
final determination of your foundation status under Section 509(a) -of the
Code. However, we have determined that you can reasonably be expected to
be a publicly supported organization described in Section 509(axij $.
Accordingly, you will be treated as a publicly supported organization,
and not as a private foundation, during an advance ruling period. This
advance ruling period begins on the date of your inception and ends on
the date shown above.
Within 90 days after the end of your advance ruling' period, you must
submit to us information needed to determine whether you have met the
requirements of the applicable support test during the advance ruling
period. If you establish that you have been a publicly supported
organization, you will be classified as a Section 509(a) (1) or 509(a)(2)
organization as long as you continue to meet the requirements of the
•
applicable support test. If you do not meet the public support require-
ments during the advance ruling period, you will be classified as a
private foundation for future periods. Also, if you are classified as
a private foundation, you will be treated as a private foundation from
the date• of your inception for purposes of Section 507(d) and 4940.
Grantors and donors may rely on the determination that you are not a
'private foundation until 90 days after the end of your advance ruling
period. If you submit the required information within the 90 days,
grantors and donors may continue to rely on the advance determination
until the--Service makes final determination of your foundation status.
However, if notice that you will no longer be treated as a Section . .;; r; ,,fir u.,4
organization is published in the Internal Revenue Bulletin, grantors
and donors may' not rely on this determination after the date of such
•
FOR HUMANITY building houses in partnership with God's people in need
October 4, 1988
Margaret Gilmore, President
Omaha Habitat for Humanity, Inc.
P.O. Box 6154
Elmwood Station
Omaha, NE 68106-0154
Dear Margaret,
This letter will confirm that Omaha Habitat for Humanity, Inc. has been added
to the roster of exempt subordinates included in Habitat for Humanity, Inc. 's
group exemption under section 501(c)(3) of the Internal Revenue Code.
The enclosed copy of the group exemption letter received from the IRS provides
evidence of Habitat's group exemption. That letter, together with this letter
which confirms your affiliate's exempt subordinate status, provide evidence of
your tax exempt status under section 501(c)(3) of the Code. Both these
letters should be retained as part of your affiliate's permanent records.
Please note that if your gross income is normally more than $25,000, you are
required to file Form 990, Return of Organizations Exempt from Income Tax, by
the 15th day of the fifth month after the end of your annual accounting
period. Also, note that a significant penalty is imposed when a return is
filed late. While filing of a group return by Habitat's national office is a
permitted option, that does not appear to be a feasible alternative at this
time.
The group exemption number assigned to Habitat by the IRS is 8545. This
number may be provided to prospective donors, foundations, and other grant
organizations as they request it, and is required on any Form 990 you may
file.
In partnership,
Zr-e-
Robert T. Mayo
RTM/mr •
Enclosure
Habitat and Church Streets/Americus,Georgia 31709/(912)924-6935
AMENDED AND RESTATED
II�SSee of S4a4u -+Coupp Ijj f Ijt1 f
III1I1I1!1I1Il1h11ll11111111IIfi;IIi ARTICLES OF INCORPORATION •
1000312321 Pgs: 6
OMAHA HABITAT FOR HUMANITY, IN OF
Filed: 07/17/2002 10:07 AM
OMAHA HABITAT FOR HUMANITY, INC.
Pursuant to the Nebraska Nonprofit Corporation Act, Omaha Habitat For Humanity, Inc.,
a Nebraska nonprofit corporation, executes the following Amended'and Restated Articles of
Incorporation:
ARTICLE I
NAME
The corporate name for the corporation is Omaha Habitat For Humanity,Inc.
ARTICLE II
DURATION •
The corporation shall have perpetual duration.
ARTICLE III
PUBLIC BENEFIT CORPORATION
This corporation is a public benefit corporation.
ARTICLE IV
PURPOSES
The purposes for which the corporation is organized are as follows:
1. To witness to and implement the gospel of Jesus Christ in Nebraska and
throughout the United States and the world by working with economically disadvantaged people
to help them to create a better human habitat in which to live and work;
2. To cooperate with other charitable organizations, through grants and otherwise,
which are working to develop a better human habitat for economically disadvantaged people;
MMU262104.1
3. To communicate the gospel of Jesus Christ by means of the spoken and written
word;
4. To receive,maintain and accept as assets of the corporation, any property,whether
real, personal or mixed, by way of gift,bequest, devise, or purchase from any person, firm, trust,
or corporation, to be held, administered and disposed of exclusively for charitable, religious,
educational, and scientific purposes within the meaning of Section 501(c)(3) of the Internal
Revenue Code, as amended, and in accordance with and pursuant to the provisions of these
Amended and Restated Articles of Incorporation; but no gift,bequest, devise, or purchase of any
such property shall be received or made and accepted if it is conditioned or limited in such
manner as shall require the disposition of income or principal to any organization other than a
"charitable organization" or for any purpose other than "charitable purposes" which would
jeoparci7e the status of the corporation as an entity exempt from federal income tax pursuant to
the relevant provisions of the Internal Revenue Code, as amended; and
5. To exclusively promote and carry on any other religious, charitable or educational
purposes and activities for which corporations may be organized and operated under the relevant
provisions of the Internal Revenue Code, as amended, and under the Nebraska Nonprofit
Corporation Act.
ARTICLE V
MEMBERS
The corporation will have no members.
ARTICLE VI
RESTRICTIONS ON ACTIVITIES
No part of the net earnings of the corporation shall inure to the benefit of, or be
distributed to, any of the directors or officers of the corporation or any other private individuals;
provided, that the corporation may pay reasonable compensation for services rendered to or for
the corporation and may make payments and distributions in furtherance of the purposes for
which the corporation is organized. No substantial part of the activities of the corporation shall
be the carrying on of propaganda, or otherwise attempting, to influence legislation; and the
corporation shall not participate in, or intervene in (including the publishing or distributing of
MMU262104.1
2
statements), any political campaign on behalf of(or in opposition to) any candidate for public
office. Notwithstanding any other provision contained in these Articles of Incorporation, the
corporation shall not carry on or conduct any activities not permitted to be carried on or
conducted by(a) an organization exempt from federal income tax under Section 501(c)(3) of the
Internal Revenue Code of 1986 or corresponding provisions of any subsequent federal tax laws
or (b) an organization contributions to which are deductible under Section 170(c)(2) of the
Internal Revenue Code of 1986 or corresponding provisions of any subsequent federal tax laws.
ARTICLE VII
REGISTERED OFFICE AND AGENT
The street address of the registered office of the corporation is 2204 Ames Avenue, -
Omaha,Nebraska, 68110; and the name of the registered agent of the corporation at that office is
Nancy C.Hemesath.
ARTICLE VIII
DISTRIBUTION OF ASSETS UPON DISSOLUTION
In the event of the dissolution and liquidation of this corporation, to the extent allowed or
permitted under applicable laws, the property and assets of the corporation shall be, as
determined by the board of directors of the corporation, distributed to or sold and the proceeds of
such sales distributed to: (i) HFH International, Inc., a Georgia Nonprofit Corporation-and a
corporation exempt under Section 501(c)(3) of the Internal Revenue Code, as amended; or
(ii) any other organization(s) organized and operating for the same purposes for which the
corporation is organised and operating or any organization(s), foundation(s), fund(s), or
corporation(s) organized and operating exclusively for religious, charitable, scientific,
educational, or other purposes permitted by Section 501(c)(3) of the Internal Revenue Code, as
amended, all of which such organizations, foundations, funds, or corporations shall be exempt
under Section 501(c)(3) of the Internal Revenue Code, as amended. In the event that any assets
are not disposed of in accordance with the provisions of these Amended and Restated Articles of
Incorporation or that the corporation shall fail to act within a reasonable time in the manner
provided in these Amended and restated Articles of Incorporation, the Court of Douglas County
shall, upon application of one or more persons having a real interest in the corporation or its
MMI1262104.1
3
assets, make such distribution(s) as provided in these Amended and Restated Articles of
Incorporation.
ARTICLE IX
GENERAL
1. The corporation shall distribute its income for each taxable year at such time and
in such manner as not to become subject to the tax on undistributed income imposed by Section
4942 of the Internal Revenue Code of 1986 or corresponding provisions of any subsequent
federal tax laws.
2. The corporation shall not engage in any act of self- dealing as defined in Section
4941(d) of the Internal Revenue Code of 1986 or corresponding provisions of any subsequent
federal tax laws.
3. The corporation shall not retain any excess business holdings as defined in
Section 4943(c) of the Internal Revenue Code of 1986 or corresponding provisions of any
subsequent federal tax laws.
4. The corporation shall not make any investments in such manner as to subject it to
tax under Section 4944 of the Internal Revenue Code of 1986 or corresponding provisions of any
subsequent federal tax laws.
5. The corporation shall not make any taxable expenditures as defined in Section
4945(d) of the Internal Revenue Code of 1986 or corresponding provisions of any subsequent
federal tax laws.
ARTICLE X
INDEMNIFICATION OF DIRECTORS
The corporation shall, and by virtue of the provisions of this Article X is obligated to,
indemnify each director of the corporation to the fullest extent permitted by law in accordance
with Section 21-1997 of the Nebraska Nonprofit Corporation Act for liability, as defined in
Section 21-1996 of the Nebraska Nonprofit Corporation Act,to any person for any action taken,
or any failure to take any action, as a director of the corporation except liability for(a) receipt of
a financial benefit to which such director is not entitled, (b) an intentional infliction of harm on
the corporation, (c) a violation of Section 21-1989 of the Nebraska Nonprofit Corporation Act, or
(d) an intentional violation of criminal law. The foregoing provisions of this Article X shall be
MML1262104.1
4
deemed to satisfy the determination and authorization requirements referred to in Subsection
(a)(3) of Section 21-1999 and in Subsection(c) of Section 21-19,101 of the Nebraska Nonprofit
Corporation Act and shall be deemed to obligate the corporation to advance funds to pay for or
reimburse expenses in accordance with Section 21-1999 of the Nebraska Nonprofit Corporation
Act to the fullest extent permitted by law.
ARTICLE XI
INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS
The corporation shall, and by virtue of the provisions of this Article XI is obligated to,
indemnify each officer, employee and agent of the corporation to the fullest extent permitted by
law in accordance with Section 21-19,102 of the Nebraska Nonprofit Corporation Act for
liability, as defined in Section 21-1996 of the Nebraska Nonprofit Corporation Act, to any person
for any action taken, or any failure to take any action, as an officer, employee or agent of the
corporation except liability for (a) receipt of a financial benefit to which such officer, employee
or agent is not entitled, (b) an intentional infliction of harm on the corporation, or (c) an
- intentional violation of criminal law. The foregoing provisions of this Article Xl shall be
deemed to satisfy the determination and authorization requirements referred to in Subsection
(a)(3) of Section 21-1999 and in Subsection(c) of Section 21-19,101 of the Nebraska Nonprofit
Corporation Act and shall be deemed to obligate the corporation to advance funds to pay for or
reimburse expenses in accordance with Subsection (2) of Section 21-19,102 of the Nebraska
Nonprofit Corporation Act to the fullest extent permitted by law.
Dated: 9 ti
/ , 2002.
e/7./..„........6L.,.
Nancy C.He sath,President
MMLJ262104.1
5
CERTIFICATE OF RESOLUTION
OF
THE BOARD OF DIRECTORS
OF
HABITAT FOR HUMANITY OF OMAHA,INC.
The undersigned hereby certify that the following is a true and correct copy of a resolution
duly adopted by the Board of Directors on July 27,2009,which resolution remains in full force and
effect without modification and does not contravene or conflict with the Bylaws, Articles of
Incorporation, or any contractual undertaking of the corporation.
RESOLVED, that the Amended and Restated Bylaws of Habitat for Humanity of Omaha,
Inc. attached hereto as Exhibit A, incorporating all previously adopted amendments, is
hereby approved.
Dated this 27th day of July,2009. •
Jor • enthal
Secretary of Habitat for Humanity of Omaha,Inc.
r`
I,Steve Lindsay,hereby certify that I am the duly elected,qualified,and acting Chairperson
of the Board of Directors of Habitat for Humanity of Omaha,Inc., that Jon Blumenthal is the duly
elected,qualified,and acting Secretary of the corporation,and that the signature of Jon Blumenthal,
appearing above his name is the genuine signature of such person,
C
Stev indsay
Chairperson of Habitat for Humanity of Omaha, Inc.
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
Revised and approved 12/18/2012 W
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.
oaoa">Quw,NOv 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-110 REVISED 11/19/93 As Further Amended
OMB Organization Chart 9/30/99
Open Government Plan TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
OMB News Releases
RSS Feeds SUBJECT: Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher
Education,Hospitals,and Other Non-Profit Organizations
Intellectual Property
Agency Info 1.Purpose.This Circular sets forth standards for obtaining consistency and uniformity among Federal agencies in the
Bulletins administration of grants to and agreements with institutions of higher education,hospitals,and other non-profit
Circulars organizations.
Budget
State and Local 2.Authority.Circular A-110 is issued under the authority of 31 U.S.C.503(the Chief Financial Officers Act),31
Governments U.S.C.1111,41 U.S.C.405(the Office of Federal Procurement Policy Act),Reorganization Plan No.2 of 1970,and
Educational and Non- E.O.11541("Prescribing the Duties of the Office of Management and Budget and the Domestic Policy Council in the
Profit Institutions Executive Office of the President").
Federal Procurement
Federal Financial 3.Policy.Except as provided herein,the standards set forth in this Circular are applicable to all Federal agencies.If
Management any statute specifically prescribes policies or specific requirements that differ from the standards provided herein,the
Federal Information provisions of the statute shall govern.
Resources/Data
Collection The provisions of the sections of this Circular shall be applied by Federal agencies to recipients.Recipients shall apply
Other Special Purpose the provisions of this Circular to subrecipients performing substantive work under grants and agreements that are
Memoranda passed through or awarded by the primary recipient,if such subrecipients are organizations described in paragraph 1.
Privacy Guidance
Reports This Circular does not apply to grants,contracts,or other agreements between the Federal Government and units of
State or local governments covered by OMB Circular A-102,"Grants and Cooperative Agreements with State and
Federal Register
Local Governments,"and the Federal agencies'grants management common rule which standardized and codified the
FOIA administrative requirements Federal agencies impose on State and local grantees.In addition,subawards and
No FEAR contracts to State or local governments 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 1 The White House Page 2 of 30
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 Suhawards.
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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.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.
_.46 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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.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.
iil 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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(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 properly 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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(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)Untiquidated 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 fora given initial period.
.3 Effect on other issuances.For awards subject to this Circular,all administrative requirements of codified
program regulations,program manuals,handbooks and other nonregulatory materials which are inconsistent with the
requirements of this Circular shall be superseded,except to the extent they are required by statute,or authorized in
accordance with the deviations provision in Section .4.
_4 Deviations.The Office of Management and Budget(OMB)may grant exceptions for classes of grants or
recipients subject to the requirements of this Circular when exceptions are not prohibited by statute.However,in the
interest of maximum uniformity,exceptions from the requirements of this Circular shail be permitted only in unusual
circumstances.Federal awarding agencies may apply more restrictive requirements to a class of recipients when
approved by OMB.Federal awarding agencies may apply less restrictive requirements when awarding small awards,
except for those requirements which are statutory.Exceptions on a case-by-case basis may also be made by Federal
awarding agencies.
.5 Subawards.Unless sections of this Circular specifically exclude subrecipients from coverage,the provisions of
this Circular shall be applied to subrecipients performing work under awards if such subrecipients are institutions of
higher education,hospitals or other non-profit organizations.State and local government subrecipients are subject to
the provisions of regulations implementing the grants management common rule,"Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local Governments,"published at 53 FR 8034
(3/11/88).
SUBPART B-Pre-Award Requirements
_.10 Purpose.Sections_.11 through_.17 prescribes forms and instructions and other pre-award matters to be
used in applying for Federal awards.
.11 Pre-award policies.
(a)Use of Grants and Cooperative Agreements,and Contracts.In each instance,the Federal awarding agency shall
decide on the appropriate award instrument(i.e.,grant,cooperative agreement,or contract).The Federal Grant and
Cooperative Agreement Act(31 U.S.C.6301-08)governs the use of grants,cooperative agreements and contracts.A
grant or cooperative agreement shall be used only when the principal purpose of a transaction is to accomplish a
public purpose of support or stimulation authorized by Federal statute.The statutory criterion for choosing between
grants and cooperative agreements is that for the latter,"substantial involvement is expected between the executive
agency and the State,local government,or other recipient when carrying out the activity contemplated in the
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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,Any special conditions shall be promptly removed
once the conditions that prompted them have been corrected.
.15 Metric system of measurement.The Metric Conversion Act,as amended by the Omnibus Trade and
Competitiveness Act(15 U.S.C.205)declares that the metric system is the preferred measurement system for U.S.
trade and commerce.The Act requires each Federal agency to establish a date or dates in consultation with the
Secretary of Commerce,when the metric system of measurement will be used in the agency's procurements,grants,
and other business-related activities.Metric implementation may take longer where the use of the system is initially
impractical or likely to cause significant inefficiencies in the accomplishment of federally-funded activities.Federal
awarding agencies shall follow the provisions of E.O.12770,"Metric Usage in Federal Government Programs."
.16 Resource Conservation and Recovery Act(RCRA)(Pub.L.94-580 codified at 42 U.S.C.6962).Under the Act,
any State agency or agency of a political subdivision of a State which is using appropriated Federal funds must comply
with Section 6002.Section 6002 requires that preference be given in procurement programs to the purchase of
specific products containing recycled materials identified in guidelines developed by the Environmental Protection
Agency(EPA)(40 CFR parts 247-254).Accordingly,State and local institutions of higher education,hospitals,and non
-profit organizations that receive direct Federal awards or other Federal funds shall give preference in their
procurement programs funded with Federal funds to the purchase of recycled products pursuant to the EPA
guidelines.
—17 Certifications and representations.Unless prohibited by statute or codified regulation,each Federal awarding
agency is authorized and encouraged to allow recipients to submit certifications and representations required by
statute,executive order,or regulation on an annual basis,if the recipients have ongoing and continuing relationships
with the agency.Annual certifications and representations shall be signed by responsible officials with the authority to
ensure recipients'compliance with the pertinent requirements.
SUBPART C-Post-Award Requirements
Financial and Program Management
_.20 Purpose of financial and program management.Sections_.21 through .28 prescribe standards for
financial management systems,methods for making payments and rules for:satisfying cost sharing and matching
requirements,accounting for program income,budget revision approvals,making audits,determining allowability of
cost,and establishing fund availability.
_.21 Standards for financial management systems.
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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 Government.
(d)The Federal awarding agency may require adequate fidelity bond coverage where the recipient lacks sufficient
coverage to protect the Federal Government's interest.
(el 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 cycle.Thereafter,the Federal awarding agency shall reimburse the recipient for its actual cash
disbursements.The working capital advance method of payment shall not be used for recipients unwilling or unable to
provide timely advances to their subrecipient to meet the subrecipient's actual cash disbursements.
(g)To the extent available,recipients shall disburse funds available from repayments to and interest earned on a
revolving fund,program income,rebates,refunds,contract settlements,audit recoveries and interest earned on such
funds before requesting additional cash payments.
(h)Unless otherwise required by statute,Federal awarding agencies shall not withhold payments for proper charges
made by recipients at any time during the project period unless(1)or(2)apply.
(1)A recipient has failed to comply with the project objectives,the terms and conditions of the award,or Federal
reporting requirements.
(2)The recipient or subrecipient is delinquent in a debt to the United States as defined in OMB Circular A-129,
"Managing Federal Credit Programs."Under such conditions,the Federal awarding agency may,upon
reasonable notice,inform the recipient that payments shall not be made for obligations incurred after a specified
date until the conditions are corrected or the indebtedness to the Federal Government is liquidated.
(i)Standards governing the use of banks and other institutions as depositories of funds advanced under awards are as
follows.
(1)Except for situations described in paragraph(i)(2),Federal awarding agencies shall not require separate
depository accounts for funds provided to a recipient or establish any eligibility requirements for depositories for
funds provided to a recipient.However,recipients must be able to account for the receipt,obligation and
expenditure of funds.
(2)Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible.
(j)Consistent with the national goal of expanding the opportunities for women-owned and minority-owned business
enterprises,recipients shall be encouraged to use women-owned and minority-owned banks(a bank which is owned
at least 50 percent by women or minority group members).
(k)Recipients shall maintain advances of Federal funds in interest bearing accounts,unless(1),(2)or(3)apply.
(1)The recipient receives less than$120,000 in Federal awards per year.
(2)The best reasonably available interest bearing account would not be expected to earn interest in excess of
$250 per year on Federal cash balances.
(3)The depository would require an average or minimum balance so high that it would not be feasible within the
expected Federal and non-Federal cash resources.
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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 recipients cost sharing or
matching when such contributions meet all of the following criteria.
(1)Are verifiable from the recipients 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 may be counted as cost sharing or matching if the service is an integral and necessary part of an approved
project or program.Rates for volunteer services shall be consistent with those paid for similar work in the recipient's
organization.In those instances in which the required skills are not found in the recipient organization,rates shall be
consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services
involved.In either case,paid fringe benefits that are reasonable,allowable,and allocable may be included in the
valuation.
(e)When an employer other than the recipient furnishes the services of an employee,these services shall be valued at
the employee's regular rate of pay(plus an amount of fringe benefits that are reasonable,allowable,and allocable,but
exclusive of overhead costs),provided these services are in the same skill for which the employee is normally paid.
(f)Donated supplies may include such items as expendable equipment,office supplies,laboratory supplies or
workshop and classroom supplies.Value assessed to donated supplies included in the cost sharing or matching share
shall be reasonable and shall not exceed the fair market value of the property at the time of the donation.
(g)The method used for determining cost sharing or matching for donated equipment,buildings and land for which title
passes to the recipient may differ according to the purpose of the award,if(1)or(2)apply.
(1)If the purpose of the award is to assist the recipient in the acquisition of equipment,buildings or land,the total
value of the donated property may be claimed as cost sharing or matching.
(2)If the purpose of the award is to support activities that require the use of equipment,buildings or land,
normally only depreciation or use charges for equipment and buildings may be made.However,the full value of
equipment or other capital assets and fair rental charges for land may be allowed,provided that the Federal
awarding agency has approved the charges.
(h)The value of donated property shall be determined in accordance with the usual accounting policies of the
recipient,with the following qualifications.
(1)The value of donated land and buildings shall not exceed its fair market value at the time of donation to the
recipient as established by an independent appraiser(e.g.,certified real property appraiser or General Services
Administration representative)and certified by a responsible official of the recipient.
(2)The value of donated equipment shall not exceed the fair market value of equipment of the same age and
condition at the time of donation.
(3)The value of donated space shall not exceed the fair rental value of comparable space as established by an
independent appraisal of comparable space and facilities in a privately-owned building in the same locality.
(4)The value of loaned equipment shall not exceed its fair rental value.
(5)The following requirements pertain to the recipient's supporting records for in-kind contributions from third
parties.
(i)Volunteer services shall be documented and,to the extent feasible,supported by the same methods
used by the recipient for its own employees.
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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.
(hi)The extension involves any change in the approved objectives or scope of the project.
(3)Carry forward unobligated balances to subsequent funding periods.
(4)For awards that support research,unless the Federal awarding agency provides otherwise in the award or in
the agency's regulations,the prior approval requirements described in paragraph(e)are automatically waived
(i.e.,recipients need-not obtain such prior approvals)unless one of the conditions included in paragraph(e)(2)
applies.
(f)The Federal awarding agency may,at its option,restrict the transfer of funds among direct cost categories or
programs,functions and activities for awards in which the Federal share of the project exceeds$100,000 and the
cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the total budget as last approved
by the Federal awarding agency.No Federal awarding agency shall permit a transfer that would cause any Federal
appropriation or part thereof to be used for purposes other than those consistent with the original intent of the
appropriation.
(g)All other changes to nonconstruction budgets,except for the changes described in paragraph(j),do not require
prior approval.
(h)For construction awards,recipients shall request prior written approval promptly from Federal awarding agencies
for budget revisions whenever(1),(2)or(3)apply.
(1)The revision results from changes in the scope or the objective of the project or program.
(2)The need arises for additional Federal funds to complete the project.
(3)A revision is desired which involves specific costs for which prior written approval requirements may be
imposed consistent with applicable OMB cost principles listed in Section .27.
(i)No other prior approval requirements for specific items may be imposed unless a deviation has been approved by
OMB.
(j)When a Federal awarding agency makes an award that provides support for both construction and nonconstruction
work,the Federal awarding agency may require the recipient to request prior approval from the Federal awarding
agency before making any fund or budget transfers between the two types of work supported.
(k)For both construction and nonconstruction awards,Federal awarding agencies shall require recipients to notify the
Federal awarding agency in writing promptly whenever the amount of Federal authorized funds is expected to exceed
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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 fora continuation
award.
(I)When requesting approval for budget revisions,recipients shall use the budget forms that were used in the
application unless the Federal awarding agency indicates a letter of request suffices.
(m)Within 30 calendar days from the date of receipt of the request for budget revisions,Federal awarding agencies
shall review the request and notify the recipient whether the budget revisions have been approved.If the revision is
still under consideration at the end of 30 calendar days,the Federal awarding agency shall inform the recipient in
writing of the date when the recipient may expect the decision.
.26 Non-Federal audits.
(a)Recipients and subrecipients that are institutions of higher education or other non-profit organizations(including
hospitals)shall be subject to the audit requirements contained in the Single Audit Act Amendments of 1996(31 USC
7501-7507)and revised OMB CircularA-133,"Audits of States,Local Governments,and Non-Profit Organizations.'
(b)State and local governments shall be subject to the audit requirements contained in the Single Audit Act
Amendments of 1996(31 USC 7501-7507)and revised OMB Circular A-133,"Audits of States,Local Governments,
and Non-Profit Organizations."
(c)For-profit hospitals not covered by the audit provisions of revised OMB Circular A-133 shall be subject to the audit
requirements of the Federal awarding agencies.
(d)Commercial organizations shall be subject to the audit requirements of the Federal awarding agency or the prime
recipient as incorporated into the award document.
.27 Allowable costs.For each kind of recipient,there is a set of Federal principles for determining allowable costs.
Allowability of costs shall be determined in accordance with the cost principles applicable to the entity incurring the
costs.Thus,allowability of costs incurred by State,local or federally-recognized Indian tribal governments is
determined in accordance with the provisions of OMB Circular A-87,"Cost Principles for State,Local,and Indian Tribal
Governments."The allowability of costs incurred by non-profit organizations is determined in accordance with the
provisions of OMB Circular A-122,"Cost Principles for Non-Profit Organizations."The allowability of costs incurred by
institutions of higher education is determined in accordance with the provisions of OMB Circular A-21,"Cost Principles
for Educational Institutions."The allowability of costs incurred by hospitals is determined in accordance with the
provisions of Appendix E of 45 CFR part 74,"Principles for Determining Costs Applicable to Research and
Development Under Grants and Contracts with Hospitals."The allowability of costs incurred by commercial
organizations and those non-profit organizations listed in Attachment C to Circular A-122 is determined in accordance
with the provisions of the Federal Acquisition Regulation(FAR)at 48 CFR part 31.
.28 Period of availability of funds.Where a funding period is specified,a recipient may charge to the grant only
allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by
the Federal awarding agency.
.29 Conditional exemptions. •
(a)OMB authorizes conditional exemption from OMB administrative requirements and cost principles circulars for
certain Federal programs with statutorily-authorized consolidated planning and consolidated administrative funding,
that are identified by a Federal agency and approved by the head of the Executive department or establishment.A
Federal agency shall consult with OMB during its consideration of whether to grant such an exemption.
(b)To promote efficiency in State and local program administration,when Federal non-entitlement programs with
common purposes have specific statutorily-authorized consolidated planning and consolidated administrative funding
and where most of the State agency's resources come from non-Federal sources,Federal agencies may exempt these
covered State-administered,non-entitlement grant programs from certain OMB grants management requirements.The
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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 A.4),"Cost Principles for Non-Profit Organizations."
and from all of the administrative requirements provisions of OMB Circular A-110,"Uniform Administrative
Requirements for Grants and Agreements with Institutions of Higher Education,Hospitals,and Other Non-Profit
Organizations,"and the agencies'grants management common rule.
(c)When a Federal agency provides this flexibility,as a prerequisite to a State's exercising this option,a State must
adopt its own written fiscal and administrative requirements for expending and accounting for all funds,which are
consistent with the provisions of OMB Circular A-87,and extend such policies to all subrecipients.These fiscal and
administrative requirements must be sufficiently specific to ensure that:funds are used in compliance with all
applicable Federal statutory and regulatory provisions,costs are reasonable and necessary for operating these
programs,and funds are not be used for general expenses required to carry out other responsibilities of a State or its
subrecipients.
Property Standards
.30 Purpose of property standards.Sections .31 through .37 set forth uniform standards governing
management and disposition of property furnished by the Federal Government whose cost was charged to a project
supported by a Federal award.Federal awarding agencies shall require recipients to observe these standards under
awards and shall not impose additional requirements,unless specifically required by Federal statute.The recipient
may use its own property management standards and procedures provided it observes the provisions of Sections
.31 through_.37.
.31 Insurance coverage.Recipients shall,at a minimum,provide the equivalent insurance coverage for real
property and equipment acquired with Federal funds as provided to property owned by the recipient.Federally-owned
property need not be insured unless required by the terms and conditions of the award.
_.32 Real property.Each Federal awarding agency shall prescribe requirements for recipients concerning the use
and disposition of real property acquired in whole or in part under awards.Unless otherwise provided by statute,such
requirements,at a minimum,shall contain the following.
(a)Title to real property shall vest in the recipient subject to the condition that the recipient shall use the real property
for the authorized purpose of the project as long as it is needed and shall not encumber the property without approval
of the Federal awarding agency.
(b)The recipient snail obtain written approval by the Federal awarding agency for the use of real property in other
federally-sponsored projects when the recipient determines that the property is no longer needed for the purpose of
the original project.Use in other projects shall be limited to those under federally-sponsored projects(i.e.,awards)or
programs that have purposes consistent with those authorized for support by the Federal awarding agency.
(c)When the real property is no longer needed as provided in paragraphs(a)and(h),the recipient shall request
disposition instructions from the Federal awarding agency or its successor Federal awarding agency.The Federal
awarding agency shall observe one or more of the following disposition instructions.
(1)The recipient may be permitted to retain title without further obligation to the Federal Government after it
compensates the Federal Government for that percentage of the current fair market value of the property
attributable to the Federal participation in the project.
(2)The recipient may be directed to sell the property under guidelines provided by the Federal awarding agency
and pay the Federal Government for that percentage of the current fair market value of the property attributable
to the Federal participation in the project(after deducting actual and reasonable selling and fix-up expenses,if
any,from the sales proceeds).When the recipient is authorized or required to sell the property,proper sales
procedures shall be established that provide for competition to the extent practicable and result in the highest
possible return.
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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)Title to federally-owned property remains vested in the Federal Government.Recipients shall submit annually
an inventory listing of federally-owned property in their custody to the Federal awarding agency.Upon
completion of the award or when the property is no longer needed,the recipient shall report the property to the
Federal awarding agency for further Federal agency utilization,
(2)If the Federal awarding agency has no further need for the property,it shall be declared excess and reported
to the General Services Administration,unless the Federal awarding agency has statutory authority to dispose of
the property by alternative methods(e.g.,the authority provided by the Federal Technology Transfer Act(15
U.S.C.3710(I))to donate research equipment to educational and non-profit organizations in accordance with
E.O.12821,"Improving Mathematics and Science Education in Support of the National Education Goals.")
Appropriate instructions shall be issued to the recipient by the Federal awarding agency.
(b)Exempt property.When statutory authority exists,the Federal awarding agency has the option to vest title to
property acquired with Federal funds in the recipient without further obligation to the Federal Government and under
conditions the Federal awarding agency considers appropriate.Such property is"exempt property."Should a Federal
awarding agency not establish conditions,title to exempt property upon acquisition shall vest in the recipient without
further obligation to the Federal Government.
34 Equipment.
(a)Title to equipment acquired by a recipient with Federal funds shall vest in the recipient,subject to conditions of this
section.
(b)The recipient shall not use equipment acquired with Federal funds to provide services to non-Federal outside
organizations for a fee that is less than private companies charge for equivalent services,unless specifically
authorized by Federal statute,for as long as the Federal Government retains an interest in the equipment.
(c)The recipient shall use the equipment in the project or program for which it was acquired as long as needed,
whether or not the project or program continues to be supported by Federal funds and shall not encumber the property
without approval of the Federal awarding agency.When no longer needed for the original project or program,the
recipient shall use the equipment in connection with its other federally-sponsored activities,in the following order of
priority:(i)Activities sponsored by the Federal awarding agency which funded the original project,then(ii)activities
sponsored by other Federal awarding agencies.
(d)During the time that equipment is used on the project or program for which it was acquired,the recipient shall make
it available for use on other projects or programs if such other use will not interfere with the work on the project or
program for which the equipment was originally acquired.First preference for such other use shall be given to other
projects or programs sponsored by the Federal awarding agency that financed the equipment;second preference shall
be given to projects or programs sponsored by other Federal awarding agencies.If the equipment is owned by the
Federal Government,use on other activities not sponsored by the Federal Government shall be permissible if
authorized by the Federal awarding agency.User charges shall be treated as program income.
(e)When acquiring replacement equipment,the recipient may use the equipment to be replaced as trade-in or sell the
equipment and use the proceeds to offset the costs of the replacement equipment subject to the approval of the
Federal awarding agency.
(f)The recipient's property management standards for equipment acquired with Federal funds and federally-owned
equipment shall include all of the following.
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(t)Equipment records shall be maintained accurately and shall include the following information.
(i)A description of the equipment.
(ii)Manufacturer's serial number,model number,Federal stock number,national stock number,or other
identification number.
(iii)Source of the equipment,including the award number.
(iv)Whether title vests in the recipient or the Federal Govemment.
(v)Acquisition date(or date received,if the equipment was furnished by the Federal Government)and
cost.
(vi)Information from which one can calculate the percentage of Federal participation in the cost of the
• equipment(not applicable to equipment furnished by the Federal Government).
(vii)Location and condition of the equipment and the date the information was reported.
(viii)Unit acquisition cost.
ix)Ultimate disposition data.including date of disposal and sales price or the method used to determine
current fair market value where a recipient compensates the Federal awarding agency for its share.
(2)Equipment owned by the Federal Government shall be identified to indicate Federal ownership.
(3)A physical inventory of equipment shall be taken and the results reconciled with the equipment records at
least once every two years.Any differences between quantities determined by the physical inspection and those
shown in the accounting records shall be investigated to determine the causes of the difference.The recipient
shall,in connection with the inventory,verify the existence,current utilization,and continued need for the
equipment.
(4)A control system shall be in effect to insure adequate safeguards to prevent loss,damage,or theft of the
equipment.Any loss,damage,or theft of equipment shall be investigated and fully documented;if the equipment
was owned by the Federal Govemment,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 recipient's
request,the recipient shall sell the equipment and reimburse the Federal awarding agency an amount computed
by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or
program.However,the recipient shall be permitted to deduct and retain from the Federal share$500 or ten
percent of the proceeds,whichever is less,for the recipient's selling and handling expenses.
(2)If the recipient is instructed to ship the equipment elsewhere,the recipient shall be reimbursed by the Federal
Government by an amount which is computed by applying the percentage of the recipient's participation in the
cost of the original project or program to the current fair market value of the equipment,plus any reasonable
shipping or interim storage costs incurred.
(3)If the recipient is instructed to otherwise dispose of the equipment,the recipient shall be reimbursed by the
Federal awarding agency for such costs incurred in its disposition.
(4)The Federal awarding agency may reserve the right to transfer the title to the Federal Government or to a
third party named by the Federal Government when such third party is otherwise eligible under existing statutes.
Such transfer shall be subject to the following standards.
(i)The equipment shall be appropriately identified in the award or otherwise made known to the recipient in
writing.
(ii)The Federal awarding agency shall issue disposition instructions within 120 calendar days after receipt
of a final inventory.The final inventory shall list all equipment acquired with grant funds and federally-
owned equipment.If the Federal awarding agency fails to issue disposition instructions within the 120
calendar day period,the recipient shall apply the standards of this section,as appropriate.
(iii)When the Federal awarding agency exercises its right to take title,the equipment shall be subject to the
provisions for federally-owned equipment.
35 Supplies and other expendable property.
(a)Title to supplies and other expendable property shall vest in the recipient upon acquisition.If there is a residual
inventory of unused supplies exceeding$5000 in total aggregate value upon termination or completion of the project or
program and the supplies are not needed for any other federally-sponsored project or program,the recipient shall
retain the supplies for use on non-Federal sponsored activities or sell them,but shall,in either case,compensate the
Federal Government for its share.The amount of compensation shall be computed in the same manner as for
equipment.
(b)The recipient shall not use supplies acquired with Federal funds to provide services to non-Federal outside
organizations for a fee that is less than private companies charge for equivalent services,unless specifically
authorized by Federal statute as long as the Federal Government retains an interest in the supplies.
_.36 Intangible property.
(a)The recipient may copyright any work that is subject to copyright and was developed,or for which ownership was
purchased,under an-award.The Federal awarding agency(ies)reserve a royalty-free,nonexclusive and irrevocable
right to reproduce,publish,or otherwise use the work for Federal purposes,and to authorize others to do so.
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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 Government Grants,Contracts and Cooperative Agreements"
(c)The Federal Government has the right to:
(1)obtain,reproduce,publish or otherwise use the data first produced under an award;and
(2)authorize others to receive,reproduce,publish,or otherwise use such data for Federal purposes.
(d)(1)In addition,in response to a Freedom of Information Act(FOIA)request for research data relating to published
research findings produced under an award that were used by the Federal Government in developing an agency
action that has the force and effect of law,the Federal awarding agency shall request,and the recipient shall provide,
within a reasonable time,the research data so that they can be made available to the public through the procedures
established under the FOIA.If the Federal awarding agency obtains the research.data solely in response to a FOIA
request,the agency may charge the requester a reasonable fee equaling the full incremental cost of obtaining the
research data.This fee should reflect costs incurred by the agency,the recipient,and applicable subrecipients.This
fee is in addition to any fees the agency may assess under the FOIA(5 U.S.C.552(a)(4)(A))
(2)The following definitions apply for purposes of paragraph(d)of this section:
(i)Research data is defined as the recorded factual material commonly accepted in the scientific
community as necessary to validate research findings,but not any of the following:preliminary analyses,
drafts of scientific papers,plans for future research,peer reviews,or communications with colleagues.This
"recorded"material excludes physical objects(e.g.,laboratory samples).Research data also do not
include:
(A)Trade secrets,commercial information,materials necessary to be held confidential by a
researcher until they are published,or similar information which is protected under law:and
(B)Personnel and medical information and similar information the disclosure of which would
constitute a clearly unwarranted invasion of personal privacy,such as information that could be used
to identify a particular person in a research study.
(ii)Published is defined as either when:
(A)Research findings are published in a peer-reviewed scientific or technical journal;or
(B)A Federal agency publicly and officially cites the research findings in support of an agency action
that has the force and effect of law.
(iii)Used by the Federal Government in developing an agency action that has the force and effect of law is
defined as when an agency publicly and officially cites the research findings in support of an agency action
that has the force and effect of law.
(e)Title to intangible property and debt instruments acquired under an award or subaward vests upon acquisition in
the recipient.The recipient shall use that property for the originally-authorized purpose,and the recipient shall not
encumber the property without approval of the Federal awarding agency.When no longer needed for the originally
authorized purpose,disposition of the intangible property shall occur in accordance with the provisions of paragraph
.34(g).
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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 clearly set forth all requirements that the bidder or offeror shall fulfill in order for the bid or offer to be
evaluated by the recipient.Any and all bids or offers may be rejected when it is in the recipient's interest to do so.
_.44 Procurement procedures.
(a)All recipients shall establish written procurement procedures.These procedures shall provide for,at a minimum,
that(1),(2)and(3)apply.
(1)Recipients avoid purchasing unnecessary items.
(2)Where appropriate,an analysis is made of lease and purchase alternatives to determine which would be the
most economical and practical procurement for the Federal Government.
(3)Solicitations for goods and services provide for all of the following.
(i)A clear and accurate description of the technical requirements for the material,product or service to be
procured.In competitive procurements,such a description shall not contain features which unduly restrict
competition.
(ii)Requirements which the bidder/offeror must fulfill and all other factors to be used in evaluating bids or
proposals.
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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 recipient's procurement procedures or operation fails to comply with the procurement standards in the
Federal awarding agency's implementation of this Circular.
(2)The procurement is expected to exceed the small purchase threshold fixed at 41 U.S.C.403(11)(currently
$25,000)and is to be awarded without competition or only one bid or offer is received in response to a
solicitation.
(3)The procurement,which is expected to exceed the small purchase threshold,specifies a"brand name"
product.
(4)The proposed award over the small purchase threshold is to be awarded to other than the apparent low
bidder under a sealed bid procurement.
(5)A proposed'contract modification changes the scope of a contract or increases the contract amount by more
than the amount of the small purchase threshold.
_.45 Cost and price analysis.Some form of cost or price analysis shall be made and documented in the
procurement files in connection with every procurement action.Price analysis may be accomplished in various ways,
including the comparison of price quotations submitted,market,prices and similar indicia,together with discounts.Cost
analysis is the review and evaluation of each element of cost to determine reasonableness,allocability and
allowability.
46 Procurement'records.Procurement records and files for purchases in excess of the small purchase threshold
shall include the following at a minimum:(a)basis for contractor selection,(b)justification for lack of competition when
competitive bids or offers are not obtained,and(c)basis for award cost or price.
47 Contract administration.A system for contract administration shall be maintained to ensure contractor
conformance with the terms,conditions and specifications of the contract and to ensure adequate and timely follow up
of all purchases.Recipients shall evaluate contractor performance and document,as appropriate,whether contractors
have met the terms,conditions and specifications of the contract.
.48 Contract provisions.The recipient shall include,in addition to provisions to define a sound and complete
agreement,the following provisions in all contracts.The following provisions shall also be applied to subcontracts.
(a)Contracts in excess of the small purchase threshold shall contain contractual provisions or conditions that allow for
administrative,contractual,or legal remedies in instances in which a contractor violates or breaches the contract
terms,and provide for such remedial actions as may be appropriate.
(b)All contracts in excess of the small purchase threshold shall contain suitable provisions for termination by the
recipient,including the manner by which termination shall be effected and the basis for settlement.In addition,such
contracts shall describe conditions under which the contract may be terminated for default as well as conditions where
the contract may be terminated because of circumstances beyond the control of the contractor. •
(c)Except as otherwise required by statute,an award that requires the contracting(or subcontracting)for construction
or facility improvements shall provide for the recipient to follow its own requirements relating to bid guarantees,
performance bonds,and payment bonds unless the construction contract or subcontract exceeds$100,000.For those
contracts or subcontracts exceeding$100,000,the Federal awarding agency may accept the bonding policy and
requirements of the recipient,provided the Federal awarding agency has made a determination that the Federal
Government's interest is adequately protected.If such a determination has not been made,the minimum requirements
shall be as follows.
(1)A bid guarantee from each bidder equivalent to five percent of the bid price.The"bid guarantee"shall consist
of a firm commitment such as a bid bond,certified check,or other negotiable instrument accompanying a bid as
assurance that the bidder shall,upon acceptance of his bid,execute such contractual documents as may be
required within the time specified.
(2)A performance bond on the part of the contractor for 100 percent of the contract price.A"performance bond"
is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such
contract.
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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_.23.
(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.
ic)if inappropriate,a final technical or performance report shall not be required after completion of the protect.
td)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 fora period of three years from the date of submission of the final expenditure report or,for awards that are
renewed quarterly or annually.from the date of the submission of the quarterly or annual financial report,as authorized
by the Federal awarding agency.The only exceptions are the following.
(1)If any litigation,claim,or audit is started before the expiration of the 3-year period,the records shall be
retained until all litigation,claims or audit findings involving the records have been resolved and final action
taken.
(2)Records for real property and equipment acquired with Federal funds shall be retained for 3 years after final
disposition.
(3)When records are transferred to or maintained by the Federal awarding agency,the 3-year retention
requirement is not applicable to the recipient.
(4)Indirect cost rate proposals,cost allocations plans,etc.as specified in paragraph_.53(g).
(c)Copies of original records may be substituted for the original records if authorized by the Federal awarding agency.
(d)The Federal awarding agency shall request transfer of certain records to its custody from recipients when it
determines that the records possess long term retention value.However,in order to avoid duplicate recordkeeping,a
Federal awarding agency may make arrangements for recipients to retain any records that are continuously needed
for joint use.
(e)The Federal awarding agency,the Inspector General,Comptroller General of the United States,or any of their duly
authorized representatives,have the right of timely and unrestricted access to any books,documents,papers,or other
records of recipients that are pertinent to the awards,in order to make audits,examinations,excerpts,transcripts and
copies of such documents.This right also includes timely and reasonable access to a recipient's personnel for the
purpose of interview and discussion related to such documents.The rights of access in this paragraph are not limited
to the required retention period,but shall last as long as records are retained.
(f)Unless required by statute,no Federal awarding agency shall place restrictions on recipients that limit public access
to the records of recipients that are pertinent to an award,except when the Federal awarding agency can demonstrate
that such records shall be kept confidential and would have been exempted from disclosure pursuant to the Freedom
• of Information Act(5 U.S.C.552)if the records had belonged to the Federal awarding agency.
(g)Indirect cost rate proposals,cost allocations plans,etc.Paragraphs(g)(1)and(g)(2)apply to the following types of
documents,and their supporting records:indirect cost rate computations or proposals,cost allocation plans,and any
similar accounting computations of the rate at which a particular group of costs is chargeable(such as computer usage
chargeback rates or composite fringe benefit rates).
(1)If submitted for negotiation.If the recipient submits to the Federal awarding agency or the subrecipient
submits to the recipient the proposal,plan,or other computation to form the basis for negotiation of the rate,then
the 3-year retention period for its supporting records starts on the date of such submission,
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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 properly incurred by the recipient before the effective date of
suspension or termination,are not in anticipation of it,and in the case of a termination,are noncancellable.<
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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 unreturned amounts that become delinquent debts.
(e)When authorized by the terms and conditions of the award,the Federal awarding agency shall make a settlement
for any upward or downward adjustments to the Federal share of costs after closeout reports are received.
(f)The recipient shall account for any real and personal property acquired with Federal funds or received from the
Federal Government in accordance with Sections .31 through .37.
(g)In the event a final audit has not been performed prior to the closeout of an award,the Federal awarding agency
shall retain the right to recover an appropriate amount after fully considering the recommendations on disallowed costs
resulting from the final audit.
72 Subsequent adjustments and continuing responsibilities.
(a)The closeout of an award does not affect any of the following.
(1)The right of the Federal awarding agency to disallow costs and recover funds on the basis of a later audit or
other review.
(2)The obligation of the recipient to return any funds due as a result of later refunds,corrections,or other
transactions.
(3)Audit requirements in Section .26.
(4)Property management requirements in Sections .31 through .37.
(5)Records retention as required in Section .53.
(b)After closeout of an award,a relationship created under an award may be modified or ended in whole or in part
with the consent of the Federal awarding agency and the recipient,provided the responsibilities of the recipient
referred to in paragraph_.73(a),including those for property management as applicable,are considered and
provisions made for continuing responsibilities of the recipient,as appropriate.
.73 Collection of amounts due.
(a)Any funds paid to a recipient in excess of the amount to which the recipient is finally determined to be entitled
under the terms and conditions of the award constitute a debt to the Federal Government.If not paid within a
reasonable period after the demand for payment,the Federal awarding agency may reduce the debt by(1),(2)or(3).
(1)Making an administrative offset against other requests for reimbursements.
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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 Flours 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 1.4 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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En espanof I Accessibility 4 Copyright Information [Privacy Policy (Contact
USA.goo i Developers !Apply fora Joh
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i+ E
MEMORANDUM TO FILE
RE: SECTION 504 ACCESSIBILITY REQUIREMENTS
PROJECT: Habitat for Humanity
Various sites
Omaha,Ne.
2014 Demolition Program
The above named project is not exempt from Section 504 Accessibility
Requirements. Accessibility modifications required:
X The above named project is exempt from Section 504 Accessibility
Requirements for the following reason(s):
Single family home buyer properties
Ed Dantzler, Develop r -• Section Manager at
_Z -/q
Robert Manners, Section 504 Officer Date
Exhibit F
CIRCULAR NO. A-122
Revised May 10, 2004
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Cost Principles for Non-Profit Organizations
1. Purpose. This Circular establishes principles for determining costs of
grants, contracts and other agreements with non-profit organizations. It does
not apply to colleges and universities which are covered by Office of Management
and Budget (OMB) Circular A-21, "Cost Principles for Educational Institutions";
State, local, and federally-recognized Indian tribal governments which are
covered by OMB Circular A-87, "Cost Principles for State, Local, and Indian
Tribal Governments" ; or hospitals. The principles are designed to provide that
the Federal Government bear its fair share of costs except where restricted or
prohibited by law. The principles do not attempt to prescribe the extent of
cost sharing or matching on grants, contracts, or other agreements. However,
such cost sharing or matching shall not be accomplished through arbitrary
limitations on individual cost elements by Federal agencies. Provision for
profit or other increment above cost is outside the scope of this Circular.
2 . Supersession. This Circular supersedes cost principles issued by individual
agencies for non-profit organizations.
3 . Applicability.
a. These principles shall be used by all Federal agencies in determining
the costs of work performed by non-profit organizations under grants,
cooperative agreements, cost reimbursement contracts, and other contracts in
which costs are used in pricing, administration, or settlement. All of these
instruments are hereafter referred to as awards. The principles do not apply to
awards under which an organization is not required to account to the Federal
Government for actual costs incurred.
b. All cost reimbursement subawards (subgrants, subcontracts, etc. ) are
subject to those Federal cost principles applicable to the particular
organization concerned. Thus, if a subaward is to a non-profit organization,
this Circular shall apply; if a subaward is to a commercial organization, the
cost principles applicable to commercial concerns shall apply; if a subaward is
to a college or university, Circular A-21 shall apply; if a subaward is to a
State, local, or federally-recognized Indian tribal government, Circular A-87
shall apply.
1
4. Definitions.
a. Non-profit organization means any corporation, trust, association,
cooperative, or other organization which:
(1) is operated primarily for scientific, educational, service,
charitable, or similar purposes in the public interest;
(2) is not organized primarily for profit; and
(3) uses its net proceeds to maintain, improve, and/or expand its
operations. For this purpose, the term "non-profit organization" excludes (i)
colleges and universities; (ii) hospitals; (iii) State, local, and federally-
recognized Indian tribal governments; and (iv) those
non-profit organizations which are excluded from coverage of this Circular in
accordance with paragraph 5.
b. Prior approval means securing the awarding agency's permission in
advance to incur cost for those items that are designated as requiring prior
approval by the Circular. Generally this permission will be in writing. Where
an item of cost requiring prior approval is specified in the budget of an award,
approval of the budget constitutes approval of that cost.
5. Exclusion of some non-profit organizations. Some non-profit organizations,
because of their size and nature of operations, can be considered to be similar
to commercial concerns for purpose of applicability of cost principles. Such
non-profit organizations shall operate under Federal cost principles applicable
to commercial concerns. A listing of these organizations is contained in
Attachment C. Other organizations may be added from time to time.
6. Responsibilities. Agencies responsible for administering programs that
involve awards to non-profit organizations shall implement the provisions of
this Circular. Upon request, implementing instruction shall be furnished to
OMB. Agencies shall designate a liaison official to serve as the agency
representative on matters relating to the implementation of this Circular. The
name and title of such representative shall be furnished to OMB within 30 days
of the date of this Circular.
7. Attachments. The principles and related policy guides are set forth in the
following Attachments:
Attachment A - General Principles
Attachment B - Selected Items of Cost
Attachment C - Non-Profit Organizations Not Subject To This Circular
8. Requests for exceptions. OMB may grant exceptions to the requirements of
this Circular when permissible under existing law. However, in the interest of
achieving maximum uniformity, exceptions will be permitted only in highly
unusual circumstances.
9. Effective Date. The provisions of this Circular are effective immediately.
Implementation shall be phased in by incorporating the provisions into new
awards made after the start of the organization's next fiscal year. For
existing awards, the new principles may be applied if an organization and the
cognizant Federal agency agree. Earlier implementation, or a delay in
2
implementation of individual provisions, is also permitted by mutual agreement
between an organization and the cognizant Federal agency.
10. Inquiries. Further information concerning this Circular may be obtained by
contacting the Office of Federal Financial Management, OMB, Washington, DC
20503, telephone (202) 395-3993.
Attachments
3
ATTACHMENT A
Circular No. A-122
GENERAL PRINCIPLES
Table of Contents
A. Basic Considerations
1. Composition of total costs
2. Factors affecting allowability of costs
3 . Reasonable costs
4. Allocable costs
5. Applicable credits
6. Advance understandings
7. Conditional exemptions
B. Direct Costs
C. Indirect Costs
D. Allocation of Indirect Costs and Determination of Indirect Cost Rates
1. General
2 . Simplified allocation method
3 . Multiple allocation base method
4. Direct allocation method
5. Special indirect cost rates
4
ATTACHMENT A
Circular No. A-122
GENERAL PRINCIPLES
A. Basic Considerations
1. Composition of total costs. The total cost of an award is the sum of
the allowable direct and allocable indirect costs less any applicable credits.
2 . Factors affecting allowability of costs. To be allowable under an
award, costs must meet the following general criteria:.
a. Be reasonable for the performance of the award and be allocable
thereto under these principles.
b. Conform to any limitations or exclusions set forth in these
principles or in the award as to types or amount of cost items.
c. Be consistent with policies and procedures that apply uniformly
to both federally-financed and other activities of the organization.
d. Be accorded consistent treatment.
e. Be determined in accordance with generally accepted accounting
principles (GAAP) .
f. Not be included as a cost or used to meet cost sharing or
matching requirements of any other federally-financed program in either the
current or a prior period.
g. Be adequately documented.
3 . Reasonable costs. A cost is reasonable if, in its nature or 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 costs.
The question of the reasonableness of specific costs must be scrutinized with
particular care in connection with organizations or separate divisions thereof
which receive the preponderance of their support from awards made by Federal
agencies. In determining the 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 organization or the performance of the
award.
6
b. The restraints or requirements imposed by such factors as
generally accepted sound business practices, arms length bargaining, Federal and
State laws and regulations, and terms and conditions of the award.
c. Whether the individuals concerned acted with prudence in the
circumstances, considering their responsibilities to the organization, its
members, employees, and clients, the public at large, and the Federal
Government.
d. Significant deviations from the established practices of the
organization which may unjustifiably increase the award costs.
4. Allocable costs.
a. A cost is allocable to a particular cost objective, such as a
grant, contract, project, service, or other activity, in accordance with the
relative benefits received. A cost is allocable to a Federal award if it is
treated consistently with other costs incurred for the same purpose in like
circumstances and if it:
(1) Is incurred specifically for the award.
(2) Benefits both the award and other work and can be
distributed in reasonable proportion to the benefits received, or
(3) Is necessary to the overall operation of the organization,
although a direct relationship to any particular cost objective cannot be shown.
b. Any cost allocable to a particular award or other cost objective
under these principles may not be shifted to other Federal awards to overcome
funding deficiencies, or to avoid restrictions imposed by law or by the terms of
the award.
5. Applicable credits.
a. The term applicable credits refers to those receipts, or
reduction of expenditures which operate to offset or reduce expense items that
are allocable to awards as direct or indirect costs. Typical examples of such
transactions are: purchase discounts, rebates or allowances, recoveries or
indemnities on losses, insurance refunds, and adjustments of overpayments or
erroneous charges. To the extent that such credits accruing or received by the
organization relate to allowable cost, they shall be credited to the Federal
Government either as a cost reduction or cash refund, as appropriate.
b. In some instances, the amounts received from the Federal
Government to finance organizational activities or service operations should be
treated as applicable credits. Specifically, the concept of netting such credit
items against related expenditures should be applied by the organization in
determining the rates or amounts to be charged to Federal awards for services
rendered whenever the facilities or other resources used in providing such
services have been financed directly, in whole or in part, by Federal funds.
c. For rules covering program income (i.e. , gross income earned
from federally-supported activities) see Sec. .24 of Office of Management and
Budget (OMB) Circular A-110, "Uniform Administrative Requirements for Grants and
Agreements with Institutions of Higher Education, Hospitals, and Other Non-
Profit Organizations. "
7
6. Advance understandings. Under any given award, the reasonableness and
allocability of certain items of costs may be difficult to determine. This is
particularly true in connection with organizations that receive a preponderance
of their support from Federal agencies. In order to avoid subsequent
disallowance or dispute based on unreasonableness or nonallocability, it is
often desirable to seek a written agreement with the cognizant or awarding
agency in advance of the incurrence of special or unusual costs. The absence of
an advance agreement on any element of cost will not, in itself, affect the
reasonableness or allocability of that element.
7. Conditional exemptions.
a. OMB authorizes conditional exemption from OMB administrative
requirements and cost principles circulars for certain Federal programs with
statutorily-authorized consolidated planning and consolidated administrative
funding, that are identified by a Federal agency and approved by the head of
the Executive department or establishment. A Federal agency shall consult with
OMB during its consideration of whether to grant such an exemption.
b. To promote efficiency in State and local program administration,
when Federal non-entitlement programs with common purposes have specific
statutorily-authorized consolidated planning and consolidated administrative
funding and where most of the State agency's resources come from non-Federal
sources, Federal agencies may exempt these covered State-administered, non-
entitlement grant programs from certain OMB grants management requirements. The
exemptions would be from all but the allocability of costs provisions of OMB
Circulars A-87 (Attachment A, subsection C.3) , "Cost Principles for State,
Local, and Indian Tribal Governments, " A-21 (Section C, subpart 4) , "Cost
Principles for Educational Institutions, " and A-122 (Attachment A, subsection
A.4) , "Cost Principles for Non-Profit Organizations, " and from all of the
administrative requirements provisions of OMB Circular A-110, "Uniform
Administrative Requirements for Grants and Agreements with Institutions of
Higher Education, Hospitals, and Other Non-Profit Organizations, " and the
agencies ' grants management common rule.
c. When a Federal agency provides this flexibility, as a
prerequisite to a State's exercising this option, a State must adopt its own
written fiscal and administrative requirements for expending and accounting for
all funds, which are consistent with the provisions of OMB Circular A-87, and
extend such policies to all subrecipients. These fiscal and administrative
requirements must be sufficiently specific to ensure that: funds are used in
compliance with all applicable Federal statutory and regulatory provisions,
costs are reasonable and necessary for operating these programs, and funds are
not be used for general expenses required to carry out other responsibilities of
a State or its subrecipients.
B. Direct Costs
1. Direct costs are those that can be identified specifically with a
particular final cost objective, i.e. , a particular award, project, service, or
other direct activity of an organization. However, a cost may not be assigned
to an award as a direct cost if any other cost incurred for the same purpose, in
like circumstance, has been allocated to an award as an indirect cost. Costs
identified specifically with awards are direct costs of the awards and are to be
assigned directly thereto. Costs identified specifically with other final cost
8
objectives of the organization are direct costs of those cost objectives and are
not to be assigned to other awards directly or indirectly.
2. Any direct cost of a minor amount may be treated as an indirect cost
for reasons of practicality where the accounting treatment for such cost is
consistently applied to all final cost objectives.
3. The cost of certain activities are not allowable as charges to Federal
awards (see, for example, fundraising costs in paragraph 17 of Attachment B) .
However, even though these costs are unallowable for purposes of computing
charges to Federal awards, they nonetheless must be treated as direct costs for
purposes of determining indirect cost rates and be allocated their share of the
organization's indirect costs if they represent activities which (1) include the
salaries of personnel, (2) occupy space, and (3) benefit from the organization's
indirect costs.
4. The costs of activities performed primarily as a service to members,
clients, or the general public when significant and necessary to the
organization's mission must be treated as direct costs whether or not allowable
and be allocated an equitable share of indirect costs. Some examples of these
types of activities include:
a. Maintenance of membership rolls, subscriptions, publications,
and related functions.
b. Providing services and information to members, legislative or
administrative bodies, or the public.
c. Promotion, lobbying, and other forms of public relations.
d. Meetings and conferences except those held to conduct the
general administration of the organization.
e. Maintenance, protection, and investment of special funds not
used in operation of the organization.
f. Administration of group benefits on behalf of members or
clients, including life and hospital insurance, annuity or retirement plans,
financial aid, etc.
C. Indirect Costs
1. Indirect costs are those that have been incurred for common or joint
objectives and cannot be readily identified with a particular final cost
objective. Direct cost of minor amounts may be treated as indirect costs under
the conditions described in subparagraph B.2. After direct costs have been
determined and assigned directly to awards or other work as appropriate,
indirect costs are those remaining to be allocated to benefiting cost
objectives. A cost may not be allocated to an award as an indirect cost if any
other cost incurred for the same purpose, in like circumstances, has been
assigned to an award as a direct cost.
2. Because of the diverse characteristics and accounting practices of
non-profit organizations, it is not possible to specify the types of cost which
may be classified as indirect cost in all situations. However, typical examples
of indirect cost for many non-profit organizations may include depreciation or
9
use allowances on buildings and equipment, the costs of operating and
maintaining facilities, and general administration and general expenses, such as
the salaries and expenses of executive officers, personnel administration, and
accounting.
3. Indirect costs shall be classified within two broad categories:
"Facilities" and "Administration. " "Facilities" is defined as depreciation and
use allowances on buildings, equipment and capital improvement, interest on debt
associated with certain buildings, equipment and capital improvements, and
operations and maintenance expenses. "Administration" is defined as general
administration and general expenses such as the director's office, accounting,
personnel, library expenses and all other types of expenditures not listed
specifically under one of the subcategories of "Facilities" (including cross
allocations from other pools, where applicable) . See indirect cost rate
reporting requirements in subparagraphs D.2 .e and D.3.g.
D. Allocation of Indirect Costs and Determination of Indirect Cost Rates
1. General.
a. Where a non-profit organization has only one major function, or
where all its major functions benefit from its 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 subparagraph 2 .
b. Where an organization has several major functions which benefit
from its indirect costs in varying degrees, allocation of indirect costs may
require the accumulation of such costs into separate cost groupings which then
are allocated individually to benefiting 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. The determination of what constitutes an organization's major
functions will depend on its purpose in being; the types of services it renders
to the public, its clients, and its members; and the amount of effort it devotes
to such activities as fundraising, public information and membership activities.
d. Specific methods for allocating indirect costs and computing
indirect cost rates along with the conditions under which each method should be
used are described in subparagraphs 2 through 5.
e. The base period for the allocation of indirect costs is the
period in which such costs are incurred and accumulated for allocation to work
performed in that period. The base period normally should coincide with the
organization's fiscal year but, in any event, shall be so selected as to avoid
inequities in the allocation of the costs.
2. Simplified allocation method.
a. Where an organization's major functions benefit from its
indirect costs to approximately the same degree, the allocation of indirect
costs may be accomplished by (i) separating the organization's total costs for
the base period as either direct or indirect, and (ii) dividing the total
allowable indirect costs (net of applicable credits) by an equitable
10
distribution base. The result of this process is an indirect cost rate which is
used to distribute indirect costs to individual 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 an
organization has only one major function encompassing a number of individual
projects or activities, and may be used where the level of Federal awards to an
organization is relatively small.
b. Both the direct costs and the indirect costs shall exclude
capital expenditures and unallowable costs. However, unallowable costs which
represent activities must be included in the direct costs under the conditions
described in subparagraph B.3.
c. The distribution base may be total direct costs (excluding
capital expenditures and other distorting items, such as major subcontracts or
subgrants) , direct salaries and wages, or other base which results in an
equitable distribution. The distribution base shall generally exclude
participant support costs as defined in paragraph 32 of Attachment B.
d. Except where a special rate(s) is required in accordance with
subparagraph 5, the indirect cost rate developed under the above principles is
applicable to all awards at the organization. If a special rate(s) is required,
appropriate modifications shall be made in order to develop the special rate(s) .
e. For an organization that receives more than $10 million in
Federal funding of direct costs in a fiscal year, a breakout of the indirect
cost component into two broad categories, Facilities and Administration as
defined in subparagraph C.3, is required. The rate in each case shall be stated
as the percentage which the amount of the particular indirect cost category
(i.e. , Facilities or Administration) is of the distribution base identified with
that category.
3 . Multiple allocation base method
a. General. Where an organization's indirect costs benefit its
major functions in varying degrees, indirect costs shall be accumulated into
separate cost groupings, as described in subparagraph b. Each grouping shall
then be allocated individually to benefitting functions by means of a base which
best measures the relative benefits. The default allocation bases by cost pool
are described in subparagraph c.
b. Identification of indirect costs. Cost groupings shall be
established so as to permit the allocation of each grouping on the basis of
benefits provided to the major functions. Each grouping shall constitute a pool
of expenses that are of like character in terms of functions they benefit and in
terms of the allocation base which best measures the relative benefits provided
to each function. The groupings are classified within the two broad categories:
"Facilities" and "Administration, " as described in subparagraph C.3 . The
indirect cost pools are defined as follows:
(1) Depreciation and use allowances. The expenses under this
heading are the portion of the costs of the organization's buildings, capital
improvements to land and buildings, and equipment which are computed in
accordance with paragraph 11 of Attachment B ("Depreciation and use
allowances") .
11
(2) Interest. Interest on debt associated with certain
buildings, equipment and capital improvements are computed in accordance with
paragraph 23 of Attachment B ("Interest") .
(3) Operation and maintenance expenses. The expenses under
this heading are those that have been incurred for the administration,
operation, maintenance, preservation, and protection of the organization's
physical plant. They include expenses normally incurred for such items as:
janitorial and utility services; repairs and ordinary or normal alterations of
buildings, furniture and equipment; care of grounds; maintenance and operation
of buildings and other plant facilities; security; earthquake and disaster
preparedness; environmental safety; hazardous waste disposal; property,
liability and other insurance relating to property; space and capital leasing;
facility planning and management; and, central receiving. The operation and
maintenance expenses category shall also include its allocable share of fringe
benefit costs, depreciation and use allowances, and interest costs.
(4) General administration and general expenses. The expenses
under this heading are those that have been incurred for the overall general
executive and, administrative offices of the organization and other expenses of a
general nature which do not relate solely to any major function of the
organization. This category shall also include its allocable share of fringe
benefit costs, operation and maintenance expense, depreciation and use
allowances, and interest costs. Examples of this category include central
offices, such as the director's office, the office of finance, business
services, budget and planning, personnel, safety and risk management, general
counsel, management information systems, and library costs.
In developing this cost pool, special care should be exercised to ensure that
costs incurred for the same purpose in like circumstances are treated
consistently as either direct or indirect costs. For example, salaries of
technical staff, project supplies, project publication, telephone toll charges,
computer costs, travel costs, and specialized services costs shall be treated as
direct costs wherever identifiable to a particular program. The salaries and
wages of administrative and pooled clerical staff should normally be treated as
indirect costs. Direct charging of these costs may be appropriate where a major
project or activity explicitly requires and budgets for administrative or
clerical services and other individuals involved can be identified with the
program or activity. Items such as office supplies, postage, local telephone
costs, periodicals and memberships should normally be treated as indirect costs.
c. Allocation bases. Actual conditions shall be taken into account
in selecting the base to be used in allocating the expenses in each grouping to
benefitting functions. The essential consideration in selecting a method or a
base is that it is the one best suited for assigning the pool of costs to cost
objectives in accordance with benefits derived; a traceable cause and effect
relationship; or logic and reason, where neither the cause nor the effect of the
relationship is determinable. When an allocation can be made by assignment of a
cost grouping directly to the function benefited, the allocation shall be made
in that manner. When the expenses in a cost grouping are more general in nature,
the allocation shall be made through the use of a selected base which produces
results that are equitable to both the Federal Government and the organization.
The distribution shall be made in accordance with the bases described herein
unless it can be demonstrated that the use of a different base would result in a
more equitable allocation of the costs, or that a more readily available base
would not increase the costs charged to sponsored awards. The results of
12
special cost studies (such as an engineering utility study) shall not be used to
determine and allocate the indirect costs to sponsored awards.
(1) Depreciation and use allowances. Depreciation and use
allowances expenses shall be allocated in the following manner:
(a) Depreciation or use allowances on buildings used
exclusively in the conduct of a single function, and on capital improvements and
equipment used in such buildings, shall be assigned to that function.
(b) Depreciation or use allowances on buildings used for
more than one function, and on capital improvements and equipment used in such
buildings, shall be allocated to the individual functions performed in each
building on the basis of usable square feet of space, excluding common areas,
such as hallways, stairwells, and restrooms.
(c) Depreciation or use allowances on buildings, capital
improvements and equipment related space (e.g. , individual rooms, and
laboratories) used jointly by more than one function (as determined by the users
of the space) shall be treated as follows. The cost of each jointly used unit
of space shall be allocated to the benefitting functions on the basis of:
(i) the employees and other users on a full-time
equivalent (FTE) basis or salaries and wages of those individual functions
benefitting from the use of that space; or
(ii) organization-wide employee FTEs or salaries
and wages applicable to the benefitting functions of the organization.
(d) Depreciation or use allowances on certain capital
improvements to land, such as paved parking areas, fences, sidewalks, and the
like, not included in the cost of buildings, shall be allocated to user
categories on a FTE basis and distributed to major functions in proportion to
the salaries and wages of all employees applicable to the functions.
(2) Interest. Interest costs shall be allocated in the same
manner as the depreciation or use allowances on the buildings, equipment and
capital equipments to which the interest relates.
(3) Operation and maintenance expenses. Operation and
maintenance expenses shall be allocated in the same manner as the depreciation
and use allowances.
(4) General administration and general expenses. General
administration and general expenses shall be allocated to benefitting functions
based on modified total direct costs (MTDC) , as described in subparagraph D.3.f.
The expenses included in this category could be grouped first according to major
functions of the organization to which they render services or provide benefits.
The aggregate expenses of each group shall then be allocated to benefitting
functions based on MTDC.
d. Order of distribution.
(1) Indirect cost categories consisting of depreciation and
use allowances, interest, operation and maintenance, and general administration
13
and general expenses shall be allocated in that order to the remaining indirect
cost categories as well as to the major functions of the organization. Other
cost categories could be allocated in the order determined to be most
appropriate by the organization. When cross allocation of costs is made as
provided in subparagraph (2) , this order of allocation does not apply.
(2) Normally, an indirect cost category will be considered
closed once it has been allocated to other cost objectives, and costs shall not
be subsequently allocated to it. However, a cross allocation of costs between
two or more indirect costs categories could be used if such allocation will
result in a more equitable allocation of costs. If a cross allocation is used,
an appropriate modification to the composition of the indirect cost categories
is required.
e. Application of indirect cost rate or rates. Except where a
special indirect cost rate(s) is required in accordance with subparagraph D.S,
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 awards included in that
function by use of a single indirect cost rate.
f. Distribution basis. Indirect costs shall be distributed to
applicable sponsored awards and other benefitting activities within each major
function on the basis of MTDC. MTDC consists of all salaries and wages, fringe
benefits, materials and supplies, services, travel, and subgrants and
subcontracts up to the first $25,000 of each subgrant or subcontract (regardless
of the period covered by the subgrant or subcontract) . Equipment, capital
expenditures, charges for patient care, rental costs and the portion in excess
of $25,000 shall be excluded from MTDC. Participant support costs shall
generally be excluded from MTDC. Other items may only be excluded when the
Federal cost cognizant agency determines that an exclusion is necessary to avoid
a serious inequity in the distribution of indirect costs.
g. Individual Rate Components. An indirect cost rate shall be
determined for each separate indirect cost pool developed. The rate in each
case shall be stated as the percentage which the amount of the particular
indirect cost pool is of the distribution base identified with that pool. Each
indirect cost rate negotiation or determination agreement shall include
development of the rate for each indirect cost pool as well as the overall
indirect cost rate. The indirect cost pools shall be classified within two
broad categories: "Facilities" and "Administration, " as described in
subparagraph C.3 .
4. Direct allocation method.
a. Some non-profit organizations treat all costs as direct costs
except general administration and general expenses. These organizations
generally separate their costs into three basic categories: (i) General
administration and general expenses, (ii) fundraising, and (iii) other direct
functions (including projects performed under Federal awards) . Joint costs,
such as depreciation, rental costs, operation and maintenance of facilities,
telephone expenses, and the like are prorated individually as direct costs to
each category and to each award or other activity using a base most appropriate
to the particular cost being prorated.
b. This method is acceptable, provided each joint cost is prorated
using a base which accurately measures the benefits provided to each award or
14
other activity. The bases must be established in accordance with reasonable
criteria, and be supported by current data. This method is compatible with the
Standards of Accounting and Financial Reporting for Voluntary Health and Welfare
Organizations issued jointly by the National Health Council, Inc. , the National
Assembly of Voluntary Health and Social Welfare Organizations, and the United
Way of America.
c. Under this method, indirect costs consist exclusively of general
administration and general expenses. In all other respects, the organization's
indirect cost rates shall be computed in the same manner as that described in
subparagraph 2.
5. Special indirect cost rates. In some instances, a single indirect
cost rate for all activities of an organization or for each major function of
the organization may not be appropriate, since it would not take into account
those different factors which may substantially affect the indirect costs
applicable to a particular segment of work. For this purpose, a particular
segment of work may be that performed under a single award or it may consist of
work under a group of awards performed in a common environment. These 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
scientific disciplines or technical skills involved, the organizational
arrangements used, or any combination thereof. When a particular segment of
work is performed 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 such work. 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 it is
determined that (i) the rate differs significantly from that which would have
been obtained under subparagraphs 2, 3, and 4, and (ii) the volume of work to
which the rate would apply is material.
E. Negotiation and Approval of Indirect Cost Rates
1. Definitions. As used in this section, the following terms have the
meanings set
forth below:
a. Cognizant agency means the Federal agency responsible for
negotiating and approving indirect cost rates for a non-profit organization on
behalf of all Federal agencies.
b. Predetermined rate means an indirect cost rate, applicable to a
specified current or future period, usually the organization's fiscal year. The.
rate is based on an estimate of the costs to be incurred during the period. A
predetermined rate is not subject to adjustment.
c. Fixed rate means an indirect cost rate which has the same
characteristics as a predetermined rate, except that the difference between the
estimated costs and the actual costs of the period covered by the rate is
carried forward as an adjustment to the rate computation of a subsequent period.
d. Final rate means an indirect cost rate applicable to a specified
past period which is based on the actual costs of the period. A final rate is
not subject to adjustment.
15
e. Provisional rate or billing rate means a temporary indirect cost
rate applicable to a specified period which is used for funding, interim
reimbursement, and reporting indirect costs on awards pending the establishment
of a final rate for the period.
f. Indirect cost proposal means the documentation prepared by an
organization to substantiate its claim for the reimbursement of indirect costs.
This proposal provides the basis for the review and negotiation leading to the
establishment of an organization's indirect cost rate.
g. Cost objective means a function, organizational subdivision,
contract, grant, or other work unit for which cost data are desired and for
which provision is made to accumulate and measure the cost of processes,
projects, jobs and capitalized projects.
2. Negotiation and approval of rates.
a. Unless different arrangements are agreed to by the agencies
concerned, the Federal agency with the largest dollar value of awards with an
organization will be designated as the cognizant agency for the negotiation and
approval of the indirect cost rates and, where necessary, other rates such as
fringe benefit and computer charge-out rates. Once an agency is assigned
cognizance for a particular non-profit organization, the assignment will not be
changed unless there is a major long-term shift in the dollar volume of the
Federal awards to the organization. All concerned Federal agencies shall be
given the opportunity to participate in the negotiation process but, after a
rate has been agreed upon, it will be accepted by all Federal agencies. When a
Federal agency has reason to believe that special operating factors affecting
its awards necessitate special indirect cost rates in accordance with
subparagraph D.5, it will, prior to the time the rates are negotiated, notify
the cognizant agency.
b. A non-profit organization which has not previously established
an indirect cost rate with a Federal agency shall submit its initial indirect
cost proposal immediately after the organization is advised that an award will
be made and, in no event, later than three months after the effective date of
the award.
c. Organizations that have previously established indirect cost
rates must submit a new indirect cost proposal to the cognizant agency within
six months after the close of each fiscal year.
d. A predetermined rate may be negotiated for use on awards where
there is reasonable assurance, based on past experience and reliable projection
of the organization's costs, that the rate is not likely to exceed a rate based
on the organization's actual costs.
e. Fixed rates may be negotiated where predetermined rates are not
considered appropriate. A fixed rate, however, shall not be negotiated if (i)
all or a substantial portion of the organization's awards are expected to expire
before the carry-forward adjustment can be made; (ii) the mix of Federal and
non-Federal work at the organization is too erratic to permit an equitable
carry-forward adjustment; or (iii) the organization's operations fluctuate
significantly from year to year.
f. Provisional and final rates shall be negotiated where neither
predetermined nor fixed rates are appropriate.
16
g. The results of each negotiation shall be formalized in a written
agreement between the cognizant agency and the non-profit organization. The
cognizant agency shall distribute copies of the agreement to all concerned
Federal agencies.
h. If a dispute arises in a negotiation of an indirect cost rate
between the cognizant agency and the non-profit organization, the dispute shall
be resolved in accordance with the appeals procedures of the cognizant agency.
i. To the extent that problems are encountered among the Federal
agencies in connection with the negotiation and approval process, OMB will lend
assistance as required to resolve such problems in a timely manner.
17
ATTACHMENT B
Circular No. A-122
SELECTED ITEMS OF COST
Table of Contents
1. Advertising and public relations costs
2. Advisory councils
3. Alcoholic beverages
4. Audit costs and related services
5. Bad debts
6. Bonding costs
7. Communication costs
8 Compensation for personal services
9. Contingency provisions
10. Defense and prosecution of criminal and civil proceedings, claims, appeals
and patent infringement
11. Depreciation and use allowances
12. Donations and contributions
13 . Employee morale, health, and welfare costs
14 . Entertainment costs
15. Equipment and other capital expenditures
16 . Fines and penalties
17. Fund raising and investment management costs
18 . Gains and losses on depreciable assets
19. Goods or services for personal use
20. Housing and personal living expenses
21. Idle facilities and idle capacity
22 . Insurance and indemnification
23 . Interest
24. Labor relations costs
25 . Lobbying
26 . Losses on other sponsored agreements or contracts
27 . Maintenance and repair costs
28 . Materials and supplies costs
29 . Meetings and conferences
30. Memberships, subscriptions, and professional activity costs
31. Organization costs
32. Page charges in professional journals
33 . Participant support costs
34. Patent costs
35. Plant and homeland security costs
36. Pre-agreement costs
37. Professional services costs
38 . Publication and printing costs
39. Rearrangement and alteration costs
40. Reconversion costs
41. Recruiting costs
42 . Relocation costs
43 . Rental costs of buildings and equipment
44. Royalties and other costs for use of patents and copyrights
45. Selling and marketing
46. Specialized service facilities
47. Taxes
48. Termination costs applicable to sponsored agreements
18
ATTACHMENT B
Circular No. A-122
SELECTED ITEMS OF COST
Paragraphs 1 through 53 provide principles to be applied in establishing the
allowability of certain items of cost. These principles apply whether a cost is
treated as direct or indirect. Failure to mention a particular item of cost is
not intended to imply that it is unallowable; rather, determination as to
allowability in each case should be based on the treatment or principles
provided for similar or related items of cost.
1. 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, direct mail, exhibits, electronic or computer
transmittals, and the like.
b. The term public relations includes community relations and means those
activities dedicated to maintaining the image of the non-profit organization or
maintaining or promoting understanding and favorable relations with the
community or public at large or any segment of the public.
c. The only allowable advertising costs are those which are solely for:
(1) The recruitment of personnel required for the performance by the
non-profit organization of obligations arising under a Federal award (See also
Attachment B, paragraph 41, Recruiting costs, and paragraph 42, Relocation
costs) ;
(2) The procurement of goods and services for the performance of a
Federal award;
(3) The disposal of scrap or surplus materials acquired in the
performance of a Federal award except when non-profit organizations are
reimbursed for disposal costs at a predetermined amount; or
(4) Other specific purposes necessary to meet the requirements of
the Federal award.
d. The only allowable public relations costs are:
(1) Costs specifically required by the Federal award;
(2) Costs of communicating with the public and press pertaining to
specific activities or accomplishments which result from performance of Federal
awards (these costs are considered necessary as part of the outreach effort for
the Federal award) ; or
(3) Costs of conducting general liaison with news media and
government public relations officers, to the extent that such activities are
limited to communication and liaison necessary keep the public informed on
matters of public concern, such as notices of Federal contract/grant awards,
financial matters, etc.
20
e. Costs identified in subparagraphs c and d if incurred for more than
one Federal award or for both sponsored work and other work of the non-profit
organization, are allowable to the extent that the principles in Attachment A,
paragraphs B. ("Direct Costs") and C. ("Indirect Costs") are observed.
f. Unallowable advertising and public relations costs include the
following:
(1) All advertising and public relations costs other than as
specified in subparagraphs c, d, and e;
(2) Costs of meetings, conventions, convocations, or other events
related to other activities of the non-profit organization, 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;
(4) Costs of advertising and public relations designed solely to
promote the non-profit organization.
2. 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.
3 . Alcoholic beverages. Costs of alcoholic beverages are unallowable.
4. Audit costs and related services
a The costs of audits required by , and performed in accordance with, the
Single Audit Act, as implemented by Circular A-133, "Audits of States, Local
Governments, and Non-Profit Organizations" are allowable. Also see 31 USC
7505(b) and section 230 ("Audit Costs") of Circular A-133.
b. Other audit costs are allowable if included in an indirect cost rate
proposal, or if specifically approved by the awarding agency as a direct cost to
an award.
c. The cost of agreed-upon procedures engagements to monitor subrecipients who
are exempted from A-133 under section 200(d) are allowable, subject to the
conditions listed in A-133, section 230 (b) (2) .
21
5. Bad debts. Bad debts, including losses (whether actual or estimated)
arising from uncollectable accounts and other claims, related collection costs,
and related legal costs, are unallowable.
6. Bonding costs.
a. Bonding costs arise when the Federal Government requires assurance
against financial loss to itself or others by reason of the act or default of
the non-profit organization. They arise also in instances where the non-profit
organization requires similar assurance. Included are such bonds as bid,
performance, payment, advance payment, infringement, and fidelity bonds.
b. Costs of bonding required pursuant to the terms of the award are
allowable.
c. Costs of bonding required by the non-profit organization in the
general conduct of its operations are allowable to the extent that such bonding
is in accordance with sound business practice and the rates and premiums are
reasonable under the circumstances .
7. Communication costs. Costs incurred for telephone services, local and long
distance telephone calls, telegrams, postage, messenger, electronic or computer
transmittal services and the like are allowable.
8 . Compensation for personal services.
a. Definition. Compensation for personal services includes all
compensation paid currently or accrued by the organization for services of
employees rendered during the period of the award (except as otherwise provided
in subparagraph h) . It includes, but is not limited to, salaries, wages,
director's and executive committee member's fees, incentive awards, fringe
benefits, pension plan costs, allowances for off-site pay, incentive pay,
location allowances, hardship pay, and cost of living differentials.
b. Allowability. Except as otherwise specifically provided in this
paragraph, the costs of such compensation are allowable to the extent that:
(1) Total compensation to individual employees is reasonable for the
services rendered and conforms to the established policy of the organization
consistently applied to both Federal and non-Federal activities; and
(2) Charges to awards whether treated as direct or indirect costs
are determined and supported as required in this paragraph.
c. Reasonableness.
(1) When the organization is predominantly engaged in activities
other than those sponsored by the Federal Government, compensation for employees
on federally-sponsored work will be considered reasonable to the extent that it
is consistent with that paid for similar work in the organization's other
activities.
(2) When the organization is predominantly engaged in federally-
sponsored activities and in cases where the kind of employees required for the
Federal activities are not found in the organization's other activities,
22
compensation for employees on federally-sponsored work will be considered
reasonable to the extent that it is comparable to that paid for similar work in
the labor markets in which the organization competes for the kind of employees
involved.
d. Special considerations in determining allowability. Certain
conditions require special consideration and possible limitations in determining
costs under Federal awards where amounts or types of compensation appear
unreasonable. Among such conditions are the following:
(1) Compensation to members of non-profit organizations, trustees,
directors, associates, officers, or the immediate families thereof.
Determination should be made that such compensation is reasonable for the actual
personal services rendered rather than a distribution of earnings in excess of
costs.
(2) Any change in an organization's compensation policy resulting in
a substantial increase in the organization's level of compensation, particularly
when it was concurrent with an increase in the ratio of Federal awards to other
activities of the organization or any change in the treatment of allowability of
specific types of compensation due to changes in Federal policy.
e. Unallowable costs. Costs which are unallowable under other paragraphs
of this Attachment shall not be allowable under this paragraph solely on the
basis that they constitute personal compensation.
f. Overtime, extra-pay shift, and multi-shift premiums. Premiums for
overtime, extra-pay shifts, and multi-shift work are allowable only with the
prior approval of the awarding agency except:
(1) When necessary to cope with emergencies, such as those resulting
from accidents, natural disasters, breakdowns of equipment, or occasional
operational bottlenecks of a sporadic nature.
(2) When employees are performing indirect functions, such as
administration, maintenance, or accounting.
(3) In the performance of tests, laboratory procedures, or other
similar operations which are continuous in nature and cannot reasonably be
interrupted or otherwise completed.
(4) When lower overall cost to the Federal Government will result.
g. Fringe benefits.
(1) Fringe benefits in the form of regular compensation paid to
employees during periods of authorized absences from the job, such as vacation
leave, sick leave, military leave, and the like, are allowable, provided such
costs are absorbed by all organization activities in proportion to the relative
amount of time or effort actually devoted to each.
(2) Fringe benefits in the form of employer contributions or
expenses for social security, employee insurance, workmen's compensation
insurance, pension plan costs (see subparagraph h) , and the like, are allowable,
provided such benefits are granted in accordance with established written
organization policies. Such benefits whether treated as indirect costs or as
direct costs, shall be distributed to particular awards and other activities in
23
a manner consistent with the pattern of benefits accruing to the individuals or
group of employees whose salaries and wages are chargeable to such awards and
other activities.
(3) (a) Provisions for a reserve under a self-insurance program
for unemployment compensation or workers' compensation are allowable to the
extent that the provisions represent reasonable estimates of the liabilities for
such compensation, and the types of coverage, extent of coverage, and rates and
premiums would have been allowable had insurance been purchased to cover the
risks. However, provisions for self-insured liabilities which do not become
payable for more than one year after the provision is made shall not exceed the
present value of the liability.
(b) Where an organization follows a consistent policy of
expensing actual payments to, or on behalf of, employees or former employees for
unemployment compensation or workers' compensation, such payments are allowable
in the year of payment with the prior approval of the awarding agency, provided
they are allocated to all activities of the organization.
(4) Costs of insurance on the lives of trustees, officers, or other
employees holding positions of similar responsibility are allowable only to the
extent that the insurance represents additional compensation. The costs of such
insurance when the organization is named as beneficiary are unallowable.
h. Organization-furnished automobiles. That portion of the cost of
organization-furnished automobiles that relates to personal use by employees
(including transportation to and from work) is unallowable as fringe benefit or
indirect costs regardless of whether the cost is reported as taxable income to
the employees. These costs are allowable as direct costs to sponsored award
when necessary for the performance of the sponsored award and approved by
awarding agencies.
i. Pension plan costs.
(1) Costs of the organization's pension plan which are incurred in
accordance with the established policies of the organization are allowable,
provided:
(a) Such policies meet the test of reasonableness;
(b) The methods of cost allocation are not discriminatory;
(c) The cost assigned to each fiscal year is determined in
accordance with generally accepted accounting principles (GAAP) , as prescribed
in Accounting Principles Board Opinion No. 8 issued by the American Institute of
Certified Public Accountants; and
(d) The costs assigned to a given fiscal year are funded for
all plan participants within six months after the end of that year. However,
increases to normal and past service pension costs caused by a delay in funding
the actuarial liability beyond 30 days after each quarter of the year to which
such costs are assignable are unallowable.
(2) Pension plan termination insurance premiums paid pursuant to the
Employee Retirement Income Security Act (ERISA) of 1974 (Pub. L. 93-406) are
allowable. Late payment charges on such premiums are unallowable.
24
(3) Excise taxes on accumulated funding deficiencies and other
penalties imposed under ERISA are unallowable.
j . Incentive compensation. Incentive compensation to employees based on
cost reduction, or efficient performance, suggestion awards, safety awards,
etc. , are allowable to the extent that the overall compensation is determined to
be reasonable and such costs are paid or accrued pursuant to an agreement
entered into in good faith between the organization and the employees before the
services were rendered, or pursuant to an established plan followed by the
organization so consistently as to imply, in effect, an agreement to make such
payment.
k. Severance pay.
(1) Severance pay, also commonly referred to as dismissal wages, is
a payment in addition to regular salaries and wages, by organizations to workers
whose employment is being terminated. Costs of severance pay are allowable only
to the extent that in each case, it is required by
(a) law,
(b) employer-employee agreement,
(c) established policy that constitutes, in effect, an implied
agreement on the organization's part, or
(d) circumstances of the particular employment.
(2) Costs of severance payments are divided into two categories as
follows:
(a) Actual normal turnover severance payments shall be
allocated to all activities; or, where the organization provides for a reserve
for normal severances, such method will be acceptable if the charge to current
operations is reasonable in light of payments actually made for normal
severances over a representative past period, and if amounts charged are
allocated to all activities of the organization.
(b) Abnormal or mass severance pay is of such a conjectural
nature that measurement of costs by means of an accrual will not achieve equity
to both parties. Thus, accruals for this purpose are not allowable. However, the
Federal Government recognizes its obligation to participate, to the extent of
its fair share, in any specific payment. Thus, allowability will be considered
on a case-by-case basis in the event or occurrence.
(c) Costs incurred in certain severance pay packages (commonly
known as "a golden parachute" payment) which are in an amount in excess of the
normal severance pay paid by the organization to an employee upon termination of
employment and are paid to the employee contingent upon a change in management
control over, or ownership of, the organization's assets are unallowable.
(d) Severance payments to foreign nationals employed by the
organization outside the United States, to the extent that the amount exceeds
the customary or prevailing practices for the organization in the United States
are unallowable, unless they are necessary for the performance of Federal
programs and approved by awarding agencies.
(e) Severance payments to foreign nationals employed by the
organization outside the United States due to the termination of the foreign
national as a result of the closing of, or curtailment of activities by, the
organization in that country, are unallowable, unless they are necessary for the
performance of Federal programs and approved by awarding agencies.
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1. Training costs. See paragraph 49.
m. Support of salaries and wages.
(1) Charges to awards for salaries and wages, whether treated as
direct costs or indirect costs, will be based on documented payrolls approved by
a responsible official(s) of the organization. The distribution of salaries and
wages to awards must be supported by personnel activity reports, as prescribed
in subparagraph (2) , except when a substitute system has been approved in
writing by the cognizant agency. (See subparagraph E.2 of Attachment A. )
(2) Reports reflecting the distribution of activity of each employee
must be maintained for all staff members (professionals and nonprofessionals)
whose compensation is charged, in whole or in part, directly to awards. In
addition, in order to support the allocation of indirect costs, such reports
must also be maintained for other employees whose work involves two or more
functions or activities if a distribution of their compensation between such
functions or activities is needed in the determination of the organization's
indirect cost rate(s) (e.g. , an employee engaged part-time in indirect cost
activities and part-time in a direct function) . Reports maintained by non-
profit organizations to satisfy these requirements must meet the following
standards:
(a) The reports must reflect an after-the-fact determination
of the actual activity of each employee. Budget estimates (i.e. , estimates
determined before the services are performed) do not qualify as support for
charges to awards.
(b) Each report must account for the total activity for which
employees are compensated and which is required in fulfillment of their
obligations to the organization.
(c) The reports must be signed by the individual employee, or
by a responsible supervisory official having first hand knowledge of the
activities performed by the employee, that the distribution of activity
represents a reasonable estimate of the actual work performed by the employee
during the periods covered by the reports.
(d) The reports must be prepared at least monthly and must
coincide with one or more pay periods.
(3) Charges for the salaries and wages of nonprofessional employees,
in addition to the supporting documentation described in subparagraphs (1) and
(2) , must also be supported by records indicating the total number of hours
worked each day maintained in conformance with Department of Labor regulations
implementing the Fair Labor Standards Act (FLSA) (29 CFR Part 516) . For this
purpose, the term "nonprofessional employee" shall have the same meaning as
"nonexempt employee, " under FLSA.
(4) Salaries and wages of employees used in meeting cost sharing or
matching requirements on awards must be supported in the same manner as salaries
and wages claimed for reimbursement from awarding agencies.
9. Contingency provisions. Contributions to a contingency reserve or any
similar provision made for events the occurrence of which cannot be foretold
26
with certainty as to time, intensity, or with an assurance of their happening,
are unallowable.
The term "contingency reserve" excludes self-insurance reserves (see Attachment B,
paragraphs 8.g. (3) and 22.a(2) (d) ) ; pension funds (see paragraph 8.i) : and reserves
for normal severance pay (see paragraph 8.k. )
10. Defense and prosecution of criminal and civil proceedings, claims, appeals
and patent infringement.
a. Definitions.
(1) Conviction, as used herein, means a judgment or a conviction of
a criminal offense by any court of competent jurisdiction, whether entered upon
as a verdict or a plea, including a conviction due to a plea of nolo contendere.
(2) Costs include, but are not limited to, administrative and
clerical expenses; the cost of legal services, whether performed by in-house or
private counsel; and the costs of the services of accountants, consultants, or
others retained by the organization to assist it; costs of employees, officers
and trustees, and any similar costs incurred before, during, and after
commencement of a judicial or administrative proceeding that bears a direct
relationship to the proceedings.
(3) Fraud, as used herein, means (i) acts of fraud corruption or
attempts to defraud the Federal Government or to corrupt its agents, (ii) acts
that constitute a cause for debarment or suspension (as specified in agency
regulations) , and (iii) acts which violate the False Claims Act, 31 U.S.C. ,
sections 3729-3731, or the Anti-Kickback Act, 41 U.S.C. , sections 51 and 54.
(4) Penalty does not include restitution, reimbursement, or
compensatory damages.
(5) Proceeding includes an investigation.
b. (1) Except as otherwise described herein, costs incurred in
connection with any criminal, civil or administrative proceeding (including
filing of a false certification) commenced by the Federal Government, or a
State, local or foreign government, are not allowable if the proceeding: (1)
relates to a violation of, or failure to comply with, a Federal, State, local or
foreign statute or regulation by the organization (including its agents and
employees) , and (2) results in any of the following dispositions:
(a) In a criminal proceeding, a conviction.
(b) In a civil or administrative proceeding involving an
allegation of fraud or similar misconduct, a determination of organizational
liability.
(c) In the case of any civil or administrative proceeding, the
imposition of a monetary penalty.
(d) A final decision by an appropriate Federal official to
debar or suspend the organization, to rescind or void an award, or to terminate
27
an award for default by reason of a violation or failure to comply with a law or
regulation.
(e) A disposition by consent or compromise, if the action
could have resulted in any of the dispositions described in (a) , (b) , (c) or
(d) .
(2) If more than one proceeding involves the same alleged
misconduct, the costs of all such proceedings shall be unallowable if any one of
them results in one of the dispositions shown in subparagraph b. (1) .
c. If a proceeding referred to in subparagraph b is commenced by the
Federal Government and is resolved by consent or compromise pursuant to an
agreement entered into by the organization and the Federal Government, then the
costs incurred by the organization in connection with such proceedings that are
otherwise not allowable under subparagraph b may be allowed to the extent
specifically provided in such agreement.
d. If a proceeding referred to in subparagraph b is commenced by a State,
local or foreign government, the authorized Federal official may allow the costs
incurred by the organization for such proceedings, if such authorized official
determines that the costs were incurred as a result of (1) a specific term or
condition of a federally-sponsored award, or (2) specific written direction of
an authorized official of the sponsoring agency.
e. Costs incurred in connection with proceedings described in
subparagraph b, but which are not made unallowable by that subparagraph, may be
allowed by the Federal Government, but only to the extent that:
(1) The costs are reasonable in relation to the activities required
to deal with the proceeding and the underlying cause of action;
(2) Payment of the costs incurred, as allowable and allocable costs,
is not prohibited by any other provision(s) of the sponsored award;
(3) The costs are not otherwise recovered from the Federal
Government or a third party, either directly as a result of the proceeding or
otherwise; and,
(4) The percentage of costs allowed does not exceed the percentage
determined by an authorized Federal official to be appropriate, considering the
complexity of the litigation, generally accepted principles governing the award
of legal fees in civil actions involving the United States as a party, and such
other factors as may be appropriate. Such percentage shall not exceed 80
percent. However, if an agreement reached under subparagraph c has explicitly
considered this 80 percent limitation and permitted a higher percentage, then
the full amount of costs resulting from that agreement shall be allowable.
f. Costs incurred by the organization in connection with the defense of
suits brought by its employees or ex-employees under section 2 of the Major
Fraud Act of 1988 (Pub. L. 100-700) , including the cost of all relief necessary
to make such employee whole, where the organization was found liable or settled,
are unallowable.
g. Costs of legal, accounting, and consultant services, and related
costs, incurred in connection with defense against Federal Government claims or
28
appeals, antitrust suits, or the prosecution of claims or appeals against the
Federal Government, are unallowable.
h. Costs of legal, accounting, and consultant services, and related
costs, incurred in connection with patent infringement litigation, are
unallowable unless otherwise provided for in the sponsored awards.
i. Costs which may be unallowable under this paragraph, including
directly associated costs, shall be segregated and accounted for by the
organization separately. During the pendency of any proceeding covered by
subparagraphs b and f, the Federal Government shall generally withhold payment
of such costs. However, if in the best interests of the Federal Government, the
Federal Government may provide for conditional payment upon provision of
adequate security, or other adequate assurance, and agreements by the
organization to repay all unallowable costs, plus interest, if the costs are
subsequently determined to be unallowable.
11. Depreciation and use allowances.
a. Compensation for the use of buildings, other capital improvements, and
equipment on hand may be made through use allowance or depreciation. However,
except as provided in Attachment B, paragraph f, 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.) .
b. The computation of use allowances or depreciation shall be based on the
acquisition cost of the assets involved. The acquisition cost of an asset
donated to the non-profit organization by a third party shall be its fair market
value at the time of the donation.
c. The computation of use allowances or depreciation 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 non-profit organization in satisfaction of a statutory matching
requirement.
d. Where 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, technological developments in the particular program area, and the renewal
and replacement policies followed for the individual items or classes of assets
involved. The method of depreciation used to assign the cost of an asset (or
group of assets) to accounting periods shall reflect the pattern of consumption
of the asset during its useful life.
In the absence of clear evidence indicating that the expected consumption of the
asset will be significantly greater or lesser in the early portions of its
useful life than in the later portions, the straight-line method shall be
presumed to be the appropriate method.
Depreciation methods once used shall not be changed unless approved in advance
by the cognizant Federal agency. When the depreciation method is introduced for
29
application to assets previously subject to a use allowance, the combination of
use allowances and depreciation applicable to such assets must not exceed the
total acquisition cost of the assets.
e. When the depreciation method is used for buildings, a building's shell
may be segregated from each building component (e.g. , plumbing system, heating,
and air conditioning system, etc.) and each item 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.
f. When the depreciation method is used for a particular class of assets,
no depreciation may be allowed on any such assets that, under subparagraph d,
would be viewed as fully depreciated. However, a reasonable use allowance may
be negotiated for such assets if warranted after taking into consideration the
amount of depreciation previously charged to the Federal Government, the
estimated useful life remaining at time of negotiation, the effect of any
increased maintenance charges or decreased efficiency due to age, and any other
factors pertinent to the utilization of the asset for the purpose contemplated.
g. Where the use allowance method is followed, the use allowance for
buildings and improvement (including land improvements, such as paved parking
areas, fences, and sidewalks) will be computed at an annual rate not exceeding
two percent of acquisition cost.
The use allowance for equipment will be computed at an annual rate not exceeding
six and two-thirds percent of acquisition cost. When the use 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 conditioning,
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 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.
h. Charges for use allowances or depreciation must be supported by
adequate property records and physical inventories must be taken at least once
every two years (a statistical sampling basis is acceptable) to ensure that
assets exist and are usable and needed. When the depreciation method is
followed, adequate depreciation records indicating the amount of depreciation
taken each period must also be maintained.
12. Donations and contributions.
a. Contributions or donations rendered. Contributions or donations,
including cash, property, and services, made by the organization, regardless of
the recipient, are unallowable.
b. Donated services received:
30
(1) Donated or volunteer services may be furnished to an
organization 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
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 non-profit organization's indirect costs or rate(s) and,
accordingly, shall be allocated a proportionate share of applicable indirect
costs when the following exist:
(a) The aggregate value of the services is material;
(b) The services are supported by a significant amount of the
indirect costs incurred by the non-profit organization; and
(c) The direct cost activity is not pursued primarily for the
benefit of the Federal Government.
(3) In those instances where there is no basis for determining the
fair market value of the services rendered, the recipient and the cognizant
agency shall negotiate an appropriate allocation of indirect cost to the
services.
(4) Where donated services directly benefit a project supported by
an award, the indirect costs allocated to the services will be considered as a
part of the total costs of the project. Such indirect costs may be reimbursed
under the award or used to meet cost sharing or matching requirements.
(5) The value of the donated services may be used to meet cost
sharing or matching requirements under conditions described in Sec._.23 of
Circular A-110. Where donated services are treated as indirect costs, indirect
cost rates will separate the value of the donations so that reimbursement will
not be made.
c. Donated goods or space.
(1) Donated goods; i.e. , expendable personal property/supplies, and
donated use of space may be furnished to a non-profit organization. The value of
the goods and space is not reimbursable either as a direct or indirect cost.
(2) The value of the donations may be used to meet cost sharing or
matching share requirements under the conditions described in Circular A-110.
Where donations are treated as indirect costs, indirect cost rates will separate
the value of the donations so that reimbursement will not be made.
13. Employee morale, health, and welfare costs.
31
a. The costs of employee information publications, health or first-aid
clinics and/or infirmaries, recreational activities, employee counseling
services, and any other expenses incurred in accordance with the non-profit
organization's established practice or custom for the. improvement of working
conditions, employer-employee relations, employee morale, and employee
performance are allowable.
b. Such costs will be equitably apportioned to all activities of the non-
profit organization. Income generated from any of these activities will be
credited to the cost thereof unless such income has been irrevocably set over to
employee welfare organizations.
14. Entertainment costs. 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.
15. Equipment and other capital expenditures.
a. For purposes of this subparagraph, the following definitions apply:
(1) "Capital Expenditures" means expenditures for the acquisition
cost of capital assets (equipment, buildings, land) , or expenditures to make
improvements to capital assets that materially increase their value or useful
life. Acquisition cost means the cost of the asset including the cost to put it
in place. Acquisition cost for equipment, for example, 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 the acquisition cost in accordance with the non-profit organization'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 or exceeds the lesser of the capitalization level established by
the non-profit organization for financial statement purposes, or $5000.
(3) "Special purpose equipment" means equipment which is used only
for research, medical, scientific, or other technical activities. Examples of
special purpose equipment include microscopes, x-ray machines, surgical
instruments, and spectrometers.
(4) "General purpose equipment" means equipment, which is not
limited to research, medical, scientific or other technical activities. Examples
include office equipment and furnishings, modular offices, telephone networks,
information technology equipment and systems, air conditioning equipment,
reproduction and printing equipment, and motor vehicles.
b. The following rules of allowability shall apply to equipment and other
capital expenditures:
32
(1) Capital expenditures for general purpose equipment, buildings,
and land are unallowable as direct charges, except where approved in advance by
the awarding agency.
(2) Capital expenditures for special purpose equipment are allowable
as direct costs, provided that items with a unit cost of $5000 or more have the
prior approval of the awarding agency.
(3) Capital expenditures for improvements to land, buildings, or
equipment which materially increase their value or useful life are unallowable
as a direct cost except with the prior approval of the awarding agency.
(4) When approved as a direct charge pursuant to paragraph 15.b. (1) ,
(2) , and (3) above, capital expenditures will be charged in the period in which
the expenditure is incurred, or as otherwise determined appropriate by and
negotiated with the awarding agency.
(5) Equipment and other capital expenditures are unallowable as
indirect costs. However, see Attachment B, paragraph 11. , Depreciation and use
allowance, for rules on the allowability of use allowances or depreciation on
buildings, capital improvements, and equipment. Also, see Attachment B,
paragraph 43. , Rental costs of buildings and equipment, for rules on the
allowability of rental costs for land, buildings, and equipment.
(6) The unamortized portion of any equipment written off as a result
of a change in capitalization levels may be recovered by continuing to claim the
otherwise allowable use allowances or depreciation on the equipment, or by
amortizing the amount to be written off over a period of years negotiated with
the cognizant agency.
16. Fines and penalties. Costs of fines and penalties resulting from
violations of, or failure of the organization to comply with Federal, State, and
local laws and regulations are unallowable except when incurred as a result of
compliance with specific provisions of an award or instructions in writing from
the awarding agency.
17. Fund raising and investment management costs.
a. Costs of organized fund raising, including financial campaigns,
endowment drives, solicitation of gifts and bequests, and similar expenses
incurred solely to raise capital or obtain contributions are unallowable.
b. Costs of investment counsel and staff and similar expenses incurred
solely to enhance income from investments are unallowable.
c. Fund raising and investment activities shall be allocated an
appropriate share of indirect costs under the conditions described in
subparagraph B.3 of Attachment A.
18. Gains and losses on depreciable assets.
a. (1) Gains and losses on sale, retirement, or other disposition of
depreciable property shall be included in the year in which they occur as
credits or charges to cost grouping(s) in which the depreciation applicable to
33
such property was included. The amount of the gain or loss to be included as a
credit or charge to the appropriate 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:
(a) The gain or loss is processed through a depreciation
account and is reflected in the depreciation allowable under paragraph 11.
(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 Attachment B, paragraph 22 .
(d) Compensation for the use of the property was provided
through use allowances in lieu of depreciation in accordance with paragraph 9 .
(e) Gains and losses arising from mass or extraordinary sales,
retirements, or other dispositions shall be considered on a case-by-case basis .
b. Gains or losses of any nature arising from the sale or exchange of
property other than the property covered in subparagraph a shall be excluded in
computing award costs.
19. Goods or services for personal use. Costs of goods or services for
personal use of the organization's employees are unallowable regardless of
whether the cost is reported as taxable income to the employees.
20. Housing and personal living expenses.
a. Costs of housing (e.g. , depreciation, maintenance, utilities,
furnishings, rent, etc. ) , housing allowances and personal living expenses for/of
the organization's officers are unallowable as fringe benefit or indirect costs
regardless of whether the cost is reported as taxable income to the employees.
These costs are allowable as direct costs to sponsored award when necessary for
the performance of the sponsored award and approved by awarding agencies.
b. The term "officers" includes current and past officers and employees .
21. 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 non-profit organization.
34
(2) "Idle facilities" means completely unused facilities that are
excess to the non-profit organization'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, property taxes 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 subparagraph, 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.
22. Insurance and indemnification.
a. Insurance includes insurance which the organization is required to
carry, or which is approved, under the terms of the award and any other
insurance which the organization maintains in connection with the general
conduct of its operations. This paragraph does not apply to insurance which
represents fringe benefits for employees (see subparagraphs 8.g and 8.i(2) ) .
(1) Costs of insurance required or approved, and maintained,
pursuant to the award are allowable.
(2) Costs of other insurance maintained by the organization in
connection with the general conduct of its operations are allowable subject to
the following limitations:
(a) Types and extent of coverage shall be in accordance with
sound business practice and the rates and premiums shall be reasonable under the
circumstances.
35
(b) Costs allowed for business interruption or other similar
insurance shall be limited to exclude coverage of management fees.
(c) Costs of insurance or of any provisions for a reserve
covering the risk of loss or damage to Federal property are allowable only to
the extent that the organization is liable for such loss or damage.
(d) Provisions for a reserve under a self-insurance program
are allowable to the extent that types of coverage, extent of coverage, rates,
and premiums would have been allowed had insurance 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 present value of the liability.
(e) Costs of insurance on the lives of trustees, officers, or
other employees holding positions of similar responsibilities are allowable only
to the extent that the insurance represents additional compensation (see
subparagraph 8 .g(4) ) . The cost of such insurance when the organization is
identified as the beneficiary is unallowable.
(f) Insurance against defects. Costs of insurance with
respect to any costs incurred to correct defects in the organization's materials
or workmanship are unallowable.
(g) Medical liability (malpractice) insurance. Medical
liability insurance is an allowable cost of Federal research programs only to
the extent that the Federal research programs involve human subjects or training
of participants in research techniques. Medical liability insurance costs shall
be treated as a direct cost and shall be assigned to individual projects based
on the manner in which the insurer allocates the risk to the population covered
by the insurance.
(3) Actual losses which could have been covered by permissible
insurance (through the purchase of insurance or a self-insurance program) are
unallowable unless expressly provided for in the award, except:
(a) Costs incurred because of losses not covered under nominal
deductible insurance coverage provided in keeping with sound business practice
are allowable.
(b) Minor losses not covered by insurance, such as spoilage,
breakage, and- disappearance of supplies, which occur in the ordinary course of
operations, are allowable.
b. Indemnification includes securing the organization against liabilities
to third persons and any other loss or damage, not compensated by insurance or
otherwise. The Federal Government is obligated to indemnify the organization
only to the extent expressly provided in the award.
23 . Interest.
a. Costs incurred for interest on borrowed capital, temporary use of
endowment funds, or the use of the non-profit organization's own funds, however
represented, are unallowable. However, interest on debt incurred after
September 29, 1995 to acquire or replace capital assets (including
36
renovations, alterations, equipment, land, and capital assets acquired through
capital leases) , acquired after September 29, 1995 and used in support of
Federal awards is allowable, provided that:
(1) For facilities acquisitions (excluding renovations and
alterations) costing over $10 million where the Federal Government's
reimbursement is expected to equal or exceed 40 percent of an asset's cost, the
non-profit organization prepares, prior to the acquisition or replacement of the
capital asset(s) , a justification that demonstrates the need for the facility in
the conduct of federally-sponsored activities. Upon request, the needs
justification must be provided to the Federal agency with cost cognizance
authority as a prerequisite to the continued allowability of interest on debt
and depreciation related to the facility. The needs justification for the
acquisition of a facility should include, at a minimum, the following:
(a) A statement of purpose and justification for facility
acquisition or replacement
(b) A statement as to why current facilities are not adequate
(c) A statement of planned future use of the facility
(d) A description of the financing agreement to be arranged
for the facility
(e) A summary of the building contract with estimated cost
information and statement of source and use of funds
(f) A schedule of planned occupancy dates
(2) For facilities costing over $500,000, the non-profit
organization prepares, prior to the acquisition or replacement of the facility,
a lease/purchase analysis in accordance with the provisions of Sec. _.30
through .37 of Circular A-110, which shows that a financed purchase or capital
lease is less costly to the organization than other leasing alternatives, on a
net present value basis. Discount rates used should be equal to the non-profit
organization's anticipated interest rates and should be no higher than the fair
market rate available to the non-profit organization from an unrelated ("arm's
length") third-party. The lease/purchase analysis shall include a comparison of
the net present value of the projected total cost comparisons of both
alternatives over the period the asset is expected to be used by the non-profit
organization. The cost comparisons associated with purchasing the facility shall
include the estimated purchase price, anticipated operating and maintenance
costs (including property taxes, if applicable) not included in the debt
financing, less any estimated asset salvage value at the end of the period
defined above. The cost comparison for a capital lease shall include the
estimated total lease payments, any estimated bargain purchase option, operating
and maintenance costs, and taxes not included in the capital leasing
arrangement, less any estimated credits due under the lease at the end of the
period defined above. Projected operating lease costs shall be based on the
anticipated cost of leasing comparable facilities at fair market rates under
rental agreements that would be renewed or reestablished over the period defined
above, and any expected maintenance costs and allowable property taxes to be
borne by the non-profit organization directly or as part of the lease
arrangement.
37
(3) The actual interest cost claimed is predicated upon interest
rates that are no higher than the fair market rate available to the non-profit
organization from an unrelated ("arm's length") third party.
(4) Investment earnings, including interest income, on bond or loan
principal, pending payment of the construction or acquisition costs, are used to
offset allowable interest cost. Arbitrage earnings reportable to the Internal
Revenue Service are not required to be offset against allowable interest costs.
(5) Reimbursements are limited to the least costly alternative based
on the total cost analysis required under subparagraph (b) . For example, if an
operating lease is determined to be less costly than purchasing through debt
financing, then reimbursement is limited to the amount determined if leasing had
been used. In all cases where a lease/purchase analysis is performed, Federal
reimbursement shall be based upon the least expensive alternative.
(6) Non--profit organizations are also subject to the following
conditions:
(a) Interest on debt incurred to finance or refinance assets
acquired before or reacquired after September 29, 1995, is not allowable.
(b) Interest attributable to fully depreciated assets is
unallowable.
(c) For debt arrangements over $1 million, unless the non-
profit organization makes an initial equity contribution to the asset purchase
of 25 percent or more, non-profit organizations shall reduce claims for interest
expense by an amount equal to imputed interest earnings on excess cash flow,
which is to be calculated as follows. Annually, non-profit organizations shall
prepare a cumulative (from the inception of the project) report of monthly cash
flows that includes inflows and outflows, regardless of the funding source.
Inflows consist of depreciation expense, amortization of capitalized
construction interest, and annual interest expense. For cash flow calculations,
the annual inflow figures shall be divided by the number of months in the year
(usually 12) that the building is in service for monthly amounts. Outflows
consist of initial equity contributions, debt principal payments (less the pro
rata share attributable to the unallowable costs of land) and interest payments.
where cumulative inflows exceed cumulative outflows, interest shall be
calculated on the excess inflows for that period and be treated as a reduction
to allowable interest expense. The rate of interest to be used to compute
earnings on excess cash flows shall be the three month Treasury Bill closing
rate as of the last business day of that month.
(d) Substantial relocation of federally-sponsored activities
from a facility financed by indebtedness, the cost of which was funded in whole
or part through Federal reimbursements, to another facility prior to the
expiration of a period of 20 years requires notice to the Federal cognizant
agency. The extent of the relocation, the amount of the Federal participation in
the financing, and the depreciation and interest charged to date may require
negotiation and/or downward adjustments of replacement space charged to Federal
programs in the future.
(e) The allowable costs to acquire facilities and equipment
are limited to a fair market value available to the non-profit organization from
an unrelated ("arm's length") third party.
38
b. For non-profit organizations subject to "full coverage" ' under the Cost
Accounting Standards (CAS) as defined at 48 CFR 9903.201, the interest
allowability provisions of subparagraph a do not apply. Instead, these
organizations' sponsored agreements are subject to CAS 414 (48 CFR 9903 .414) ,
cost of money as an element of the cost of facilities capital, and CAS 417 (48
CFR 9903.417) , cost of money as an element of the cost of capital assets under
construction.
c. The following definitions are to be used for purposes of this
paragraph:
(1) Re-acquired assets means assets held by the non-profit
organization prior to September 29, 1995 that have again come to be held by
the organization, whether through repurchase or refinancing. It does not include
assets acquired to replace older assets.
(2) Initial equity contribution means the amount or value of
contributions made by non-profit organizations for the acquisition of the asset
or prior to occupancy of facilities.
(3) Asset costs means the capitalizable costs of an asset, including
construction costs, acquisition costs, and other such costs capitalized in
accordance with GAAP.
24. Labor relations costs. Costs incurred in maintaining satisfactory
relations between the organization and its employees, including costs of labor
management committees, employee publications, and other related activities are
allowable.
25. Lobbying.
a. Notwithstanding other provisions of this Circular, costs associated
with the following activities are unallowable:
(1) Attempts to influence the outcomes of any Federal, State, or
local election, referendum, initiative, or similar procedure, through in kind or
cash contributions, endorsements, publicity, or similar activity;
(2) Establishing, administering, contributing to, or paying the
expenses of a political party, campaign, political action committee, or other
organization established for the purpose of influencing the outcomes of
elections;
(3) Any attempt to influence: (i) The introduction of Federal or
State legislation; or (ii) the enactment or modification of any pending Federal
or State legislation through communication with any member or employee of the
Congress or State legislature (including efforts to influence State or local
officials to engage in similar lobbying activity) , or with any Government
official or employee in connection with a decision to sign or veto enrolled
legislation;
(4) Any attempt to influence: (i) The introduction of Federal or
State legislation; or (ii) the enactment or modification of any pending Federal
or State legislation by preparing, distributing or using publicity or
39
propaganda, or by urging members of the general public or any segment thereof to
contribute to or participate in any mass demonstration, march, rally,
fundraising drive, lobbying campaign or letter writing or telephone campaign; or
(5) Legislative liaison activities, including attendance at
legislative sessions or committee hearings, gathering information regarding
legislation, and analyzing the effect of legislation, when such activities are
carried on in support of or in knowing preparation for an effort to engage in
unallowable lobbying.
b. The following activities are excepted from the coverage of
subparagraph a:
(1) Providing a technical and factual presentation of information on
a topic directly related to the performance of a grant, contract or other
agreement through hearing testimony, statements or letters to the Congress or a
State legislature, or subdivision, member, or cognizant staff member thereof, in
response to a documented request (including a Congressional Record notice
requesting testimony or statements for the record at a regularly scheduled
hearing) made by the recipient member, legislative body or subdivision, or a
cognizant staff member thereof; provided such information is readily obtainable
and can be readily put in deliverable form; and further provided that costs
under this section for travel, lodging or meals are unallowable unless incurred
to offer testimony at a regularly scheduled Congressional hearing pursuant to a
written request for such presentation made by the Chairman or Ranking Minority
Member of the Committee or Subcommittee conducting such hearing.
(2) Any lobbying made unallowable by subparagraph a(3) to influence
State legislation in order to directly reduce the cost, or to avoid material
impairment of the organization's authority to perform the grant, contract, or
other agreement.
(3) Any activity specifically authorized by statute to be undertaken
with funds from the grant, contract, or other agreement.
c. (1) When an organization seeks reimbursement for indirect costs,
total lobbying costs shall be separately identified in the indirect cost rate
proposal, and thereafter treated as other unallowable activity costs in
accordance with the procedures of subparagraph B.3 of Attachment A.
(2) Organizations shall submit, as part of the annual indirect cost
rate proposal, a certification that the requirements and standards of this
paragraph have been complied with.
(3) Organizations shall maintain adequate records to demonstrate
that the determination of costs as being allowable or unallowable pursuant to
paragraph 25 complies with the requirements of this Circular.
(4) Time logs, calendars, or similar records shall not be required
to be created for purposes of complying with this paragraph during any
particular calendar month when: (1) the employee engages in lobbying (as defined
in subparagraphs (a) and (b) ) 25 percent or less of the employee's compensated
hours of employment during that calendar month, and (2) within the preceding
five-year period, the organization has not materially misstated allowable or
unallowable costs of any nature, including legislative lobbying costs. When
conditions (1) and (2) are met, organizations are not required to establish
records to support the allowabliliy of claimed costs in addition to records
40
already required or maintained. Also, when conditions (1) and (2) are met, the
absence of time logs, calendars, or similar records will not serve as a basis
for disallowing costs by contesting estimates of lobbying time spent by
employees during a calendar month.
(5) Agencies shall establish procedures for resolving in advance, in
consultation with OMB, any significant questions or disagreements concerning the
interpretation or application of paragraph 25. Any such advance resolution shall
be binding in any subsequent settlements, audits or investigations with respect
to that grant or contract for purposes of interpretation of this Circular;
provided, however, that this shall not be construed to prevent a contractor or
grantee from contesting the lawfulness of such a determination.
d. Executive lobbying costs. Costs incurred in attempting to
improperly influence either directly or indirectly, an employee or officer of
the Executive Branch of the Federal Government to give consideration or to act
regarding a sponsored agreement or a regulatory matter are unallowable. Improper
influence means any influence that induces or tends to induce a Federal employee
or officer to give consideration or to act regarding a federally-sponsored
agreement or regulatory matter on any basis other than the merits of the matter.
26. Losses on other sponsored agreements or contracts. Any excess of costs
over income on any award is unallowable as a cost of any other award. This
includes, but is not limited to, the organization's contributed portion by
reason of cost sharing agreements or any under-recoveries through negotiation of
lump sums for, or ceilings on, indirect costs.
27. Maintenance and repair costs. Costs incurred for necessary maintenance,
repair, or upkeep of buildings and equipment (including Federal property unless
otherwise provided for) which neither add to the permanent value of the property
nor appreciably prolong its intended life, but keep it in an efficient operating
condition, are allowable. Costs incurred for improvements which add to the
permanent value of the buildings and equipment or appreciably prolong their
intended life shall be treated as capital expenditures (see paragraph 15) .
28. Materials and supplies costs.
a. Costs incurred for materials, supplies, and fabricated parts necessary
to carry out a Federal award are allowable.
b. Purchased materials and supplies shall be charged at their actual
prices, net of applicable credits. Withdrawals from general stores or
stockrooms should be charged at their actual net cost under any recognized
method of pricing inventory withdrawals, consistently applied. Incoming
transportation charges are a proper part of materials and supplies costs.
c. Only materials and supplies actually used for the performance of a
Federal award may be charged as direct costs.
d. Where federally-donated or furnished materials are used in performing
the 'Federal award, such materials will be used without charge.
41
29. Meetings and conferences. Costs of meetings and conferences, the primary
purpose of which is the dissemination of technical information, are allowable.
This includes costs of meals, transportation, rental of facilities, speakers'
fees, and other items incidental to such meetings or conferences. But see
Attachment B, paragraphs 14. , Entertainment costs, and 33. , Participant support
costs.
30. Memberships, subscriptions, and professional activity costs.
a. Costs of the non-profit organization's membership in business,
technical, and professional organizations are allowable.
b. Costs of the non-profit organization's subscriptions to business,
professional, and technical periodicals are allowable.
c. Costs of membership in any civic or community organization are
allowable with prior approval by Federal cognizant agency.
d. Costs of membership in any country club or social or dining club or
organization are unallowable.
31. Organization costs. Expenditures, such as incorporation fees, brokers '
fees, fees to promoters, organizers or management consultants, attorneys,
accountants, or investment counselors, whether or not employees of the
organization, in connection with establishment or reorganization of an
organization, are unallowable except with prior approval of the awarding agency.
32. Page charges in professional journals. Page charges for professional
journal publications are allowable as a necessary part of research costs, where:
a. The research papers report work supported by the Federal Government;
and
b. The charges are levied impartially on all research papers published by
the journal, whether or not by federally-sponsored authors.
33 . Participant support costs. Participant support costs are direct costs for
items such as stipends or subsistence allowances, travel allowances, and
registration fees paid to or on behalf of participants or trainees (but not
employees) in connection with meetings, conferences, symposia, or training
projects. These costs are allowable with the prior approval of the awarding
agency.
34. Patent costs.
a. The following costs relating to patent and copyright matters are
allowable: (i) cost of preparing disclosures, reports, and other documents
required by the Federal award and of searching the art to the extent necessary
to make such disclosures; (ii) cost of preparing documents and any other patent
costs in connection with the filing and prosecution of a United States patent
application where title or royalty-free license is required by the Federal
Government to be conveyed to the Federal Government; and (iii) general
counseling services relating to patent and copyright matters, such as advice on
patent and copyright laws, regulations, clauses, and employee agreements (but
42
see paragraphs 37. , Professional services costs, and 44. , Royalties and other
costs for use of patents and copyrights) .
b. The following costs related to patent and copyright matter are
unallowable:
(1) Cost of preparing disclosures, reports, and other documents and
of searching the art to the extent necessary to make disclosures not required by
the award
(2) Costs in connection with filing and prosecuting any foreign
patent application, or any United States patent application, where the Federal
award does not require conveying title or a royalty-free license to the Federal
Government (but see paragraph 45. , Royalties and other costs for use of patents
and copyrights) .
35. Plant and homeland security costs. Necessary and reasonable expenses
incurred for routine and homeland security to protect facilities, personnel, and
work products are allowable. Such costs include, but are not limited to, wages
and uniforms of personnel engaged in security activities; equipment; barriers;
contractual security services; consultants; etc. Capital expenditures for
homeland and plant security purposes are subject to paragraph 15. , Equipment and
other capital expenditures, of this Circular.
36. Pre-agreement 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.
37. Professional services costs.
a. Costs of professional and consultant services rendered by persons who
are members of a particular profession or possess a special skill, and who are
not officers or employees of the non-profit organization, are allowable, subject
to subparagraphs b and c when reasonable in relation to the services rendered
and when not contingent upon recovery of the costs from the Federal Government.
In addition, legal and related services are limited under Attachment B,
paragraph 10.
b. In determining the allowability of costs in a particular case, no
single factor or any special combination of factors is necessarily
determinative. However, the following factors are relevant:
(1) The nature and scope of the service rendered in relation to the
service required.
(2) The necessity of contracting for the service, considering the
non-profit organization's. capability in the particular area.
(3) The past pattern of such costs, particularly in the years prior
to Federal awards.
43
(4) The impact of Federal awards on the non-profit organization's
business (i.e. , what new problems have arisen) .
(5) Whether the proportion of Federal work to the non-profit
organization's total business is such as to influence the non-profit
organization in favor of incurring the cost, particularly where the services
rendered are not of a continuing nature and have little relationship to work
under Federal grants and contracts.
(6) Whether the service can be performed more economically by direct
employment rather than contracting.
(7) The qualifications of the individual or concern rendering the
service and the customary fees charged, especially on non-Federal awards.
(8) Adequacy of the contractual agreement for the service (e.g. ,
description of the service, estimate of time required, rate of compensation, and
termination provisions) .
c. In addition to the factors in subparagraph b, retainer fees to be
allowable must be supported by evidence of bona fide services available or
rendered
38. Publication and printing costs.
a. Publication costs include the costs of printing (including the
processes of composition, plate-making, press work, binding, and the end
products produced by such processes) , distribution, promotion, mailing, and
general handling. Publication costs also include page charges in professional
publications.
b. If these costs are not identifiable with a particular cost objective,
they should be allocated as indirect costs to all benefiting activities of the
non-profit organization.
c. Page charges for professional journal publications are allowable as a
necessary part of research costs where:
(1) The research papers report work supported by the Federal
Government: and
(2) The charges are levied impartially on all research papers
published by the journal, whether or not by federally-sponsored authors.
39. Rearrangement and alteration costs. Costs incurred for ordinary or normal
rearrangement and alteration of facilities are allowable. Special arrangement
and alteration costs incurred specifically for the project are allowable with
the prior approval of the awarding agency.
40. Reconversion costs. Costs incurred in the restoration or rehabilitation of
the non-profit organization'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.
44
41. Recruiting costs.
a. Subject to subparagraphs b, c, and d, and provided that the size of
the staff recruited and maintained is in keeping with workload requirements,
costs of "help wanted" advertising, operating costs of an employment office
necessary to secure and maintain an adequate staff, costs of operating an
aptitude and educational testing program, travel costs of employees while
engaged in recruiting personnel, travel costs of applicants for interviews for
prospective employment, and relocation costs incurred incident to recruitment of
new employees, are allowable to the extent that such costs are incurred pursuant
to a well-managed recruitment program. Where the organization uses employment
agencies, costs that are not in excess of standard commercial rates for such
services are allowable.
b. In publications, costs of help wanted advertising that includes color,
includes advertising material for other than recruitment purposes, or is
excessive in size (taking into consideration recruitment purposes for which
intended and normal organizational practices in this respect) , are unallowable.
c. Costs of help wanted advertising, special emoluments, fringe benefits,
and salary allowances incurred to attract professional personnel from other
organizations that do not meet the test of reasonableness or do not conform with
the established practices of the organization, are unallowable.
d. Where relocation costs incurred incident to recruitment of a new
employee have been allowed either as an allocable direct or indirect cost, and
the newly hired employee resigns for reasons within his control within twelve
months after being hired, the organization will be required to refund or credit
such relocation costs to the Federal Government.
42 . Relocation costs.
a. Relocation costs are costs incident to the permanent change of duty
assignment (for an indefinite period or for a stated period of not less than 12
months) of an existing employee or upon recruitment of a new employee.
Relocation costs are allowable, subject to the limitation described in
subparagraphs b, c, and d, provided that:
(1) The move is for the benefit of the employer.
(2) Reimbursement to the employee is in accordance with an
established written policy consistently followed by the employer.
(3) The reimbursement does not exceed the employee's actual (or
reasonably estimated) expenses.
b. Allowable relocation costs for current employees are limited to the
following:
(1) The costs of transportation of the employee, members of his
immediate family and his household, and personal effects to the new location.
45
(2) The costs of finding a new home, such as advance trips by
employees and spouses to locate living quarters and temporary lodging during the
transition period, up to maximum period of 30 days, including advance trip time.
(3) Closing costs, such as brokerage, legal, and appraisal fees,
incident to the disposition of the employee's former home. These costs, together
with those described in (4) , are limited to 8 percent of the sales price of the
employee's former home.
(4) The continuing costs of ownership of the vacant former home
after the settlement or lease date of the employee's new permanent home, such as
maintenance of buildings and grounds (exclusive of fixing up expenses) ,
utilities, taxes, and property insurance.
(5) Other necessary and reasonable expenses normally incident to
relocation, such as the costs of canceling an unexpired lease, disconnecting and
reinstalling household appliances, and purchasing insurance against loss of or
damages to personal property. The cost of canceling an unexpired lease is
limited to three times the monthly rental.
c. Allowable relocation costs for new employees are limited to those
described in (1) and (2) of subparagraph b. When relocation costs incurred
incident to the recruitment of new employees have been allowed either as a
direct or indirect cost and the employee resigns for reasons within his control
within 12 months after hire, the organization shall refund or credit the Federal
Government for its share of the cost. However, the costs of travel to an
overseas location shall be considered travel costs in accordance with paragraph
50 and not relocation costs for the purpose of this paragraph if dependents are
not permitted at the location for any reason and the costs do not include costs
of transporting household goods.
d. The following costs related to relocation are unallowable:
(1) Fees and other costs associated with acquiring a new home.
(2) A loss on the sale of a former home.
(3) Continuing mortgage principal and interest payments on a home
being sold.
(4) Income taxes paid by an employee related to reimbursed
relocation costs.
43 . Rental costs of buildings and equipment.
a. Subject to the limitations described in subparagraphs b. through d. of
this paragraph 43, 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. Rental arrangements
should be reviewed periodically to determine if circumstances have changed and
other options are available.
b. Rental costs under "sale and lease back" arrangements are allowable
only up to the amount that would be allowed had the non-profit organization
46
continued to own the property. This amount would include expenses such as
depreciation or use allowance, maintenance, taxes, and insurance.
c. Rental costs under "less-than-arms-length" leases are allowable only up
to the amount (as explained in subparagraph b. of this paragraph 43. ) that would
be allowed had title to the property vested in the non-profit organization. For
this purpose, a less-than-arms-length lease is one under which one -party to the
lease agreement is able to control or substantially influence the actions of the
other. Such leases include, but are not limited to those between (i) divisions
of a non-profit organization; (ii) non-profit organizations under common control
through common officers, directors, or members.; and (iii) a non-profit
organization and a director, trustee, officer, or key employee of the non-profit
organization or his immediate family, either directly or through corporations,
trusts, or similar arrangements in which they hold a controlling interest. For
example, a non-profit organization may establish a separate corporation for the
sole purpose of owning property and leasing it back to the non-profit
organization.
d. Rental costs under leases which are required to be treated as capital
leases under GAAP are allowable only up to the amount (as explained in
subparagraph b) that would be allowed had the non-profit organization purchased
the property on the date the lease agreement was executed. The provisions of
Financial Accounting Standards Board Statement 13, Accounting for Leases, 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
subparagraph 23. Unallowable costs include amounts paid for profit, management
fees, and taxes that would not have been incurred had the non-profit
organization purchased the facility.
44. Royalties and other costs for use of patents and copyrights.
a. Royalties on a patent or copyright or amortization of the cost of
acquiring by purchase a copyright, patent, or rights thereto, necessary for the
proper performance of the award are allowable unless:
(1) The Federal Government has a license or the right to free use of
the patent or copyright.
(2) The patent or copyright has been adjudicated to be invalid, or
has been administratively determined to be invalid.
(3) The patent or copyright is considered to be unenforceable.
(4) The patent or copyright is expired.
b. Special care should be exercised in determining reasonableness where
the royalties may have arrived at as a result of less-than-arm's-length
bargaining, e.g. :
(1) Royalties paid to persons, including corporations, affiliated
with the non-profit organization.
(2) Royalties paid to unaffiliated parties, including corporations,
under an agreement entered into in contemplation that a Federal award would be
made.
47
(3) Royalties paid under an agreement entered into after an award is
made to a non-profit organization.
c. In any case involving a patent or copyright formerly owned by the non-
profit organization, the amount of royalty allowed should not exceed the cost
which would have been allowed had the non-profit organization retained title
thereto.
45. Selling and marketing. Costs of selling and marketing any products or
services of the non-profit organization are unallowable (unless allowed under
Attachment B, paragraph 1. as allowable public relations cost. However, these
costs are allowable as direct costs, with prior approval by awarding agencies,
when they are necessary for the performance of Federal programs.
46. Specialized service facilities.
a. The costs of services provided by highly complex or specialized
facilities operated by the non-profit organization, such as computers, wind
tunnels, and reactors are allowable, provided the charges for the services meet
the conditions of either 46 b. or c. and, in addition, take into account any
items of income or Federal financing that qualify as applicable credits under
Attachment A, subparagraph A.5. of this Circular.
b. The costs of such services, when material, must be charged directly to
applicable awards based on actual usage of the services on the basis of a
schedule of rates or established methodology that (i) does not discriminate
against federally-supported activities of the non-profit organization, including
usage by the non-profit organization for internal purposes, and (ii) is designed
to recover only the aggregate costs of the services. The costs of each service
shall consist normally of both its direct costs and its allocable share of all
indirect costs. Rates shall be adjusted at least biennially, and shall take
into consideration over/under applied costs of the previous period(s) .
c. Where the costs incurred for a service are not material, they may be
allocated as indirect costs.
d. Under some extraordinary circumstances, where it is in the best
interest of the Federal Government and the institution to establish alternative
costing arrangements, such arrangements may be worked out with the cognizant
Federal agency.
47. Taxes.
a. In general, taxes which the organization is required to pay and which
are paid or accrued in accordance with GAAP, and payments made to local
governments in lieu of taxes which are commensurate with the local government
services received are allowable, except for (i) taxes from which exemptions are
available to the organization directly or which are available to the
organization based on an exemption afforded the Federal Government and in the
latter case when the awarding agency makes available the necessary exemption
certificates, (ii) special assessments on land which represent capital
improvements, and (iii) Federal income taxes.
b. Any refund of taxes, and any payment to the organization of interest
thereon, which were allowed as award costs, will be credited either as a cost
reduction or cash refund, as appropriate, to the Federal Government.
48
48 . Termination costs applicable to sponsored agreements.
Termination of awards generally gives rise to the incurrence of costs, or the
need for special treatment of costs, which would not have arisen had the Federal
award not been terminated. Cost principles covering these items are set forth
below. They are to be used in conjunction with the other provisions of this
Circular in termination situations.
a. The cost of items reasonably usable on the non-profit organization' s
other work shall not be allowable unless the non-profit organization submits
evidence that it would not retain such items at cost without sustaining a loss.
In deciding whether such items are reasonably usable on other work of the non-
profit organization, the awarding agency should consider the non-profit
organization's plans and orders for current and scheduled activity.
Contemporaneous purchases of common items by the non-profit organization shall
be regarded as evidence that such items are reasonably usable on the non-profit
organization's other work. Any acceptance of common items as allocable to the
terminated portion of the Federal award shall be limited to the extent that the
quantities of such items on hand, in transit., and on order are in excess of the
reasonable quantitative requirements of other work.
b. If in a particular case, despite all reasonable efforts by the non-
profit organization, certain costs cannot be discontinued immediately after the
effective date of termination, such costs are generally allowable within the
limitations set forth in this Circular, except that any such costs continuing
after termination due to the negligent or willful failure of the non-profit
organization to discontinue such costs shall be unallowable.
c. Loss of useful value of special tooling, machinery, and is generally
allowable if:
(1) Such special tooling, special machinery, or equipment is not
reasonably capable of use in the other work of the non-profit organization,
(2) The interest of the Federal Government is protected by transfer
of title or by other means deemed appropriate by the awarding agency, and
(3) The loss of useful value for any one terminated Federal award is
limited to that portion of the acquisition cost which bears the same ratio to
the total acquisition cost as the terminated portion of the Federal award bears
to the entire terminated Federal award and other Federal awards for which the
special tooling, special machinery, or equipment was acquired.
d. Rental costs under unexpired leases are generally allowable where
clearly shown to have been reasonably necessary for the performance of the
terminated Federal award less the residual value of such leases, if:
(1) the amount of such rental claimed does not exceed the reasonable
use value of the property leased for the period of the Federal award and such
further period as may be reasonable, and
(2) the non-profit organization makes all reasonable efforts to
terminate, assign, settle, or otherwise reduce the cost of such lease. There
also may be included the cost of alterations of such leased property, provided
49
such alterations were necessary for the performance of the Federal award, and of
reasonable restoration required by the provisions of the lease.
e. Settlement expenses including the following are generally allowable:
(1) Accounting, legal, clerical, and similar costs reasonably
necessary for:
(a) The preparation and presentation to the awarding agency of
settlement claims and supporting data with respect to the terminated portion of
the Federal award, unless the termination is for default (see Subpart .61 of
Circular A-110) ; and
(b) The termination and settlement of subawards.
(2) Reasonable costs for the storage, transportation, protection,
and disposition of property provided by the Federal Government or acquired or
produced for the Federal award, except when grantees or contractors are
reimbursed for disposals at a predetermined amount in accordance with Subparts
.32 through .37 of Circular A-110.
(3) Indirect costs related to salaries and wages incurred as
settlement expenses in subparagraphs (1) and (2) . Normally, such indirect costs
shall be limited to fringe benefits, occupancy cost, and immediate supervision.
f. Claims under sub awards, including the allocable portion of claims
which are common to the Federal award, and to other work of the non-profit
organization are generally allowable.
An appropriate share of the non-profit organization's indirect expense may be
allocated to the amount of settlements with subcontractors and/or subgrantees,
provided that the amount allocated is otherwise consistent with the basic
guidelines contained in Attachment A. The indirect expense so allocated shall
exclude the same and similar costs claimed directly or indirectly as settlement
expenses.
49. Training costs.
a. Costs of preparation and maintenance of a program of instruction
including but not limited to on-the-job, classroom, and apprenticeship training,
designed to increase the vocational effectiveness of employees, including
training materials, textbooks, salaries or wages of trainees (excluding overtime
compensation which might arise therefrom) , and (i) salaries of the director of
training and staff when the training program is conducted by the organization;
or (ii) tuition and fees when the training is in an institution not operated by
the organization, are allowable.
b. Costs of part-time education, at an undergraduate or post-graduate
college level, including that provided at the organization's own facilities, are
allowable only when the course or degree pursued is relative to the field in
which the employee is now working or may reasonably be expected to work, and are
limited to:
(1) Training materials.
(2) Textbooks.
50
(3) Fees charges by the educational institution.
(4) Tuition charged by the educational institution or, in lieu of
tuition, instructors' salaries and the related share of indirect costs of the
educational institution to the extent that the sum thereof is not in excess of
the tuition which would have been paid to the participating educational
institution.
(5) Salaries and related costs of instructors who are employees of
the organization.
(6) Straight-time compensation of each employee for time spent
attending classes during working hours not in excess of 156 hours per year and
only to the extent that circumstances do not permit the operation of classes or
attendance at classes after regular working hours; otherwise, such compensation
is unallowable.
c. Costs of tuition, fees, training materials, and textbooks (but not
subsistence, salary, or any other emoluments) in connection with full-time
education, including that provided at the organization's own facilities, at a
post-graduate (but not undergraduate) college level, are allowable only when the
course or degree pursued is related to the field in which the employee is now
working or may reasonably be expected to work, and only where the costs receive
the prior approval of the awarding agency. Such costs are limited to the costs
attributable to a total period not to exceed one school year for each employee
so trained. In unusual cases the period may be extended.
d. Costs of attendance of up to 16 weeks per employee per year at
specialized programs specifically designed to enhance the effectiveness of
executives or managers or to prepare employees for such positions are allowable.
Such costs include enrollment fees, training materials, textbooks and related
charges, employees' salaries, subsistence, and travel. Costs allowable under
this paragraph do not include those for courses that are part of a degree-
oriented curriculum, which are allowable only to the extent set forth in
subparagraphs b and c.
e. Maintenance expense, and normal depreciation or fair rental, on
facilities owned or leased by the organization for training purposes are
allowable to the extent set forth in paragraphs 11, 27, and 50.
f. Contributions or donations to educational or training institutions,
including the donation of facilities or other properties, and scholarships or
fellowships, are unallowable.
g. Training and education costs in excess of those otherwise allowable
under subparagraphs b and may be allowed with prior approval of the awarding
agency. To be considered for approval, the organization must demonstrate that
such costs are consistently incurred pursuant to an established training and
education program, and that the course or degree pursued is relative to the
field in which the employee is now working or may reasonably be expected to
work.
50. Transportation costs. Transportation costs include freight, express,
cartage, and postage charges relating either to goods purchased, in process, or
delivered. These costs are allowable. When such costs can readily be identified
with the items involved, they may be directly charged as transportation costs or
51
added to the cost of such items (see paragraph 28) . Where identification with
the materials received cannot readily be made, transportation costs may be
charged to the appropriate indirect cost accounts if the organization follows a
consistent, equitable procedure in this respect.
51. Travel costs.
a. General. Travel costs are the expenses for transportation, lodging,
subsistence, and related items incurred by employees who are in travel status on
official business of the non-profit organization. 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 not to selected days of the trip, and results in charges
consistent with those normally allowed in like circumstances in the non-profit
organization's non-federally-sponsored activities.
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 non-profit organization in its
regular operations as the result of the non-profit organization's written travel
policy. In the absence of an acceptable, written non-profit organization policy
regarding travel costs, the rates and amounts established under subchapter I of
Chapter 57, Title 5, United States Code ("Travel and Subsistence Expenses;
Mileage Allowances") , or by the Administrator of General Services, or by the
President (or his or her designee) pursuant to any provisions of such subchapter
shall apply to travel under Federal awards (48 CFR 31.205-46 (a) ) .
c. Commercial air travel.
(1) Airfare costs in excess of the customary standard commercial
airfare (coach or equivalent) , Federal Government contract airfare (where
authorized and available) , or the lowest commercial discount airfare are
unallowable except when such accommodations would: (a) require circuitous
routing; (b) require travel during unreasonable hours; (c) excessively prolong
travel; (d) result in additional costs that would offset the transportation
savings; or (e) offer accommodations not reasonably adequate for the traveler's
medical needs. The non-profit organization must justify and document these
conditions on a case-by-case basis in order for the use of first-class airfare
to be allowable in such cases.
(2) Unless a pattern of avoidance is detected, the Federal
Government will generally not question a non-profit organization's
determinations that customary standard airfare or other discount airfare is
unavailable for specific trips if the non-profit organization can demonstrate
either of the following: (a) that such airfare was not available in the
specific case; or (b) that it is the non-profit organization's overall practice
to make routine use of such airfare.
d. Air travel by other than commercial carrier. Costs of travel by non-
profit organization-owned, -leased, or -chartered aircraft include the cost of
lease, charter, operation (including personnel costs) , maintenance,
depreciation, insurance, and other related costs. The portion of such costs
that exceeds the cost of allowable commercial air travel, as provided for in
subparagraph] c. , is unallowable.
52
e. Foreign travel. Direct charges for foreign travel costs are allowable
only when the travel has received prior approval of the awarding agency. Each
separate foreign trip must receive such approval. For purposes of this
provision, "foreign travel" includes any travel outside Canada, Mexico, the
United States, and any United States territories and possessions. However, the
term "foreign travel" for a non-profit organization located in a foreign country
means travel outside that country.
52. Trustees. Travel and subsistence costs of trustees (or directors) are
allowable. The costs are subject to restrictions regarding lodging, subsistence
and air travel costs provided in paragraph 51.
53
ATTACHMENT C
Circular No. A-122
NON-PROFIT ORGANIZATIONS NOT SUBJECT TO THIS CIRCULAR
Advance Technology Institute (ATI) , Charleston, South Carolina
Aerospace Corporation, El Segundo, California
American Institutes of Research (AIR) , Washington D.C.
Argonne National Laboratory, Chicago, Illinois
Atomic Casualty Commission, Washington, D.C.
Battelle Memorial Institute, Headquartered in Columbus, Ohio
Brookhaven National Laboratory, Upton, New York
Charles Stark Draper Laboratory, Incorporated, Cambridge, Massachusetts
CNA Corporation (CNAC) , Alexandria, Virginia
Environmental Institute of Michigan, Ann Arbor, Michigan
Georgia Institute of Technology/Georgia Tech Applied Research Corporation/
Georgia Tech Research Institute, Atlanta, Georgia
Hanford Environmental Health Foundation, Richland, Washington
IIT Research Institute, Chicago, Illinois
Institute of Gas Technology, Chicago, Illinois
Institute for Defense Analysis, Alexandria, Virginia
LMI, McLean, Virginia
Mitre Corporation, Bedford, Massachusetts
Mitretek Systems, Inc. , Falls Church, Virginia
National Radiological Astronomy Observatory, Green Bank, West Virginia
National Renewable Energy Laboratory, Golden, Colorado
Oak Ridge Associated Universities, Oak Ridge, Tennessee
Rand Corporation, Santa Monica, California
Research Triangle Institute, Research Triangle Park, North Carolina
Riverside Research Institute, New York, New York
South Carolina Research Authority (SCRA) , Charleston, South Carolina
54
Southern Research Institute, Birmingham, Alabama
Southwest Research Institute, San Antonio, Texas
SRI International, Menlo Park, California
Syracuse Research Corporation, Syracuse, New York
Universities Research Association, Incorporated (National Acceleration Lab) ,
Argonne, Illinois
Urban Institute, Washington D.C.
Non-profit insurance companies, such as Blue Cross and Blue Shield Organizations
Other non-profit organizations as negotiated with awarding agencies
55
EXHIBIT G
DAVIS BACON EXEMPTION CHECKLIST
Project Name: Habitat for Humanity Demolition Program
Project Address: 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-
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:
:(144.4u.a;
0 Date: c #JcR//4
Signre of Responsible Administrator
A description of the scope of the project is attached.
Revised and approved 7/12/2011
CITY OF OMAHA Exhibit H
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
1 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 11/10/2011
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 terms 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 I
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.
5 .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 5 .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 5 .520, and, with the exception of R&D as described in
5 .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 § .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
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 organization's 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
program's 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
5 .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 seq.) 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
13
(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 S .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 5_.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 (a) 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
0MB 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) , 5 .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) (1) (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 -judgment . 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.
§ .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
NON-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(list):
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
$ % $
TOTALS $ % $
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:
OPPORTUNITY Revised and approved 6/18/2010
Exhibit K
UNITED STATES CITIZENSHIP ATTESTATION FORM FOR PUBLIC BENEFIT
For the purposes of complying with Neb. Rev. Stat. §§ 4-108 through 4-114, I attest as follows:
I am a citizen of the United States.
OR
I am a qualified alien under the Federal Immigration and Nationality Act. My
immigration status and alien number as follows:
, and I agree to provide
a copy of my USCIS (United States Citizenship and Immigration Services)
documentation upon request.
I hereby attest that my response and the information provided on this form and any related
application for public benefits are true, complete and accurate and I understand that this
information may be used to verify my lawful presence in the United States.
PRINT NAME:
By:
SIGNATURE:
DATE:
OPPORTUNITY Created and approved 10/26/2009
Exhibit L
AFFIDAVIT FOR EMPLOYEE CLASSIFICATION ACT
STATE OF )
) §
COUNTY OF )
I, ,being first duly sworn under oath, state and
depose as follows:
1. I am competent to testify to,and have personal knowledge of,the matters stated in this affidavit.
2. I am(a contractor)(the authorized agent of the contractor •
). I attest to the following: (a) each individual performing services for such contractor is properly
classified under the Nebraska Employee Classification Act, 2010 LB 563 ("the Act"), (b) such contractor has
completed a federal I-9 immigration form and has such form on file for each employee performing services, (c) such
contractor has complied with Neb. Rev. Stat. section 4-114 (federal immigration verification system), (d) such
contractor has no reasonable basis to believe that any individual performing services for such contractor is an
undocumented worker, and(e)as of the time of the contract, such contractor is not barred from contracting with the
state or any political subdivision pursuant to the Act.
FURTHER AFFIANT SAYETH NAUGHT. •
•
Affiant
SUBSCRIBED AND SWORN TO before me this day of ,20
Notary Public
O
•
OPPORTUNITY Approved 6/1/10
Exhibit M
SOIL WORK POLICY
For Housing Development Programs
(January 2011)
The City of Omaha operates several federally funded housing development programs. These programs may
involve the removal of structures, installation of public infrastructure, and site preparation work prior to the
construction of new residential structures.
The United States Environmental Protection Agency("EPA")has identified a prominent lead hazard in Omaha:
soil contamination attributed to emissions from the former ASARCO plant which was located in the former
Union Pacific Railroad yards along the Missouri River. The Omaha Lead Superfund Site is generally bound by
Florence to the north,the Missouri River to the east,the Douglas-Sarpy County line to the south, and 50th Street
to the west. Only residential use properties are included in the Omaha Lead Superfund Site.
Policy:
The objectives of the soil work policy are to ensure site soils are safe for the property's intended use and to
remove project sites from the Omaha Lead Superfund Site before they are conveyed to another party. The
following steps are the preferred means of achieving these objectives while the EPA is conducting soil clean-up
in Omaha:
1. The City will first determine the soil clean up status of the project site according to the EPA.
a. If the EPA has not tested the project site,then the City will request the EPA test soil prior to
any soil work at the project site. The City will facilitate and/or expedite the sampling process
when possible.
2. If the soil has been tested by the EPA and does not require clean up,then site work may proceed.
3. If the soil has been tested by the EPA and requires clean up,then:
a. Site work involving soil may not occur until soil clean-up is completed. The City will facilitate
and/or expedite the clean-up process when possible.
Other options are permissible, as necessary,as long as the process is documented.
Regardless of the method of addressing potential soil contamination, the City is required to test site soil at the
end of a project before the property is sold or otherwise conveyed to another party. If the lead concentration
exceeds 400 parts per million then further mitigation work and follow up testing is required.
The Environmental Review for each project site will describe the steps taken to address lead contamination in
soil.
Exhibit N
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.
OPPORTUNITY Rev. 5/7/08
Exhibit 0
MINORITY BUSINESS & WOMEN BUSINESS
ENTERPRISE PLAN
March 2011
otAAHA,AI
04 II E8
II
4.
O44r4D FESS." PLANNING• OMAHA
Jim Suttle, Mayor PLANNING DEPARTMENT R.E. Cunningham, RA, F. SAME
City of Omaha CITY OF OMAHA City of Omaha
Planning Department
Omaha/Douglas Civic Center
1819 Farnam Street
Omaha,Nebraska 68183
1 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 3/28/2011
Date:
Project Address:
Owner Information
Name:
General Contractor Information
Name:
(BRE Code: 1 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.
A
DAMP
NIT'OPPOR
8 Reviewed and approved 3/28/2011
Attachment: 1
AFFIDAVIT
Applicant— Income
State of Nebraska )
) §
County of Douglas )
TO: Whom It May Concern:
We, Affiant/s herein, being first duly sworn on
oath, state and certify that I have reported all of my income to the City of Omaha in accordance with the
following Definition of Income:
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;
income from other self-employment sources;
3. Farm self-employment income;
4. Interest, dividends,net rental income, or income from estates or trusts, or regular recurring gifts;
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.
EOUAL HOUSING
OPPORTUNITY Revised and approved 1/4/2012
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).
I further certify that I am aware of the following: PENALTY FOR FALSE OR FRAUDULENT
STATEMENT, U.S.C. Title 18, Section 1001, provides: "Whoever, in any matter within jurisdiction of
any department or agency of the United States knowingly and willfully falsifies...or makes false,
fictitious or fraudulent statements or representations...(or makes or uses any false writing or document
knowing the same to contain any false, fictitious, or fraudulent statement or entry,) shall be fined not
more than$10,000.00 or imprisoned not more than five(5)years, or both".
Signature
Signature
On this day of , , before me, the undersigned, a Notary Public duly
commissioned and qualified in and for said county, personally came , to me known to be the
person(s) named in and who executed the foregoing instrument, and acknowledged that he executed the
same as his voluntary act and deed for the purposes therein stated.
Witness my hand and notarial seal the day and year last above written.
Notary Public
My Commission expires
OPPORTUNITY Revised and approved 1/10/2012
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.
C-25A CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha,Nebraska
RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:
WHEREAS, the City of Omaha received $5,130,000 in Community Development
Block Grant funds from the U.S. Department of Housing and Urban Development, as stated in the
Omaha-Council Bluffs Consortium Consolidated Submission for Community Development
Programs: 2013 Action Plan approved by the City Council on January 15,2013,Resolution No.26,
and as amended by City Council on March 19,2013,Resolution 359 and on July 5,2013,Resolution
899; and,
WHEREAS, the Omaha-Council Bluffs Consortium Consolidated Submission for
Community Development Programs: 2013 Action Plan identified the demolition of blighted and
physically deteriorated structures as an important component for improving neighborhood safety and
neighborhood revitalization; and,
WHEREAS,the City of Omaha has allocated$100,000.00 to Habitat for Humanity of
Omaha to demolish blighted and physically deteriorated structures that it owns; and,
WHEREAS, Habitat for Humanity of Omaha will provide a funding match of
$100,000.00 for the demolition of additional blighted and physically deteriorated structures that it
owns; and,
WHEREAS, the Planning Department and the Mayor recommend approval of this
grant; and,
WHEREAS, it is beneficial and desirable to demolish blighted and physically
deteriorated buildings.
By
Councilmember
Adopted
City Clerk
Approved
Mayor
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C-25A CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha,Nebraska
PAGE 2
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF OMAHA:
THAT,the attached Agreement,as recommended by the Mayor,between the City of
Omaha and Habitat for Humanity of Omaha, a Nebraska Non-profit Corporation, 1701 North 24th
Street, Omaha, Nebraska 68110, in the amount of $100,000.00 for the purpose of demolishing
blighted and physically deteriorated structures over the course of the grant period(approximately one
year)as stated in said Agreement, is hereby approved. Funds shall be paid from the City of Omaha
FY 2013 Community Development Block Grant Program, Fund No. 12186, Organization No.
128072.
APPROVED AS TO FORM:
CITY ATTORNEY DATE
1977 dlh
By Apete.ie.
Counci lmember
Adopted 4 201. `Q
/1‘1.
C' CI rk 3/4/7"
Approved..,
Mayor
NO. c/
Resolution by
Res. THAT, the attached Agreement, as
recommended by the Mayor,between the City
of Omaha and Habitat for Humanity of
Omaha, a Nebraska Non-profit Corporation,
1701 North 24t" Street, Omaha, Nebraska
68110, in the amount of$100,000.00 for the
purpose of demolishing blighted and
physically deteriorated structures over the
course of the grant period(approximately one
year) as stated in said Agreement, is hereby
approved. Funds shall be paid from the City
of Omaha FY 2013 Community Development
Block Grant Program, Fund No. 12186,
Organization No. 128072.
1977 dlh
Presented to City Council
MAR 4 2014
Adopted
gaoler grown
City Clerk