RES 2013-0550 - Agmt with Council Bluffs for funds for acquisition of land or new construction related costs 0 oMAHA,NFB� Planning Department
Omaha/Douglas Civic Center
� 1819 Farnam Street,Suite 1100
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Omaha,Nebraska 68183
_ (402)444-5150
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CITY -- " R. E. Cunningham,RA,F.SAME
Cityof Omaha t '�' Director
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Jim Suttle,Mayor
April 9, 2013
Honorable President
and Members of the City Council,
The attached proposed Resolution approves an Inter-Local HOME Investment Partnerships
Program (HOME) loan agreement in the amount of$293,480.00 (comprised of$132,300.00 in
FY 2009 and $161,180.00 in FY 2010 HOME Program Funds) between the City of Omaha and
the City of Council Bluffs, 209 Pearl Street, Council Bluffs, Iowa 51503.
The City of Council Bluffs will use the HOME Program funds to provide partial financing for
land acquisition and/or new construction-related costs within two (2) to four (4) multi-family
housing projects. The FY 2009 funds will assist in providing rental housing to six (5) qualified
low- and moderate income households whose annual household incomes are 80% and below the
Median Income (MFI) By Family Size and one (1) rental unit shall be made available to a family
whose annual household income is 50% and below the MFI for a total of six (6) units. The FY
2010 funds will provide financial assistance for three (3) rental housing units of which two (2)
shall be made available to families whose annual household incomes are 80% and below the MFI
while the remaining one (1) unit shall be rented to a family whose annual household income is
50% and below the MFI.
The Omaha City Council approved the HOME Investments Partnerships Program Consortium
Cooperation Agreement between the City of Omaha and the City of Council Bluffs on June 19,
2012 by Resolution No. 812. The HOME Consortium Cooperation Agreement created the
Omaha-Council Bluffs Home Consortium for the purposes of receiving an increased HOME
Fund allocation from the U.S. Department of Housing and Urban Development (HUD) and
administering the HOME Program as a single grantee. The HOME Consortium Cooperative
Agreement shall be in full force and effect until September 30, 2015.
The Project for FY 2009 is included in the FY 2009 Consolidated Submission for Community
Planning and Development Programs (Consolidated Plan) approved by the City of Omaha City
Council on FY 2009 Consolidated Plan on October 28, 2008 by Resolution No. 1492, as
amended April 14, 2009 by Resolution No. 235, and as amended again June 9, 2009 by
Resolution No. 494. FY 2010 HOME funds are included in the FY 2010 Consolidated Plan was
approved by the City Council, City of Omaha on December 15, 2009 by Resolution No. 1347.
Honorable President
and Members of the City Council
Page 2
Funding in the amount of$132,300.00 shall be payable from the FY 2009 and $161,180.00 shall
be payable from FY 2008 HOME Investment Partnerships Housing Development Program, Fund
No. 12179, Organization No. 128042.
The total estimated cost for the Project is $132,300.00 for FY 2009 funds and will be funded
with FY 2009 HOME funds. Total cost for the FY 2010 Project is estimated at $181,180.00 and
will be paid with FY 2010 HOME funds.
Authorizing the approval of this proposed Resolution would allow the City of Council Bluffs to
make affordable housing opportunities available to low and moderate-income residents of
Council Bluffs, Iowa.
Your favorable consideration of this Resolution will be appreciated.
Respectfully submitted, Referred to City Council for Consideration:
/2 ,T E . 312 ('7 27. 1
. E. Cunningham, RA, F.SAME Date Mayor's ffic Date
,pvf Planning Director
Approved: A. . ove :
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^�'�jg vn' - J r ) /11
Allen Herink v'Vr ) Date uman Rig s and Relatio s Department Date
Acting Finance Director
1827 dlh
INTER-LOCAL HOME AGREEMENT
(PARTIAL FUNDING FOR ACQUISITION OF LAND AND/OR NEW CONSTRUCTION
RELATED COSTS OF TWO TO FOUR MULTI-FAMILY HOUSING DEVELOPMENT
PROJECTS)
THIS AGREEMENT is entered into by and between the City of Omaha, Nebraska and
the City of Council Bluffs, Iowa, a municipal corporation, 209 Pearl Street, Council Bluffs, Iowa
51503 (sometimes hereinafter referred to as the "Subrecipient") based on terms, conditions and
provisions as set forth below.
RECITALS:
WHEREAS, the City of Omaha (hereinafter referred to as "the City") is a municipal
corporation located in Douglas County, Nebraska, and is organized and existing under the laws
of the State of Nebraska, and is authorized and empowered to exercise all powers conferred by
the State constitution, laws, Home Rule Charter of the City of Omaha, 1956, as amended, and
local ordinances, including but not limited to, the power to contract; and,
WHEREAS, the City of Council Bluffs is a municipal corporation located in
Pottawattamie County, Iowa, and is organized and existing under the laws of the State of Iowa,
and is authorized and empowered to exercise all powers conferred by the Iowa State constitution,
laws and local ordinances including,but not limited to, the power to contract; and,
WHEREAS, the City of Omaha annually receives HOME Investment Partnerships
Program (HOME) funds under Title II of the Cranston-Gonzalez National Affordable Housing
Act, as amended, for the purpose of providing affordable housing opportunities for low-income
households; and,
WHEREAS, on July 24, 2001, by Resolution No. 1874, the Omaha City Council
approved Home Investment Partnerships Program Consortium Cooperation Agreement
(Cooperation Agreement) between the City of Omaha and the City of Council Bluffs for the
purposes of receiving a HOME Fund allocation from the U.S. Department of Housing and Urban
Development and administering the HOME Program as a single grantee; and,
WHEREAS, the City of Omaha and the City of Council Bluffs are considered
geographically contiguous units of local government; and,
WHEREAS, the Cooperation Agreement provided for the transfer of a portion of the
HOME Funds received by the City of Omaha, as lead member of the consortium, to the City of
Council Bluffs based on the proportion of HOME Funds attributable to the City of Council
Bluffs' participation in the Consortium, less ten percent to be used by the City of Omaha for
administrative purposes; and,
WHEREAS, the City of Omaha has applied for and received HOME Investment
Partnerships Program (hereinafter referred to as "HOME") Funds under Title II of the National
Affordable Housing Act of 1990, for the purpose of providing affordable housing opportunities
for low income households; and,
WHEREAS, the Omaha—Council Bluffs Consortium FY 2009 Consolidated Submission
for Community Planning and Development Programs (hereinafter referred to as "Consolidated
Plan"), outlining priorities, programs and funding allocations for the 2009 program year
approved by the City Council, City of Omaha on October 28, 2008 by Resolution No. 1492, as
amended April 14, 2009 by Resolution No. 235, and as amended again June 9, 2009 by
Resolution No. 494; and the FY 2010 Consolidated Plan was approved by the City Council, City
of Omaha on December 15, 2009 by Resolution No. 1347, as amended; and,
WHEREAS, the City of Council Bluffs has submitted applications for partial
financing for land acquisition and/or new construction of nine (9) rental units within two (2) to
four (4) multiple-family housing projects through the use of $132,300.00 in FY 2009 HOME
funds and $161,180.00 in FY 2010 HOME funds for a total of$293,480.00. All nine (9) units
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shall be located on sites to be determined at a later date within the City of Council Bluffs. Seven
(7) of the units are to be made available to qualified low- and moderate-income households
whose annual household incomes are 80% and below of the Median Income By Family Size and
two (2) shall be made available to families whose annual household incomes are 50% and below
the MFI, over the term of the Agreement(hereafter referred to as the "Project"); and,
WHEREAS, the City of Council Bluffs has been involved in the acquisition of land and
new construction of multiple-family housing projects; and,
WHEREAS, the Consolidated Plan identified that the Projects provide or improve
housing which is determined to benefit low- and moderate-income persons, therefore the Project
is consistent with the Consolidated Plans and are eligible for funding; and,
WHEREAS, the City of Omaha wishes to enter into an Inter-Local Agreement with the
City of Council Bluffs in utilizing such HOME funds; and,
WHEREAS, the City of Council Bluffs has the same program year, January 1 to
December 31, as the City of Omaha; and,
WHEREAS, it is in the best interest of the City of Omaha and the residents thereof that
the City of Omaha enter into an Inter-Local Agreement with the City of Council Bluffs to
provide partial funding for the completion of this worthwhile Project.
NOW, THEREFORE, IN CONSIDERATION OF THESE MUTUAL 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 "Subrecipient" shall mean — a public or private non-profit agency, authority or
organization receiving HOME funds to undertake eligible activities. In this
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Agreement, the Subrecipient shall be the City of Council Bluffs, an Iowa
municipal corporation, Community Development Department, 209 Pearl Street,
Council Bluffs, Iowa 51503.
1.02.1"Contractor" shall mean—the City of Council Bluffs.
1.03 "Director" shall mean—the Planning Director of the City of Omaha.
1.04 "Recipient" shall mean—the City of Omaha.
1.05 "Developer" shall mean — qualified for-profit or non-profit organizations(s) that
the Subrecipient approves to undertake eligible HOME Projects.
1.05.1 "Client" shall mean — a qualified participant making application to the
Developer/Property Owner to occupy a HOME assisted unit.
1.06 "HUD" shall mean—the U.S. Department of Housing and Urban Development.
1.07 "HOME Funds" shall mean — that portion of the HOME Investment Partnerships
Program funds awarded to the City, subject to and conditioned upon actual receipt
of same by the City, as may be available to grant during the FY 2009 program
year for the use specified herein in an amount not to exceed $132,300.00 and
$161,180.00 in FY 2010 program payable from the HOME Housing Development
Program, Fund No. 12179 Organization No. 128042, subject to the terms,
conditions and requirements of said Loan Fund Agreement.
1.08 "Floating Units" shall mean — the designated HOME-assisted units may change
over time as long as the total number of HOME-assisted units in the Project
remains constant; the units are comparable in size, features and number of
bedrooms to the non-HOME-assisted units; and each of the designated HOME-
assisted units is occupied by a qualified low- and moderate-income household
whose annual household income is at or below 80% of the Median Income by
Family Size (MFI), as defined and periodically adjusted by HUD, at the time of
initial occupancy. (Exhibit "B") All HOME-assisted units shall be occupied as
the household's principal place of residence throughout the Affordability Period.
1.09 "Property" or "Project(s)" shall mean — Nine (9) HOME-assisted, floating units
constructed within two (2) to four (4) multiple-family housing development
projects at locations to be determined at a later date.
1.10 "HOME Program Multifamily Assistance" shall mean — a HOME program grant
provided to Developers for land acquisition or new construction-related costs.
For each individual project with five or more HOME-assisted units, at least
twenty percent (20%) of the HOME-assisted rental units must be occupied by
households with annual incomes equal to or less than fifty percent (50%) of
median family income (MFI). Tenants occupying such units shall be governed by
Low HOME rent levels. Maximum MFI for the balance of the HOME-assisted
units shall be 80% and below of MFI. The Project shall provide HOME Program
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Multi-family Assistance for two to four properties, wherein HOME-assisted units
shall be floating units. Developers of assisted Properties shall be required to
execute for the benefit of Subrecipient a Mortgage, Promissory Note and
Covenant to ensure assisted units meet affordability requirements for requisite
periods.
1.11 "Construction Financing" shall mean, but is not limited to — billings for
construction work, closing costs, profit and overhead, predevelopment and public
improvement costs, financing, legal, accounting, architectural or construction
supervision costs, costs for materials, labor, utility hookups and site preparation
associated with the construction of the Project.
1.11.1 Profit and overhead of the Developer's general contractor shall not
exceed 15% of hard construction cost.
1.12 "Construction Completion" shall mean — the date the Project has been certified by
the City as meeting 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 Property
Rehabilitation Standards (PRS), Nebraska Department of Economic Development
(NDED) Rehabilitation Standards, and accessibility requirements, where
applicable.
1.13 "Project Completion" shall mean — the date leveraged funds have been received
by the Subrecipient and allocated to the Project, Construction Completion has
been certified and approved by the Subrecipient, all HOME funds have been
disbursed, and all units have been occupied by eligible households.
1.14 "Project Close Out" shall mean — the dates all project HOME funds have been
disbursed and the Subrecipient and the City of Omaha have completed HUD close
out procedures (24 C.F.R. 92.507 and OMB Circular A-87)) (Exhibit "A"). The
distinction between Project Close Out and Project Completion is that occupancy
requirements are required to be satisfied for Project Completion.
1.15 "Affordability Period" (24 C.F.R. 92.252(e)) shall mean — that time period, up to
twenty (20) years after Project Close Out in which Subrecipient and its
Developers shall keep assisted units affordable. During the Affordability Period,
the Subrecipient must ensure that HOME-assisted units continue to meet rent,
property standards, and occupancy requirements and as described in Sections
2.01, 4.07, 5.03 herein for a period of twenty (20) years commencing at Project
Closeout. In the event the Term of the Agreement would be extended, the
Affordability Period would be extended for the additional time. Alternately, in
the event Project Close Out would be accelerated, the term of the Agreement and
Affordability Period may be moved forward correspondingly.
1.16 "Low-Income Family or Household" shall mean — a household whose annual
income does not exceed 80% of the median family income for the Omaha NE-IA
Metropolitan Statistical Area as determined by HUD (Exhibit "B").
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1.16.1 "HOME Program Rents" (Exhibit "N") (24 C.F.R. 92.252) shall mean —
the maximum rents (including utility allowance) for the Omaha, NE-IA
Metropolitan Statistical Area as established by HUD as of the effective
date of the lease. These rents shall be HOME High and Low rents as
established by HUD and applied in accordance with Section 2.01
("Exhibit D"). In no event shall rents be required to be lower than the
designated HOME rent limit in effect for the Project at time of project
commitment. If the lease converts to a month to month lease after initial
12-month lease, the HOME rent limits and utility allowance in effect for
each separate month apply.
If the unit receives Federal or State project-based rental subsidy and the
very low-income family pays a contribution toward rent not more than
30 percent of the family's adjusted income, the maximum rent (i.e.
tenant contribution plus project-based rental subsidy) is the rent
allowable under the Federal. or State project-based subsidy program (24
C.F.R. 92.252(b)(2). 235
1.17 "Program Income" shall mean — the gross income received by the Subrecipient
directly generated from the use of HOME Funds (24 C.F.R. 92.503). When such
income is generated by an activity that is only partially assisted with HOME
Funds, the income shall be prorated to reflect the percentage of HOME Funds
used (See Exhibit"C" attached hereto and incorporated herein by this reference as
though fully set forth). Any program income funds received during the term of
this Agreement shall be returned to the City within thirty (30) days prior to any
additional distribution of HOME Funds.
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SECTION 2. RESPONSIBILITIES OF SUBRECIPIENT
2.01 Overall Project Performance The Subrecipient shall use the FY 2009 HOME
Funds in the amount of$132,300.00 and FY 2010 HOME funds in the amount of
$161,180.00 for the following projects to assist qualified low- and moderate-
income renters to occupy affordable rental units as their principal place of
residence. Occupants shall be those households whose annual incomes are 80%
and below the Median Family Income (Exhibit"B") as set forth in Section 2.01.1.
2.01.1 FY 2009 Project Achievements
Total Projects
Multiple Family Housing Units Total HOME Total Low/Moderate
(a minimum of) Assisted Units Income Units
6 6 6
Number of Maximum Percent
Low/Moderate of Area Maximum Rent for
Households (minimum) Median Income Permitted HOME-assisted units
5 80% High HOME Rent
1 50% Low HOME Rent
Number of Households Permitted
to be Above Maximum Percent of Area
Low/Moderate Households Median Income Permitted
0 None
2.01.2 FY 2010 Project Achievements
Total Projects Multiple
Family Housing Units Total HOME Total Low/Moderate
(a minimum of) Assisted Units Income Units
3 3 3
Number of Maximum Percent of
Low/Moderate Area Maximum Rent for
Households (minimum) Median Income Permitted HOME-assisted units
2 80% High HOME Rent
1 50% Low HOME Rent
Number of Households Permitted
to be Above Low/Moderate Maximum Percent of Area
Households Median Income Permitted
0 None
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2.02 Project Budget. The Subrecipient will leverage additional public/private funds
with the HOME funds to complete the project.
2.02 Project Budget. The Subrecipient shall use the HOME Program funds identified
in Section 2.01 to leverage additional public and private funds following the
Subrecipient's Subsidy Layering Policy(Attachment 6). When the specific project
has been identified including site, developer and sources of funding the
Subrecipient shall and provide a completed Project Budget to the City.
2.03 Term of the Agreement.
2.03.1 This Agreement shall be in full force and effect and shall end the first day
following the end of the 20-year Affordability Period. Project completion
as well as services of the Developer will start effective the date of the
proceed order issued by the City and Levels of Project Performance stated
in Section 2.01 shall be completed within 24 months. This date may be
extended by the Planning Director. In the event the Project Completion
Date for the Levels of Project Performance would be accelerated, the
Term of the Agreement and Affordability Period shall be moved forward
correspondingly.
SECTION 3. CONDITIONS FOR RECEIPT OF CITY FINANCING
3.01 Documents Required by City. Subrecipient shall submit satisfactory written
confirmation of the following documents to limit the Subrecipient's and the City's
liability hereunder. The City shall not assume any obligation to make any or all
of the above-referenced funding available, nor shall the City incur any liability
hereunder, unless and until the Subrecipient has received and submitted the
documents listed below.
3.01.1 Property Insurance. Subrecipient shall require Developers/property owners to
procure and maintain, at a minimum, fire and extended coverage insurance in
an amount sufficient to protect the City of Council Bluffs' interest in the
property during the term of the Agreement and financing security documents
(OMB Circular A-110) (Exhibit "D"). The insurance policy shall include the
City of Council Bluffs and the City of Omaha as additional insured. Written
evidence of such insurance shall be submitted to the City of Council bluffs for
approval. In the event of damage of the property, any insurance proceeds are
to be applied, at the discretion of the City of Council Bluffs Community
Development Director, to the reconstruction of the property or repayment, in
full, of the funding.
3.01.2 Performance and Labor Material Payment Bond and/or an Irrevocable Letter
of Credit. Subrecipient's Developer shall acquire and maintain performance
bond and/or letter of credit in force for one year following the completion of
the Construction Work from the Developer/General Contractor and all
subcontractors in an aggregate amount of the contract bid for the Properties.
The Bonds and/or Letters of Credit shall be in favor of the Subrecipient and
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shall be submitted to the Subrecipient's City of Council Bluffs Community
Development Depai lucent Director for review and approval. The Community
Development Department Director reserves the right to reject the Letters of
Credit and Choice of Surety of the Bonds. Upon written request by the
Developer, the City of Council Bluffs Community Development Depai li lent
Director may waive this requirement.
3.01.3 Contractors' Insurance and Workers' Compensation. The Subrecipient or its
contractors and subcontractors shall submit Certificates of Insurance in favor
of the City of Council Bluffs for review and approval by the City of Council
Bluffs Community Development Director. The insurance coverage shall
include pollutant liability for lead reduction work, if applicable. Workers'
Compensation and, at a minimum, the following amount of coverage:
• Contractor's Personal Liability $1,000,000.00
• Combined Bodily Injury and Property Damage $2,000,000.00
($1,000,000.00 each occurrence)
• Produce, Including Completed Operations $1,000,000.00
3.01.4 Security for HOME funds. Subrecipient shall require the Developer to
execute a grant agreement/covenants/deed of trust and promissory note
sufficient to secure the HOME funds throughout the affordability in
accordance with HOME Program regulations.
3.01.5 Plan Submissions. Subrecipient shall submit all plans, working drawings
and/or specifications necessary or incidental to this Project to the Director for
review and approval.
3.01.6 Affirmative Marketing Plan. A copy of the Subrecipient's and its
subcontractor's affirmative marketing plan shall be submitted to the City for
review and approval.
3.01.7 Minority/Women Owned Business Enterprise Plan. Subrecipient shall submit
to the Director for review and approval a minority and women business
participation plan, 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. (Exhibit"0")
3.01.8 Eligible Contractors. Subrecipient 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 Subrecipient shall approve all contractors and
subcontractors prior to being hired by the Developer or designee.
3.01.9 Funding Compliance Deadline. In the event that all conditions of funding are
not met on or before June 1, 2014, then this Agreement shall automatically
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become null and void and the City shall not be deemed to have assumed any
obligation or liability hereunder. Upon the sole discretion of the Director, this
date may be extended.
3.01.10 Section 504. Subrecipient and its Developers shall comply with Section 504
of the Rehabilitation Act of 1973 (29 U.S.C. 706), which requires that new
construction of multi-family projects shall be designed and constructed to be
readily accessible to and usable by individuals with handicaps and the
Subrecipient shall provide all necessary information and documents including
but not limited to a project location, description and site plans. Multi-family
housing means a project containing five or more dwelling units. A minimum
of five percent (5%), or at least one unit, of the total dwelling units shall be
readily accessible to and usable by individuals with mobility impairments and
two percent (2%), or at least one unit, of the total units shall be accessible to
the hearing and/or visually impaired (see Attachment 5, CPD Notices 00-9,
02-03 and 00-10) attached hereto and incorporated herein).
SECTION 4. PROJECT RESPONSIBILITIES OF THE SUBRECIPIENT
4.01 Eligible Use of Funds. The Subrecipient does hereby certify, contract and agree that
any and all funding obtained or made available hereunder shall be used solely and
exclusively for the purposes described herein.
4.02 Terms and Conditions. The Subrecipient shall abide by all terms and conditions of
this Agreement and shall be responsible for the security and maintenance of the sites
described in Section 1.08 herein.
4.03 Use Restrictions. The Subrecipient agrees that each of the housing units assisted
pursuant to this Agreement shall be occupied by a Low-Income Family as their
principal place of residence throughout the Affordability Period.
4..04 Breach of Agreement. If through breach of this Agreement the Subrecipient fails to
apply the occupancy, affordability and use restrictions as described herein, HOME
funds previously provided to the Subrecipient through fulfillment of this Agreement
may be required to be returned to the City.
4.05 Ineligible Costs. The Subrecipient shall be responsible for payment of any Project
costs that exceed those specified in this Agreement.
4.05.1 Eligible Costs. The Subrecipient shall not request disbursement of funds
under this Agreement until the funds are needed for payment of eligible costs
as described in Section 1.09 herein.
4.05.1.1 Luxury Items. Property amenities shall be those amenities
reasonably anticipated in comparable properties. Any
items determined by the City as luxury items shall not be
considered an eligible cost for construction.
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4.06 Lead-Based Paint Prohibition. Subrecipient or its Developer(s) shall not use lead-
based paint in the performance of this Agreement, including the performance of
any subcontractor (42 USC 4821 et seq., 24 C.F.R. 92.355 and 24 C.F.R. Part 35).
"Lead-based Paint" means any paint containing more than six one-hundredths of
one (1) per centum of lead by weight (calculated as lead metal) in the total
nonvolatile content of the paint, or the equivalent measure of lead in the dried
film of paint already applied. The Subrecipient further agrees to abide by Federal
requirements regarding lead-based paint poison prevention.
4.07 Ongoing Property Restrictions. During the term of this Agreement and that of
any grant, deed of trust/mortgage, covenant documents, the Subrecipient or its
Developer shall:
4.07.1 Maintain the Property 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 Property in an aggregate
amount sufficient to protect the Subrecipient's interest in the Property.
Such property insurance policy must be properly endorsed showing the
Subrecipient as an additional insured. In the event of loss or damage, the
Subrecipient shall provide immediate written notification to the City of
any loss. Proceeds from any claim under this policy may, at the discretion
of the Director, be either applied to restore or replace the improvements
damaged or be paid to the Subrecipient to satisfy the obligation to the
Subrecipient under the terms of this Agreement.
4.08 Davis-Bacon Labor Standards. Subrecipient agrees to comply with the
requirements of the Secretary of Labor in accordance with the Davis-Bacon Acts
amended (40 U.S.C. 76a-a-7), the provisions of Contract Work Hours, the Safety
Standards Act, the Copeland "Anti-Kickback" Act (18 U.S.C. 874 and 40 U.S.C.
276 (c) and all other applicable federal, state and local laws and regulations
pertaining to labor standards insofar as those acts apply to the performance of this
Agreement and the Subrecipient shall provide all necessary information and
documents including but not limited to a project location, description and site
plans. In the event Davis Bacon wage rates are triggered on any individual
property in the Project, Subrecipient and its Developer shall comply with and
ensure that all bid documents, contracts, and subcontracts contain the HUD 4010
Federal Labor Standards provisions (attached herein as Exhibit "E") and
applicable Department of Labor Wage Determination. In addition, Subrecipient
shall certify that no Developer or its subcontractors are ineligible for federally
assisted work. Once a Project is identified as subject to Davis-Bacon, all funds
involved in the Project shall be governed by Davis-Bacon Labor Standards. The
wage determination may be modified to keep it current. All actions modifying a
general wage determination apply unless notice of such action is published less
than 10 days before the contract award for the HOME assisted property in the
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Project. The wage determination is required to be updated in the event
construction has not commenced within ninety (90) days for the date of the
contract award to its Developers.
4.09 Property Standards (24 C.F.R. 92.251). The Subrecipient or its Developer(s) shall
ensure that all work performed and the Construction Work meets all state, federal
and local laws, ordinances, regulations and codes, including but not limited to,
Section 8 Housing Quality Standards for Existing Homes (HQS) as established by
HUD, the Subrecipient's Local Property Standards.
4.09.1 After completion of Construction Work, the Property must comply with
all appropriate Subrecipient codes and ordinances, Federal Section 8
Housing Quality Standards and fire safety codes (24 C.F.R. 570.02), City
of Council Bluffs Property Rehabilitation Standards and accessibility
requirements, where applicable.
4.09.2 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
HOME Program proceeds.
4.10 Affirmative Marketing Policy (24 C.F.R. 92-351). The Subrecipient agrees to
comply with the City's Affirmative Marketing Policy, or comparable policy,
attached hereto as Exhibit "F" and incorporated herein by this reference as though
fully set forth. These affirmative marketing procedures must be employed in the
advertising and marketing of this Project for the Affordability Period. In
marketing, the Subrecipient shall also conform to the nondiscrimination
provisions.
The Subrecipient must require all Developers and Owners of units constructed
under this agreement and the language of the above
4.10 must be included in all contracts and subcontracts between the Subrecipient
and the Developer or Owner.
4.11 Preconstruction Meeting. The Subrecipient and its subcontractors shall attend a
preconstruction meeting with the City Construction Specialist prior to the start of
any Construction Work.
4.12 National Environmental Policy Act of 1969. The Developer shall not begin any
construction of 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 SUBRECIPIENT
Subrecipient agrees to comply with the following requirements:
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5.01 Financial Management.
5.01.1 Accounting Standards. The Subrecipient 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 Principals. The Subrecipient shall comply with the requirements and
the standards of OMB Circular No. A-87, "Cost Principles for the States,
Local, and Indian Tribal Governments" (Exhibit "A"), and with the
requirements of OMB Circular A-110 (Exhibit "D"). Both Exhibits are
attached hereto and incorporated herein as though fully set forth.
5.01.3 Audits. The Subrecipient shall comply with all provisions and regulations
of the Program and have an annual audit completed in compliance with
OMB Circular A-133, attached hereto as Exhibit "G", 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
the Subrecipient within 30 days after receipt of audit by the
Subrecipient. Failure of the Subrecipient to comply with the
above audit requirements will constitute a violation of this
Agreement and may result in the withholding of future
payments and may constitute a default subject to default
remedies referenced herein in Section 9.
5.02 Documentation and Record-Keeping (24 C.F.R. 92.508). All Subrecipient's/
Developers' records with respect to any matters covered in this Agreement shall
be made available to the City, its designees or the Federal Government, at any
time during normal business hours, as often as the City deems necessary, to audit,
examine, and make excerpts or transcripts of all relevant data. Any contract
entered into by the Subrecipient, its Developer(s) with any subcontractors shall
include this Section to ensure said access.
5.02.1 Record Retention. The Subrecipient, its Developer(s) and their
subcontractors shall maintain such records and accounts, including
property, personnel and financial records, as are deemed necessary by the
City to assure a proper accounting for all expenses. The Comptroller
General of the United States, or any of their duly authorized
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representatives, or any duly authorized representatives of the City, as
approved by the Director, shall have access to any books, documents,
papers, records and accounts of the Subrecipient, its Developer(s) and
their subcontractors which are directly pertinent to this Project for the
purpose of making audit, examination, excerpts and transcriptions. Such
records and accounts shall be retained for five (5) years after expiration of
the Affordability Period. (OMB Circular A-110) (Exhibit"D").
5.03 Reports. The Subrecipient shall submit to the City the following reports in
accordance with 24 C.F.R. 92.505 with the submission timelines as specified.
5.03.1 Tenant/Occupancy Report. For each HOME-assisted unit, the
Subrecipient shall provide to the Director an initial tenant survey,
asset/income computation form and notarized City of Omaha Definition of
Income Form, copy of the executed lease, utility allowance table effective
on the date of the lease, citizenship attestation form for public benefit, and
race and ethnicity of household members. Attached as Exhibit "H", and
incorporated herein by this reference as though fully set forth, are copies
of the requisite forms. These forms are due at the time of initial lease
execution and annually thereafter for each tenant household occupying a
HOME-assisted unit during the Affordability Period. The Subrecipient
must also submit evidence of affirmative marketing efforts undertaken
during the calendar year reporting period. Annual reports shall be due
January 31 and shall include all information for up to and including the
end of the previous calendar year. The City will determine the reporting
format throughout the Affordability Period.
For each household or individual occupying a HOME-assisted unit in the
Property, the Subrecipient shall retain the following records for five (5)
years after the required Affordability Period as specified in Section 1.13 of
this Agreement. In the event the Term of the Agreement would be
extended, the timeframe for record retention would be extended
correspondingly.
5.03.1.1 name(s) tenant(s)
5.03.1.2 address of property
5.03.1.3 household income as a percent of Median Family income
(MFI) as determined by HUD, income verification forms
used in determining MFI including the City's Asset Form
(Exhibit"B")
5.03.1.4 household size
5.03.1.5 gender of head of household member
5.03.1.6 name and age of each household member
5.03.1.7 race/ethnicity of head of household
5.03.1.8 disability status of any household member
5.03.1.9 copy of annual lease for rental properties
5.03.2.10 evidence of affirmative marketing efforts
5.03.2.11 copy of definition of income affidavit signed by tenant
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5.03.2.12 United States Citizenship Attestation Form For Public
Benefit(Exhibit M)
5.04 Financial Status Reports. Subrecipient shall maintain financial status reports
(OMB Circular A-110) (Exhibit "D"). These reports shall accompany pay
requests. In the event pay requests are not submitted for ninety (90) days,
financial status report shall be due, at a minimum, 15 calendar days from the end
of the calendar year quarter. Attached as Exhibit "I", and incorporated herein by
this reference as though fully set forth, is a sample financial status report.
5.05 Personnel and Participant Conditions.
5.05.1 Contract Compliance Clause
5.05.1.1 Section 10-192 of the Omaha Municipal Code, Equal
Employment Opportunity Clause. (Exhibit "P") The
Subrecipient and its contractor shall not discriminate
against any employee or applicant for employment because
of race, religion, color, sex, age, sexual orientation, gender
identity, national origin, familial or handicap status. As
used herein, the word "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 Subrecipient 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.
5.05.1.2 The Subrecipient 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, sexual
orientation, gender identity, national origin, familial or
handicap status.
5.05.1.3 The Subrecipient 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.
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5.05.1.4 The Subrecipient and its contractors shall furnish to the
Human Rights and Relations Director 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 Director 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.
5.05.1.5 The Subrecipient 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
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.
5.05.1.6 The Subrecipient and its contractors shall file and shall
cause his subcontractors, if any, to file compliance reports
with the Subrecipient'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 Director. Compliance reports filed at
such times as directed shall contain information as to the
employment practices, policies, programs and statistics of
the Subrecipient, contractor and his subcontractors.
5.05.1.7 The Subrecipient and its contractors or its subcontractors
shall include the provisions of Paragraphs 5.05.1.1 through
5.05.1.7 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)
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5.05.2 Workers' Compensation. The Subrecipient shall provide Workers'
Compensation Insurance coverage for all employees involved in the
performance in this Agreement.
5.05.3 Employment Insurance and Bonding. The Subrecipient's Developers shall
purchase a blanket fidelity bond covering all employees, at a minimum, in
an amount equal to cash advances from the Subrecipient. The
Subrecipient and its Developers shall comply with bonding and insurance
requirements of OMB Circular A-110 (Exhibit "D"), Bonding and
Insurance.
5.05.4 Minority Business/Women Business Enterprise Plan (MBE/WBE). The
Subrecipient 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 "women and members of minority groups" means a
business at least fifty-one percent (51%) owned and controlled by minority
group members or women. Subrecipient will agree to adopt the City's
MBE/WBE Enterprise Plan. (Exhibit"0")
5.05.5 Section 3 - Employment of Low-Income Persons (Section 3 Clause of
HUD Act of 68, as amended, 1 U.S.C. 1701u). The Subrecipient and its
Developer(s) shall make their best efforts to comply with Section 3. The
purpose of Section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects
covered by Section 3 shall, to the greatest extent feasible, be directed to
low and very low-income persons (80% or below if MFI), particularly
persons who are recipients of HUD assistance for housing. (Exhibit "Q")
5.05.6 Conflict of Interest. The Subrecipient agrees to abide by the provisions of
24 C.F.R. 92.356 with respect to conflicts of interest, and covenants that it
presently has financial interest and shall not acquire any financial interest,
direct or indirect, which would conflict in any manner or degree with the
performance of services required under this Agreement. The Subrecipient
further covenants that in the performance of this Agreement no person
having such a financial interest shall be employed or retained by the
Subrecipient hereunder. These conflict of interest provisions apply to any
person who is an employee, agent, consultant, officer or elected official or
appointed official of the City or any designated public agencies or
subrecipients which are receiving funds under the HOME program
5.05.7 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.
5.05.7.1 The 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
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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 (Exhibit "L") available on the
Depaitnient 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 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."
5.05.7.2 The Subrecipient shall have contractors have each person
signing the application for a benefit under this agreement
execute a United States Citizenship Attestation Form For
Public Benefit (Exhibit "L") verifying eligibility status for
the purposes of receiving a public benefit. The
Subrecipient shall maintain aggregate records for the
duration of the contract showing: (a) the number of
applicants for public benefits under this agreement; and (b)
the number of applicants rejected pursuant to the lawful
presence requirement set forth in the above-referenced
Nebraska statutes. Further the Subrecipient shall provide a
summary report to the City no later than December 15th
each calendar year reflecting this applicant data for such
calendar year.
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5.05.8 Employee Classification Act. To comply with the Nebraska Employee
Classification Act, Subrecipient shall ensure 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 "N") 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.
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SECTION 6. SUBRECIPIENT'S COMPLIANCE WITH OTHER FEDERAL
REGULATIONS
6.01 Environmental Review. The Subrecipient agrees to provide to the City upon
request information and documents necessary to conduct an Environmental
Review including, but not limited to, project location, description and site plans
for the purpose to determine project compliance with the following regulations
insofar as they apply to the performance of this agreement:
6.01.1 Clean Air Act, 42, U.S.C., 1857, et seq.
6.01.2 Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.,
as amended 1318 relating to inspection, monitoring entry, reports and
information as well as other requirements specified in Section 114 and
Section 308, and all regulations and guidelines issued thereunder.
6.01.3 Environmental Protection Agency (EPA) regulations pursuant to 40
C.F.R. Part 50, as amended.
6.01.4 National Environmental Policy Act of 1969.
6.01.5 HUD Environmental Review Procedures (24 C.F.R. Part 58).
6.01.6 Flood Disaster Protection Act of 1973 (24 U.S.C. 4106 and P.L. 2234) in
regard to the sale, lease or other transfer of land acquired, cleared or
improved under the terms of the Agreement as it may apply to provisions
of this Agreement.
6.01.7 Historic Preservation requirements set forth in the National Historic
Preservation Act of 1966, as amended (16 U.S.C. 470) and the
procedures set forth in 36 C.F.R., Part 800, Advisory Council on Historic
Preservation Procedures for Protection of Historic Properties, insofar as
they apply to the performance of this Agreement. In general, this
requires concurrence from the State Historic Preservation Office for all
rehabilitation and demolition of historic properties that are forty-five (45)
years old or older or that are included on a Federal, State or local historic
property list.
6.02 Uniform Relocation Act. The Subrecipient shall comply with the applicable
regulations of the Uniform Relocation Act of 1970, as amended (URA) (42
U.S.C. 4601-4655), or Section 104 (d) of the Housing and Community
Development Act of 1974, as amended (Section 104 (d)), which require relocation
assistance be provided to resident owners, tenants, businesses and other occupants
that are displaced as a result of a federally-assisted project. In the event that the
Subrecipient or its agent displaces any tenant-occupant of the property, it shall
immediately notify the City in writing of the circumstances surrounding said
displacement and comply with 24 C.FR. 92.353.
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6.03 Fair Housing. Subrecipient shall provide fair housing services designed to further
the fair housing objectives of the Fair Housing Act (42 U.S.C. 3601-20) by
making all persons, without regard to race, color, religion, sex, national origin,
familial or handicap status, aware of the range of housing opportunities available
to them and provide fair housing enforcement, education and outreach activities
designed to further the housing objective of avoiding undue concentrations of
assisted persons in areas containing a high proportion of low- and moderate-
income persons.
6.04 Drug Free Workplace. Subrecipient shall continue to provide a drug-free
workplace in accordance with 41 U.S.C. 702 and shall submit a Certification of
the Drug Free Workplace to the City prior to disbursement of funds. See Exhibit
"J", attached hereto and incorporated herein as though fully set forth.
6.05 Soil Work Policy. The Subrecipient and its contractors and subcontractors shall
comply with the Soil Work Policy, if applicable, see Exhibit "R", which is
incorporated herein by this reference as though fully set forth.
SECTION 7. RESPONSIBILITIES OF THE CITY OF OMAHA
7.01 Performance Monitoring. The City will monitor the performance standards of the
Subrecipient as stated herein. Substandard performance as determined by the City
will constitute non-compliance with this Agreement. If action to correct such
substandard performance is not taken by the Subrecipient within a reasonable
period of time after being notified by the City, contract suspension or termination
procedures may be initiated.
7.02 Payments. It is expressly agreed and understood that the total amount to be paid
by the City under this Agreement shall not exceed $293,480.00 comprised of
$132,300.00 in FY 2009 HOME funds and $161,180.00 FY 2010 HOME funds.
The payment of these funds is subject to and conditioned upon actual receipt by
the City of the same. Should adequate funding not be available to the City, the
City shall notify the Subrecipient as soon as reasonably possible and the
Agreement will be terminated.
7.02.1 Funds Allocated to the Subrecipient. Payments will be contingent on
Duties and Conditions specified herein. Drawdowns for the payment of
eligible expenses shall not be made until the funds are needed based upon
the value of the construction, administration, or professional services work
completed at the time the payment request is made.
7.02.2 Obligation for Payment. In no event shall the City become obligated to
make any payments for any work performed, materials furnished, expense
incurred, or any other expenditure of any kind whatsoever, unless same is
expressly included in this Agreement, nor shall the City incur any liability
hereunder, unless and until the Subrecipient has timely and fully complied
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with its duties and obligations hereunder. No payments shall be made for
any work, labor,material or expenses incurred the Director deems to be:
7.02.2.1 not in conformance with applicable state, federal and/or local
laws, including but not limited to, the building, plumbing
and/or electrical codes; or,
7.02.2.2 not in conformance with all plans, working drawings and/or
specifications as approved.
7.02.2.3 unacceptable or substandard; or,
7.02.2.4 not in accordance with this Agreement or related contracts as
approved for this Project.
7.03 Progress Payments. Progress payments and final payment, as may be authorized
by the Director or his designated representative, are subject to:
7.03.1 Receipt of Subrecipient's loan determination documents, copies of
executed loan documents and eligibility documentation.
7.03.2 Receipt of documentation that property meets Property Standards in
Section 4.07 herein.
7.04 Inspections. The City shall perform all construction progress inspections and
final inspections to certify Project progress and Completion and provide a copy of
the inspection report to the Rehabilitation/Construction Manager and Subrecipient
prior to final disbursement of HOME proceeds. In addition, the City shall
perform on-site inspections of Property every one to three years from project
completion to ensure compliance with property standards (24 C.F.R. 92.504
(c)(4)(d)). A copy of all inspection reports shall be submitted to the Subrecipient
throughout the affordability period.
7.04.1 Construction Progress Reports. The Subrecipient shall provide access to
the construction site for purposes reporting to the Director (AIA G702
Form or comparable document) describing the progress of construction,
and any significant problems and/or delays in construction on this project.
Reports will be submitted at the time of each pay request, or by the 15th
day of each month if no pay request is made before the 15th day of the
month (or upon written request from the Director, but no more frequently
than monthly). The progress reports are required until such time as all
Construction Work is completed and the City issues the final payment of
construction to the Subrecipient.
7.04.2 Payment for Inspections. The City shall submit request for payment to the
Subrecipient for all construction inspections conducted by the City of
Omaha in the amount of $42.00 per hour. Annual monitoring inspection
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following construction completion will not require payment to the City by
the Subrecipient.
7.05 Technical Assistance. The Director shall assist the Subrecipient in the same
manner the Director provides technical assistance to other Subrecipients during
the construction phase to ensure compliance with such housing quality standards
and property rehabilitation standards.
SECTION 8. MUTUAL AGREEMENTS BETWEEN CITY AND SUBRECIPIENT.
8.01 Release of Information Laws. The Subrecipient specifically hereby states, agrees
and certifies that it is familiar with the limited purpose set forth in the Federal
Laws, Rules and Regulations, and in the laws of the State of Nebraska, for which
personal information requested may be used and that the information received
will be used solely for those limited purposes and not to harass, degrade or
humiliate any person. The information released shall be used for the limited
purposes stated, and the Subrecipient further agrees to indemnify and hold
harmless the City for any liability arising out of the improper use by the
Subrecipient of information provided.
8.02 Applicable Laws. Parties to this Agreement shall conform with all existing and
applicable City ordinances, resolutions, state laws, federal laws, and all existing
and applicable rules and regulations. Iowa law will govern the term and the
performance under this Agreement.
8.03 Interest of City. Pursuant to Section 8.05 of the Home Rule Charter, no elected
official or any officer or employee of the City shall have a financial interest,
direct or indirect, in any City agreement. Any violation of this section with the
knowledge of the person or corporation contracting with the City shall render the
Agreement voidable by the Mayor or Council.
8.04 Independent Contractor. Nothing contained in this Agreement is intended to, or
shall be construed in any manner, as creating or establishing the relationship of
employer/employee between the parties. The Subrecipient shall at all times
remain an independent contractor with respect to the services to be performed
under this Agreement. The City shall be exempt from payment of all
Unemployment Compensation, FICA, retirement, life and/or medical insurance
and Worker's Compensation Insurance as the Subrecipient is an Independent
Contractor.
8.05 Project Roles. The Subrecipient shall ensure that the Project meets the objectives
stated herein. The City has selected the Subrecipient to assist in the Project since
it is consistent with the Consolidated Plan. With respect to this Project, the City
is not acting as the Subrecipient or Developer's architect or engineer. The City
makes no warranties, express or implied, as to the Construction Work. The City
owes no duty to the Subrecipient or any other persons that shall arise because of
any inspection of the premises by the City's agents or employees.
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8.06 Captions. Captions used in this Agreement are for convenience and are not used
in the construction of this Agreement.
8.07 Merger. This Agreement shall not be merged into any other oral or written
agreement, lease or deed of any type.
8.08 Modification. This Agreement and any related documents securing the financing
contain the entire agreement of the parties. No representations were made or
relied upon by either party other than those that are expressly set forth herein. No
agent, employee, or other representative of either party is empowered to alter any
of the terms herein unless done in writing and signed by an authorized officer of
the respective parties,pursuant to Section 10-142 of the Omaha Municipal Code.
8.09 Assignment. The Subrecipient may not assign its rights or obligations under this
Agreement without the express prior written consent of the City.
8.10 Assignment. The Developer may not assign its rights or obligations under this
Agreement without the express prior written consent of the Community
Development Director of the Subrecipient.
8.11 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.
8.12 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 "K", 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.
8.13 Reversion of Assets. Upon the expiration of this Agreement, the Subrecipient
shall transfer to the City of Omaha any HOME funds on hand at the time of
expiration and any accounts receivable attributable to the use of HOME funds (24
C.F.R. 92.504(c)(2)(vii)).
8.14 Indemnification. The Subrecipient shall indemnify and hold the City harmless
from and against: (1) any and all claims arising from contracts between the
Developer and third parties made to effectuate the purposes of this Agreement;
and, (2) any and all claims, liabilities or damages arising from the preparation or
presentation of any of the work covered by this Agreement.
8.15 Unenforceable Provisions. Any provision of this Agreement, which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be in effect to
the extent of such prohibition or enforceability without invalidating the remaining
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provisions hereof or affecting the validity or enforceability of such provision in
any other jurisdiction.
8.16 Disclosure of Lobbying. The Subrecipient shall certify and disclose, to the best of
its knowledge and belief, that:
8.16.1 No Federal appropriated funds have been paid or will be paid, by or on
behalf of the Subrecipient, to any person for influencing or attempting to
influence an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal
contract, the making of any Federal grant, the making of any Federal loan,
the entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment or modification of any Federal
contract, grant, loan, or cooperative agreement.
8.16.2 If any funds other than Federal appropriated funds have been paid or will
be paid to any person for influencing or attempting to influence an officer
or employee of any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in
connection with this Federal contract, grant, loan, or cooperative
agreement, the Subrecipient shall complete and submit standard Form-
LLL, "Disclosure Form to Report Lobbying", in accordance with its
instructions.
8.16.3 The language of this certification 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.
8.17 Notices. The City and the Subrecipient hereby expressly agree that for purposes
of notice, including legal service or process, during the term of this Agreement,
and for the period of any applicable statute of limitations thereafter, the following
named individuals shall be authorized representatives of the parties:
1) City:
Director
Planning Department
City of Omaha
1819 Farnam Street, Room 1111
Omaha, Nebraska 68183
2) Subrecipient:
Director
Community Development Department
City of Council Bluffs
209 Pearl Street
Council Bluffs, Iowa 51503
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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.
8.18 Applicability. This Agreement shall be binding upon the parties hereto and shall
run with the Property.
SECTION 9. DEFAULT PROVISIONS
9.01 Remedies. If, through any cause, the Subrecipient shall fail to fulfill in a timely
and proper manner any obligations under this Agreement, or violate any of the
covenants, representations or agreements hereof, the City may upon written
notice, and the Developer's failure within thirty (30) days of the date of such
notice to cure the alleged violation, terminate this Agreement or such parts thereof
as to this Agreement, and may initiate proceedings for any damages caused to the
City by reason of such default and termination.
9.02 Non-Recourse Loan. The HOME Program Repayable Loan is a non-recourse
loan; therefore, in the event of a default, the City shall rely solely upon the
Property which is secured by the deed of trust which is the security for the non-
recourse promissory note and will not initiate or participate in any claim or
proceedings against the maker of the non-recourse promissory note or its partners
(or the members, or officers, or directors, or shareholders of any partner) for
payment of any sum due under the non-recourse promissory note or any other
sum due under the deed of trust.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
indicated below:
CITY OF OMAHA, CITY OF COUNCIL BLUFFS,
a Municipal Corporation a Mu 'cipal Corporation
►70 • E CI OF OMAHA MA , IT OF FFS
ATTEST: ATTEST: ,�
CIT ERK,CITY OF OMAHA CITY CLERK,CITY COUNCIL BLUFFS
Date I/4A? Date b.-d /3
OVE AS TO F RM: r APPROV S TO FORM:
ASS TANT ITY ATTORNEY DA CITY ATTORNEY DATE
CIT OF OMAHA CITY OF COUNCIL BLUFFS
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SCHEDULE OF EXHIBITS
Agreement
Exhibit Location Description
A 1.14, 5.01.2 OMB Circular A-87
B 1.08, 1.14, 2.01 and 5.03.1.3 Median Family Income Chart
C 1.17 Definition- Program Income
D 3.01.1, 5.01.1, 5.01.2, 5.02.1, OMB Circular A-110
5.04 and 5.05.3
E 4.08 Davis Bacon Federal Labor Standards
(HUD 4010)
F 4.10 Affirmative Marketing Policy
G 5.01.3 OMB Circular A-133
H 5.03.1 Tenant/Occupancy Report
I 5.04 Financial Status Reports
J 6.04 Drug-Free Workplace Certification
K 8.12 Termination - 24 C.F.R. 85.43 - 85.44
L 5.03.2.12, 5.05.7.2 United States Citizenship Attestation
Form For Public Benefit
M 5.05.8 Affidavit for Employee Classification Act
N 1.16.1 HOME Program Rents
O 3.01.7, 5.05.4 Minority and Women Enterprise Plan
P 5.05.1.1 Section 10-192 of the Omaha
Municipal Code, Equal Employment
Opportunity Clause
Q 5.05.5 Section 3 Clause
R 6.05 Soil Work Policy
ATTACHMENTS:
1 City of Omaha Definition of Income
2 Exemption from Municipal Code Section 10-196
3 CPD Notices 00-9, 02-03 and 00-10
4 Council Bluffs Project Funding Commitments
5 Subsidy Layering Policy
-28-
X ,' //7-- 4
OMB CIRCULAR A-87(REVISED 05/10/04)
CIRCULAR NO. A-87
Revised
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Cost Principles for State, Local, and Indian Tribal Governments
1. Purpose.This Circular establishes principles and standards for determining costs for Federal
awards carried out through grants,cost reimbursement contracts,and other agreements with
State and local governments and federally-recognized Indian tribal governments(governmental
units).
2.Authority.This Circular is issued under the authority of the Budget and Accounting Act of
1921,as amended;the Budget and Accounting Procedures Act of 1950,as amended;the Chief
Financial Officers Act of 1990;Reorganization Plan No. 2 of 1970; and Executive Order No.
11541 ("Prescribing the Duties of the Office of Management and Budget and the Domestic
Policy Council in the Executive Office of the President").
3. Background. As part of the governmentwide grant streamlining effort under P.L. 106-107,
Federal Financial Award Management Improvement Act of 1999, OMB led an interagency
workgroup to simplify and make consistent,to the extent feasible,the various rules used to
award Federal grants. An interagency task force was established in 2001 to review existing cost
principles for Federal awards to State, local,and Indian tribal governments; Colleges and
Universities; and Non-Profit organizations. The task force studied Selected Items of Cost in each
of the three cost principles to determine which items of costs could be stated consistently and/or
more clearly. A proposed revised Circular reflecting the results of those efforts was issued on
August 12, 2002 at 67 FR 52558. Extensive comments on the proposed revisions,discussions
with interest groups, and related developments were considered in developing this revision.
4. Rescissions. This Circular rescinds and supersedes Circular A-87, as amended, issued May 4,
1995.
5. Policy. This Circular establishes principles and standards to provide a uniform approach for
determining costs and to promote effective program delivery, efficiency,and better relationships
between governmental units and the Federal Government. The principles are for determining
allowable costs only. They are not intended to identify the circumstances or to dictate the extent
of Federal and governmental unit participation in the financing of a particular Federal award.
Provision for profit or other increment above cost is outside the scope of this Circular.
6. Definitions.Definitions of key terms used in this Circular are contained in Attachment A,
Section B.
7. Required Action.Agencies responsible for administering programs that involve cost
1
reimbursement contracts, grants,and other agreements with governmental units shall issue
regulations to implement the provisions of this Circular and its Attachments.
8. OMB Responsibilities. The Office of Management and Budget(OMB)will review agency
regulations and implementation of this Circular,and will provide policy interpretations and
assistance to insure effective and efficient implementation.Any exceptions will be subject to
approval by OMB. Exceptions will only be made in particular cases where adequate justification
is presented.
9. Information Contact. Further information concerning this Circular may be obtained by
contacting the Office of Federal Financial Management,Financial Standards and Reporting
Branch, Office of Management and Budget, Washington,DC 20503,telephone 202-395-3993.
10.Policy Review Date. OMB Circular A-87 will have a policy review three years from the date
of issuance.
11. Effective Date.This Circular is effective as follows:
- Except as otherwise provided herein,these rules are effective June 9,2004.
OMB CIRCULAR NO.A-87
COST PRINCIPLES FOR STATE,LOCAL AND INDIAN TRIBAL GOVERNMENTS
TABLE OF CONTENTS
Attachment A- General Principles for Determining Allowable Costs
Attachment B- Selected Items of Cost
Attachment C- State/Local-Wide Central Service Cost Allocation Plans
Attachment D-Public Assistance Cost Allocation Plans
Attachment E- State and Local Indirect Cost Rate Proposals
ATTACHMENT A
Circular No.A-87
GENERAL PRINCIPLES FOR DETERMININGALLOWABLE COSTS
TABLE OF CONTENTS
A. Purpose and Scope
2
1.Objectives
2.Policy guides
3.Application
B.Definitions
1.Approval or authorization of the awarding or cognizant Federal agency
2.Award
3.Awarding agency
4. Central service cost allocation plan
5. Claim
6. Cognizant agency
7. Common rule
8. Contract
9. Cost
10. Cost allocation plan
11. Cost objective
12. Federally-recognized Indian tribal government
13. Governmental unit
14. Grantee department or agency
15. Indirect cost rate proposal
16. Local government
17.Public assistance cost allocation plan
18. State
C. Basic Guidelines
1. Factors affecting allowability of costs
3
2. Reasonable costs
3.Allocable costs
4.Applicable credits
D. Composition of Cost
1. Total cost
2. Classification of costs
E. Direct Costs
1. General
2.Application
3.Minor items
F. Indirect Costs
1. General
2. Cost allocation plans and indirect cost proposals
3.Limitation on indirect or administrative costs
G. Interagency Services
H. Required Certifications
A. Purpose and Scope
1. Objectives. This Attachment establishes principles for determining the allowable costs
incurred by State, local, and federally-recognized Indian tribal governments (governmental units)
under grants, cost reimbursement contracts, and other agreements with the Federal Government
(collectively referred to in this Circular as "Federal awards"). The principles are for the purpose
of cost determination and are not intended to identify the circumstances or dictate the extent of
Federal or governmental unit participation in the financing of a particular program or project.
The principles are designed to provide that Federal awards bear their fair share of cost
recognized under these principles except where restricted or prohibited by law. Provision for
profit or other increment above cost is outside the scope of this Circular.
2.Policy guides.
a. The application of these principles is based on the fundamental premises that:
4
(1)Governmental units are responsible for the efficient and effective administration of Federal
awards through the application of sound management practices.
(2) Governmental units assume responsibility for administering Federal funds in a manner
consistent with underlying agreements,program objectives,and the terms and conditions of the
Federal award.
(3)Each governmental unit, in recognition of its own unique combination of staff, facilities, and
experience,will have the primary responsibility for employing whatever form of organization
and management techniques may be necessary to assure proper and efficient administration of
Federal awards.
b. Federal agencies should work with States or localities which wish to test alternative
mechanisms for paying costs for administering Federal programs. The Office of Management
and Budget(OMB) encourages Federal agencies to test fee-for-service alternatives as a
replacement for current cost-reimbursement payment methods in response to the National
Performance Review's(NPR)recommendation. The NPR recommended the fee-for-service
approach to reduce the burden associated with maintaining systems for charging administrative
costs to Federal programs and preparing and approving cost allocation plans. This approach
should also increase incentives for administrative efficiencies and improve outcomes.
3. Application.
a.These principles will be applied by all Federal agencies in determining costs incurred by
governmental units under Federal awards(including subawards)except those with(1)
publicly-financed educational institutions subject to OMB Circular A-21, "Cost Principles for
Educational Institutions," and(2)programs administered by publicly-owned hospitals and other
providers of medical care that are subject to requirements promulgated by the sponsoring Federal
agencies. However,this Circular does apply to all central service and.department/agency costs
that are allocated or billed to those educational institutions,hospitals, and other providers of
medical care or services by other State and local government departments and agencies.
b.All subawards are subject to those Federal cost principles applicable to the particular
organization concerned. Thus, if a subaward is to a governmental unit(other than a college,
university or hospital),this Circular shall apply; if a subaward is to a commercial organization,
the cost principles applicable to commercial organizations shall apply; if a subaward is to a
college or university,Circular A-21 shall apply; if a subaward is to a hospital,the cost principles
used by the Federal awarding agency for awards to hospitals shall apply, subject to the
provisions of subsection A.3.a. of this Attachment; if a subaward is to some other non-profit
organization, Circular A-122, "Cost Principles for Non-Profit Organizations," shall apply.
c. These principles shall be used as a guide in the pricing of fixed price arrangements where
costs are used in determining the appropriate price.
d. Where a Federal contract awarded to a governmental unit incorporates a Cost Accounting
Standards(CAS)clause,the requirements of that clause shall apply. In such cases,the
5
governmental unit and the cognizant Federal agency shall establish an appropriate advance
agreement on how the governmental unit will comply with applicable CAS requirements when
estimating, accumulating and reporting costs under CAS-covered contracts. The agreement shall
indicate that OMB Circular A-87 requirements will be applied to other Federal awards. In all
cases, only one set of records needs to be maintained by the governmental unit.
e. Conditional exemptions.
(1)OMB authorizes conditional exemption from OMB administrative requirements and cost
principles circulars for certain Federal programs with statutorily-authorized consolidated
planning and consolidated administrative funding,that are identified by a Federal agency and
approved by the head of the Executive department or establishment. A Federal agency shall
consult with OMB during its consideration of whether to grant such an exemption.
(2)To promote efficiency in State and local program administration,when Federal
non-entitlement programs with common purposes have specific statutorily-authorized
consolidated planning and consolidated administrative funding and where most of the State
agency's resources come from non-Federal sources,Federal agencies may exempt these covered
State-administered,non-entitlement grant programs from certain OMB grants management
requirements.The exemptions would be from all but the allocability of costs provisions of OMB
Circulars A-87 (Attachment A, subsection C.3), "Cost Principles for State,Local,and Indian
Tribal Governments," A-21 (Section C, subpart 4), "Cost Principles for Educational Institutions,"
and A-122 (Attachment A, subsection A.4), "Cost Principles for Non-Profit Organizations," and
from all of the administrative requirements provisions of OMB Circular A-110, "Uniform
Administrative Requirements for Grants and Agreements with Institutions of Higher Education,
Hospitals,and Other Non-Profit Organizations," and the agencies'grants management common
rule.
(3) When a Federal agency provides this flexibility, as a prerequisite to a State's exercising this
option,a State must adopt its own written fiscal and administrative requirements for expending
and accounting for all funds,which are consistent with the provisions of OMB Circular A-87,
and extend such policies to all subrecipients. These fiscal and administrative requirements must
be sufficiently specific to ensure that: funds are used in compliance with all applicable Federal
statutory and regulatory provisions, costs are reasonable and necessary for operating these
programs,and funds are not be used for general expenses required to carry out other
responsibilities of a State or its subrecipients.
B. Definitions
1. "Approval or authorization of the awarding or cognizant Federal agency" means
documentation evidencing consent prior to incurring a specific cost. If such costs are specifically
identified in a Federal award document, approval of the document constitutes approval of the
costs. If the costs are covered by a State/local-wide cost allocation plan or an indirect cost
proposal, approval of the plan constitutes the approval.
2. "Award" means grants, cost reimbursement contracts and other agreements between a State,
6
local and Indian tribal government and the Federal Government.
3. "Awarding agency"means(a)with respect to a grant, cooperative agreement,or cost
reimbursement contract,the Federal agency,and(b)with respect to a subaward,the party that
awarded the subaward.
4. "Central service cost allocation plan"means the documentation identifying, accumulating, and
allocating or developing billing rates based on the allowable costs of services provided by a
governmental unit on a centralized basis to its departments and agencies. The costs of these
services may be allocated or billed to users.
5. "Claim" means a written demand or written assertion by the governmental unit or grantor
seeking, as a matter of right,the payment of money in a sum certain,the adjustment or
interpretation of award terms,or other relief arising under or relating to the award.A voucher,
invoice or other routine request for payment that is not a dispute when submitted is not a claim.
Appeals, such as those filed by a governmental unit in response to questioned audit costs,are not
considered claims until a final management decision is made by the Federal awarding agency.
6. "Cognizant agency" means the Federal agency responsible for reviewing,negotiating,and
approving cost allocation plans or indirect cost proposals developed under this Circular on behalf
of all Federal agencies. OMB publishes a listing of cognizant agencies.
7. "Common Rule"means the "Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments;Final Rule" originally issued at 53 FR
8034-8103 (March 11, 1988). Other common rules will be referred to by their specific titles.
8. "Contract"means a mutually binding legal relationship obligating the seller to furnish the
supplies or services(including construction)and the buyer to pay for them. It includes all types
of commitments that obligate the government to an expenditure of appropriated funds and that,
except as otherwise authorized,are in writing. In addition to bilateral instruments,contracts
include (but are not limited to): awards and notices of awards;job orders or task orders issued
under basic ordering agreements; letter contracts; orders, such as purchase orders, under which
the contract becomes effective by written acceptance or performance; and,bilateral contract
modifications. Contracts do not include grants and cooperative agreements covered by 31 U.S.C.
6301 et seq.
9. "Cost" means an amount as determined on a cash, accrual, or other basis acceptable to the
Federal awarding or cognizant agency. It does not include transfers to a general or similar fund.
10. "Cost allocation plan" means central service cost allocation plan, public assistance cost
allocation plan,and indirect cost rate proposal. Each of these terms are further defined in this
section.
•
11. "Cost objective" means a function, organizational subdivision, contract,grant, or other
activity for which cost data are needed and for which costs are incurred.
7
12. "Federally recognized Indian tribal government" means the governing body or a
governmental agency of any Indian tribe,band,nation, or other organized group or community
(including any native village as defined in Section 3 of the Alaska Native Claims Settlement Act,
85 Stat. 688)certified by the Secretary of the Interior as eligible for the special programs and
services provided through the Bureau of Indian Affairs.
13. "Governmental unit" means the entire State, local, or federally-recognized Indian tribal
government, including any component thereof. Components of governmental units may function
independently of the governmental unit in accordance with the term of the award.
14. "Grantee department or agency"means the component of a State, local, or
federally-recognized Indian tribal government which is responsible for the performance or
administration of all or some part of a Federal award.
15. "Indirect cost rate proposal" means the documentation prepared by a governmental unit or
component thereof to substantiate its request for the establishment of an indirect cost rate as
described in Attachment E of this Circular.
16. "Local government" means a county,municipality, city,town,township, local public
authority, school district, special district, intrastate district, council of governments (whether or
not incorporated as a non-profit corporation under State law),any other regional or interstate
government entity,or any agency or instrumentality of a local government.
17. "Public assistance cost allocation plan" means a narrative description of the procedures that
will be used in identifying,measuring and allocating all administrative costs to all of the
programs administered or supervised by State public assistance agencies as described in
Attachment D of this Circular.
18. "State" means any of the several States of the United States,the District of Columbia,the
Commonwealth of Puerto Rico,any territory or possession of the United States, or any agency or
instrumentality of a State exclusive of local governments.
C.Basic Guidelines
1. Factors affecting allowability of costs. To be allowable under Federal awards,costs must meet
the following general criteria:
a. Be necessary and reasonable for proper and efficient performance and administration of
Federal awards.
b. Be allocable to Federal awards under the provisions of this Circular.
c. Be authorized or not prohibited under State or local laws or regulations.
d. Conform to any limitations or exclusions set forth in these principles,Federal laws,terms and
conditions of the Federal award, or other governing regulations as to types or amounts of cost
items.
8
e.Be consistent with policies,regulations, and procedures that apply uniformly to both Federal
awards and other activities of the governmental unit.
f.Be accorded consistent treatment.A cost may not be assigned to a Federal award as a direct
cost if any other cost incurred for the same purpose in like circumstances has been allocated to
the Federal award as an indirect cost.
g. Except as otherwise provided for in this Circular,be determined in accordance with generally
accepted accounting principles.
h.Not be included as a cost or used to meet cost sharing or matching requirements of any other
Federal award in either the current or a prior period, except as specifically provided by Federal
law or regulation.
i. Be the net of all applicable credits.
j. Be adequately documented.
2. Reasonable costs.A cost is reasonable if, in its nature and amount, it does not exceed that
which would be incurred by a prudent person under the circumstances prevailing at the time the
decision was made to incur the cost. The question of reasonableness is particularly important
when governmental units or components are predominately federally-funded. In determining
reasonableness of a given cost, consideration shall be given to:
a. Whether the cost is of a type generally recognized as ordinary and necessary for the operation
of the governmental unit or the performance of the Federal award.
b. The restraints or requirements imposed by such factors as: sound business practices; arms
length bargaining; Federal, State and other laws and regulations; and,terms and conditions of the
Federal award.
c.Market prices for comparable goods or services.
d. Whether the individuals concerned acted with prudence in the circumstances considering their
responsibilities to the governmental unit, its employees,the public at large,and the Federal
Government.
e. Significant deviations from the established practices of the governmental unit which may
unjustifiably increase the Federal award's cost.
3. Allocable costs.
a.A cost is allocable to a particular cost objective if the goods or services involved are
chargeable or assignable to such cost objective in accordance with relative benefits received.
b.All activities which benefit from the governmental unit's indirect cost, including unallowable
activities and services donated to the governmental unit by third parties,will receive an
9
appropriate allocation of indirect costs.
c.Any cost allocable to a particular Federal award or cost objective under the principles
provided for in this Circular may not be charged to other Federal awards to overcome fund
deficiencies,to avoid restrictions imposed by law or terms of the Federal awards,or for other
reasons.
d. Where an accumulation of indirect costs will ultimately result in charges to a Federal award, a
cost allocation plan will be required as described in Attachments C, D,and E.
4. Applicable credits.
a. Applicable credits refer to those receipts or reduction of expenditure-type transactions that
offset or reduce expense items allocable to Federal awards as direct or indirect costs. Examples
of such transactions are: purchase discounts,rebates or allowances,recoveries or indemnities on
losses, insurance refunds or rebates, and adjustments of overpayments or erroneous charges. To
the extent that such credits accruing to or received by the governmental unit relate to allowable
costs,they shall be credited to the Federal award either as a cost reduction or cash refund, as
appropriate.
b. In some instances,the amounts received from the Federal Government to finance activities or
service operations of the governmental unit should be treated as applicable credits. Specifically,
the concept of netting such credit items(including any amounts used to meet cost sharing or
matching requirements) should be recognized in determining the rates or amounts to be charged
to Federal awards. (See Attachment B, item 11, "Depreciation and use allowances," for areas of
potential application in the matter of Federal financing of activities.)
D. Composition of Cost
1. Total cost.The total cost of Federal awards is comprised of the allowable direct cost of the
program,plus its allocable portion of allowable indirect costs, less applicable credits.
2. Classification of costs. There is no universal rule for classifying certain costs as either direct
or indirect under every accounting system. A cost may be direct with respect to some specific
service or function,but indirect with respect to the Federal award or other final cost objective.
Therefore, it is essential that each item of cost be treated consistently in like circumstances either
as a direct or an indirect cost. Guidelines for determining direct and indirect costs charged to
Federal awards are provided in the sections that follow.
E. Direct Costs
1. General. Direct costs are those that can be identified specifically with a particular final cost
objective.
2. Application. Typical direct costs chargeable to Federal awards are:
a. Compensation of employees for the time devoted and identified specifically to the
10
performance of those awards.
b. Cost of materials acquired,consumed, or expended specifically for the purpose of those
awards.
c.Equipment and other approved capital expenditures.
d. Travel expenses incurred specifically to carry out the award.
3. Minor items.Any direct cost of a minor amount may be treated as an indirect cost for reasons
of practicality where such accounting treatment for that item of cost is consistently applied to all
cost objectives.
F. Indirect Costs
1. General.Indirect costs are those: (a)incurred for a common or joint purpose benefiting more
than one cost objective,and(b)not readily assignable to the cost objectives specifically
benefitted,without effort disproportionate to the results achieved. The term "indirect costs," as
used herein, applies to costs of this type originating in the grantee department,as well as those
incurred by other departments in supplying goods, services, and facilities. To facilitate equitable
distribution of indirect expenses to the cost objectives served, it may be necessary to establish a
number of pools of indirect costs within a governmental unit department or in other agencies
providing services to a governmental unit department. Indirect cost pools should be distributed to
benefitted cost objectives on bases that will produce an equitable result in consideration of
relative benefits derived.
2. Cost allocation plans and indirect cost proposals. Requirements for development and
submission of cost allocation plans and indirect cost rate proposals are contained in Attachments
C, D,and E.
3.Limitation on indirect or administrative costs.
a. In addition to restrictions contained in this Circular,there may be laws that further limit the
amount of administrative or indirect cost allowed.
b.Amounts not recoverable as indirect costs or administrative costs under one Federal award
may not be shifted to another Federal award, unless specifically authorized by Federal legislation
or regulation.
G. Interagency Services. The cost of services provided by one agency to another within the
governmental unit may include allowable direct costs of the service plus a pro rate share of
indirect costs.A standard indirect cost allowance equal to ten percent of the direct salary and
wage cost of providing the service(excluding overtime, shift premiums, and fringe benefits)may
be used in lieu of determining the actual indirect costs of the service. These services do not
include centralized services included in central service cost allocation plans as described in
Attachment C.
11
H.Required Certifications. Each cost allocation plan or indirect cost rate proposal required by
Attachments C and E must comply with the following:
1.No proposal to establish a cost allocation plan or an indirect cost rate,whether submitted to a
Federal cognizant agency or maintained on file by the governmental unit, shall be acceptable
unless such costs have been certified by the governmental unit using the Certificate of Cost
Allocation Plan or Certificate of Indirect Costs as set forth in Attachments C and E. The
certificate must be signed on behalf of the governmental unit by an individual at a level no lower
than chief financial officer of the governmental unit that submits the proposal or component
covered by the proposal.
2.No cost allocation plan or indirect cost rate shall be approved by the Federal Government
unless the plan or rate proposal has been certified. Where it is necessary to establish a cost
allocation plan or an indirect cost rate and the governmental unit has not submitted a certified
proposal for establishing such a plan or rate in accordance with the requirements,the Federal
Government may either disallow all indirect costs or unilaterally establish such a plan or rate.
Such a plan or rate may be based upon audited historical data or such other data that have been
furnished to the cognizant Federal agency and for which it can be demonstrated that all
unallowable costs have been excluded. When a cost allocation plan or indirect cost rate is
unilaterally established by the Federal Government because of failure of the governmental unit
to submit a certified proposal,the plan or rate established will be set to ensure that potentially
unallowable costs will not be reimbursed.
12
ATTACHMENT B
Circular No. A-87
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,and claims
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 disposition of depreciable property and other capital assets and
substantial relocation of Federal programs
19. General government expenses
13
20. Goods or services for personal use
21. Idle facilities and idle capacity
22. Insurance and indemnification
23. Interest
24. Lobbying
25. Maintenance, operations, and repairs
26. Materials and supplies costs
27. Meetings and conferences
28. Memberships, subscriptions, and professional activity costs
29. Patent costs
30. Plant and homeland security costs
31. Pre-award costs
32. Professional service costs
33. Proposal costs
34. Publication and printing costs
35. Rearrangement and alteration costs
36. Reconversion costs
37. Rental costs of building and equipment
38. Royalties and other costs for the use of patents
39. Selling and marketing
40. Taxes
41. Termination costs applicable to sponsored agreements
42. Training costs
43. Travel costs.
14
Sections 1 through 43 provide principles to be applied in establishing the allowability or
unallowability of certain items of cost. These principles apply whether a cost is treated as direct
or indirect. A cost is allowable for Federal reimbursement only to the extent of benefits received
by Federal awards and its conformance with the general policies and principles stated in
Attachment A to this Circular.Failure to mention a particular item of cost in these sections is
not intended to imply that it is either allowable or unallowable;rather,determination of
allowability in each case should be based on the treatment or standards provided for similar or
related items of cost.
1. 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 governmental unit 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 governmental unit of
obligations arising under a Federal award ;
(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 governmental units 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.
15
e. Costs identified in subsections c and d if incurred for more than one Federal award or for both
sponsored work and other work of the governmental unit,are allowable to the extent that the
principles in Attachment A, sections E. ("Direct Costs")and F. ("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 subsections c, d,and e;
(2)Costs of meetings,conventions, convocations, or other events related to other activities of
the governmental unit, 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 governmental unit.
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 a cost allocation plan or indirect cost 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).
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
16
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 governmental unit. They arise also in
instances where the governmental unit 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 governmental unit 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. General. Compensation for personnel services includes all remuneration,paid currently or
accrued,for services rendered during the period of performance under Federal awards, including
but not necessarily limited to wages, salaries,and fringe benefits. The costs of such
compensation are allowable to the extent that they satisfy the specific requirements of this
Circular,and that the total compensation for individual employees:
(1) Is reasonable for the services rendered and conforms to the established policy of the
governmental unit consistently applied to both Federal and non-Federal activities;
(2)Follows an appointment made in accordance with a governmental unit's laws and rules and
meets merit system or other requirements required by Federal law,where applicable; and
(3)Is determined and supported as provided in subsection h.
b. Reasonableness. Compensation for employees engaged in work on Federal awards will be
considered reasonable to the extent that it is consistent with that paid for similar work in other
activities of the governmental unit. In cases where the kinds of employees required for Federal
awards are not found in the other activities of the governmental unit,compensation will be
considered reasonable to the extent that it is comparable to that paid for similar work in the labor
market in which the employing government competes for the kind of employees involved.
Compensation surveys providing data representative of the labor market involved will be an
acceptable basis for evaluating reasonableness.
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c. Unallowable costs. Costs which are unallowable under other sections of these principles shall
not be allowable under this section solely on the basis that they constitute personnel
compensation.
d. Fringe benefits.
(1)Fringe benefits are allowances and services provided by employers to their employees as
compensation in addition to regular salaries and wages. Fringe benefits include,but are not
limited to,the costs of leave,employee insurance,pensions, and unemployment benefit plans.
Except as provided elsewhere in these principles,the costs of fringe benefits are allowable to the
extent that the benefits are reasonable and are required by law, governmental unit-employee
agreement,or an established policy of the governmental unit.
(2)The cost of fringe benefits in the form of regular compensation paid to employees during
periods of authorized absences from the job, such as for annual leave, sick leave, holidays,court
leave, military leave,and other similar benefits,are allowable if: (a)they are provided under
established written leave policies; (b)the costs are equitably allocated to all related activities,
including Federal awards; and, (c)the accounting basis (cash or accrual) selected for costing
each type of leave is consistently followed by the governmental unit.
(3)When a governmental unit uses the cash basis of accounting,the cost of leave is recognized
in the period that the leave is taken and paid for.Payments for unused leave when an employee
retires or terminates employment are allowable in the year of payment provided they are
allocated as a general administrative expense to all activities of the governmental unit or
component.
(4) The accrual basis may be only used for those types of leave for which a liability as defined
by Generally Accepted Accounting Principles(GAAP)exists when the leave is earned. When a
governmental unit uses the accrual basis of accounting, in accordance with GAAP,allowable
leave costs are the lesser of the amount accrued or funded.
(5)The cost of fringe benefits in the form of employer contributions or expenses for social
security; employee life,health, unemployment,and worker's compensation insurance(except as
indicated in section 22,Insurance and indemnification);pension plan costs(see subsection e.);
and other similar benefits are allowable,provided such benefits are granted under established
written policies. Such benefits,whether treated as indirect costs or as direct costs, shall be
allocated to Federal awards and all other activities in a manner consistent with the pattern of
benefits attributable to the individuals or group(s) of employees whose salaries and wages are
chargeable to such Federal awards and other activities.
e. Pension plan costs. Pension plan costs may be computed using a pay-as-you-go method or an
acceptable actuarial cost method in accordance with established written policies of the
governmental unit.
(1) For pension plans financed on a pay-as-you-go method,allowable costs will be limited to
those representing actual payments to retirees or their beneficiaries.
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(2)Pension costs calculated using an actuarial cost-based method recognized by GAAP are
allowable for a given fiscal year if they are funded for that year within six months after the end
of that year. Costs funded after the six month period(or a later period agreed to by the cognizant
agency) are allowable in the year funded. The cognizant agency may agree to an extension of the
six month period if an appropriate adjustment is made to compensate for the timing of the
charges to the Federal Government and related Federal reimbursement and the governmental
unit's contribution to the pension fund.Adjustments may be made by cash refund or other
equitable procedures to compensate the Federal Government for the time value of Federal
reimbursements in excess of contributions to the pension fund.
(3)Amounts funded by the governmental unit in excess of the actuarially determined amount for
a fiscal year may be used as the governmental unit's contribution in future periods.
(4)When a governmental unit converts to an acceptable actuarial cost method,as defined by
GAAP, and funds pension costs in accordance with this method,the unfunded liability at the
time of conversion shall be allowable if amortized over a period of years in accordance with
GAAP.
(5)The Federal Government shall receive an equitable share of any previously allowed pension
costs(including earnings thereon)which revert or inure to the governmental unit in the form of a
refund,withdrawal, or other credit.
f. Post-retirement health benefits. Post-retirement health benefits(PRHB)refers to costs of
health insurance or health services not included in a pension plan covered by subsection e. for
retirees and their spouses,dependents,and survivors.PRHB costs may be computed using a
pay-as-you-go method or an acceptable actuarial cost method in accordance with established
written polices of the governmental unit.
(1)For PRHB financed on a pay as-you-go method, allowable costs will be limited to those
representing actual payments to retirees or their beneficiaries.
(2)PRHB costs calculated using an actuarial cost method recognized by GAAP are allowable if
they are funded for that year within six months after the end of that year. Costs funded after the
six month period(or a later period agreed to by the cognizant agency)are allowable in the year
funded. The cognizant agency may agree to an extension of the six month period if an
appropriate adjustment is made to compensate for the timing of the charges to the Federal
Government and related Federal reimbursements and the governmental unit's contributions to the
PRHB fund.Adjustments may be made by cash refund,reduction in current year's PRHB costs,
or other equitable procedures to compensate the Federal Government for the time value of
Federal reimbursements in excess of contributions to the PRHB fund.
(3)Amounts funded in excess of the actuarially determined amount for a fiscal year may be used
as the government's contribution in a future period.
(4)When a governmental unit converts to an acceptable actuarial cost method and funds PRHB
costs in accordance with this method,the initial unfunded liability attributable to prior years
19
shall be allowable if amortized over a period of years in accordance with GAAP, or, if no such
GAAP period exists,over a period negotiated with the cognizant agency.
(5)To be allowable in the current year,the PRHB costs must be paid either to:
(a)An insurer or other benefit provider as current year costs or premiums, or
(b)An insurer or trustee to maintain a trust fund or reserve for the sole purpose of providing
post-retirement benefits to retirees and other beneficiaries.
(6)The Federal Government shall receive an equitable share of any amounts of previously
allowed post-retirement benefit costs(including earnings thereon)which revert or inure to the
governmental unit in the form of a refund,withdrawal, or other credit.
g. Severance pay.
(1)Payments in addition to regular salaries and wages made to workers whose employment is
being terminated are allowable to the extent that, in each case,they are required by (a) law, (b)
employer-employee agreement, or(c)established written policy.
(2) Severance payments(but not accruals) associated with normal turnover are allowable. Such
payments shall be allocated to all activities of the governmental unit as an indirect cost.
(3)Abnormal or mass severance pay will be considered on a case-by-case basis and is allowable
only if approved by the cognizant Federal agency.
h. Support of salaries and wages. These standards regarding time distribution are in addition to
the standards for payroll documentation.
(1) Charges to Federal awards for salaries and wages,whether treated as direct or indirect costs,
will be based on payrolls documented in accordance with generally accepted practice of the
governmental unit and approved by a responsible official(s)of the governmental unit.
(2)No further documentation is required for the salaries and wages of employees who work in a
single indirect cost activity.
(3) Where employees are expected to work solely on a single Federal award or cost objective,
charges for their salaries and wages will be supported by periodic certifications that the
employees worked solely on that program for the period covered by the certification. These
certifications will be prepared at least semi-annually and will be signed by the employee or
supervisory official having first hand knowledge of the work performed by the employee.
(4) Where employees work on multiple activities or cost objectives, a distribution of their
salaries or wages will be supported by personnel activity reports or equivalent documentation
which meets the standards in subsection (5) unless a statistical sampling system(see subsection
(6))or other substitute system has been approved by the cognizant Federal agency. Such
documentary support will be required where employees work on:
20
(a)More than one Federal award,
(b)A Federal award and a non-Federal award,
(c)An indirect cost activity and a direct cost activity,
(d)Two or more indirect activities which are allocated using different allocation bases, or
(e)An unallowable activity and a direct or indirect cost activity.
(5)Personnel activity reports or equivalent documentation must meet the following standards:
(a)They must reflect an after-the-fact distribution of the actual activity of each employee,
(b)They must account for the total activity for which each employee is compensated,
(c)They must be prepared at least monthly and must coincide with one or more pay periods, and
(d)They must be signed by the employee.
(e)Budget estimates or other distribution percentages determined before the services are
performed do not qualify as support for charges to Federal awards but may be used for interim
accounting purposes,provided that:
(i)The governmental unit's system for establishing the estimates produces reasonable
approximations of the activity actually performed;
(ii)At least quarterly,comparisons of actual costs to budgeted distributions based on the
monthly activity reports are made. Costs charged to Federal awards to reflect adjustments made
as a result of the activity actually performed may be recorded annually if the quarterly
comparisons show the differences between budgeted and actual costs are less than ten percent;
and
(iii)The budget estimates or other distribution percentages are revised at least quarterly, if
necessary,to reflect changed circumstances.
(6) Substitute systems for allocating salaries and wages to Federal awards may be used in place
of activity reports. These systems are subject to approval if required by the cognizant agency.
Such systems may include, but are not limited to, random moment sampling,case counts, or
other quantifiable measures of employee effort.
(a) Substitute systems which use sampling methods(primarily for Temporary Assistance to
Needy Families(TANF),Medicaid, and other public assistance programs)must meet acceptable
statistical sampling standards including:
(i)The sampling universe must include all of the employees whose salaries and wages are to be
allocated based on sample results except as provided in subsection(c);
21
(ii)The entire time period involved must be covered by the sample; and
(iii) The results must be statistically valid and applied to the period being sampled.
(b)Allocating charges for the sampled employees' supervisors, clerical and support staffs,based
on the results of the sampled employees,will be acceptable.
(c)Less than full compliance with the statistical sampling standards noted in subsection(a)may
be accepted by the cognizant agency if it concludes that the amounts to be allocated to Federal
awards will be minimal, or if it concludes that the system proposed by the governmental unit will
result in lower costs to Federal awards than a system which complies with the standards.
(7) Salaries and wages of employees used in meeting cost sharing or matching requirements of
Federal awards must be supported in the same manner as those claimed as allowable costs under
Federal awards.
i. Donated services.
(1)Donated or volunteer services may be furnished to a governmental unit by professional and
technical personnel, consultants, and other skilled and unskilled labor. The value of these
services is not reimbursable either as a direct or indirect cost. However,the value of donated
services may be used to meet cost sharing or matching requirements in accordance with the
provisions of the Common Rule.
(2)The value of donated services utilized in the performance of a direct cost activity shall,when
material in amount,be considered in the determination of the governmental unit's indirect costs
or rate(s) and,accordingly, shall be allocated a proportionate share of applicable indirect costs.
(3)To the extent feasible, donated services will be supported by the same methods used by the
governmental unit to support the allocability of regular personnel services.
9. Contingency provisions. Contributions to a contingency reserve or any similar provision
made for events the occurrence of which cannot be foretold 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, section 22.c.),pension plan reserves(see
Attachment B, section 8.e.), and post-retirement health and other benefit reserves(see
Attachment B, section 8.f.)computed using acceptable actuarial cost methods.
10. Defense and prosecution of criminal and civil proceedings, and claims.
a. The following costs are unallowable for contracts covered by 10 U.S.C. 2324(k), "Allowable
costs under defense contracts."
(1) Costs incurred in defense of any civil or criminal fraud proceeding or similar proceeding
(including filing of false certification brought by the United States where the contractor is found
liable or has pleaded nolo contendere to a charge of fraud or similar proceeding(including filing
22
of a false certification).
(2)Costs incurred by a contractor in connection with any criminal,civil or administrative
proceedings commenced by the United States or a State to the extent provided in 10 U.S.C.
2324(k).
b.Legal expenses required in the administration of Federal programs are allowable.Legal
expenses for prosecution of claims against the Federal Government are unallowable.
11. Depreciation and use allowances.
a.Depreciation and use allowances are means of allocating the cost of fixed assets to periods
benefiting from asset use. Compensation for the use of fixed assets on hand may be made
through depreciation or use allowances.A combination of the two methods may not be used in
connection with a single class of fixed assets(e.g.,buildings,office equipment, computer
equipment, etc.)except as provided for in subsection g.Except for enterprise funds and internal
service funds that are included as part of a State/local cost allocation plan, classes of assets shall
be determined on the same basis used for the government-wide financial statements.
b. The computation of depreciation or use allowances shall be based on the acquisition cost of
the assets involved. Where actual cost records have not been maintained,a reasonable estimate
of the original acquisition cost may be used. The value of an asset donated to the governmental
unit by an unrelated third party shall be its fair market value at the time of donation.
Governmental or quasi-governmental organizations located within the same State shall not be
considered unrelated third parties for this purpose.
c. The computation of depreciation or use allowances will exclude:
(1)The cost of land;
(2)Any portion of the cost of buildings and equipment borne by or donated by the Federal
Government irrespective of where title was originally vested or where it presently resides; and
(3)Any portion of the cost of buildings and equipment contributed by or for the governmental
unit,or a related donor organization, in satisfaction of a matching requirement.
d. Where the depreciation method is followed,the period of useful service (useful life)
established in each case for usable capital assets must take into consideration such factors as type
of construction,nature of the equipment used,historical usage patterns,technological
developments, and the renewal and replacement policies of the governmental unit followed for
the individual items or classes of assets involved. In the absence of clear evidence indicating that
the expected consumption of the asset will be significantly greater in the early portions than in
the later portions of its useful life,the straight line method of depreciation shall be used.
Depreciation methods once used shall not be changed unless approved by the Federal cognizant
or awarding agency. When the depreciation method is introduced for application to an asset
23
previously subject to a use allowance,the annual depreciation charge thereon may not exceed the
amount that would have resulted had the depreciation method been in effect from the date of
acquisition of the asset. The combination of use allowances and depreciation applicable to the
asset shall not exceed the total acquisition cost of the asset or fair market value at time of
donation.
e. When the depreciation method is used for buildings, a building's shell may be segregated from
the major component of the building(e.g.,plumbing system,heating,and air conditioning
system,etc.)and each major component depreciated over its estimated useful life, or the entire
building(i.e.,the shell and all components)may be treated as a single asset and depreciated over
a single useful life.
f. Where the use allowance method is followed,the use allowance for buildings and
improvements (including land improvements, such as paved parking areas, fences, and
sidewalks)will be computed at an annual rate not exceeding two percent of acquisition costs.
The use allowance for equipment will be computed at an annual rate not exceeding 6 2/3 percent
of acquisition cost. When the use allowance method is used for buildings,the entire building
must be treated as a single asset;the building's components (e.g.,plumbing system, heating and
air condition,etc.)cannot be segregated from the building's shell.
The two percent limitation,however, need not be applied to equipment which is merely attached
or fastened to the building but not permanently fixed to it and which is used as furnishings or
decorations or for specialized purposes (e.g., dentist chairs and dental treatment units,counters,
laboratory benches bolted to the floor,dishwashers,modular furniture,carpeting, etc.). Such
equipment will be considered as not being permanently fixed to the building if it can be removed
without the destruction of, or need for costly or extensive alterations or repairs,to the building or
the equipment. Equipment that meets these criteria will be subject to the 6 2/3 percent equipment
use allowance limitation.
g. A reasonable use allowance may be negotiated for any assets that are considered to be fully
depreciated,after taking into consideration the amount of depreciation previously charged to the
government,the estimated useful life remaining at the time of negotiation,the effect of any
increased maintenance charges,decreased efficiency due to age,and any other factors pertinent
to the utilization of the asset for the purpose contemplated.
h. Charges for use allowances or depreciation must be supported by adequate property records.
Physical inventories must be taken at least once every two years(a statistical sampling approach
is acceptable)to ensure that assets exist, and are in use. Governmental units will manage
equipment in accordance with State laws and procedures. When the depreciation method is
followed,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 governmental unit,regardless of the recipient,are unallowable.
24
b.Donated services received:
(1)Donated or volunteer services may be furnished to a governmental unit by professional and
technical personnel, consultants,and other skilled and unskilled labor. The value of these
services is not reimbursable either as a direct or indirect cost.However,the value of donated
services may be used to meet cost sharing or matching requirements in accordance with the
Federal Grants Management Common Rule.
(2) The value of donated services utilized in the performance of a direct cost activity shall,when
material in amount,be considered in the determination of the governmental unit's indirect costs
or rate(s)and,accordingly, shall be allocated a proportionate share of applicable indirect costs.
(3)To the extent feasible, donated services will be supported by the same methods used by the
governmental unit to support the allocability of regular personnel services.
13. Employee morale,health, and welfare costs.
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 governmental unit'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 governmental unit. Income
generated from any of these activities will be offset against expenses.
14. Entertainment. Costs of entertainment, including amusement,diversion, and social activities
and any costs directly associated with such costs(such as tickets to shows or sports events,
meals, lodging,rentals,transportation,and gratuities)are unallowable.
15. Equipment and other capital expenditures.
a. For purposes of this subsection 15,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 governmental
25
unit's regular accounting practices.
(2) "Equipment" means an article of nonexpendable,tangible personal property having a useful
life of more than one year and an acquisition cost which equals or exceeds the lesser of the
capitalization level established by the governmental unit 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:
(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 Attachment B, section 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 and negotiated with the awarding agency. In addition,
Federal awarding agencies are authorized at their option to waive or delegate the prior approval
requirement.
(5)Equipment and other capital expenditures are unallowable as indirect costs. However, see
section 11, Depreciation and use allowance, for rules on the allowability of use allowances or
depreciation on buildings, capital improvements, and equipment. Also, see section 37,Rental
costs,concerning 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.
(7)When replacing equipment purchased in whole or in part with Federal funds,the
governmental unit may use the equipment to be replaced as a trade-in or sell the property and use
26
the proceeds to offset the cost of the replacement property.
16. Fines and penalties. Fines,penalties,damages,and other settlements resulting from
violations(or alleged violations)of, or failure of the governmental unit to comply with,Federal,
State, local, or Indian tribal laws and regulations are unallowable except when incurred as a
result of compliance with specific provisions of the Federal award or written instructions by the
awarding agency authorizing in advance such payments.
17. Fund raising and investment management costs.
a. Costs of organized fund raising, including financial campaigns, solicitation of gifts and
bequests, and similar expenses incurred to raise capital or obtain contributions are unallowable,
regardless of the purpose for which the funds will be used.
b. Costs of investment counsel and staff and similar expenses incurred to enhance income from
investments are unallowable. However, such costs associated with investments covering pension,
self-insurance,or other funds which include Federal participation allowed by this Circular are
allowable.
c.Fund raising and investment activities shall be allocated an appropriate share of indirect costs
under the conditions described in subsection C.3.b. of Attachment A.
18. Gains and losses on disposition of depreciable property and other capital assets and
substantial relocation of Federal programs.
a. (1)Gains and losses on the sale,retirement, or other disposition of depreciable property shall
be included in the year in which they occur as credits or charges to the asset cost grouping(s) in
which the property was included. The amount of the gain or loss to be included as a credit or
charge to the appropriate asset cost grouping(s) shall be the difference between the amount
realized on the property and the undepreciated basis of the property.
(2)Gains and losses on the disposition of depreciable property shall not be recognized as a
separate credit or charge under the following conditions:
(a)The gain or loss is processed through a depreciation account and is reflected in the
depreciation allowable under sections 11 and 15.
(b)The property is given in exchange as part of the purchase price of a similar item and the gain
or loss is taken into account in determining the depreciation cost basis of the new item.
(c)A loss results from the failure to maintain permissible insurance,except as otherwise
provided in subsection 22.d.
(d) Compensation for the use of the property was provided through use allowances in lieu of
depreciation.
b. Substantial relocation of Federal awards from a facility where the Federal Government
27
participated in the financing to another facility prior to the expiration of the useful life of the
financed facility requires Federal agency approval. The extent of the relocation,the amount of
the Federal participation in the financing, and the depreciation charged to date may require
negotiation of space charges for Federal awards.
c. Gains or losses of any nature arising from the sale or exchange of property other than the
property covered in subsection a., e.g., land or included in the fair market value used in any
adjustment resulting from a relocation of Federal awards covered in subsection b. shall be
excluded in computing Federal award costs.
19. General government expenses.
a. The general costs of government are unallowable(except as provided in Attachment B,
section 43, Travel costs). These include:
(1) Salaries and expenses of the Office of the Governor of a State or the chief executive of a
political subdivision or the chief executive of federally-recognized Indian tribal government;
(2) Salaries and other expenses of a State legislature,tribal council, or similar local
governmental body, such as a county supervisor, city council, school board,etc.,whether
incurred for purposes of legislation or executive direction;
(3) Costs of the judiciary branch of a government;
(4) Costs of prosecutorial activities unless treated as a direct cost to a specific program if
authorized by program statute or regulation(however,this does not preclude the allowability of
other legal activities of the Attorney General);and
(5) Costs of other general types of government services normally provided to the general public,
such as fire and police, unless provided for as a direct cost under a program statute or
regulation.
b.For federally-recognized Indian tribal governments and Councils Of Governments (COGs),
the portion of salaries and expenses directly attributable to managing and operating Federal
programs by the chief executive and his staff is allowable
20. Goods or services for personal use. Costs of goods or services for personal use of the
governmental unit's employees are unallowable regardless of whether the cost is reported as
taxable income to the 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 governmental unit.
28
(2) "Idle facilities" means completely unused facilities that are excess to the governmental unit's
current needs.
(3) "Idle capacity"means the unused capacity of partially used facilities. It is the difference
between: (a)that which a facility could achieve under 100 percent operating time on a one-shift
basis less operating interruptions resulting from time lost for repairs, setups,unsatisfactory
materials, and other normal delays; and(b)the extent to which the facility was actually used to
meet demands during the accounting period.A multi-shift basis should be used if it can be
shown that this amount of usage would normally be expected for the type of facility involved.
(4) "Cost of idle facilities or idle capacity" means costs such as maintenance,repair,housing,
rent,and other related costs, e.g., insurance, interest,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 subsection, costs of idle facilities are
allowable for a reasonable period of time, ordinarily not to exceed one year,depending on the
initiative taken to use, lease, or dispose of such facilities.
c.The costs of idle capacity are normal costs of doing business and are a factor in the normal
fluctuations of usage or indirect cost rates from period to period. Such costs are allowable,
provided that the capacity is reasonably anticipated to be necessary or was originally reasonable
and is not subject to reduction or elimination by use on other Federal awards, subletting,renting,
or sale, in accordance with sound business,economic, or security practices. Widespread idle
capacity throughout an entire facility or among a group of assets having substantially the same
function may be considered idle facilities.
22. Insurance and indemnification.
a. Costs of insurance required or approved and maintained,pursuant to the Federal award, are
allowable.
b. Costs of other insurance in connection with the general conduct of activities are allowable
subject to the following limitations:
(1)Types and extent and cost of coverage are in accordance with the governmental unit's policy
and sound business practice.
(2)Costs of insurance or of contributions to any reserve covering the risk of loss of,or damage
29
to, Federal Government property are unallowable except to the extent that the awarding agency
has specifically required or approved such costs.
c. Actual losses which could have been covered by permissible insurance(through a
self-insurance program or otherwise)are unallowable,unless expressly provided for in the
Federal award or as described below. However,the Federal Government will participate in
actual losses of a self insurance fund that are in excess of reserves. Costs incurred because of
losses not covered under nominal deductible insurance coverage provided in keeping with sound
management practice,and minor losses not covered by insurance, such as spoilage,breakage,
and disappearance of small hand tools,which occur in the ordinary course of operations, are
allowable.
d. Contributions to a reserve for certain self-insurance programs including workers
compensation,unemployment compensation, and severance pay are allowable subject to the
following provisions:
(1)The type of coverage and the extent of coverage and the rates and premiums would have been
allowed had insurance (including reinsurance)been purchased to cover the risks. However,
provision for known or reasonably estimated self-insured liabilities, which do not become
payable for more than one year after the provision is made, shall not exceed the discounted
present value of the liability. The rate used for discounting the liability must be determined by
giving consideration to such factors as the governmental unit's settlement rate for those liabilities
and its investment rate of return.
(2)Earnings or investment income on reserves must be credited to those reserves.
(3)Contributions to reserves must be based on sound actuarial principles using historical
experience and reasonable assumptions. Reserve levels must be analyzed and updated at least
biennially for each major risk being insured and take into account any reinsurance, coinsurance,
etc. Reserve levels related to employee-related coverages will normally be limited to the value of
claims (a) submitted and adjudicated but not paid, (b) submitted but not adjudicated,and(c)
incurred but not submitted. Reserve levels in excess of the amounts based on the above must be
identified and justified in the cost allocation plan or indirect cost rate proposal.
(4)Accounting records,actuarial studies, and cost allocations(or billings)must recognize any
significant differences due to types of insured risk and losses generated by the various insured
activities or agencies of the governmental unit. If individual departments or agencies of the
governmental unit experience significantly different levels of claims for a particular risk,those
differences are to be recognized by the use of separate allocations or other techniques resulting
in an equitable allocation.
(5)Whenever funds are transferred from a self-insurance reserve to other accounts (e.g., general
fund),refunds shall be made to the Federal Government for its share of funds transferred,
including earned or imputed interest from the date of transfer.
e. Actual claims paid to or on behalf of employees or former employees for workers'
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compensation,unemployment compensation, severance pay,and similar employee benefits(e.g.,
subsection 8.f. for post retirement health benefits), are allowable in the year of payment provided
(1)the governmental unit follows a consistent costing policy and(2)they are allocated as a
general administrative expense to all activities of the governmental unit.
f. Insurance refunds shall be credited against insurance costs in the year the refund is received.
g. Indemnification includes securing the governmental unit against liabilities to third persons and
other losses not compensated by insurance or otherwise. The Federal Government is obligated to
indemnify the governmental unit only to the extent expressly provided for in the Federal award,
except as provided in subsection d.
h. Costs of commercial insurance that protects against the costs of the contractor for correction
of the contractor's own defects in materials or workmanship are unallowable.
23. Interest.
a. Costs incurred for interest on borrowed capital or the use of a governmental unit's own funds,
however represented,are unallowable except as specifically provided in subsection b. or
authorized by Federal legislation.
b. Financing costs(including interest)paid or incurred which are associated with the otherwise
allowable costs of building acquisition, construction,or fabrication,reconstruction or
remodeling completed on or after October 1, 1980 is allowable subject to the conditions in(1)
through(4)of this section 23.b. Financing costs(including interest)paid or incurred on or after
September 1, 1995 for land or associated with otherwise allowable costs of equipment is
allowable, subject to the conditions in(1)through(4).
(1) The financing is provided(from other than tax or user fee sources)by a bona fide third party
external to the governmental unit;
(2) Thee assets are used in support of Federal awards;
(3) Earnings on debt service reserve funds or interest earned on borrowed funds pending
payment of the construction or acquisition costs are used to offset the current period's cost or
the capitalized interest, as appropriate. Earnings subject to being reported to the Federal
Internal Revenue Service under arbitrage requirements are excludable.
(4) For debt arrangements over$1 million, unless the governmental unit makes an initial equity
contribution to the asset purchase of 25 percent or more,the governmental unit shall reduce
claims for interest cost by an amount equal to imputed interest earnings on excess cash flow,
which is to be calculated as follows.Annually,non-Federal entities 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 cost. For cash flow
calculations,the annual inflow figures shall be divided by the number of months in the year
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(i.e.,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 cost. 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.
(5)Interest attributable to fully depreciated assets is unallowable.
24. Lobbying.
a. General. The cost of certain influencing activities associated with obtaining grants,contracts,
cooperative agreements,or loans is an unallowable cost.Lobbying with respect to certain grants,
contracts, cooperative agreements, and loans shall be governed by the common rule, "New
Restrictions on Lobbying"published at 55 FR 6736 (February 26, 1990), including definitions,
and the Office of Management and Budget "Government-wide Guidance for New Restrictions on
Lobbying" and notices published at 54 FR 52306 (December 20, 1989), 55 FR 24540 (June 15,
1990), and 57 FR 1772 (January 15, 1992),respectively.
b. 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.
25. Maintenance,operations, and repairs.Unless prohibited by law,the cost of utilities,
insurance, security,janitorial services, elevator service, upkeep of grounds,necessary
maintenance,normal repairs and alterations, and the like are allowable to the extent that they: (1)
keep property(including Federal property, unless otherwise provided for) in an efficient
operating condition, (2)do not add to the permanent value of property or appreciably prolong its
intended life,and(3)are not otherwise included in rental or other charges for space. Costs which
add to the permanent value of property or appreciably prolong its intended life shall be treated as
capital expenditures(see sections 11 and 15).
26. 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.
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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.
27. 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, section 14,Entertainment costs.
28. Memberships, subscriptions,and professional activity costs.
a. Costs of the governmental unit's memberships in business,technical, and professional
organizations are allowable.
b. Costs of the governmental unit's subscriptions to business,professional,and technical
periodicals are allowable.
c. Costs of membership in civic and community, social organizations are allowable as a direct
cost with the approval of the Federal awarding agency.
d. Costs of membership in organizations substantially engaged in lobbying are unallowable.
29. 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 see Attachment B, sections 32,Professional
service costs,and 38,Royalties and other costs for use of patents and copyrights).
b. The following costs related to patent and copyright matter are unallowable:
(i) 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
(ii) Costs in connection with filing and prosecuting any foreign patent application,or(ii)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 Attachment B, section 38.,Royalties and
other costs for use of patents and copyrights).
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30. 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 section 15.,Equipment and
other capital expenditures,of this Circular.
31. Pre-award costs.Pre-award costs are those incurred prior to the effective date of the award
directly pursuant to the negotiation and in anticipation of the award where such costs are
necessary to comply with the proposed delivery schedule or period of performance. Such costs
are allowable only to the extent that they would have been allowable if incurred after the date of
the award and only with the written approval of the awarding agency.
32. Professional service 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
governmental unit,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, section 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 governmental unit's capability
in the particular area.
(3)The past pattern of such costs,particularly in the years prior to Federal awards.
(4)The impact of Federal awards on the governmental unit's business (i.e.,what new problems
have arisen).
(5) Whether the proportion of Federal work to the governmental unit's total business is such as
to influence the
governmental unit 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.
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(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 available or rendered evidence of bona fide services available or rendered.
33.Proposal costs. Costs of preparing proposals for potential Federal awards are allowable.
Proposal costs should normally be treated as indirect costs and should be allocated to all
activities of the governmental unit utilizing the cost allocation plan and indirect cost rate
proposal. However,proposal costs may be charged directly to Federal awards with the prior
approval of the Federal awarding agency.
34.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 governmental unit.
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
35. Rearrangement and alteration costs. Costs incurred for ordinary and normal rearrangement
and alteration of facilities are allowable. Special arrangements and alterations costs incurred
specifically for a Federal award are allowable with the prior approval of the Federal awarding
agency.
36. Reconversion costs. Costs incurred in the restoration or rehabilitation of the governmental
unit's facilities to approximately the same condition existing immediately prior to
commencement of Federal awards, less costs related to normal wear and tear,are allowable.
37.Rental costs of buildings and equipment.
a. Subject to the limitations described in subsections b.through d. of this section,rental costs are
allowable to the extent that the rates are reasonable in light of such factors as: rental costs of
comparable property, if any; market conditions in the area; alternatives available; and,the type,
life expectancy, condition, and value of the property leased. Rental arrangements should be
35
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 governmental unit 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 Attachment B, section 37.b)that would be allowed had title to the property vested
in the governmental unit. 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 governmental unit; (ii)
governmental units under common control through common officers,directors, or members; and
(iii)a governmental unit and a director,trustee, officer, or key employee of the governmental
unit or his immediate family,either directly or through corporations,trusts, or similar
arrangements in which they hold a controlling interest.For example,a governmental unit may
establish a separate corporation for the sole purpose of owning property and leasing it back to the
governmental unit.
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 subsection b)that would be allowed had the
governmental unit 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 Attachment B, section 23. Unallowable costs
include amounts paid for profit,management fees,and taxes that would not have been incurred
had the governmental unit purchased the facility.
38. Royalties and other costs for the use of patents.
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
36
been arrived at as a result of less-than-arms-length bargaining,e.g.:
(1)Royalties paid to persons, including corporations,affiliated with the governmental unit.
(2)Royalties paid to unaffiliated parties, including corporations, under an agreement entered
into in contemplation that a Federal award would be made.
(3)Royalties paid under an agreement entered into after an award is made to a governmental
unit.
c. In any case involving a patent or copyright formerly owned by the governmental unit,the
amount of royalty allowed should not exceed the cost which would have been allowed had the
governmental unit retained title thereto.
39. Selling and marketing. Costs of selling and marketing any products or services of the
governmental unit are unallowable(unless allowed under Attachment B, section 1.as allowable
public relations costs or under Attachment B, section 33. as allowable proposal costs.
40. Taxes.
a. Taxes that a governmental unit is legally required to pay are allowable,except for
self-assessed taxes that disproportionately affect Federal programs or changes in tax policies that
disproportionately affect Federal programs.This provision becomes effective for taxes paid
during the governmental unit's first fiscal year that begins on or after January 1, 1998,and
applies thereafter.
b. Gasoline taxes,motor vehicle fees,and other taxes that are in effect user fees for benefits
provided to the Federal Government are allowable.
c. This provision does not restrict the authority of Federal agencies to identify taxes.where
Federal participation is inappropriate. Where the identification of the amount of unallowable
taxes would require an inordinate amount of effort,the cognizant agency may accept a
reasonable approximation thereof.
41. 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 governmental unit's other work shall not be
allowable unless the governmental unit 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 governmental unit,the awarding agency should consider the governmental unit's
plans and orders for current and scheduled activity.
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Contemporaneous purchases of common items by the governmental unit shall be regarded as
evidence that such items are reasonably usable on the governmental unit'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 governmental unit, 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 governmental unit to
discontinue such costs shall be unallowable.
c. Loss of useful value of special tooling,machinery,and equipment is generally allowable if:
(1) Such special tooling, special machinery, or equipment is not reasonably capable of use in the
other work of the governmental unit,
(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,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 governmental unit 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 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 .44 of the Grants Management Common Rule implementing OMB
Circular A-102); and
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(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_.31 and .32 of the Grants Management Common Rule implementing OMB
Circular A-102.
f. Claims under subawards, including the allocable portion of claims which are common to the
Federal award,and to other work of the governmental unit are generally allowable.
An appropriate share of the governmental unit'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.
42. Training costs. The cost of training provided for employee development is allowable.
43. 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 governmental
unit. 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 governmental unit's non-federally-sponsored
activities. Notwithstanding the provisions of Attachment B, section 19, General government
expenses,travel costs of officials covered by that section are allowable with the prior approval of
an awarding agency when they are specifically related to Federal awards.
b. Lodging and subsistence. Costs incurred by employees and officers for travel, including costs
of lodging,other subsistence, and incidental expenses, shall be considered reasonable and
allowable only to the extent such costs do not exceed charges normally allowed by the
governmental unit in its regular operations as the result of the governmental unit's written travel
policy. In the absence of an acceptable,written governmental unit 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.
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(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
governmental unit 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 governmental unit's determinations that customary standard airfare or other discount
airfare is unavailable for specific trips if the governmental unit can demonstrate either of the
following: (a)that such airfare was not available in the specific case;or(b)that it is the
governmental unit's overall practice to make routine use of such airfare.
d.Air travel by other than commercial carrier. Costs of travel by governmental unit-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 subsection c., is
unallowable.
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 governmental unit located in a foreign country means travel outside that
country.
ATTACHMENT C
Circular No.A-87
STATE/LOCAL-WIDE CENTRAL SERVICE COST ALLOCATION PLANS
TABLE OF CONTENTS
A. General
B. Definitions
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1.Billed central services
2.Allocated central services
3.Agency or operating agency
C. Scope of the Central Service Cost Allocation Plans
D. Submission Requirements
E.Documentation Requirements for Submitted Plans
1. General
2.Allocated central services
3. Billed services
a. General
b. Internal service funds
c. Self-insurance funds
d.Fringe benefits
4. Required certification
F.Negotiation and Approval of Central Service Plans
G. Other Policies
1.Billed central service activities
2. Working capital reserves
3. Carry-forward adjustments of allocated central service costs
4.Adjustments of billed central services
5. Records retention
6. Appeals
7. OMB assistance
A. General.
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1. Most governmental units provide certain services, such as motor pools, computer centers,
purchasing, accounting, etc.,to operating agencies on a centralized basis. Since
federally-supported awards are performed within the individual operating agencies,there needs
to be a process whereby these central service costs can be identified and assigned to benefitted
activities on a reasonable and consistent basis. The central service cost allocation plan provides
that process.All costs and other data used to distribute the costs included in the plan should be
supported by formal accounting and other records that will support the propriety of the costs
assigned to Federal awards.
2. Guidelines and illustrations of central service cost allocation plans are provided in a brochure
published by the Department of Health and Human Services entitled "A Guide for State and
Local Government Agencies: Cost Principles and Procedures for Establishing Cost Allocation
Plans and Indirect Cost Rates for Grants and Contracts with the Federal Government." A copy of
this brochure may be obtained from the Superintendent of Documents, U.S. Government Printing
Office.
B. Definitions.
1. "Billed central services"means central services that are billed to benefitted agencies and/or
programs on an individual fee-for-service or similar basis. Typical examples of billed central
services include computer services,transportation services, insurance,and fringe benefits.
2. "Allocated central services" means central services that benefit operating agencies but are not
billed to the agencies on a fee-for-service or similar basis. These costs are allocated to benefitted
agencies on some reasonable basis. Examples of such services might include general accounting,
personnel administration,purchasing, etc.
3. "Agency or operating agency" means an organizational unit or sub-division within a
governmental unit that is responsible for the performance or administration of awards or
activities of the governmental unit.
C. Scope of the Central Service Cost Allocation Plans. The central service cost allocation plan
will include all central service costs that will be claimed(either as a billed or an allocated cost)
under Federal awards and will be documented as described in section E. Costs of central services
omitted from the plan will not be reimbursed.
D. Submission Requirements.
1. Each State will submit a plan to the Department of Health and Human Services for each year
in which it claims central service costs under Federal awards. The plan should include (a) a
projection of the next year's allocated central service cost(based either on actual costs for the
most recently completed year or the budget projection for the coming year), and(b)a
reconciliation of actual allocated central service costs to the estimated costs used for either the
most recently completed year or the year immediately preceding the most recently completed
year.
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2.Each local government that has been designated as a"major local government" by the Office
of Management and Budget(OMB) is also required to submit a plan to its cognizant agency
annually. OMB periodically lists major local governments in the Federal Register.
3.All other local governments claiming central service costs must develop a plan in accordance
with the requirements described in this Circular and maintain the plan and related supporting
documentation for audit. These local governments are not required to submit their plans for
Federal approval unless they are specifically requested to do so by the cognizant agency. Where
a local government only receives funds as a sub-recipient,the primary recipient will be
responsible for negotiating indirect cost rates and/or monitoring the sub-recipient's plan.
4.All central service cost allocation plans will be prepared and,when required, submitted within
six months prior to the beginning of each of the governmental unit's fiscal years in which it
proposes to claim central service costs. Extensions may be granted by the cognizant agency on a
case-by-case basis.
E.Documentation Requirements for Submitted Plans. The documentation requirements
described in this section may be modified,expanded,or reduced by the cognizant agency on a
case-by-case basis. For example,the requirements may be reduced for those central services
which have little or no impact on Federal awards. Conversely, if a review of a plan indicates that
certain additional information is needed,and will likely be needed in future years, it may be
routinely requested in future plan submissions. Items marked with an asterisk(*)should be
submitted only once; subsequent plans should merely indicate any changes since the last plan.
1. General.All proposed plans must be accompanied by the following:an organization chart
sufficiently detailed to show operations including the central service activities of the State/local
government whether or not they are shown as benefiting from central service functions; a copy
of the Comprehensive Annual Financial Report(or a copy of the Executive Budget if budgeted
costs are being proposed)to support the allowable costs of each central service activity included
in the plan;and,a certification(see subsection 4.)that the plan was prepared in accordance with
this Circular,contains only allowable costs,and was prepared in a manner that treated similar
costs consistently among the various Federal awards and between Federal and non-Federal
awards/activities.
2.Allocated central services.For each allocated central service,the plan must also include the
following: a brief description of the service*, an identification of the unit rendering the service
and the operating agencies receiving the service,the items of expense included in the cost of the
service,the method used to distribute the cost of the service to benefitted agencies, and a
summary schedule showing the allocation of each service to the specific benefitted
agencies. If any self-insurance funds or fringe benefits costs are treated as allocated(rather than
billed)central services, documentation discussed in subsections 3.b. and c. shall also be
included.
3. Billed services.
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a. General. The information described below shall be provided for all billed central services,
including internal service funds, self-insurance funds, and fringe benefit funds.
b. Internal service funds.
(1)For each internal service fund or similar activity with an operating budget of$5 million or
more,the plan shall include: a brief description of each service; a balance sheet for each fund
based on individual accounts contained in the governmental unit's accounting system;a
revenue/expenses statement,with revenues broken out by source,e.g.,regular billings, interest
earned, etc.; a listing of all non-operating transfers(as defined by Generally Accepted
Accounting Principles(GAAP)) into and out of the fund; a description of the procedures
(methodology)used to charge the costs of each service to users, including how billing rates are
determined; a schedule of current rates; and, a schedule comparing total revenues(including
imputed revenues)generated by the service to the allowable costs of the service, as determined
under this Circular,with an explanation of how variances will be handled.
(2)Revenues shall consist of all revenues generated by the service, including unbilled and
uncollected revenues. If some users were not billed for the services(or were not billed at the full
rate for that class of users),a schedule showing the full imputed revenues associated with these
users shall be provided. Expenses shall be broken out by object cost categories(e.g., salaries,
supplies, etc.).
c. Self-insurance funds. For each self-insurance fund,the plan shall include:the fund balance
sheet; a statement of revenue and expenses including a summary of billings and claims paid by
agency; a listing of all non-operating transfers into and out of the fund;the type(s) of risk(s)
covered by the fund(e.g.,automobile liability,workers' compensation, etc.); an explanation of
how the level of fund contributions are determined, including a copy of the current actuarial
report(with the actuarial assumptions used)if the contributions are determined on an actuarial
basis; and,a description of the procedures used to charge or allocate fund contributions to
benefitted activities. Reserve levels in excess of claims (1) submitted and adjudicated but not
paid, (2) submitted but not adjudicated, and(3) incurred but not submitted must be identified and
explained.
d.Fringe benefits.For fringe benefit costs,the plan shall include: a listing of fringe benefits
provided to covered employees,and the overall annual cost of each type of benefit; current
fringe benefit policies*; and procedures used to charge or allocate the costs of the benefits to
benefitted activities. In addition, for pension and post-retirement health insurance plans,the
following information shall be provided:the governmental unit's funding policies, e.g.,
legislative bills,trust agreements, or State-mandated contribution rules, if different from
actuarially determined rates;the pension plan's costs accrued for the year;the amount funded,
and date(s)of funding; a copy of the current actuarial report(including the actuarial
assumptions);the plan trustee's report; and,a schedule from the activity showing the value of the
interest cost associated with late funding.
4. Required certification. Each central service cost allocation plan will be accompanied by a
certification in the following form:
44
CERTIFICATE OF COST ALLOCATION PLAN
This is to certify that I have reviewed the cost allocation plan submitted herewith and to the best
of my knowledge and belief:
(1)All costs included in this proposal [identify date] to establish cost allocations or billings for
[identify period covered by plan] are allowable in accordance with the requirements of OMB
Circular A-87, "Cost Principles for State,Local,and Indian Tribal Governments,"and the
Federal award(s)to which they apply. Unallowable costs have been adjusted for in allocating
costs as indicated in the cost allocation plan.
(2)All costs included in this proposal are properly allocable to Federal awards on the basis of a
beneficial or causal relationship between the expenses incurred and the awards to which they are
allocated in accordance with applicable requirements. Further,the same costs that have been
treated as indirect costs have not been claimed as direct costs. Similar types of costs have been
accounted for consistently.
I declare that the foregoing is true and correct.
Governmental Unit:
Signature:
Name of Official:
Title:
Date of Execution:
F.Negotiation and Approval of Central Service Plans.
1.All proposed central service cost allocation plans that are required to be submitted will be
reviewed, negotiated,and approved by the Federal cognizant agency on a timely basis. The
cognizant agency will review the proposal within six months of receipt of the proposal and either
negotiate/approve the proposal or advise the governmental unit of the additional documentation
needed to support/evaluate the proposed plan or the changes required to make the proposal
acceptable. Once an agreement with the governmental unit has been reached,the agreement will
be accepted and used by all Federal agencies,unless prohibited or limited by statute. Where a
Federal funding agency has reason to believe that special operating factors affecting its awards
necessitate special consideration,the funding agency will,prior to the time the plans are
negotiated,notify the cognizant agency.
2. The results of each negotiation shall be formalized in a written agreement between the
cognizant agency and the governmental unit.This agreement will be subject to re-opening if the
agreement is subsequently found to violate a statute or the information upon which the plan was
negotiated is later found to be materially incomplete or inaccurate. The results of the negotiation
shall be made available to all Federal agencies for their use.
45
3.Negotiated cost allocation plans based on a proposal later found to have included costs that:
(a)are unallowable(i)as specified by law or regulation, (ii) as identified in Attachment B of this
Circular, or(iii)by the terms and conditions of Federal awards, or(b)are unallowable because
they are clearly not allocable to Federal awards, shall be adjusted,or a refund shall be made at
the option of the Federal cognizant agency. These adjustments or refunds are designed to correct
the plans and do not constitute a reopening of the negotiation.
G. Other Policies.
1. Billed central service activities. Each billed central service activity must separately account
for all revenues(including imputed revenues)generated by the service, expenses incurred to
furnish the service, and profit/loss.
2. Working capital reserves. Internal service funds are dependent upon a reasonable level of
working capital reserve to operate from one billing cycle to the next. Charges by an internal
service activity to provide for the establishment and maintenance of a reasonable level of
working capital reserve, in addition to the full recovery of costs,are allowable.A working
capital reserve as part of retained earnings of up to 60 days cash expenses for normal operating
purposes is considered reasonable. A working capital reserve exceeding 60 days may be
approved by the cognizant Federal agency in exceptional cases.
3. Carry-forward adjustments of allocated central service costs. Allocated central service costs
are usually negotiated and approved for a future fiscal year on a "fixed with carry-forward"
basis. Under this procedure,the fixed amounts for the future year covered by agreement are not
subject to adjustment for that year. However,when the actual costs of the year involved become
known,the differences between the fixed amounts previously approved and the actual costs will
be carried forward and used as an adjustment to the fixed amounts established for a later year.
This "carry-forward"procedure applies to all central services whose costs were fixed in the
approved plan.However, a carry-forward adjustment is not permitted,for a central service
activity that was not included in the approved plan,or for unallowable costs that must be
reimbursed immediately.
4. Adjustments of billed central services. Billing rates used to charge Federal awards shall be
based on the estimated costs of providing the services, including an estimate of the allocable
central service costs. A comparison of the revenue generated by each billed service(including
total revenues whether or not billed or collected)to the actual allowable costs of the service will
be made at least annually, and an adjustment will be made for the difference between the revenue
and the allowable costs. These adjustments will be made through one of the following
adjustment methods: (a) a cash refund to the Federal Government for the Federal share of the
adjustment, (b)credits to the amounts charged to the individual programs, (c)adjustments to
future billing rates, or(d) adjustments to allocated central service costs. Adjustments to allocated
central services will not be permitted where the total amount of the adjustment for a particular
service(Federal share and non-Federal) share exceeds$500,000.
5. Records retention. All central service cost allocation plans and related documentation used as
a basis for claiming costs under Federal awards must be retained for audit in accordance with the
46
records retention requirements contained in the Common Rule.
6.Appeals. If a dispute arises in the negotiation of a plan between the cognizant agency and the
governmental unit,the dispute shall be resolved in accordance with the appeals procedures of the
cognizant agency.
7. OMB assistance. To the extent that problems are encountered among the Federal agencies
and/or governmental units in connection with the negotiation and approval process,OMB will
lend assistance, as required,to resolve such problems in a timely manner.
ATTACHMENT D
Circular No. A-87
PUBLIC ASSISTANCE COST ALLOCATION PLANS
TABLE OF CONTENTS
A. General
B.Definitions
1. State public assistance agency
2. State public assistance agency costs
C. Policy
D. Submission, Documentation, and Approval of Public Assistance Cost Allocation Plans
E.Review of Implementation of Approved Plans
F. Unallowable Costs
A. General. Federally-financed programs administered by State public assistance agencies are
funded predominately by the Department of Health and Human Services(HITS). In support of its
stewardship requirements, HHS has published requirements for the development,documentation,
submission,negotiation,and approval of public assistance cost allocation plans in Subpart E of
45 CFR Part 95.All administrative costs(direct and indirect)are normally charged to Federal
awards by implementing the public assistance cost allocation plan. This Attachment extends
these requirements to all Federal agencies whose programs are administered by a State public
assistance agency. Major federally-financed programs typically administered by State public
assistance agencies include: Temporary Assistance to Needy Families(TANF),Medicaid,Food
Stamps, Child Support Enforcement,Adoption Assistance and Foster Care,and Social Services
Block Grant.
B. Definitions.
47
1. "State public assistance agency" means a State agency administering or supervising-the
administration of one or more public assistance programs operated by the State as identified in
Subpart E of 45 CFR Part 95.For the purpose of this Attachment,these programs include all
programs administered by the State public assistance agency.
2. "State public assistance agency costs" means all costs incurred by,or allocable to,the State
public assistance agency, except expenditures for financial assistance,medical vendor
payments, food stamps,and payments fqr services and goods provided directly to program
recipients.
C. Policy. State public assistance agencies will develop, document and implement,and the
Federal Government will review,negotiate,and approve,public assistance cost allocation plans
in accordance with Subpart E of 45 CFR Part 95. The plan will include all programs
administered by the State public assistance agency. Where a letter of approval or disapproval is
transmitted to a State public assistance agency in accordance with Subpart E,the letter will apply
to all Federal agencies and programs. The remaining sections of this Attachment(except for the
requirement for certification) summarize the provisions of Subpart E of 45 CFR Part 95.
D. Submission,Documentation, and Approval of Public Assistance Cost Allocation Plans.
1. State public assistance agencies are required to promptly submit amendments to the cost
allocation plan to HHS for review and approval.
2. Under the coordination process outlined in subsection E, affected Federal agencies will review
all new plans and plan amendments and provide comments, as appropriate,to HHS. The
effective date of the plan or plan amendment will be the first day of the quarter following the
submission of the plan or amendment,unless another date is specifically approved by HHS.
HHS, as the cognizant agency acting on behalf of all affected Federal agencies, will, as
necessary, conduct negotiations with the State public assistance agency and will inform the State
agency of the action taken on the plan or plan amendment.
E. Review of Implementation of Approved Plans.
1. Since public assistance cost allocation plans are of a narrative nature,the review during the
plan approval process consists of evaluating the appropriateness of the proposed groupings of
costs(cost centers)and the related allocation bases.As such,the Federal Government needs
some assurance that the cost allocation plan has been implemented as approved. This is
accomplished by reviews by the funding agencies, single audits,or audits conducted by the
cognizant audit agency.
2. Where inappropriate charges affecting more than one funding agency are identified,the
cognizant HHS cost negotiation office will be advised and will take the lead in resolving the
issue(s)as provided for in Subpart E of 45 CFR Part 95.
3. If a dispute arises in the negotiation of a plan or from a disallowance involving two or more
48
funding agencies,the dispute shall be resolved in accordance with the appeals procedures set out
in 45 CFR Part 75. Disputes involving only one funding agency will be resolved in accordance
with the funding agency's appeal process.
4. To the extent that problems are encountered among the Federal agencies and/or governmental
units in connection with the negotiation and approval process,the Office of Management and
Budget will lend assistance,as required,to resolve such problems in a timely manner.
F. Unallowable Costs. Claims developed under approved cost allocation plans will be based on
allowable costs as identified in this Circular. Where unallowable costs have been claimed and
reimbursed,they will be refunded to the program that reimbursed the unallowable cost using one
of the following methods: (a)a cash refund,(b)offset to a subsequent claim,or(c)credits to the
amounts charged to individual awards.
ATTACHMENT E
Circular No. A-87
STATE AND LOCAL INDIRECT COST RATE PROPOSALS
TABLE OF CONTENTS
A. General
B.Definitions
1.Indirect cost rate proposal
2. Indirect cost rate
3. Indirect cost pool
4. Base
5. Predetermined rate
6.Fixed rate
7.Provisional rate
8. Final rate
9. Base period
C. Allocation of Indirect Costs and Determination of Indirect Cost Rates
1. General
49
2. Simplified method
3. Multiple allocation base method
4. Special indirect cost rates
D. Submission and Documentation of Proposals
1. Submission of indirect cost rate proposals
2. Documentation of proposals
3. Required certification
E.Negotiation and Approval of Rates
F. Other Policies
1. Fringe benefit rates
2. Billed services provided by the grantee agency
3. Indirect cost allocations not using rates
4. Appeals
5. Collections of unallowable costs and erroneous payments
6. OMB assistance
A. General.
1. Indirect costs are those that have been incurred for common or joint purposes. These costs
benefit more than one cost objective and cannot be readily identified with a particular final cost
objective without effort disproportionate to the results achieved.After direct costs have been
determined and assigned directly to Federal awards and other activities as appropriate, indirect
costs are those remaining to be allocated to benefitted cost objectives. A cost may not be
allocated to a Federal award as an indirect cost if any other cost incurred for the same purpose, in
like circumstances,has been assigned to a Federal award as a direct cost.
2. Indirect costs include (a)the indirect costs originating in each department or agency of the
governmental unit carrying out Federal awards and(b)the costs of central governmental services
distributed through the central service cost allocation plan (as described in Attachment C)and
not otherwise treated as direct costs.
3. Indirect costs are normally charged to Federal awards by the use of an indirect cost rate.A
separate indirect cost rate(s) is usually necessary for each department or agency of the
50
governmental unit claiming indirect costs under Federal awards. Guidelines and illustrations of
indirect cost proposals are provided in a brochure published by the Department of Health and
Human Services entitled"A Guide for State and Local Government Agencies: Cost Principles
and Procedures for Establishing Cost Allocation Plans and Indirect Cost Rates for Grants and
Contracts with the Federal Government." A copy of this brochure may be obtained from the
Superintendent of Documents,U.S. Government Printing Office.
4.Because of the diverse characteristics and accounting practices of governmental units,the
types of costs which may be classified as indirect costs cannot be specified in all situations.
However,typical examples of indirect costs may include certain State/local-wide central service
costs, general administration of the grantee department or agency,accounting and personnel
services performed within the grantee department or agency,depreciation or use allowances on
buildings and equipment,the costs of operating and maintaining facilities,etc.
5. This Attachment does not apply to State public assistance agencies. These agencies should
refer instead to Attachment D.
B. Definitions.
1. "Indirect cost rate proposal" means the documentation prepared by a governmental unit or
subdivision thereof to substantiate its request for the establishment of an indirect cost rate.
2. "Indirect cost rate" is a device for determining in a reasonable manner the proportion of
indirect costs each program should bear. It is the ratio (expressed as a percentage)of the indirect
costs to a direct cost base.
3. "Indirect cost pool" is the accumulated costs that jointly benefit two or more programs or other
cost objectives.
4. "Base" means the accumulated direct costs (normally either total direct salaries and wages or
total direct costs exclusive of any extraordinary or distorting expenditures)used to distribute
indirect costs to individual Federal awards.The direct cost base selected should result in each
award bearing a fair share of the indirect costs in reasonable relation to the benefits received
from the costs.
5. "Predetermined rate"means an indirect cost rate, applicable to a specified current or future
period, usually the governmental unit's fiscal year.This rate is based on an estimate of the costs
to be incurred during the period. Except under very unusual circumstances, a predetermined rate
is not subject to adjustment. (Because of legal constraints,predetermined rates are not permitted
for Federal contracts;they may,however,be used for grants or cooperative agreements.)
Predetermined rates may not be used by governmental units that have not submitted and
negotiated the rate with the cognizant agency. In view of the potential advantages offered by this
procedure, negotiation of predetermined rates for indirect costs for a period of two to four years
should be the norm in those situations where the cost experience and other pertinent facts
available are deemed sufficient to enable the parties involved to reach an informed judgment as
to the probable level of indirect costs during the ensuing accounting periods.
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6. "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, allowable costs of the
period covered by the rate is carried forward as an adjustment to the rate computation of a
subsequent period.
7. "Provisional rate" means a temporary indirect cost rate applicable to a specified period which
is used for funding, interim reimbursement, and reporting indirect costs on Federal awards
pending the establishment of a"final" rate for that period.
8. "Final rate"means an indirect cost rate applicable to a specified past period which is based on
the actual allowable costs of the period.A final audited rate is not subject to adjustment.
9. "Base period" for the allocation of indirect costs is the period in which such costs are incurred
and accumulated for allocation to activities performed in that period. The base period normally
should coincide with the governmental unit's fiscal year,but in any event, shall be so selected as
to avoid inequities in the allocation of costs.
C.Allocation of Indirect Costs and Determination of Indirect Cost Rates.
1. General.
a. Where a governmental unit's department or agency has only one major function,or where all
its major functions benefit from the indirect costs to approximately the same degree,the
allocation of indirect costs and the computation of an indirect cost rate may be accomplished
through simplified allocation procedures as described in subsection 2.
b. Where a governmental unit's department or agency has several major functions which benefit
from its indirect costs in varying degrees,the allocation of indirect costs may require the
accumulation of such costs into separate cost groupings which then are allocated individually to
benefitted functions by means of a base which best measures the relative degree of benefit.The
indirect costs allocated to each function are then distributed to individual awards and other
activities included in that function by means of an indirect cost rate(s).
c. Specific methods for allocating indirect costs and computing indirect cost rates along with the
conditions under which each method should be used are described in subsections 2, 3 and 4.
2. Simplified method.
a. Where a grantee agency's major functions benefit from its indirect costs to approximately the
same degree,the allocation of indirect costs may be accomplished by (1)classifying the grantee
agency's total costs for the base period as either direct or indirect, and.(2) dividing the total
allowable indirect costs(net of applicable credits)by an equitable distribution base. The result of
this process is an indirect cost rate which is used to distribute indirect costs to individual Federal
awards. The rate should be expressed as the percentage which the total amount of allowable
indirect costs bears to the base selected. This method should also be used where a governmental
unit's department or agency has only one major function encompassing a number of individual
52
projects or activities,and may be used where the level of Federal awards to that department or
agency is relatively small.
b.Both the direct costs and the indirect costs shall exclude capital expenditures and unallowable
costs. However,unallowable costs must be included in the direct costs if they represent activities
to which indirect costs are properly allocable.
c.The distribution base may be(1)total direct costs(excluding capital expenditures and other
distorting items, such as pass-through funds,major subcontracts,etc.), (2) direct salaries and
wages,or(3)another base which results in an equitable distribution.
3. Multiple allocation base method.
a. Where a grantee agency's indirect costs benefit its major functions in varying degrees, such
costs shall be accumulated into separate cost groupings.Each grouping shall then be allocated
individually to benefitted functions by means of a base which best measures the relative benefits.
b. The cost groupings should be established so as to permit the allocation of each grouping on
the basis of benefits provided to the major functions. Each grouping should constitute a pool of
expenses that are of like character in terms of the functions they benefit and in terms of the
allocation base which best measures the relative benefits provided to each function. The number
of separate groupings should be held within practical limits,taking into consideration the
materiality of the amounts involved and the degree of precision needed.
c.Actual conditions must be taken into account in selecting the base to be used in allocating the
expenses in each grouping to benefitted functions. When an allocation can be made by
assignment of a cost grouping directly to the function benefitted,the allocation shall be made in
that manner. When the expenses in a grouping are more general in nature,the allocation should
be made through the use of a selected base which produces results that are equitable to both the
Federal Government and the governmental unit. In general, any cost element or related factor
associated with the governmental unit's activities is potentially adaptable for use as an allocation
base provided that: (1) it can readily be expressed in terms of dollars or other quantitative
measures(total direct costs,direct salaries and wages, staff hours applied, square feet used,hours
of usage,number of documents processed,population served, and the like), and(2) it is common
to the benefitted functions during the base period.
d.Except where a special indirect cost rate(s) is required in accordance with subsection 4,the
separate groupings of indirect costs allocated to each major function shall be aggregated and
treated as a common pool for that function. The costs in the common pool shall then be
distributed to individual Federal awards included in that function by use of a single indirect cost
rate.
e.The distribution base used in computing the indirect cost rate for each function may be (1)
total direct costs(excluding capital expenditures and other distorting items such as pass-through
funds,major subcontracts, etc.), (2)direct salaries and wages, or(3) another base which results
in an equitable distribution. An indirect cost rate should be developed for each separate indirect
53
cost pool developed. The rate in each case should be stated as the percentage relationship
between the particular indirect cost pool and the distribution base identified with that pool.
4. Special indirect cost rates.
a. In some instances, a single indirect cost rate for all activities of a grantee department or
agency or for each major function of the agency may not be appropriate. It may not take into
account those different factors which may substantially affect the indirect costs applicable to a
particular program or group of programs. The factors may include the physical location of the
work,the level of administrative support required,the nature of the facilities or other resources
employed,the organizational arrangements used, or any combination thereof. When a particular
award is carried out in an environment which appears to generate a significantly different level
of indirect costs,provisions should be made for a separate indirect cost pool applicable to that
award. The separate indirect cost pool should be developed during the course of the regular
allocation process,and the separate indirect cost rate resulting therefrom should be used,
provided that: (1)the rate differs significantly from the rate which would have been developed
under subsections 2. and 3., and(2)the award to which the rate would apply is material in
amount.
b.Although this Circular adopts the concept of the full allocation of indirect costs,there are
some Federal statutes which restrict the reimbursement of certain indirect costs. Where such
restrictions exist, it may be necessary to develop a special rate for the affected award. Where a
"restricted rate" is required,the procedure for developing a non-restricted rate will be used
except for the additional step of the elimination from the indirect cost pool those costs for which
the law prohibits reimbursement.
D. Submission and Documentation of Proposals.
1. Submission of indirect cost rate proposals.
a. All departments or agencies of the governmental unit desiring to claim indirect costs under
Federal awards must prepare an indirect cost rate proposal and related documentation to support
those costs. The proposal and related documentation must be retained for audit in accordance
with the records retention requirements contained in the Common Rule.
b. A governmental unit for which a cognizant agency assignment has been specifically
designated must submit its indirect cost rate proposal to its cognizant agency. The Office of
Management and Budget(OMB)will periodically publish lists of governmental units identifying
the appropriate Federal cognizant agencies. The cognizant agency for all governmental units or
agencies not identified by OMB will be determined based on the Federal agency providing the
largest amount of Federal funds. In these cases, a governmental unit must develop an indirect
cost proposal in accordance with the requirements of this Circular and maintain the proposal and
related supporting documentation for audit. These governmental units are not required to submit
their proposals unless they are specifically requested to do so by the cognizant agency. Where a
local government only receives funds as a sub-recipient,the primary recipient will be responsible
for negotiating and/or monitoring the sub-recipient's plan.
54
c.Each Indian tribal government desiring reimbursement of indirect costs must submit its
indirect cost proposal to the Department of the Interior(its cognizant Federal agency).
d. Indirect cost proposals must be developed(and,when required, submitted)within six months
after the close of the governmental unit's fiscal year,unless an exception is approved by the
cognizant Federal agency. If the proposed central service cost allocation plan for the same period
has not been approved by that time,the indirect cost proposal may be prepared including an
amount for central services that is based on the latest federally-approved central service cost
allocation plan. The difference between these central service amounts and the amounts
ultimately approved will be compensated for by an adjustment in a subsequent period.
2.Documentation of proposals. The following shall be included with each indirect cost proposal:
a. The rates proposed, including subsidiary work sheets and other relevant data,cross referenced
and reconciled to the financial data noted in subsection b.Allocated central service costs will be
supported by the summary table included in the approved central service cost allocation plan.
This summary table is not required to be submitted with the indirect cost proposal if the central
service cost allocation plan for the same fiscal year has been approved by the cognizant agency
and is available to the funding agency.
b.A copy of the financial data(financial statements, comprehensive annual financial report,
executive budgets,accounting reports,etc.)upon which the rate is based.Adjustments resulting
from the use of unaudited data will be recognized,where appropriate, by the Federal cognizant
agency in a subsequent proposal.
c. The approximate amount of direct base costs incurred under Federal awards. These costs
should be broken out between salaries and wages and other direct costs.
d.A chart showing the organizational structure of the agency during the period for which the
proposal applies,along with a functional statement(s)noting the duties and/or responsibilities of
all units that comprise the agency. (Once this is submitted,only revisions need be submitted with
subsequent proposals.)
3. Required certification. Each indirect cost rate proposal shall be accompanied by a certification
in the following form:
CERTIFICATE OF INDIRECT COSTS
This is to certify that I have"reviewed the indirect cost rate proposal submitted herewith and to
the best of my knowledge and belief:
(1)All costs included in this proposal [identify date] to establish billing or final indirect costs
rates for [identify period covered by rate] are allowable in accordance with the requirements of
the Federal award(s)to which they apply and OMB Circular A-87, "Cost Principles for State,
Local, and Indian Tribal Governments."Unallowable costs have been adjusted for in allocating
costs as indicated in the cost allocation plan.
55
(2)All costs included in this proposal are properly allocable to Federal awards on the basis of a
beneficial or causal relationship between the expenses incurred and the agreements to which they
are allocated in accordance with applicable requirements. Further,the same costs that have been
treated as indirect costs have not been claimed as direct costs. Similar types of costs have been
accounted for consistently and the Federal Government will be notified of any accounting
changes that would affect the predetermined rate.
I declare that the foregoing is true and correct.
Governmental Unit:
Signature:
Name of Official:
Title:
Date of Execution:
E.Negotiation and Approval of Rates.
1. Indirect cost rates will be reviewed,negotiated, and approved by the cognizant Federal agency
on a timely basis. Once a rate has been agreed upon, it will be accepted and used by all Federal
agencies unless prohibited or limited by statute. Where a Federal funding agency has reason to
believe that special operating factors affecting its awards necessitate special indirect cost rates,
the funding agency will,prior to the time the rates are negotiated,notify the cognizant Federal
agency.
2. The use of predetermined rates, if allowed, is encouraged where the cognizant agency has
reasonable assurance based on past experience and reliable projection of the grantee agency's
costs,that the rate is not likely to exceed a rate based on actual costs. Long-term agreements
utilizing predetermined rates extending over two or more years are encouraged,where
appropriate.
3. The results of each negotiation shall be formalized in a written agreement between the
cognizant agency and the governmental unit. This agreement will be subject to re-opening if the
agreement is subsequently found to violate a statute, or the information upon which the plan was
negotiated is later found to be materially incomplete or inaccurate. The agreed upon rates shall
be made available to all Federal agencies for their use.
4.Refunds shall be made if proposals are later found to have included costs that(a)are
unallowable(i)as specified by law or regulation, (ii)as identified in Attachment B of this
Circular,or(iii)by the terms and conditions of Federal awards,or(b)are unallowable because
they are clearly not allocable to Federal awards. These adjustments or refunds will be made
regardless of the type of rate negotiated(predetermined, final, fixed,or provisional).
F. Other Policies.
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1.Fringe benefit rates. If overall fringe benefit rates are not approved for the governmental unit
as part of the central service cost allocation plan,these rates will be reviewed, negotiated and
approved for individual grantee agencies during the indirect cost negotiation process. In these
cases, a proposed fringe benefit rate computation should accompany the indirect cost proposal. If
fringe benefit rates are not used at the grantee agency level(i.e.,the agency specifically
identifies fringe benefit costs to individual employees),the governmental unit should so advise
the cognizant agency.
2. Billed services provided by the grantee agency. In some cases, governmental units provide
and bill for services similar to those covered by central service cost allocation plans(e.g.,
computer centers). Where this occurs,the governmental unit should be guided by the
requirements in Attachment C relating to the development of billing rates and documentation
requirements,and should advise the cognizant agency of any billed services.Reviews of these
types of services(including reviews of costing/billing methodology,profits or losses, etc.)will
be made on a case-by-case basis as warranted by the circumstances involved.
3. Indirect cost allocations not using rates. In certain situations,a governmental unit,because of
the nature of its awards,may be required to develop a cost allocation plan that distributes
indirect(and, in some cases,direct)costs to the specific funding sources. In these cases,a
narrative cost allocation methodology should be developed,documented,maintained for audit,or
submitted, as appropriate,to the cognizant agency for review,negotiation, and approval.
4. Appeals. If a dispute arises in a negotiation of an indirect cost rate(or other rate)between the
cognizant agency and the governmental unit,the dispute shall be resolved in accordance with the
appeals procedures of the cognizant agency.
5. Collection of unallowable costs and erroneous payments. Costs specifically identified as
unallowable and charged to Federal awards either directly or indirectly will be refunded
(including interest chargeable in accordance with applicable Federal agency regulations).
6. OMB assistance. To the extent that problems are encountered among the Federal agencies
and/or governmental units in connection with the negotiation and approval process, OMB will
lend assistance,as required,to resolve such problems in a timely manner.
57
G X 6'1 6
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%.
Revised and approved 12/18/2012
•
EXHIBIT C
DEFINITION OF PROGRAM INCOME
"Program income" means gross income received by the Recipient or a Subrecipient directly generated from the uses of
CDBG/HOME/NSP and other federal funds. When such income is generated by an activity that is only partially assisted
with CDBG/HOME/NSP and other federal funds, the income shall be prorated to reflect the percentage of
CDBG/HOME/NSP and other federal funds used.
(1) Program income includes,but is not limited to the following:
(i) Proceeds from the disposition by sale or long term lease of real property purchased or improved with
CDBG/HOME/NSP and other federal funds;
(ii) Proceeds from the disposition of equipment purchased with CDBG/HOME/NSP and other federal funds;
(iii) Gross income from the use or rental of real or personal property acquired by the Recipient or a
Subrecipient with CDBG/HOME/NSP and other federal funds, less the costs incidental to the generation
of such income;
(iv) Gross income from the use or rental of real property owned by the Recipient or a Subrecipient that was
constructed or improved with CDBG/HOME/NSP and other federal funds, less the costs incidental to the
generation of such income;
(v) Payments of principal and interest on loans made using CDBG/HOME/NSP and other federal funds;
(vi) Proceeds from the sale of loans made with CDBG/HOME/NSP and other federal funds;
(vii) Proceeds from the sale of obligations secured by loans made with CDBG/HOME/NSP and other federal
funds;
(viii) Interest earned on funds held in a revolving fund account;
(ix) Interest earned on program income pending disposition of such income; and
(x) Funds collected through special assessments made against properties owned and occupied by households
not of low- and moderate-income, where such assessments are used to recover all or part of the
CDBG/HOME/NSP and other federal portion of a public improvement.
(2) Program income does not include interest earned (except for interest described in §570.513) on cash advances
from the US Treasury. Such interest shall be remitted to HUD for transmittal to the US Treasury and will not be
reallocated under Section 106(c) or(d) of the Act. Examples of other receipts that are not considered program
income are proceeds from fundraising activities carried out by Subrecipients receiving CDBG/HOME/NSP and
other federal assistance; funds collected through special assessments used to recover the non-CDBG/HOME/NSP
and other federal portion of a public improvement; and proceeds from the disposition of real property acquired or
improved with CDBG/HOME/NSP and other federal funds when such disposition occurs after the applicable time
period specified in §570.503(b)(8) for Subrecipient-controlled property or §570.505 for Recipient-controlled
property for CDBG program funds and §92.503 for HOME/NSP program funds.
(3) Any program income generated by NSP funds through March 31, 2013 shall be used to construct housing units
east of 72nd Street affordable to low-, moderate-, and middle-income(LMMI)households. After March 31, 2013,
all program income generated by NSP funds will be limited to eligible CDBG activities, including the benefit to
low-and moderate-income (LMI) (not LMMI)households during the term of this Agreement shall be returned to
the City within thirty(30)days.
Revised and approved 12/3/2009
----WOo(7"-----D
Circular A-110
subrecipients performing required by Federal statute or are
CIRCULAR A-110 substantive work under grants and approved by OMB.
(REVISED 11/19/93,As Further agreements that are passed
Amended 9/30/99) through or awarded by the primary 6. OMB Responsibilities. OMB
recipient, if such subrecipients are will review agency regulations and
CIRCULAR NO.A-110 organizations described in implementation of this Circular,
Revised paragraph 1. and will provide interpretations of
policy requirements and
TO THE HEADS OF EXECUTIVE This Circular does not apply to assistance to insure effective and
DEPARTMENTS AND grants, contracts, or other efficient implementation. Any
ESTABLISHMENTS agreements between the Federal exceptions will be subject to
Government and units of State or approval by OMB, as indicated in
Uniform Administrative local governments covered by Section .4 in the Attachment.
Requirements for Grants and OMB Circular A-102, "Grants and Exceptions will only be made in
Agreements With Institutions of Cooperative Agreements with particular cases where adequate
Higher Education, Hospitals, and State and Local Governments," justification is presented.
Other Non-Profit Organizations and the Federal agencies' grants
management common rule which 7. Information Contact. Further
1. Purpose. This Circular sets standardized and codified the information concerning this
forth standards for obtaining administrative requirements Circular may be obtained by
consistency and uniformity among Federal agencies impose on State contacting the Office of Federal
Federal agencies in the and local grantees. In addition, Financial Management, Office of
administration of grants to and subawards and contracts to State Management and Budget,
agreements with institutions of or local governments are not Washington, DC 20503, telephone
higher education, hospitals, and covered by this Circular. However, (202)395-3993.
other non-profit organizations. this Circular applies to subawards
made by State and local 8. Termination Review Date.
2. Authority. Circular A-110 is governments to organizations This Circular will have a policy
issued under the authority of 31 covered by this Circular. Federal review three years from date of
U.S.C. 503 (the Chief Financial agencies may apply the provisions issuance.
Officers Act), 31 U.S.C. 1111, 41 of this Circular to commercial
U.S.C. 405 (the Office of Federal organizations, foreign 9. Effective Date. The standards
Procurement Policy Act), governments, organizations under set forth in this Circular which
Reorganization Plan No. 2 of the jurisdiction of foreign affect Federal agencies will be
1970, and E.O. 11541 governments, and international effective 30 days after publication
("Prescribing the Duties of the organizations. of the final revision in the Federal
Office of Management and Budget Register. Those standards which
and the Domestic Policy Council 4. Definitions. Definitions of key Federal agencies impose on
in the Executive Office of the terms used in this Circular are grantees will be adopted by
President"). contained in Section .2 in the agencies in codified regulations
Attachment. within six months after publication
3. Policy. Except as provided in the Federal Register. Earlier
herein, the standards set forth in 5. Required Action. The specific implementation is encouraged.
this Circular are applicable to all requirements and responsibilities
Federal agencies. If any statute of Federal agencies and Attachment
specifically prescribes policies or institutions of higher education,
specific requirements that differ hospitals, and other non-profit
from the standards provided organizations are set forth in this
herein, the provisions of the Circular. Federal agencies
statute shall govern. responsible for awarding and
administering grants to and other
The provisions of the sections of agreements with organizations
this Circular shall be applied by described in paragraph 1 shall
Federal agencies to recipients. adopt the language in the Circular
Recipients shall apply the unless different provisions are
provisions of this Circular to
1
Circular A-110
Grants and Agreements with .22 Payment. .47 Contract administration.
Institutions of Higher
Education, Hospitals,and Other .23 Cost sharing or matching. .48 Contract provisions.
Non-Profit Organizations
.24 Program income. Reports and Records
SUBPART A -GENERAL
.25 Revision of budget and .50 Purpose of reports and
Sec. program plans. records.
-1 Purpose. .26 Non-Federal audits. .51 Monitoring and reporting
program performance.
.2 Definitions. .27 Allowable costs.
.52 Financial reporting.
3 Effect on other issuances. .28 Period of availability of
funds. _.53 Retention and access
.4 Deviations. requirements for records.
.29 Conditional exemptions.
.5 Subawards. Termination and Enforcement
Property Standards
SUBPART B - PRE AWARD _.60 Purpose of termination and
REQUIREMENTS _.30 Purpose of property enforcement.
standards.
-10 Purpose. .61 Termination.
31 Insurance coverage.
-11 Pre-award policies. .62 Enforcement.
32 Real property.
_.12 Forms for applying for SUBPART D - • AFTER-THE-
Federal assistance. .33 Federally-owned and AWARD REQUIREMENTS
exempt property.
13 Debarment and .70 Purpose.
suspension. .34 Equipment.
_.71 Closeout procedures.
14 Special award conditions. .35 Supplies and other
expendable property. _.72 Subsequent adjustments
-15 Metric system of and continuing responsibilities.
measurement. .36 Intangible property.
.73 Collection of amounts due.
_.16 Resource Conservation .37 Property trust relationship.
and Recovery Act. APPENDIX A - CONTRACT
Procurement Standards PROVISIONS
_.17 Certifications and
representations. _.40 Purpose of procurement ***"*
standards.
SUBPART C - POST-AWARD SUBPART A-General
REQUIREMENTS .41 Recipient responsibilities.
_.1 Purpose. This Circular
Financial and Program -42 Codes of conduct. establishes uniform administrative
Management requirements for Federal grants
43 Competition. and agreements awarded to
20 Purpose of financial and institutions of higher education,
program management. .44 Procurement procedures. hospitals, and other non-profit
organizations. Federal awarding
21 Standards for financial .45 Cost and price analysis. agencies shall not impose
management systems. additional or inconsistent
.46 Procurement records. requirements, except as provided
2
Circular A-110
in Sections .4, and —14 or either before outlays are made by thereto, on which Federal
unless specifically required by the recipient or through the use of sponsorship ends.
Federal statute or executive order. predetermined payment
Non-profit organizations that schedules. (k) Disallowed costs means
implement Federal programs for those charges to an award that
the States are also subject to (e) Award means financial. the Federal awarding agency
State requirements. assistance that provides support determines to be unallowable, in
or stimulation to accomplish a accordance with the applicable
2 Definitions. public purpose. Awards include Federal cost principles or other
grants and other agreements in terms and conditions contained in
(a)Accrued expenditures means the form of money or property in the award.
the charges incurred by the lieu of money, by the Federal
recipient during a given period Government to an eligible (I) Equipment means tangible
requiring the provision of funds recipient. The term does not nonexpendable personal property
for: (1) goods and other tangible include: technical assistance, including exempt property charged
property received; (2) services which provides services instead of directly to the award having a
performed by employees, money; other assistance in the useful life of more than one year
contractors, subrecipients, and form of loans, loan guarantees, and an acquisition cost of $5000
other payees; and, (3) other interest subsidies, or insurance; or more per unit. However,
amounts becoming owed under direct payments of any kind to consistent with recipient policy,
programs for which no current individuals; and, contracts which lower limits may be established.
services or performance is are required to be entered into
required. and administered under (m) Excess property means
procurement laws and regulations. property under the control of any
(b) Accrued income means the Federal awarding agency that, as
sum of: (1) earnings during a (f) Cash contributions means the determined by the head thereof, is
given period from (i) services recipient's cash outlay, including no longer required for its needs or
performed by the recipient, and (ii) the outlay of money contributed to the discharge of its
goods and other tangible property the recipient by third parties. responsibilities.
delivered to purchasers, and (2)
amounts becoming owed to the (g) Closeout means the process (n) Exempt property means
recipient for which no current by which a Federal awarding tangible personal property
services or performance is agency determines that all acquired in whole or in part with
required by the recipient. applicable administrative actions Federal funds, where the Federal
and all required work of the award awarding agency has statutory
(c) Acquisition cost of have been completed by the authority to vest title in the
equipment means the net invoice recipient and Federal awarding recipient without further obligation
price of the equipment, including agency. to the Federal Government. An
the cost of modifications, example of exempt property
attachments, accessories, or (h) Contract means a authority is contained in the
auxiliary apparatus necessary to procurement contract under an Federal Grant and Cooperative
make the property usable for the award or subaward, and a Agreement Act (31 U.S.C. 6306),
purpose for which it was acquired. procurement subcontract under a for property acquired under an
Other charges, such as the cost of recipient's or subrecipient's award to conduct basic or applied
installation, transportation, taxes, contract. research by a non-profit institution
duty or protective in-transit of higher education or non-profit
insurance, shall be included or (i) Cost sharing or matching organization whose principal
excluded from the unit acquisition means that portion of project or purpose is conducting scientific
cost in accordance with the program costs not borne by the research.
recipient's regular accounting Federal Government.
practices. (o) Federal awarding agency
(j) Date of completion means the means the Federal agency that
(d) Advance means a payment date on which all work under an provides an award to the recipient.
made by Treasury check or other award is completed or the date on
appropriate payment mechanism the award document, or any (p) Federal funds authorized
to a recipient upon its request supplement or amendment means the total amount of Federal
3
Circular A-110
funds obligated by the Federal of cash disbursements for direct (y) Project costs means all
Government for use by the charges for goods and services, allowable costs, as set forth in the
recipient. This amount may the amount of indirect expense applicable Federal cost principles,
include any authorized carryover incurred, the value of in-kind incurred by a recipient and the
of unobligated funds from prior contributions applied, and the net value of the contributions made by
funding periods when permitted by increase (or decrease) in the third parties in accomplishing the
agency regulations or agency amounts owed by the recipient for objectives of the award during the
implementing instructions. goods and other property project period.
received, for services performed
(q) Federal share of real property, by employees, contractors, (z) Project period means the
equipment, or supplies means that subrecipients and other payees period established in the award
percentage of the property's and other amounts becoming document during which Federal
acquisition costs and any owed under programs for which sponsorship begins and ends.
improvement expenditures paid no current services or
with Federal funds. performance are required. (aa) Property means, unless
otherwise stated, real property,
(r) Funding period means the (v) Personal property means equipment, intangible property
period of time when Federal property of any kind except real and debt instruments.
funding is available for obligation property. It may be tangible,
by the recipient. having physical existence, or (bb) Real property means land,
intangible, having no physical including land improvements,
(s) Intangible property and debt existence, such as copyrights, structures and appurtenances
instruments means, but is not patents,or securities. thereto, but excludes movable
limited to, trademarks, copyrights, machinery and equipment.
patents and patent applications (w) Prior approval means written
and such property as loans, notes approval by an authorized official (cc) Recipient means an
and other debt instruments, lease evidencing prior consent. organization receiving financial
agreements, stock and other assistance directly from Federal
instruments of property ownership, (x) Program income means gross awarding agencies to carry out a
whether considered tangible or income earned by the recipient project or program. The term
intangible. that is directly generated by a includes public and private
supported activity or earned as a institutions of higher education,
(t) Obligations means the result of the award (see public and private hospitals, and
amounts of orders placed, exclusions in paragraphs .24 other quasi-public and private
contracts and grants awarded, (e) and (h)). Program income non-profit organizations such as,
services received and similar includes, but is not limited to, but not limited to, community
transactions during a given period income from fees for services action agencies, research
that require payment by the performed, the use or rental of institutes, educational
recipient during the same or a real or personal property acquired associations, and health centers.
future period. under federally-funded projects, The term may include commercial
the sale of commodities or items organizations, foreign or
(u) Outlays or expenditures fabricated under an award, license international organizations (such
means charges made to the fees and royalties on patents and as agencies of the United Nations)
project or program. They may be copyrights, and interest on loans which are recipients,
reported on a cash or accrual made with award funds. Interest subrecipients, or contractors or
basis. For reports prepared on a earned on advances of Federal subcontractors of recipients or
cash basis, outlays are the sum of funds is not program income. subrecipients at the discretion of
cash disbursements for direct Except as otherwise provided in the Federal awarding agency. The
charges for goods and services, Federal awarding agency term does not include
the amount of indirect expense regulations or the terms and government-owned contractor-
charged, the value of third party conditions of the award, program operated facilities or research
in-kind contributions applied and income does not include the centers providing continued
the amount of cash advances and receipt of principal on loans, support for mission-oriented,
payments made to subrecipients. rebates, credits, discounts, etc., or large-scale programs that are
For reports prepared on an interest earned on any of them. government-owned or controlled,
accrual basis, outlays are the sum or are designated as federally-
4
Circular A-110
funded research and development the recipient for the use of the identifiable to the project or
centers. funds provided. The term may program.
include foreign or international
(dd) Research and development organizations (such as agencies (II) Unliquidated obligations, for
means all research activities, both of the United Nations) at the financial reports prepared on a
basic and applied, and all discretion of the Federal awarding cash basis, means the amount of
development activities that are agency. obligations incurred by the
supported at universities, colleges, recipient that have not been paid.
and other non-profit institutions. (hh) Supplies means all personal For reports prepared on an
"Research" is defined as a property excluding equipment, accrued expenditure basis, they
systematic study directed toward intangible property, and debt represent the amount of
fuller scientific knowledge or instruments as defined in this obligations incurred by the
understanding of the subject section, and inventions of a recipient for which an outlay has
studied. "Development" is the contractor conceived or first not been recorded.
systematic use of knowledge and actually reduced to practice in the
understanding gained from performance of work under a (mm) Unobligated balance
research directed toward the funding agreement ("subject means the portion of the funds
production of useful materials, inventions"), as defined in 37 CFR authorized by the Federal
devices, systems, or methods, part 401, "Rights to Inventions awarding agency that has not
including design and development Made by Nonprofit Organizations been obligated by the recipient
of prototypes and processes. The and Small Business Firms Under and is determined by deducting
term research also includes Government Grants, Contracts, the cumulative obligations from
activities involving the training of and Cooperative Agreements." the cumulative funds authorized.
individuals in research techniques
where such activities utilize the (ii) Suspension means an action (nn) Unrecovered indirect cost
same facilities as other research by a Federal awarding agency that means the difference between the
and development activities and temporarily withdraws Federal amount awarded and the amount
where such activities are not sponsorship under an award, which could have been awarded
included in the instruction function. pending corrective action by the under the recipient's approved
recipient or pending a decision to negotiated indirect cost rate.
(ee) Small awards means a grant terminate the award by the
or cooperative agreement not Federal awarding agency. (oo) Working capital advance
exceeding the small purchase Suspension of an award is a means a procedure where by
threshold fixed at 41 U.S.C. separate action from suspension funds are advanced to the
403(11) (currently$25,000). under Federal agency regulations recipient to cover its estimated
implementing E.O.s 12549 and disbursement needs for a given
(ff) Subaward means an award of 12689, "Debarment and initial period.
financial assistance in the form of Suspension."
money, or property in lieu of _.3 Effect on other issuances.
money, made under an award by (jj) Termination means the For awards subject to this
a recipient to an eligible cancellation of Federal Circular, all administrative
subrecipient or by a subrecipient sponsorship, in whole or in part, requirements of codified program
to a lower tier subrecipient. The under an agreement at any time regulations, program manuals,
term includes financial assistance prior to the date of completion. handbooks and other
when provided by any legal nonregulatory materials which are
agreement, even if the agreement (kk) Third party in-kind inconsistent with the requirements
is called a contract, but does not contributions means the value of of this Circular shall be
include procurement of goods and non-cash contributions provided superseded, except to the extent
services nor does it include any by non-Federal third parties. Third they are required by statute, or
form of assistance which is party in-kind contributions may be authorized in accordance with the
excluded from the definition of in the form of real property, deviations provision in
"award"in paragraph (e). equipment, supplies and other Section .4.
expendable property, and the
(gg) Subrecipient means the value of goods and services _.4 Deviations. The Office of
legal entity to which a subaward is directly benefiting and specifically Management and Budget (OMB)
made and which is accountable to may grant exceptions for classes
5
Circular A-110
of grants or recipients subject to awarding agency shall decide on (c) For Federal programs covered
the requirements of this Circular the appropriate award instrument by E.O. 12372,
when exceptions are not (i.e., grant, cooperative "Intergovernmental Review of
prohibited by statute. However, in agreement, or contract). The Federal Programs," the applicant
the interest of maximum Federal Grant and Cooperative shall complete the appropriate
uniformity, exceptions from the Agreement Act (31 U.S.C. 6301- sections of the SF-424
requirements of this Circular shall 08) governs the use of grants, (Application for Federal
be permitted only in unusual cooperative agreements and Assistance) indicating whether the
circumstances. Federal awarding contracts. A grant or cooperative application was subject to review
agencies may apply more agreement shall be used only by the State Single Point of
restrictive requirements to a class when the principal purpose of a Contact (SPOC). The name and
of recipients when approved by transaction is to accomplish a address of the SPOC for a
OMB. Federal awarding agencies public purpose of support or particular State can be obtained
may apply less restrictive stimulation authorized by Federal from the Federal awarding agency
requirements when awarding statute. The statutory criterion for or the Catalog of Federal
small awards, except for those choosing between grants and Domestic Assistance. The
requirements which are statutory. cooperative agreements is that for SPOC shall advise the applicant
Exceptions on a case-by-case the latter, "substantial involvement whether the program for which
basis may also be made by is expected between the executive application is made has been
Federal awarding agencies. agency and the State, local selected by that State for review.
government, or other recipient
_.5 Subawards. Unless sections when carrying out the activity (d) Federal awarding agencies
of this Circular specifically exclude contemplated in the agreement." that do not use the SF-424 form
subrecipients from coverage, the Contracts shall be used when the should indicate whether the
provisions of this Circular shall be principal purpose is acquisition of application is subject to review by
applied to subrecipients property or services for the direct the State under E.O. 12372.
performing work under awards if benefit or use of the Federal
such subrecipients are institutions Government. —13 Debarment and
of higher education, hospitals or suspension. Federal awarding
other non-profit organizations. (b) Public Notice and Priority agencies and recipients shall
State and local government Setting. Federal awarding comply with the nonprocurement
subrecipients are subject to the agencies shall notify the public of debarment and suspension
provisions of regulations its intended funding priorities for common rule implementing E.O.s
implementing the grants discretionary grant programs, 12549 and 12689, "Debarment
management common unless funding priorities are and Suspension." This common
rule,"Uniform Administrative established by Federal statute. rule restricts subawards and
Requirements for Grants and contracts with certain parties that
Cooperative Agreements to State _.12 Forms for applying for are debarred, suspended or
and Local Governments," Federal assistance. otherwise excluded from or
published at 53 FR 8034 ineligible for participation in
(3/11/88). (a) Federal awarding agencies Federal assistance programs or •
shall comply with the applicable activities.
SUBPART B - Pre-Award report clearance requirements of 5
Requirements CFR part 1320, "Controlling _.14 Special award conditions.
Paperwork Burdens on the If an applicant or recipient: (a) has
_.10 Purpose. Sections _.11 Public," with regard to all forms a history of poor performance, (b)
through —17 prescribes forms used by the Federal awarding is not financially stable, (c) has a
and instructions and other pre- agency in place of or as a management system that does not
award matters to be used in supplement to the Standard Form meet the standards prescribed in
applying for Federal awards. 424(SF-424)series. this Circular, (d) has not
conformed to the terms and
—11 Pre-award policies. (b) Applicants shall use the SF- conditions of a previous award, or
424 series or those forms and (e) is not otherwise responsible,
(a) Use of Grants and Cooperative instructions prescribed by the Federal awarding agencies may
Agreements, and Contracts. In Federal awarding agency. impose additional requirements as
each instance, the Federal needed, provided that such
6
Circular A-110
applicant or recipient is notified in containing recycled materials (a) Federal awarding agencies
writing as to: the nature of the identified in guidelines developed shall require recipients to relate
additional requirements, the by the Environmental Protection financial data to performance data
reason why the additional Agency (EPA) (40 CFR parts 247- and develop unit cost information
requirements are being imposed, 254). Accordingly, State and local whenever practical.
the nature of the corrective action institutions of higher education,
needed, the time allowed for hospitals, and non-profit (b) Recipients' financial
completing the corrective actions, organizations that receive direct management systems shall
and the method for requesting Federal awards or other Federal provide for the following.
reconsideration of the additional funds shall give preference in their
requirements imposed. Any procurement programs funded (1) Accurate, current and
special conditions shall be with Federal funds to the purchase complete disclosure of the
promptly removed once the of recycled products pursuant to financial results of each federally-
conditions that prompted them the EPA guidelines. sponsored project or program in
have been corrected. accordance with the reporting
.17 Certifications and requirements set forth in Section
.15 Metric system of representations. Unless prohibited _.52. If a Federal awarding
measurement. The Metric by statute or codified regulation, agency requires reporting on an
Conversion Act, as amended by each Federal awarding agency is accrual basis from a recipient that
the Omnibus Trade and authorized and encouraged to maintains its records on other than
Competitiveness Act (15 U.S.C. allow recipients to submit an accrual basis, the recipient
205) declares that the metric certifications and representations shall not be required to establish
system is the preferred required by statute, executive an accrual accounting system.
measurement system for U.S. order, or regulation on an annual These recipients may develop
trade and commerce. The Act basis, if the recipients have such accrual data for its reports on
requires each Federal agency to ongoing and continuing the basis of an analysis of the
establish a date or dates in relationships with the agency. documentation on hand.
consultation with the Secretary of Annual certifications and
Commerce, when the metric representations shall be signed by (2) Records that identify
system of measurement will be responsible officials with the adequately the source and
used in the agency's authority to ensure recipients' application of funds for federally-
procurements, grants, and other compliance with the pertinent sponsored activities. These
business-related activities. Metric requirements. records shall contain information
implementation may take longer pertaining to Federal awards,
where the use of the system is SUBPART C - Post-Award authorizations, obligations,
initially impractical or likely to Requirements unobligated balances, assets,
cause significant inefficiencies in outlays, income and interest.
• the accomplishment of federally- Financial and Program
funded activities. Federal Management (3) Effective control over and
awarding agencies shall follow the accountability for all funds,
provisions of E.O. 12770, "Metric .20 Purpose of financial and property and other assets.
Usage in Federal Government program management. Sections Recipients shall adequately
Programs." _.21 through .28 prescribe safeguard all such assets and
standards for financial assure they are used solely for
.16 Resource Conservation management systems, methods authorized purposes.
and Recovery Act (RCRA) (Pub. for making payments and rules
L. 94-580 codified at 42 U.S.C. for: satisfying cost sharing and (4) Comparison of outlays with
6962). Under the Act, any State matching requirements, budget amounts for each award.
agency or agency of a political accounting for program income, Whenever .appropriate, financial
subdivision of a State which is budget revision approvals, making information should be related to
using appropriated Federal funds audits, determining allowability of performance and unit cost data.
must comply with Section 6002. cost, and establishing fund
Section 6002 requires that availability. (5)Written procedures to minimize
preference be given in the time elapsing between the
procurement programs to the .21 Standards for financial transfer of funds to the recipient
purchase of specific products management systems. from the U.S. Treasury and the
7
Circular A-110
issuance or redemption of checks, as prescribed in 31 CFR part 223, (1) Advance payment
warrants or payments by other "Surety Companies Doing mechanisms include, but are not
means for program purposes by Business with the United States." limited to, Treasury check and
the recipient. To the extent that electronic funds transfer.
the provisions of the Cash .22 Payment.
Management Improvement Act (2) Advance payment
(CMIA) (Pub. L. 101-453) govern, (a) Payment methods shall mechanisms are subject to 31
payment methods of State minimize the time elapsing CFR part 205.
agencies, instrumentalities, and between the transfer of funds from
fiscal agents shall be consistent the United States Treasury and (3) Recipients shall be authorized
with CMIA Treasury-State the issuance or redemption of to submit requests for advances
Agreements or the CMIA default checks, warrants, or payment by and reimbursements at least
procedures codified at 31 CFR other means by the recipients. monthly when electronic fund
part 205, "Withdrawal of Cash Payment methods of State transfers are not used.
from the Treasury for Advances agencies or instrumentalities shall
under Federal Grant and Other be consistent with Treasury-State (d) Requests for Treasury check
Programs." CMIA agreements or default advance payment shall be
procedures codified at 31 CFR submitted on SF-270, "Request
(6) Written procedures for part 205. for Advance or Reimbursement,"
determining the reasonableness, or other forms as may be
allocability and allowability of (b) Recipients are to be paid in authorized by OMB. This form is
costs in accordance with the advance, provided they maintain not to be used when Treasury
provisions of the applicable or demonstrate the willingness to check advance payments are
Federal cost principles and the maintain: (1) written procedures made to the recipient
terms and conditions of the award. that minimize the time elapsing automatically through the use of a
between the transfer of funds and predetermined payment schedule
(7) Accounting records including disbursement by the recipient, and or if precluded by special Federal
cost accounting records that are (2)financial management systems awarding agency instructions for
supported by source that meet the standards for fund electronic funds transfer.
documentation. control and accountability as
established in Section _.21. _ (e) Reimbursement is the
(c) Where the Federal Cash advances to a recipient preferred method when the
Government guarantees or organization shall be limited to the requirements in paragraph (b)
insures the repayment of money minimum amounts needed and be cannot be met. Federal awarding
borrowed by the recipient, the timed to be in accordance with the agencies may also use this
Federal awarding agency, at its actual, immediate cash method on any construction
discretion, may require adequate requirements of the recipient agreement, or if the major portion
bonding and insurance if the organization in carrying out the of the construction project is
bonding and insurance purpose of the approved program accomplished through private
requirements of the recipient are or project. The timing and amount market financing or Federal loans,
not deemed adequate to protect of cash advances shall be as and the Federal assistance
the interest of the Federal close as is administratively constitutes a minor portion of the
Government. feasible to the actual project.
disbursements by the recipient
(d) The Federal awarding agency organization for direct program or (1) When the reimbursement
may require adequate fidelity bond project costs and the method is used, the Federal
coverage where the recipient proportionate share of any awarding agency shall make
lacks sufficient coverage to protect allowable indirect costs. payment within 30 days after
the Federal Government's receipt of the billing, unless the
interest. (c) Whenever possible, advances billing is improper.
shall be consolidated to cover
(e) Where bonds are required in anticipated cash needs for all (2) Recipients shall be authorized
the situations described above, awards made by the Federal to submit request for
the bonds shall be obtained from awarding agency to the recipient. reimbursement at least monthly
companies holding certificates of when electronic funds transfers
authority as acceptable sureties, are not used.
8
Circular A-110
(f) If a recipient cannot meet the conditions, the Federal awarding excess of $250 per year on
criteria for advance payments and agency may, upon reasonable Federal cash balances.
the Federal awarding agency has notice, inform the recipient that
determined that reimbursement is payments shall not be made for (3) The depository would require
not feasible because the recipient obligations incurred after a an average or minimum balance
lacks sufficient working capital, the specified date until the conditions so high that it would not be
Federal awarding agency may are corrected or the indebtedness feasible within the expected
provide cash on a working capital to the Federal Government is Federal and non-Federal cash
advance basis. Under this liquidated. resources.
procedure, the Federal awarding
agency shall advance cash to the (i) Standards governing the use of (I) For those entities where CMIA
recipient to cover its estimated banks and other institutions as and its implementing regulations
disbursement needs for an initial depositories of funds advanced do not apply, interest earned on
period generally geared to the under awards are as follows. Federal advances deposited in
awardee's disbursing cycle. interest bearing accounts shall be
Thereafter, the Federal awarding (1) Except for situations described remitted annually to Department of
agency shall reimburse the in paragraph (i)(2), Federal Health and Human Services,
recipient for its actual cash awarding agencies shall not Payment Management System,
disbursements. The working require separate depository Rockville, MD 20852. Interest
capital advance method of accounts for funds provided to a amounts up to $250 per year may
payment shall not be used for recipient or establish any eligibility be retained by the recipient for
recipients unwilling or unable to requirements for depositories for administrative expense. State
provide timely advances to their funds provided to a recipient. universities and hospitals shall
subrecipient to meet the However, recipients must be able comply with CMIA, as it pertains to
subrecipient's actual cash to account for the receipt, interest. If an entity subject to
disbursements. obligation and expenditure of CMIA uses its own funds to pay
funds. pre-award costs for discretionary
(g) To the extent available, awards without prior written
recipients shall disburse funds (2) Advances of Federal funds approval from the Federal
available from repayments to and shall be deposited and maintained awarding agency, it waives its
interest earned on a revolving in insured accounts whenever right to recover the interest under
fund, program income, rebates, possible. CMIA.
refunds, contract settlements,
audit recoveries and interest 6) Consistent with the national (m) Except as noted elsewhere in
earned on such funds before goal of expanding the this Circular, only the following
requesting additional cash opportunities for women-owned forms shall be authorized for the
payments. and minority-owned business recipients in requesting advances
enterprises, recipients shall be and reimbursements. Federal
(h) Unless otherwise required by encouraged to use women-owned agencies shall not require more
statute, Federal awarding and minority-owned banks (a bank than an original and two copies of
agencies shall not withhold which is owned at least 50 percent these forms.
payments for proper charges by women or minority group
made by recipients at any time members). (1) SF-270, Request for Advance
during the project period unless or Reimbursement. Each Federal
(1)or(2)apply. (k) Recipients shall maintain awarding agency shall adopt the
advances of Federal funds in SF-270 as a standard form for all
(1)A recipient has failed to comply interest bearing accounts, unless nonconstruction programs when
with the project objectives, the (1), (2)or(3)apply. electronic funds transfer or
terms and conditions of the award, predetermined advance methods
or Federal reporting requirements. (1) The recipient receives less are not used. Federal awarding
than $120,000 in Federal awards agencies, however, have the
(2) The recipient or subrecipient is per year. option of using this form for
delinquent in a debt to the United construction programs in lieu of
States as defined in OMB Circular (2) The best reasonably available the SF-271, "Outlay Report and
A-129, "Managing Federal Credit interest bearing account would not Request for Reimbursement for
Programs." Under such be expected to earn interest in Construction Programs."
9
Circular A-110
(2) SF-271, Outlay Report and prior approval of the Federal (e) When an employer other than
Request for Reimbursement for awarding agency. the recipient furnishes the
Construction Programs. Each services of an employee, these
Federal awarding agency shall (c) Values for recipient services shall be valued at the
adopt the SF-271 as the standard contributions of services and employee's regular rate of pay
form to be used for requesting property shall be established in (plus an amount of fringe benefits
reimbursement for construction accordance with the applicable that are reasonable, allowable,
programs. However, a Federal cost principles. If a Federal and allocable, but exclusive of
awarding agency may substitute awarding agency authorizes overhead costs), provided these
the SF-270 when the Federal recipients to donate buildings or services are in the same skill for
awarding agency determines that land for construction/facilities which the employee is normally
it provides adequate information to acquisition projects or long-term paid.
meet Federal needs. use, the value of the donated
property for cost sharing or (f) Donated supplies may include
_23 Cost sharing or matching. matching shall be the lesser of(1) such items as expendable
or(2). equipment, office supplies,
(a) All contributions, including laboratory supplies or workshop
cash and third party in-kind, shall (1) The certified value of the and classroom supplies. Value
be accepted as part of the remaining life of the property assessed to donated supplies
recipient's cost sharing or recorded in the recipient's included in the cost sharing or
matching when such contributions accounting records at the time of matching share shall be
meet all of the following criteria. donation. reasonable and shall not exceed
the fair market value of the
(1) Are verifiable from the (2) The current fair market value. property at the time of the
recipient's records. However, when there is sufficient donation.
justification, the Federal awarding
(2) Are not included as agency may approve the use of (g) The method used for
contributions for any other the current fair market value of the determining cost sharing or
federally-assisted project or donated property, even if it matching for donated equipment,
program. exceeds the certified value at the buildings and land for which title
time of donation to the project. passes to the recipient may differ
(3)Are necessary and reasonable according to the purpose of the
for proper and efficient (d) Volunteer services furnished award, if(1)or(2)apply.
accomplishment of project or by professional and technical
program objectives. personnel, consultants, and other (1) If the purpose of the award is
skilled and unskilled labor may be to assist the recipient in the
(4) Are allowable under the counted as cost sharing or acquisition of equipment, buildings
applicable cost principles. matching if the service is an or land, the total value of the
integral and necessary part of an donated property may be claimed
(5) Are not paid by the Federal approved project or program. as cost sharing or matching.
Government under another award, Rates for volunteer services shall
except where authorized by be consistent with those paid for (2) If the purpose of the award is
Federal statute to be used for cost similar work in the recipient's to support activities that require
sharing or matching. organization. In those instances in the use of equipment, buildings or
which the required skills are not land, normally only depreciation or
(6) Are provided for in the found in the recipient organization, use charges for equipment and
approved budget when required rates shall be consistent with buildings may be made. However,
by the Federal awarding agency. those paid for similar work in the the full value of equipment or
labor market in which the recipient other capital assets and fair rental
(7) Conform to other provisions of competes for the kind of services charges for land may be allowed,
this Circular, as applicable. involved. In either case, paid provided that the Federal
fringe benefits that are awarding agency has approved
(b) Unrecovered indirect costs reasonable, allowable, and the charges.
may be included as part of cost allocable may be included in the
sharing or matching only with the valuation. (h) The value of donated property
shall be determined in accordance
10
Circular A-110
with the usual accounting policies program income related to (e) Unless Federal awarding
of the recipient, with the following projects financed in whole or in agency regulations or the terms
qualifications. part with Federal funds. and conditions of the award
provide otherwise, recipients shall
(1) The value of donated land and (b) Except as provided in have no obligation to the Federal
buildings shall not exceed its fair paragraph (h) below, program Government regarding program.
market value at the time of income earned during the project income earned after the end of the
donation to the recipient as period shall be retained by the project period.
established by an independent recipient and, in accordance with
appraiser (e.g., certified real Federal awarding agency (f) If authorized by Federal
property appraiser or General regulations or the terms and awarding agency regulations or
Services Administration conditions of the award, shall be the terms and conditions of the
representative) and certified by a used in one or more of the ways award, costs incident to the
responsible official of the recipient. listed in the following. generation of program income
may be deducted from gross
(2) The value of donated (1) Added to funds committed to income to determine program
equipment shall not exceed the the project by the Federal income, provided these costs
fair market value of equipment of awarding agency and recipient have not been charged to the
the same age and condition at the and used to further eligible project award.
time of donation. or program objectives.
(g) Proceeds from the sale of
(3) The value of donated space (2) Used to finance the non- property shall be handled in
shall not exceed the fair rental Federal share of the project or accordance with the requirements
value of comparable space as program. of the Property Standards (See
established by an independent Sections .30 through .37).
appraisal of comparable space (3) Deducted from the total project
and facilities in a privately-owned or program allowable cost in (h) Unless Federal awarding
building in the same locality. determining the net allowable agency regulations or the terms
costs on which the Federal share and condition of the award provide
(4)The value of loaned equipment of costs is based. otherwise, recipients shall have no
shall not exceed its fair rental obligation to the Federal
value. (c) When an agency authorizes Government with respect to
the disposition of program income program income earned from
(5) The following requirements as described in paragraphs (b)(1) license fees and royalties for
pertain to the recipient's or (b)(2), program income in copyrighted material, patents,
supporting records for in-kind excess of any limits stipulated patent applications, trademarks,
contributions from third parties. shall be used in accordance with and inventions produced under an
paragraph(b)(3). award. However, Patent and
(i) Volunteer services shall be Trademark Amendments (35
documented and, to the extent (d) In the event that the Federal U.S.C. 18) apply to inventions
feasible, supported by the same awarding agency does not specify made under an experimental,
methods used by the recipient for in its regulations or the terms and developmental, or research
its own employees. conditions of the award how award.
program income is to be used,
(ii) The basis for determining the paragraph (b)(3) shall apply —25 Revision of budget and
valuation for personal service, automatically to all projects or program plans.
material, equipment, buildings and programs except research. For
land shall be documented. awards that support research, (a)The budget plan is the financial
paragraph (b)(1) shall apply expression of the project or
.24 Program income. automatically unless the awarding program as approved during the
agency indicates in the terms and award process. It may include
(a) Federal awarding agencies conditions another alternative on either the Federal and non-
shall apply the standards set forth the award or the recipient is Federal share, or only the Federal
in this section in requiring recipient subject to special award share, depending upon Federal
organizations to account for conditions, as indicated in Section awarding agency requirements. It
—14. shall be related to performance for
11
Circular A-110
program evaluation purposes CFR part 31, "Contract Cost the recipient must notify the
whenever appropriate. Principles and Procedures," as Federal awarding agency in
applicable. writing with the supporting
(b) Recipients are required to reasons and revised expiration
report deviations from budget and (7) The transfer of funds allotted date at least 10 days before the
program plans, and request prior for training allowances (direct expiration date specified in the
approvals for budget and program payment to trainees) to other award. This one-time extension
plan revisions, in accordance with categories of expense. may not be exercised merely for
this section. the purpose of using unobligated
(8) Unless described in the balances.
(c) For nonconstruction awards, application and funded in the
recipients shall request prior approved awards, the subaward, (i) The terms and conditions of
approvals from Federal awarding transfer or contracting out of any award prohibit the extension.
agencies for one or more of the work under an award. This
following program or budget provision does not apply to the (ii) The extension requires
related reasons. purchase of supplies, material, additional Federal funds.
equipment or general support
(1) Change in the scope or the services. (iii) The extension involves any
objective of the project or program change in the approved objectives
(even if there is no associated (d) No other prior approval or scope of the project.
budget revision requiring prior requirements for specific items
written approval). may be imposed unless a (3) Carry forward unobligated
deviation has been approved by balances to subsequent funding
(2) Change in a key person OMB. periods.
specified in the application or
award document. (e) Except for requirements listed (4) For awards that support
in paragraphs (c)(1) and (c)(4) of research, unless the Federal
(3) The absence for more than this section, Federal awarding awarding agency provides
three months, or a 25 percent agencies are authorized, at their otherwise in the award or in the
reduction in time devoted to the option, to waive cost-related and agency's regulations, the prior
project, by the approved project administrative prior written approval requirements described
director or principal investigator. approvals required by this Circular in paragraph (e) are automatically
and OMB Circulars A-21 and A- waived (i.e., recipients need not
(4) The need for additional 122. Such waivers may include obtain such prior approvals)
Federal funding. authorizing recipients to do any unless one of the conditions
one or more of the following. included in paragraph (e)(2)
(5) The transfer of amounts applies.
budgeted for indirect costs to (1) Incur pre-award costs 90
absorb increases in direct costs, calendar days prior to award or (f) The Federal awarding agency
or vice versa, if approval is more than 90 calendar days with may, at its option, restrict the
required by the Federal awarding the prior approval of the Federal transfer of funds among direct
agency. awarding agency. All pre-award cost categories or programs,
costs are incurred at the functions and activities for awards
(6) The inclusion, unless waived recipient's risk (i.e., the Federal in which the Federal share of the
by the Federal awarding agency, awarding agency is under no project exceeds $100,000 and the
of costs that require prior approval obligation to reimburse such costs cumulative amount of such
in accordance with OMB Circular if for any reason the recipient does transfers exceeds or is expected
A-21, "Cost Principles for not receive an award or if the to exceed 10 percent of the total
Educational Institutions," OMB award is less than anticipated and budget as last approved by the
Circular A-122, "Cost Principles inadequate to cover such costs). Federal awarding agency. No
for Non-Profit Organizations," or Federal awarding agency shall
45 CFR part 74 Appendix E, (2) Initiate a one-time extension of permit a transfer that would cause
"Principles for Determining Costs the expiration date of the award of any Federal appropriation or part
Applicable to Research and up to 12 months unless one or thereof to be used for purposes
Development under Grants and more of the following conditions other than those consistent with
Contracts with Hospitals," or 48 apply. For one-time extensions,
12
Circular A-110
the original intent of the promptly whenever the amount of Governments, and Non-Profit
appropriation. Federal authorized funds is Organizations."
expected to exceed the needs of
(g) All other changes to the recipient for the project period (c) For-profit hospitals not covered
nonconstruction budgets, except by more than $5000 or five by the audit provisions of revised
for the changes described in percent of the Federal award, OMB Circular A-133 shall be
paragraph (j), do not require prior whichever is greater. This subject to the audit requirements
approval. notification shall not be required if of the Federal awarding agencies.
an application for additional
(h) For construction awards, funding is submitted for a (d) Commercial organizations
recipients shall request prior continuation award. shall be subject to the audit
written approval promptly from requirements of the Federal
Federal awarding agencies for (I) When requesting approval for awarding agency or the prime
budget revisions whenever(1), (2) budget revisions, recipients shall recipient as incorporated into the
or(3)apply. use the budget forms that were award document.
used in the application unless the
(1) The revision results from Federal awarding agency _.27 Allowable costs. For each
changes in the scope or the indicates a letter of request kind of recipient, there is a set of
objective of the project or suffices. Federal principles for determining
program. allowable costs. Allowability of
(m) Within 30 calendar days from costs shall be determined in
(2) The need arises for additional the date of receipt of the request accordance with the cost
Federal funds to complete the for budget revisions, Federal principles applicable to the entity
project. awarding agencies shall review incurring the costs. Thus,
the request and notify the recipient allowability of costs incurred by
(3) A revision is desired which whether the budget revisions have State, local or federally-
involves specific costs for which been approved. If the revision is recognized Indian tribal
prior written approval still under consideration at the end governments is determined in
requirements may be imposed of 30 calendar days, the Federal accordance with the provisions of
consistent with applicable OMB awarding agency shall inform the OMB Circular A-87, "Cost
cost principles listed in recipient in writing of the date Principles for State, Local, and
Section .27. when the recipient may expect the Indian Tribal Governments." The
decision. allowability of costs incurred by
(i) No other prior approval non-profit organizations is
requirements for specific items _26 Non-Federal audits. determined in accordance with the
may be imposed unless a provisions of OMB Circular A-122,
deviation has been approved by (a) Recipients and subrecipients "Cost Principles for Non-Profit
OMB. that are institutions of higher Organizations." The allowability of
education or other non-profit costs incurred by institutions of
(j) When a Federal awarding organizations (including hospitals) higher education is determined in
agency makes an award that shall be subject to the audit accordance with the provisions of
provides support for both requirements contained in the OMB Circular A-21, "Cost
construction and nonconstruction Single Audit Act Amendments of Principles for Educational
work, the Federal awarding 1996 (31 USC 7501-7507) and Institutions." The allowability of
agency may require the recipient revised OMB Circular A-133, costs incurred by hospitals is
to request prior approval from the "Audits of States, Local determined in accordance with the
Federal awarding agency before Governments, and Non-Profit provisions of Appendix E of 45
making any fund or budget Organizations." CFR part 74, "Principles for
transfers between the two types of Determining Costs Applicable to
work supported. (b) State and local governments Research and Development
shall be subject to the audit Under Grants and Contracts with
(k) For both construction and requirements contained in the Hospitals." The allowability of
nonconstruction awards, Federal Single Audit Act Amendments of costs incurred by commercial
awarding agencies shall require 1996 (31 USC 7501-7507) and organizations and those non-profit
recipients to notify the Federal revised OMB Circular A-133, organizations listed in Attachment
awarding agency in writing "Audits of States, Local C to Circular A-122 is determined
13
Circular A-110
in accordance with the provisions (Attachment A, subsection A.4), procedures provided it observes
of the Federal Acquisition "Cost Principles for Non-Profit the provisions of Sections .31
Regulation (FAR) at 48 CFR part Organizations," and from all of the through .37.
31. administrative requirements
provisions of OMB Circular A-110, _.31 Insurance coverage.
_.28 Period of availability of "Uniform Administrative Recipients shall, at a minimum,
funds. Where a funding period is Requirements for Grants and provide the equivalent insurance
specified, a recipient may charge Agreements with. Institutions of coverage for real property and
to the grant only allowable costs Higher Education, Hospitals, and equipment acquired with Federal
resulting from obligations incurred Other Non-Profit Organizations," funds as provided to property
during the funding period and any and the agencies' grants owned by the recipient. Federally-
pre-award costs authorized by the management common rule. owned property need not be
Federal awarding agency. insured unless required by the
(c) When a Federal agency terms and conditions of the award.
.29 Conditional exemptions. provides this flexibility, as a
prerequisite to a State's exercising _.32 Real property. Each
(a) OMB authorizes conditional this option, a State must adopt its Federal awarding agency shall
exemption from OMB own written fiscal and prescribe requirements for
administrative requirements and administrative requirements for recipients concerning the use and
cost principles circulars for certain expending and accounting for all disposition of real property
Federal programs with statutorily- funds, which are consistent with acquired in whole or in part under
authorized consolidated planning the provisions of OMB Circular A- awards. Unless otherwise
and consolidated administrative 87, and extend such policies to all provided by statute, such
funding, that are identified by a subrecipients. These fiscal and requirements, at a minimum, shall
Federal agency and approved by administrative requirements must contain the following.
the head of the Executive be sufficiently specific to ensure
department or establishment. A that: funds are used in compliance (a) Title to real property shall vest
Federal agency shall consult with with all applicable Federal in the recipient subject to the
OMB during its consideration of statutory and regulatory condition that the recipient shall
whether to grant such an provisions, costs are reasonable use the real property for the
exemption. and necessary for operating these authorized purpose of the project
programs, and funds are not be as long as it is needed and shall
(b) To promote efficiency in State used for general expenses not encumber the property without
and local program administration, required to carry out other approval of the Federal awarding
when Federal non-entitlement responsibilities of a State or its agency.
programs with common purposes subrecipients.
have specific statutorily-authorized (b) The recipient shall obtain
consolidated planning and Property Standards written approval by the Federal
consolidated administrative awarding agency for the use of
funding and where most of the _.30 Purpose of property real property in other federally-
State agency's resources come standards. Sections _.31 sponsored projects when the
from non-Federal sources, through .37 set forth uniform recipient determines that the
Federal agencies may exempt standards governing management property is no longer needed for
these covered State-administered, and disposition of property the purpose of the original project.
non-entitlement grant programs furnished by the Federal Use in other projects shall be
from certain OMB grants Government whose cost was limited to those under federally-
management requirements. The charged to a project supported by sponsored projects (i.e., awards)
exemptions would be from all but a Federal award. Federal or programs that have purposes
the allocability of costs provisions awarding agencies shall require consistent with those authorized
of OMB Circulars A-87 recipients to observe these for support by the Federal
(Attachment A, subsection C.3), standards under awards and shall awarding agency.
"Cost Principles for State, Local, not impose additional
and Indian Tribal Governments," requirements, unless specifically (c) When the real property is no
A-21 (Section C, subpart 4), "Cost required by Federal statute. The longer needed as provided in
Principles for Educational recipient may use its own property paragraphs (a) and (b), the
Institutions," and A-122 management standards and recipient shall request disposition
14
Circular A-110
instructions from the Federal listing of federally-owned property (b) The recipient shall not use
awarding agency or its successor in their custody to the Federal equipment acquired with Federal
Federal awarding agency. The awarding agency. Upon funds to provide services to non-
Federal awarding agency shall completion of the award or when Federal outside organizations for
observe one or more of the the property is no longer needed, a fee that is less than private
following disposition instructions. the recipient shall report the companies charge for equivalent
property to the Federal awarding services, unless specifically
(1)The recipient may be permitted agency for further Federal agency authorized by Federal statute, for
to retain title without further utilization. as long as the Federal
obligation to the Federal Government retains an interest in
Government after it compensates (2) If the Federal awarding agency the equipment.
the Federal Government for that has no further need for the
percentage of the current fair property, it shall be declared (c) The recipient shall use the
market value of the property excess and reported to the equipment in the project or
attributable to the Federal General Services Administration, program for which it was acquired
participation in the project. unless the Federal awarding as long as needed, whether or not
agency has statutory authority to the project or program continues
(2) The recipient may be directed dispose of the property by to be supported by Federal funds
to sell the property under alternative methods (e.g., the and shall not encumber the
guidelines provided by the Federal authority provided by the Federal property without approval of the
awarding agency and pay the Technology Transfer Act (15 Federal awarding agency. When
Federal Government for that U.S.C. 3710 (I)) to donate no longer needed for the original
percentage of the current fair research equipment to educational project or program, the recipient
market value of the property and non-profit organizations in shall use the equipment in
attributable to the Federal accordance with E.O. 12821, connection with its other federally-
participation in the project (after "Improving Mathematics and sponsored activities, in the
deducting actual and reasonable Science Education in Support of following order of priority: (i)
selling and fix-up expenses, if any, the National Education Goals.") Activities sponsored by the
from the sales proceeds). When Appropriate instructions shall be Federal awarding agency which
the recipient is authorized or issued to the recipient by the funded the original project, then
required to sell the property, Federal awarding agency. (ii) activities sponsored by other
proper sales procedures shall be Federal awarding agencies.
established that provide for (b) Exempt property. When
competition to the extent statutory authority exists, the (d) During the time that equipment
practicable and result in the Federal awarding agency has the is used on the project or program
highest possible return. option to vest title to property for which it was acquired, the
acquired with Federal funds in the recipient shall make it available for
(3) The recipient may be directed recipient without further obligation use on other projects or programs
to transfer title to the property to to the Federal Government and if such other use will not interfere
the Federal Government or to an under conditions the Federal with the work on the project or
eligible third party provided that, in awarding agency considers program for which the equipment
such cases, the recipient shall be appropriate. Such property is was originally acquired. First
entitled to compensation for its "exempt property." Should a preference for such other use
attributable percentage of the Federal awarding agency not shall be given to other projects or
current fair market value of the establish conditions, title to programs sponsored by the
property. exempt property upon acquisition Federal awarding agency that
shall vest in the recipient without financed the equipment; second
_.33 Federally-owned and further obligation to the Federal preference shall be given to
exempt property. Government. projects or programs sponsored
by other Federal awarding
(a)Federally-owned property. —34 Equipment. agencies. If the equipment is
owned by the Federal
(1) Title to federally-owned (a) Title to equipment acquired by Government, use on other
property remains vested in the a recipient with Federal funds activities not sponsored by the
Federal Government. Recipients shall vest in the recipient, subject Federal Government shall be
shall submit annually an inventory to conditions of this section. permissible if authorized by the
15
Circular A-110
Federal awarding agency. User (ix) Ultimate disposition data, activities in accordance with the
charges shall be treated as including date of disposal and following standards. For
program income. sales price or the method used to equipment with a current per unit
determine current fair market fair market value of $5000 or
(e) When acquiring replacement value where a recipient more, the recipient may retain the
equipment, the recipient may use compensates the Federal equipment for other uses provided
the equipment to be replaced as awarding agency for its share. that compensation is made to the
trade-in or sell the equipment and original Federal awarding agency
use the proceeds to offset the (2) Equipment owned by the or its successor. The amount of
costs of the replacement Federal Government shall be compensation shall be computed
equipment subject to the approval identified to indicate Federal by applying the percentage of
of the Federal awarding agency. ownership. Federal participation in the cost of
the original project or program to
(f) The recipient's property (3) A physical inventory of the current fair market value of the
management standards for equipment shall be taken and the equipment. If the recipient has no
equipment acquired with Federal results reconciled with the need for the equipment, the
funds and federally-owned equipment records at least once recipient shall request disposition
equipment shall include all of the every two years. Any differences instructions from the Federal
following. between quantities determined by awarding agency. The Federal
the physical inspection and those awarding agency shall determine
(1) Equipment records shall be shown in the accounting records whether the equipment can be
maintained accurately and shall shall be investigated to determine used to meet the agency's
include the following information. the causes of the difference. The requirements. If no requirement
recipient shall, in connection with exists within that agency, the
(i)A description of the equipment. the inventory, verify the existence, availability of the equipment shall
current utilization, and continued be reported to the General
(ii) Manufacturer's serial number, need for the equipment. Services Administration by the
model number, Federal stock Federal awarding agency to
number, national stock number, or (4) A control system shall be in determine whether a requirement
other identification number. effect to insure adequate for the equipment exists in other
safeguards to prevent loss, Federal agencies. The Federal
(iii) Source of the equipment, damage, or theft of the equipment. awarding agency shall issue
including the award number. Any loss, damage, or theft of instructions to the recipient no
equipment shall be investigated later than 120 calendar days after
(iv) Whether title vests in the and fully documented; if the the recipient's request and the
recipient or the Federal equipment was owned by the following procedures shall govern.
Government. Federal Government, the recipient
shall promptly notify the Federal (1) If so instructed or if disposition
(v) Acquisition date (or date awarding agency. instructions are not issued within
received, if the equipment was 120 calendar days after the
furnished by the Federal (5) Adequate maintenance recipient's request, the recipient
Government)and cost. procedures shall be implemented shall sell the equipment and
to keep the equipment in good reimburse the Federal awarding
(vi) Information from which one condition. agency an amount computed by
can calculate the percentage of applying to the sales proceeds the
Federal participation in the cost of (6) Where the recipient is percentage of Federal
the equipment (not applicable to authorized or required to sell the participation in the cost of the
equipment furnished by the equipment, proper sales original project or program.
Federal Government). procedures shall be established However, the recipient shall be
which provide for competition to permitted to deduct and retain
(vii) Location and condition of the the extent practicable and result in from the Federal share $500 or
equipment and the date the the highest possible return. ten percent of the proceeds,
information was reported. whichever is less, for the
(g) When the recipient no longer recipient's selling and handling
(viii) Unit acquisition cost. needs the equipment, the expenses.
equipment may be used for other
16
Circular A-110
(2) If the recipient is instructed to _.35 Supplies and other Nonprofit Organizations and Small
ship the equipment elsewhere, the expendable property. Business Firms Under
recipient shall be reimbursed by Government Grants, Contracts
the Federal Government by an (a) Title to supplies and other and Cooperative Agreements."
amount which is computed by expendable property shall vest in
applying the percentage of the the recipient upon acquisition. If (c) The Federal Government has
recipient's participation in the cost there is a residual inventory of the right to:
of the original project or program unused supplies exceeding $5000
to the current fair market value of in total aggregate value upon (1) obtain, reproduce, publish or
the equipment, plus any termination or completion of the otherwise use the data first
reasonable shipping or interim project or program and the produced under an award; and
storage costs incurred.' supplies are not needed for any
other federally-sponsored project (2) authorize others to receive,
(3) If the recipient is instructed to or program, the recipient shall reproduce, publish, or otherwise
otherwise dispose of the retain the supplies for use on non- use such data for Federal
equipment, the recipient shall be Federal sponsored activities or purposes.
reimbursed by the Federal sell them, but shall, in either case,
awarding agency for such costs compensate the Federal (d) (1) In addition, in response to a
incurred in its disposition. Government for its share. The Freedom of Information Act
amount of compensation shall be (FOIA) request for research data
(4) The Federal awarding agency computed in the same manner as relating to published research
may reserve the right to transfer for equipment. findings produced under an award
the title to the Federal that were used by the Federal
Government or to a third party (b) The recipient shall not use Government in developing an
named by the Federal supplies acquired with Federal agency action that has the force
Government when such third party funds to provide services to non- and effect of law, the Federal
is otherwise eligible under existing Federal outside organizations for awarding agency shall request,
statutes. Such transfer shall be a fee that is less than private and the recipient shall provide,
subject to the following standards. companies charge for equivalent within a reasonable time, the
services, unless specifically research data so that they can be
(i) The equipment shall be authorized by Federal statute as made available to the public
appropriately identified in the long as the Federal Government through the procedures
award or otherwise made known retains an interest in the supplies. established under the FOIA. If the
to the recipient in writing. Federal awarding agency obtains
36 Intangible property. the research data solely in
(ii) The Federal awarding agency response to a FOIA request, the
shall issue disposition instructions (a) The recipient may copyright agency may charge the requester
within 120 calendar days after any work that is subject to a reasonable fee equaling the full
receipt of a final inventory. The copyright and was developed, or incremental cost of obtaining the
final inventory shall list all for which ownership was research data. This fee should
equipment acquired with grant purchased, under an award. The reflect costs incurred by the
funds and federally-owned Federal awarding agency(ies) agency, the recipient, and
equipment. If the Federal reserve a royalty-free, applicable subrecipients. This fee
awarding agency fails to issue nonexclusive and irrevocable right is in addition to any fees the
disposition instructions within the to reproduce, publish, or otherwise agency may assess under the
120 calendar day period, the use the work for Federal FOIA(5 U.S.C. 552(a)(4)(A)).
recipient shall apply the standards purposes, and to authorize others
of this section, as appropriate. to do so. (2) The following definitions apply
for purposes of paragraph (d) of
(iii) When the Federal awarding (b) Recipients are subject to this section:
agency exercises its right to take applicable regulations governing
title, the equipment shall be patents and inventions, including (i)Research data is defined as the
subject to the provisions for government-wide regulations recorded factual material
federally-owned equipment. issued by the Department of commonly accepted in the
Commerce at 37 CFR part 401, scientific community as necessary
"Rights to Inventions Made by to validate research findings, but
17
Circular A-110
not any of the following: encumber the property without of the contractual responsibilities
preliminary analyses, drafts of approval of the Federal awarding arising under its contract(s). The
scientific papers, plans for future agency. When no longer needed recipient is the responsible
research, peer reviews, or for the originally authorized authority, without recourse to the
communications with colleagues. purpose, disposition of the Federal awarding agency,
This "recorded" material excludes intangible property shall occur in regarding the settlement and
physical objects (e.g., laboratory accordance with the provisions of satisfaction of all contractual and
samples). Research data also do paragraph—34(g). administrative issues arising out of
not include: procurements entered into in
_.37 Property trust relationship. support of an award or other
(A) Trade secrets, commercial Real property, equipment, agreement. This includes
information, materials necessary intangible property. and debt disputes, claims, protests of
to be held confidential by a instruments that are acquired or award, source evaluation or other
researcher until they are improved with Federal funds shall matters of a contractual nature.
published, or similar information be held in trust by the recipient as Matters concerning violation of
which is protected under law; and trustee for the beneficiaries of the statute are to be referred to such
project or program under which Federal, State or local authority as
(B) Personnel and medical the property was acquired or may have proper jurisdiction.
information and similar information improved. Agencies may require
the disclosure of which would recipients to record liens or other _.42 Codes of conduct. The
constitute a clearly unwarranted appropriate notices of record to recipient shall maintain written
invasion of personal privacy, such indicate that personal or real standards of conduct governing
as information that could be used property has been acquired or the performance of its employees
to identify a particular person in a improved with Federal funds and engaged in the award and
research study. that use and disposition conditions administration of contracts. No
apply to the property. employee, officer, or agent shall
(ii) Published is defined as either participate in the selection, award,
when: Procurement Standards or administration of a contract
supported by Federal funds if a
(A) Research findings are _.40 Purpose of procurement real or apparent conflict of interest
published in a peer-reviewed standards. Sections _.41 would be involved. Such a conflict
scientific or technical journal; or through—48 set forth standards would arise when the employee,
for use by recipients in officer, or agent, any member of
(B)A Federal agency publicly and establishing procedures for the his or her immediate family, his or
officially cites the research procurement of supplies and other her partner, or an organization
findings in support of an agency expendable property, equipment, which employs or is about to
action that has the force and effect real property and other services employ any of the parties
of law. with Federal funds. These indicated herein, has a financial or
standards are furnished to ensure other interest in the firm selected
(iii) Used by the Federal that such materials and services for an award. The officers,
Government in developing an are obtained in an effective employees, and agents of the
agency action that has the force manner and in compliance with recipient shall neither solicit nor
and effect of law is defined as the provisions of applicable accept gratuities, favors, or
when an agency publicly and Federal statutes and executive anything of monetary value from
officially cites the research orders. No additional procurement contractors, or parties to
findings in support of an agency standards or requirements shall subagreements. However,
action that has the force and effect be imposed by the Federal recipients may set standards for
of law. awarding agencies upon situations in which the financial
recipients, unless specifically interest is not substantial or the
(e) Title to intangible property and required by Federal statute or gift is an unsolicited item of
debt instruments acquired under executive order or approved by nominal value. The standards of
an award or subaward vests upon OMB. conduct shall provide for
acquisition in the recipient. The disciplinary actions to be applied
recipient shall use that property for _.41 Recipient responsibilities. for violations of such standards by
the originally-authorized purpose, The standards contained in this officers, employees, or agents of
and the recipient shall not section do not relieve the recipient the recipient.
18
Circular A-110
43 Competition. All (i) A clear and accurate (2) Make information on
procurement transactions shall be description of the technical forthcoming opportunities
conducted in a manner to provide, requirements for the material, available and arrange time frames
to the maximum extent practical, product or service to be procured. for purchases and contracts to
open and free competition. The In competitive procurements, such encourage and facilitate
recipient shall be alert to a description shall not contain participation by small businesses,
organizational conflicts of interest features which unduly restrict minority-owned firms, and
as well as noncompetitive competition. women's business enterprises.
practices among contractors that
may restrict or eliminate (ii) Requirements which the (3) Consider in the contract
competition or otherwise restrain bidder/offeror must fulfill and all process whether firms competing
trade. In order to ensure objective other factors to be used in for larger contracts intend to
contractor performance and evaluating bids or proposals. subcontract with small
eliminate unfair competitive businesses, minority-owned firms,
advantage, contractors that (iii) A description, whenever and women's business
develop or draft specifications, practicable, of technical enterprises.
requirements, statements of work, requirements in terms of functions
invitations for bids and/or requests to be performed or performance (4) Encourage contracting with
for proposals shall be excluded required, including the range of consortiums of small businesses,
from competing for such acceptable characteristics or minority-owned firms and
procurements. Awards shall be minimum acceptable standards. women's business enterprises
made to the bidder or offeror when a contract is too large for
whose bid or offer is responsive to (iv)The specific features of"brand one of these firms to handle
the solicitation and is most name or equal" descriptions that individually.
advantageous to the recipient, bidders are required to meet when
price, quality and other factors such items are included in the (5) Use the services and
considered. Solicitations shall solicitation. assistance, as appropriate, of
clearly set forth all requirements such organizations as the Small
that the bidder or offeror shall fulfill (v) The acceptance, to the extent Business Administration and the
in order for the bid or offer to be practicable and economically Department of Commerce's
evaluated by the recipient. Any feasible, of products and services Minority Business Development
and all bids or offers may be dimensioned in the metric system Agency in the solicitation and
rejected when it is in the of measurement. utilization of small businesses,
recipient's interest to do so. minority- owned firms and
(vi) Preference, to the extent women's business enterprises.
.44 Procurement procedures. practicable and economically
feasible, for products and services (c) The type of procuring
(a) All recipients shall establish that conserve natural resources instruments used (e.g., fixed price
written procurement procedures. and protect the environment and contracts, cost reimbursable
These procedures shall provide are energy efficient. contracts, purchase orders, and
for, at a minimum, that(1), (2)and incentive contracts) shall be
(3)apply. (b) Positive efforts shall be made determined by the recipient but
by recipients to utilize small shall be appropriate for the
(1) Recipients avoid purchasing businesses, minority-owned firms, particular procurement and for
unnecessary items. and women's business promoting the best interest of the
enterprises, whenever possible. program or project involved. The
(2)Where appropriate, an analysis Recipients of Federal awards shall "cost-plus-a-percentage-of-cost"
is made of lease and purchase take all of the following steps to or "percentage of construction
alternatives to determine which further this goal. cost" methods of contracting shall
would be the most economical not be used.
and practical procurement for the (1) Ensure that small businesses,
Federal Government. minority-owned firms, and (d) Contracts shall be made only
women's business enterprises are with responsible contractors who
(3) Solicitations for goods and used to the fullest extent possess the potential ability to
services provide for all of the practicable. perform successfully under the
following. terms and conditions of the
19
Circular A-110
proposed procurement. _.45 Cost and price analysis. legal remedies in instances in
Consideration shall be given to Some form of cost or price which a contractor violates or
such matters as contractor analysis shall be made and breaches the contract terms, and
integrity, record of past documented in the procurement provide for such remedial actions
performance, financial and files in connection with every as may be appropriate.
technical resources or procurement action. Price analysis
accessibility to other necessary may be accomplished in various (b) All contracts in excess of the
resources. In certain ways, including the comparison of small purchase threshold shall
circumstances, contracts with price quotations submitted, market contain suitable provisions for
certain parties are restricted by prices and similar indicia, together termination by the recipient,
agencies' implementation of E.O.s with discounts. Cost analysis is including the manner by which
12549 and 12689, "Debarment the review and evaluation of each termination shall be effected and
and Suspension." element of cost to determine the basis for settlement. In
reasonableness, allocability and addition, such contracts shall
(e) Recipients shall, on request, allowability. describe conditions under which
make available for the Federal the contract may be terminated for
awarding agency, pre-award _.46 Procurement records. default as well as conditions
review and procurement Procurement records and files for where the contract may be
documents, such as request for purchases in excess of the small terminated because of
proposals or invitations for bids, purchase threshold shall include circumstances beyond the control
independent cost estimates, etc., the following at a minimum: (a) of the contractor.
when any of the following basis for contractor selection, (b)
conditions apply. justification for lack of competition (c) Except as otherwise required
when competitive bids or offers by statute, an award that requires
(1) A recipient's procurement are not obtained, and (c) basis for the contracting (or subcontracting)
procedures or operation fails to award cost or price. for construction or facility
comply with the procurement improvements shall provide for the
standards in the Federal awarding _.47 Contract administration. A recipient to follow its own
agency's implementation of this system for contract administration requirements relating to bid
Circular. shall be maintained to ensure guarantees, performance bonds,
contractor conformance with the and payment bonds unless the
(2) The procurement is expected terms, conditions and construction contract or
to exceed the small purchase specifications of the contract and subcontract exceeds $100,000.
threshold fixed at 41 U.S.C. 403 to ensure adequate and timely For those contracts or
(11) (currently $25,000) and is to follow up of all purchases. subcontracts exceeding $100,000,
be awarded without competition or Recipients shall evaluate the Federal awarding agency may
only one bid or offer is received in contractor performance and accept the bonding policy and
response to a solicitation. document, as appropriate, requirements of the recipient,
whether contractors have met the provided the Federal awarding
(3) The procurement, which is terms, conditions and agency has made a determination
expected to exceed the small specifications of the contract. that the Federal Government's
purchase threshold, specifies a interest is adequately protected. If
"brand name"product. _.48 Contract provisions. The such a determination has not been
recipient shall include, in addition made, the minimum requirements
(4) The proposed award over the to provisions to define a sound shall be as follows.
small purchase threshold is to be and complete agreement, the
awarded to other than the following provisions in all (1) A bid guarantee from each
apparent low bidder under a contracts. The following provisions bidder equivalent to five percent of
sealed bid procurement. shall also be applied to the bid price. The "bid guarantee"
subcontracts. shall consist of a firm commitment
(5) A proposed contract such as a bid bond, certified
modification changes the scope of (a) Contracts in excess of the check, or other negotiable
a contract or increases the small purchase threshold shall instrument accompanying a bid as
contract amount by more than the contain contractual provisions or assurance that the bidder shall,
amount of the small purchase conditions that allow for upon acceptance of his bid,
threshold. administrative, contractual, or execute such contractual
20
Circular A-110
documents as may be required Reports and Records (1) A comparison of actual
within the time specified. accomplishments with the goals
.50 Purpose of reports and and objectives established for the
(2) A performance bond on the records. Sections .51 through period, the findings of the
part of the contractor for 100 _.53 set forth the procedures for investigator, or both. Whenever
percent of the contract price. A monitoring and reporting on the appropriate and the output of
"performance bond" is one recipient's financial and program programs or projects can be
executed in connection with a performance and the necessary readily quantified, such
contract to secure fulfillment of all standard reporting forms. They quantitative data should be related
the contractor's obligations under also set forth record retention to cost data for computation of unit
such contract. requirements. costs.
(3)A payment bond on the part of .51 Monitoring and reporting (2) Reasons why established
the contractor for 100 percent of program performance. goals were not met, if appropriate.
the contract price. A "payment
bond" is one executed in (a) Recipients are responsible for (3) Other pertinent information
connection with a contract to managing and monitoring each including, when appropriate,
assure payment as required by project, program, subaward, analysis and explanation of cost
statute of all persons supplying function or activity supported by overruns or high unit costs.
labor and material in the execution the award. Recipients shall
of the work provided for in the monitor subawards to ensure (e) Recipients shall not be
contract. subrecipients have met the audit required to submit more than the
requirements as delineated in original and two copies of
(4) Where bonds are required in Section .26. performance reports.
the situations described herein,
the bonds shall be obtained from (b) The Federal awarding agency (f) Recipients shall immediately
companies holding certificates of shall prescribe the frequency with notify the Federal awarding
authority as acceptable sureties which the performance reports agency of developments that have
pursuant to 31 CFR part 223, shall be submitted. Except as a significant impact on the award-
"Surety Companies Doing provided in paragraph —51(f), supported activities. Also,
Business with the United States." performance reports shall not be notification shall be given in the
required more frequently than case of problems, delays, or
(d) All negotiated contracts quarterly or, less frequently than adverse conditions which
(except those for less than the annually. Annual reports shall be materially impair the ability to
small purchase threshold) due 90 calendar days after the meet the objectives of the award.
awarded by recipients shall grant year; quarterly or semi- This notification shall include a
include a provision to the effect annual reports shall be due 30 statement of the action taken or
that the recipient, the Federal days after the reporting period. contemplated, and any assistance
awarding agency, the Comptroller The Federal awarding agency needed to resolve the situation.
General of the United States, or may require annual reports before
any of their duly authorized the anniversary dates of multiple (g) Federal awarding agencies
representatives, shall have access year awards in lieu of these may make site visits, as needed.
to any books, documents, papers requirements. The final
and records of the contractor performance reports are due 90 (h) Federal awarding agencies
which are directly pertinent to a calendar days after the expiration shall comply with clearance
specific program for the purpose or termination of the award. requirements of 5 CFR part 1320
of making audits, examinations, when requesting performance
excerpts and transcriptions. (c) If inappropriate, a final data from recipients.
technical or performance report
(e) All contracts, including small shall not be required after .52 Financial reporting.
purchases, awarded by recipients completion of the project.
and their contractors shall contain (a) The following forms or such
the procurement provisions of (d) When required, performance other forms as may be approved
Appendix A to this Circular, as reports shall generally contain, for by OMB are authorized for
applicable. each award, brief information on obtaining financial information
each of the following. from recipients.
21
Circular A-110
(1) SF-269 or SF-269A, Financial the end of each specified reporting When monthly advances do not
Status Report. period for quarterly and semi- exceed $25,000 per recipient,
annual reports, and 90 calendar provided that such advances are
(i) Each Federal awarding agency days for annual and final reports. monitored through other forms
shall require recipients to use the Extensions of reporting due dates contained in this section; (2) If, in
SF-269 or SF-269A to report the may be approved by the Federal the Federal awarding agency's
status of funds for all awarding agency upon request of opinion, the recipients accounting
nonconstruction projects or the recipient. controls are adequate to minimize
programs. A Federal awarding excessive Federal advances; or,
agency may, however, have the (2) SF-272, Report of Federal (3) When the electronic payment
option of not requiring the SF-269 Cash Transactions. mechanisms provide adequate
or SF-269A when the SF-270, data.
Request for Advance or (i) When funds are advanced to
Reimbursement, or SF-272, recipients the Federal awarding (b) When the Federal awarding
Report of Federal Cash agency shall require each agency needs additional
Transactions, is determined to recipient to submit the SF-272 information or more frequent
provide adequate information to and, when necessary, its reports, the following shall be
meet its needs, except that a final continuation sheet, SF-272a. The observed.
SF-269 or SF-269A shall be Federal awarding agency shall
required at the completion of the use this report to monitor cash (1) When additional information is
project when the SF-270 is used advanced to recipients and to needed to comply with legislative
only for advances. obtain disbursement information requirements, Federal awarding
for each agreement with the agencies shall issue instructions
(ii) The Federal awarding agency recipients. to require recipients to submit
shall prescribe whether the report such information under the
shall be on a cash or accrual (ii) Federal awarding agencies "Remarks"section of the reports.
basis. If the Federal awarding may require forecasts of Federal
agency requires accrual cash requirements in the (2) When a Federal awarding
information and the recipient's "Remarks"section of the report. agency determines that a
accounting records are not recipient's accounting system
normally kept on the accrual (iii) When practical and deemed does not meet the standards in
basis, the recipient shall not be necessary, Federal awarding Section _.21, additional
required to convert its accounting agencies may require recipients to pertinent information to further
system, but shall develop such report in the "Remarks" section monitor awards may be obtained
accrual information through best the amount of cash advances upon written notice to the recipient
estimates based on an analysis of received in excess of three days. until such time as the system is
the documentation on hand. Recipients shall provide short brought up to standard. The
narrative explanations of actions Federal awarding agency, in
(iii) The Federal awarding agency taken to reduce the excess obtaining this information, shall
shall determine the frequency of balances. comply with report clearance
the Financial Status Report for requirements of 5 CFR part 1320.
each project or program, (iv) Recipients shall be required to
considering the size and submit not more than the original (3) Federal awarding agencies are
complexity of the particular project and two copies of the SF-272 15 encouraged to shade out any line
or program. However, the report calendar days following the end of item on any report if not
shall not be required more each quarter. The Federal necessary.
frequently than quarterly or less awarding agencies may require a
frequently than annually. A final monthly report from those (4) Federal awarding agencies
report shall be required at the recipients receiving advances may accept the identical
completion of the agreement. totaling $1 million or more per information from the recipients in
year. machine readable format or
(iv) The Federal awarding agency computer printouts or electronic
shall require recipients to submit (v) Federal awarding agencies outputs in lieu of prescribed
the SF-269 or SF-269A (an may waive the requirement for formats.
original and no more than two submission of the SF-272 for any
copies) no later than 30 days after one of the following reasons: (1)
22
Circular A-110
(5) Federal awarding agencies (c) Copies of original records may (g) Indirect cost rate proposals,
may provide computer or be substituted for the original cost allocations plans, etc.
electronic outputs to recipients records if authorized by the Paragraphs (g)(1)and (g)(2) apply
when such expedites or Federal awarding agency. to the following types of
contributes to the accuracy of documents, and their supporting
reporting. (d) The Federal awarding agency records: indirect cost rate
shall request transfer of certain computations or proposals, cost
.53 Retention and access records to its custody from allocation plans, and any similar
requirements for records. recipients when it determines that accounting computations of the
the records possess long term rate at which a particular group of
(a) This section sets forth retention value. However, in order costs is chargeable (such as
requirements for record retention to avoid duplicate recordkeeping, computer usage chargeback rates
and access to records for awards a Federal awarding agency may or composite fringe benefit rates).
to recipients. Federal awarding make arrangements for recipients
agencies shall not impose any to retain any records that are (1) If submitted for negotiation. If
other record retention or access continuously needed for joint use. the recipient submits to the
requirements upon recipients. Federal awarding agency or the
(e) The Federal awarding agency, subrecipient submits to the
(b) Financial records, supporting the Inspector General, Comptroller recipient the proposal, plan, or
documents, statistical records, General of the United States, or other computation to form the
and all other records pertinent to any of their duly authorized basis for negotiation of the rate,
an award shall be retained for a representatives, have the right of then the 3-year retention period
period of three years from the date timely and unrestricted access to for its supporting records starts on
of submission of the final any books, documents, papers, or the date of such submission.
expenditure report or, for awards other records of recipients that are
that are renewed quarterly or pertinent to the awards, in order to (2) If not submitted for negotiation.
annually, from the date of the make audits, examinations, If the recipient is not required to
submission of the quarterly or excerpts, transcripts and copies of submit to the Federal awarding
annual financial report, as such documents. This right also agency or the subrecipient is not
authorized by the Federal includes timely and reasonable required to submit to the recipient
awarding agency. The only access to a recipient's personnel the proposal, plan, or other
exceptions are the following. for the purpose of interview and computation for negotiation
discussion related to such purposes, then the 3-year
(1) If any litigation, claim, or audit documents. The rights of access retention period for the proposal,
is started before the expiration of in this paragraph are not limited to plan, or other computation and its
the 3-year period, the records the required retention period, but supporting records starts at the
shall be retained until all litigation, shall last as long as records are end of the fiscal year (or other
claims or audit findings involving retained. accounting period) covered by the
the records have been resolved proposal, plan, or other
and final action taken. (f) Unless required by statute, no computation.
Federal awarding agency shall
(2) Records for real property and place restrictions on recipients Termination and Enforcement
equipment acquired with Federal that limit public access to the
funds shall be retained for 3 years records of recipients that are _.60 Purpose of termination and
after final disposition. pertinent to an award, except enforcement. Sections—61 and
when the Federal awarding —62 set forth uniform
(3) When records are transferred agency can demonstrate that such suspension, termination and
to or maintained by the Federal records shall be kept confidential enforcement procedures.
awarding agency, the 3-year and would have been exempted
retention requirement is not from disclosure pursuant to the .61 Termination.
applicable to the recipient. Freedom of Information Act (5
U.S.C. 552) if the records had (a) Awards may be terminated in
(4) Indirect cost rate proposals, belonged to the Federal awarding whole or in part only if (1), (2) or
cost allocations plans, etc. as agency. (3)apply.
specified in paragraph—53(g).
23
Circular A-110
(1) By the Federal awarding following actions, as appropriate in (2)The costs would be allowable if
agency, if a recipient materially the circumstances. the award were not suspended or
fails to comply with the terms and expired normally at the end of the
conditions of an award. (1) Temporarily withhold cash funding period in which the
payments pending correction of termination takes effect.
(2) By the Federal awarding the deficiency by the recipient or
agency with the consent of the more severe enforcement action (d) Relationship to debarment and
recipient, in which case the two by the Federal awarding agency. suspension. The enforcement
parties shall agree upon the remedies identified in this section,
termination conditions, including (2)Disallow(that is, deny both use including suspension and
the effective date and, in the case of funds and any applicable termination, do not preclude a
of partial termination, the portion matching credit for) all or part of recipient from being subject to
to be terminated. the cost of the activity or action debarment and suspension under
not in compliance. E.O.s 12549 and 12689 and the
(3) By the recipient upon sending Federal awarding agency
to the Federal awarding agency (3) Wholly or partly suspend or implementing regulations (see
written notification setting forth the terminate the current award. Section—13).
reasons for such termination, the
effective date, and, in the case of (4)Withhold further awards for the SUBPART D - After-the-Award
partial termination, the portion to project or program. Requirements
be terminated. However, if the
Federal awarding agency (5) Take other remedies that may _.70 Purpose. Sections _.71
determines in the case of partial be legally available. through .73 contain closeout
termination that the reduced or procedures and other procedures
modified portion of the grant will (b) Hearings and appeals. In for subsequent disallowances and
not accomplish the purposes for taking an enforcement action, the adjustments.
which the grant was made, it may awarding agency shall provide the
terminate the grant in its entirety recipient an opportunity for —71 Closeout procedures.
under either paragraphs (a)(1) or hearing, appeal, or other
(2). administrative proceeding to which (a) Recipients shall submit, within
the recipient is entitled under any 90 calendar days after the date of
(b) If costs are allowed under an statute or regulation applicable to completion of the award, all
award, the responsibilities of the the action involved. financial, performance, and other
recipient referred to in paragraph reports as required by the terms
—71(a), including those for (c) Effects of suspension and and conditions of the award. The
property management as termination. Costs of a recipient Federal awarding agency may
applicable, shall be considered in resulting from obligations incurred approve extensions when
the termination of the award, and by the recipient during a requested by the recipient.
provision shall be made for suspension or after termination of
continuing responsibilities of the an award are not allowable unless (b) Unless the Federal awarding
recipient after termination, as the awarding agency expressly agency authorizes an extension, a
appropriate. authorizes them in the notice of recipient shall liquidate all
suspension or termination or obligations incurred under the
_.62 Enforcement. subsequently. Other recipient award not later than 90 calendar
costs during suspension or after days after the funding period or
(a) Remedies for noncompliance. termination which are necessary the date of completion as
If a recipient materially fails to and not reasonably avoidable are specified in the terms and
comply with the terms and allowable if(1)and(2)apply. conditions of the award or in
conditions of an award, whether agency implementing instructions.
stated in a Federal statute, (1) The costs result from
regulation, assurance, application, obligations which were properly (c) The Federal awarding agency
or notice of award, the Federal incurred by the recipient before shall make prompt payments to a
awarding agency may, in addition the effective date of suspension or recipient for allowable
to imposing any of the special termination, are not in anticipation reimbursable costs under the
conditions outlined in Section of it, and in the case of a award being closed out.
—14, take one or more of the termination, are noncancellable.
24
Circular A-110
(d) The recipient shall promptly (4) Property management Appendix A
refund any balances of requirements in Sections .31
unobligated cash that the Federal through .37. Contract Provisions
awarding agency has advanced or
paid and that is not authorized to (5) Records retention as required All contracts, awarded by a
be retained by the recipient for in Section .53. recipient including small
use in other projects. OMB purchases, shall contain the
Circular A-129 governs unreturned (b) After closeout of an award, a following provisions as applicable:
amounts that become delinquent relationship created under an
debts. award may be modified or ended 1. Equal Employment
in whole or in. part with the Opportunity - All contracts shall
(e) When authorized by the terms consent of the Federal awarding contain a provision requiring
and conditions of the award, the agency and the recipient, provided compliance with E.O. 11246,
Federal awarding agency shall the responsibilities of the recipient "Equal Employment Opportunity,"
make a settlement for any upward referred to in paragraph_73(a), as amended by E.O. 11375,
or downward adjustments to the including those for property "Amending Executive Order
Federal share of costs after management as applicable, are 11246 Relating to Equal
closeout reports are received. considered and provisions made Employment Opportunity," and as
for continuing responsibilities of supplemented by regulations at 41
(f) The recipient shall account for the recipient,as appropriate. CFR part 60, "Office of Federal
any real and personal property Contract Compliance Programs,
acquired with Federal funds or _.73 Collection of amounts due. Equal Employment Opportunity,
received from the Federal Department of Labor."
Government in accordance with (a)Any funds paid to a recipient in
Sections .31 through .37. excess of the amount to which the 2. Copeland "Anti-Kickback"
recipient is finally determined to Act(18 U.S.C. 874 and 40 U.S.C.
(g) In the event a final audit has be entitled under the terms and 276c) - All contracts and
not been performed prior to the conditions of the award constitute subgrants in excess of $2000 for
closeout of an award, the Federal a debt to the Federal Government. construction or repair awarded by
awarding agency shall retain the If not paid within a reasonable recipients and subrecipients shall
right to recover an appropriate period after the demand for include a provision for compliance
amount after fully considering the payment, the Federal awarding with the Copeland "Anti-Kickback"
recommendations on disallowed agency may reduce the debt by Act (18 U.S.C. 874), as
costs resulting from the final audit. (1), (2)or(3). supplemented by Department of
Labor regulations (29 CFR part 3,
_.72 Subsequent adjustments (1) Making an administrative offset "Contractors and Subcontractors
and continuing responsibilities. against other requests for on Public Building or Public Work
reimbursements. Financed in Whole or in Part by
(a) The closeout of an award does Loans or Grants from the United
not affect any of the following. (2) Withholding advance States"). The Act provides that
payments otherwise due to the each contractor or subrecipient
(1) The right of the Federal recipient. shall be prohibited from inducing,
awarding agency to disallow costs by any means, any person
and recover funds on the basis of (3) Taking other action permitted employed in the construction,
a later audit or other review. by statute. completion, or repair of public
work, to give up any part of the
(2) The obligation of the recipient (b) Except as otherwise provided compensation to which he is
to return any funds due as a result by law, the Federal awarding otherwise entitled. The recipient
of later refunds, corrections, or agency shall charge interest on an shall report all suspected or
other transactions. overdue debt in accordance with 4 reported violations to the Federal
CFR Chapter II, "Federal Claims awarding agency.
(3) Audit requirements in Section Collection Standards."
.26. 3. Davis-Bacon Act, as
amended (40 U.S.C. 276a to a-7)
- When required by Federal
program legislation, all
25
Circular A-110
construction contracts awarded by pay for all hours worked in excess 7. Byrd Anti-Lobbying
the recipients and subrecipients of of 40 hours in the work week. Amendment (31 U.S.C. 1352) -
more than $2000 shall include a Section 107 of the Act is Contractors who apply or bid for
provision for compliance with the applicable to construction work an award of $100,000 or more
Davis-Bacon Act (40 U.S.C. 276a and provides that no laborer or shall file the required certification.
to a-7) and as supplemented by mechanic shall be required to Each tier certifies to the tier above
Department of Labor regulations work in surroundings or under that it will not and has not used
(29 CFR part 5, "Labor Standards working conditions which are Federal appropriated funds to pay
Provisions Applicable to Contracts unsanitary, hazardous or any person or organization for
Governing Federally Financed and dangerous. These requirements influencing or attempting to
Assisted Construction"). Under do not apply to the purchases of influence an officer or employee of
this Act, contractors shall be supplies or materials or articles any agency, a member of
required to pay wages to laborers ordinarily available on the open Congress, officer or employee of
and mechanics at a rate not less market, or contracts for Congress, or an employee of a
than the minimum wages specified transportation or transmission of member of Congress in
in a wage determination made by intelligence. connection with obtaining any
the Secretary of Labor. In addition, Federal contract, grant or any
contractors shall be required to 5. Rights to Inventions Made other award covered by 31 U.S.C.
pay wages not less than once a Under a Contract or Agreement 1352. Each tier shall also disclose
week. The recipient shall place a - Contracts or agreements for the any lobbying with non-Federal
copy of the current prevailing performance of experimental, funds that takes place in
wage determination issued by the developmental, or research work connection with obtaining any
Department of Labor in each shall provide for the rights of the Federal award. Such disclosures
solicitation and the award of a Federal Government and the are forwarded from tier to tier up
contract shall be conditioned upon recipient in any resulting invention to the recipient.
the acceptance of the wage in accordance with 37 CFR part
determination. The recipient shall 401, "Rights to Inventions Made 8. Debarment and Suspension
report all suspected or reported by Nonprofit Organizations and (E.O.s 12549 and 12689) - No
violations to the Federal awarding Small Business Firms Under contract shall be made to parties
agency. Government Grants, Contracts listed on the General Services
and Cooperative Agreements," Administration's List of Parties
4. Contract Work Hours and and any implementing regulations Excluded from Federal
Safety Standards Act (40 U.S.C. issued by the awarding agency. Procurement or Nonprocurement
327-333) - Where applicable, all Programs in accordance with
contracts awarded by recipients in 6. Clean Air Act (42 U.S.C. 7401 E.O.s 12549 and 12689,
excess of $2000 for construction et seq.) and the Federal Water "Debarment and Suspension."
contracts and in excess of $2500 Pollution Control Act (33 U.S.C. This list contains the names of
for other contracts that involve the 1251 et seq.), as amended - parties debarred, suspended, or
employment of mechanics or Contracts and subgrants of otherwise excluded by agencies,
laborers shall include a provision amounts in excess of $100,000 and contractors declared ineligible
for compliance with Sections 102 shall contain a provision that under statutory or regulatory
and 107 of the Contract Work requires the recipient to agree to authority other than E.O. 12549.
Hours and Safety Standards Act comply with all applicable Contractors with awards that
(40 U.S.C. 327-333), as standards, orders or regulations exceed the small purchase
supplemented by Department of issued pursuant to the Clean Air threshold shall provide the
Labor regulations (29 CFR part 5). Act (42 U.S.C. 7401 et seq.) and required certification regarding its
Under Section 102 of the Act, the Federal Water Pollution exclusion status and that of its
each contractor shall be required Control Act as amended (33 principal employees.
to compute the wages of every U.S.C. 1251 et seq.). Violations
mechanic and laborer on the basis shall be reported to the Federal
of a standard work week of 40 awarding agency and the
hours. Work in excess of the Regional Office of the
standard work week is permissible Environmental Protection Agency
provided that the worker is (EPA).
compensated at a rate of not less
than 1 1/2 times the basic rate of
26
EXHIBIT
DAVIS BACON EXEMPTION CHECKLIST
Project Name:
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
x 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 eminent 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 (legalacct/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:
, 11 Date:
Signture of Responsible Administrator
A description of the scope of the project is attached.
Revised and approved 7/12/2011
CITY OF OMAHA 5- /b1n
AFFIRMATIVE MARKETING POLICY
AND MONITORING PROCEDURES
Effective: October 1, 1999
Revised: November 10, 2011
Affirmative Marketing Policy
In furtherance of the City of Omaha's commitment to non-discrimination and equal opportunity in housing, the
City of Omaha establishes procedures to affirmatively market units constructed or rehabilitated under any City-
assisted program or project. These procedures are intended to further the objectives of Title VIII of the Civil
Rights Act of 1968 and Executive Order 11063. It is the affirmative marketing goal of the City of Omaha to
assure that individuals who normally might not apply for vacant rehabilitated or constructed units because of
their race or ethnicity:
• know about the vacancies
• feel welcome to apply
• have the opportunity to rent or purchase the units
This policy will be carried out through the following procedures:
1. Informing the public, potential tenants and owners about federal fair housing laws and affirmative
marketing policies
• The City of Omaha will inform the public, potential tenants, purchasers and owners about its
affirmative marketing policy, Title VIII and Executive Order 11063.
• The City will place public notices in the Omaha World Herald and the community media serving
minority groups to inform owners of the program.
• City representatives will meet with property owners and assist them in preparing program
applications as requested and necessary.
• Owners selected for a rehabilitation program shall notify in-place tenants in writing of their
involvement in the program and provide them with the following options in accordance with
provisions of the Uniform Relocation Act;
1. Remain in the present unit during rehabilitation.
2. Move temporarily to another unit within the project while his/her unit is being rehabilitated.
3. Permanently relocate or voluntarily abandon the unit during the rehabilitation.
• Owners shall post the HUD Equal Housing Opportunity Logo in the project building and display
the Fair Housing Poster in their rental office and on all application and documents/forms.
• Owners shall use media accessible to minorities when advertising the availability of units.
• Owners shall use the Equal Housing Opportunity logo, slogan or statement in all advertising.
• Owners shall maintain a non-discriminatory hiring policy.
1 Reviewed and revised 11/10/2011
• Owners shall adopt a fair housing policy.
2. Informing low- and moderate-income persons about available units
Property Owners having vacant units may contact the Omaha Housing Authority (OHA) at 402-444-
6900 and place units on OHA's "Available Unit" list. This list is distributed to families who have
received Certificates of Family Participation and are looking for units to rent. The listing will remain on
the "Available" list for 35 calendar days, then be removed. If still vacant, the property may be relisted.
Property Owners must document any conversation/notification regarding posting of vacancies.
If the property is not listed with OHA when rehabilitated or constructed units are available for initial
occupancy, the owner shall inform the following outreach agencies and/or other agencies of this fact in
writing and submit a copy of the letters to the City of Omaha, Planning Department, Housing and
Community Development Division, Loan Section, 1819 Farnam Street, Room 1111, Omaha, Nebraska,
68183.
Chicano Awareness Center, Inc. Urban League of Nebraska
4821 South 24th Street 3022 North 24th Street
Omaha, NE 68107 Omaha, NE 68111
Family Housing Advisory Services Community Alliance
2401 Lake Street 4001 Leavenworth Street
Omaha, NE 68111 Omaha, NE 68105
Eastern Nebraska Human Services Heartland Family Service
900 South 74th Plaza, Suite 200 2101 South 42nd Street
Omaha, NE 68114 Omaha,NE 68105
Greater Omaha Community Action Heartland Family Service
2406 Fowler Avenue 6720 North 30th Street
Omaha,NE 68111 Omaha,NE 68112
Greater Omaha Community Action Heartland Family Service
5002 South 24th Street, Suite 203 2580 South 90th Street
Omaha,NE 68111 Omaha,NE 68124
League of Human Dignity Heartland Family Service
5513 Center Street 11212 Davenport Street
Omaha, NE 68106 Omaha, NE 68154
Heartland Family Service Nebraska Commission for the Deaf
116 E. Mission Avenue 1313 Farnam on the Mall
Bellevue,NE 68005 Omaha, NE 68102
Heartland Family Service Omaha Association for the Blind
302 American Parkway 1024 South 32°d 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 teiiiis 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 deteiniination
will be made by reviewing the information provided on the Demographics Form for Applicant and
Tenant Survey Foiln 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
e.:-. KtIfi,6t -- G
Circular No. A-133
Revised to show changes published in the Federal Register June 27, 2003
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
Attachment
2
PART --AUDITS OF STATES, LOCAL GOVERNMENTS, AND NON-PROFIT
ORGANIZATIONS
Subpart A--General
Sec.
.100 Purpose.
.105 Definitions.
Subpart B--Audits
.200 Audit requirements.
.205 Basis for determining Federal awards expended.
.210 Subrecipient and vendor determinations.
.215 Relation to other audit requirements.
.220 Frequency of audits.
.225 Sanctions.
.230 Audit costs.
.235 Program-specific audits.
Subpart C--Auditees
.300 Auditee responsibilities.
.305 Auditor selection.
.310 Financial statements.
.315 Audit findings follow-up.
.320 Report submission.
Subpart D--Federal Agencies and Pass-Through Entities
.400 Responsibilities.
.405 Management decision.
Subpart E--Auditors
.500 Scope of audit.
.505 Audit reporting.
_.510 Audit findings.
.515 Audit working papers.
.520 Major program determination.
_.525 Criteria for Federal program risk.
.530 Criteria for a low-risk auditee.
Appendix A to Part _ - Data Collection Form (Form SF-SAC) .
Appendix B to Part - Circular A-133 Compliance Supplement.
3
Subpart A--General
§ .100 Purpose.
This part sets forth standards for obtaining consistency and uniformity
among Federal agencies for the audit of non-Federal entities expending Federal
awards.
§ .105 Definitions.
Auditee means any non-Federal entity that expends Federal awards which
must be audited under this part.
Auditor means an auditor, that is a public accountant or a Federal,
State or local government audit organization, which meets the general
standards specified in generally accepted government auditing standards
(GAGAS) . The term auditor does not include internal auditors of non-profit
organizations.
Audit finding means deficiencies which the auditor is required by
§ _.510(a) to report in the schedule of findings and questioned costs.
CFDA number means the number assigned to a Federal program in the
Catalog of Federal Domestic Assistance (CFDA) .
Cluster of programs means a grouping of closely related programs that
share common compliance requirements. The types of clusters of programs are
research and development (R&D) , student financial aid (SFA) , and other
clusters. "Other clusters" are as defined by the Office of Management and
Budget (OMB) in the compliance supplement or as designated by a State for
Federal awards the State provides to its subrecipients that meet the
definition of a cluster of programs. When designating an "other cluster, " a
State shall identify the Federal awards included in the cluster and advise the
subrecipients of compliance requirements applicable to the cluster, consistent
with § .400 (d) (1) and § .400 (d) (2) , respectively. A cluster of programs
shall be considered as one program for determining major programs, as
described in § .520, and, with the exception of R&D as described in
§ .200(c) , whether a program-specific audit may be elected.
Cognizant agency for audit means the Federal agency designated to carry
out the responsibilities described in § .400(a) .
Compliance supplement refers to the Circular A-133 Compliance
Supplement, included as Appendix B to Circular A-133, or such documents as
OMB or its designee may issue to replace it. This document is available from
the Government Printing Office, Superintendent of Documents, Washington, DC
20402-9325.
Corrective action means action taken by the auditee that:
(1) Corrects identified deficiencies;
(2) Produces recommended improvements; or
(3) Demonstrates that audit findings are either invalid or do not
warrant auditee action.
Federal agency has the same meaning as the term agency in Section 551 (1)
of title 5, United States Code.
Federal award means Federal financial assistance and Federal cost-
reimbursement contracts that non-Federal entities receive directly from
Federal awarding agencies or indirectly from pass-through entities. It does
4
not include procurement contracts, under grants or contracts, used to buy
goods or services from vendors. Any audits of such vendors shall be covered
by the terms and conditions of the contract. Contracts to operate Federal
Government owned, contractor operated facilities (GOCOs) are excluded from the
requirements of this part.
Federal awarding agency means the Federal agency that provides an award
directly to the recipient.
Federal financial assistance means assistance that non-Federal entities
receive or administer in the form of grants, loans, loan guarantees, property
(including donated surplus property) , cooperative agreements, interest
subsidies, insurance, food commodities, direct appropriations, and other
assistance, but does not include amounts received as reimbursement for
services rendered to individuals as described in § .205(h) and § .205(i) .
Federal program means:
(1) All Federal awards to a non-Federal entity assigned a single
number in the CFDA.
(2) When no CFDA number is assigned, all Federal awards from the same
agency made for the same purpose should be combined and considered one
program.
(3) Notwithstanding paragraphs (1) and (2) of this definition, a
cluster of programs. The types of clusters of programs are:
(i) Research and development (R&D) ;
(ii) Student financial aid (SFA) ; and
(iii) "Other clusters, " as described in the definition of cluster
of programs in this section.
GAGAS means generally accepted government auditing standards issued by
the Comptroller General of the United States, which are applicable to
financial audits.
Generally accepted accounting principles has the meaning specified in
generally accepted auditing standards issued by the American Institute of
Certified Public Accountants (AICPA) .
Indian tribe means any Indian tribe, band, nation, or other organized
group or community, including any Alaskan Native village or regional or
village corporation (as defined in, or established under, the Alaskan Native
Claims Settlement Act) that is recognized by the United States as eligible for
the special programs and services provided by the United States to Indians
because of their status as Indians.
Internal control means a process, effected by an entity's management and
other personnel, designed to provide reasonable assurance regarding the
achievement of objectives in the following categories:
(1) Effectiveness and efficiency of operations;
(2) Reliability of financial reporting; and
(3) Compliance with applicable laws and regulations.
Internal control pertaining to the compliance requirements for Federal
programs (Internal control over Federal programs) means a process--effected by
5
an entity's management and other personnel--designed to provide reasonable
assurance regarding the achievement of the following objectives for Federal
programs:
(1) Transactions are properly recorded and accounted for to:
(i) Permit the preparation of reliable financial statements and
Federal reports;
(ii) Maintain accountability over assets; and
(iii) Demonstrate compliance with laws, regulations, and other
compliance requirements;
(2) Transactions are executed in compliance with:
(i) Laws, regulations, and the provisions of contracts or grant
agreements that could have a direct and material effect on a Federal program;
and
(ii) Any other laws and regulations that are identified in the
compliance supplement; and
(3) Funds, property, and other assets are safeguarded against loss
from unauthorized use or disposition.
Loan means a Federal loan or loan guarantee received or administered by
a non-Federal entity.
Local government means any unit of local government within a State,
including a county, borough, municipality, city, town, township, parish, local
public authority, special district, school district, intrastate district,
council of governments, and any other instrumentality of local government.
Major program means a Federal program determined by the auditor to be a
major program in accordance with § .520 or a program identified as a major
program by a Federal agency or pass-through entity in accordance with
§ .215(c) .
Management decision means the evaluation by the Federal awarding agency
or pass-through entity of the audit findings and corrective action plan and
the issuance of a written decision as to what corrective action is necessary.
Non-Federal entity means a State, local government, or non-profit
organization.
Non-profit organization means:
(1) any corporation, trust, association, cooperative, or other
organization that:
(i) Is operated primarily for scientific, educational, service,
charitable, or similar purposes in the public interest;
(ii) Is not organized primarily for profit; and
(iii) Uses its net proceeds to maintain, improve, or expand its
operations; and
(2) The term non-profit organization includes non-profit institutions
of higher education and hospitals.
6
OMB means the Executive Office of the President, Office of Management
and Budget.
Oversight agency for audit means the Federal awarding agency that
provides the predominant amount of direct funding to a recipient not assigned
a cognizant agency for audit. When there is no direct funding, the Federal
agency with the predominant indirect funding shall assume the oversight
responsibilities. The duties of the oversight agency for audit are described
in § .400(b) .
Effective July 28, 2003, the following is added to this definition:
A Federal agency with oversight for an auditee may reassign oversight to
another Federal agency which provides substantial funding and agrees to
be the oversight agency for audit. Within 30 days after any
reassignment, both the old and the new oversight agency for audit shall
notify the auditee, and, if known, the auditor of the reassignment. "
Pass-through entity means a non-Federal entity that provides a Federal
award to a subrecipient to carry out a Federal program.
Program-specific audit means an audit of one Federal program as provided
for in § .200(c) and § .235.
Questioned cost means a cost that is questioned by the auditor because
of an audit finding:
(1) Which resulted from a violation or possible violation of a
provision of a law, regulation, contract, grant, cooperative agreement, or
other agreement or document governing the use of Federal funds, including
funds used to match Federal funds;
(2) Where the costs, at the time of the audit, are not supported by
adequate documentation; or
(3) Where the costs incurred appear unreasonable and do not reflect
the actions a prudent person would take in the circumstances.
Recipient means a non-Federal entity that expends Federal awards
received directly from a Federal awarding agency to carry out a Federal
program.
Research and development (R&D) means all research activities, both basic
and applied, and all development activities that are performed by a non-
Federal entity. Research is defined as a systematic study directed toward
fuller scientific knowledge or understanding of the subject studied. The term
research also includes activities involving the training of individuals in
research techniques where such activities utilize the same facilities as other
research and development activities and where such activities are not included
in the instruction function. Development is the systematic use of knowledge
and understanding gained from research directed toward the production of
useful materials, devices, systems, or methods, including design and
development of prototypes and processes.
Single audit means an audit which includes both the entity's financial
statements and the Federal awards as described in § .500.
State means any State of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, and the Trust Territory of the
7
Pacific Islands, any instrumentality thereof, any multi-State, regional, or
interstate entity which has governmental functions, and any Indian tribe as
defined in this section.
Student Financial Aid (SFA) includes those programs of general student
assistance, such as those authorized by Title IV of the Higher Education Act
of 1965, as amended, (20 U.S.C. 1070 et seq. ) which is administered by the
U.S. Department of Education, and similar programs provided by other Federal
agencies. It does not include programs which provide fellowships or similar
Federal awards to students on a competitive basis, or for specified studies or
research.
Subrecipient means a non-Federal entity that expends Federal awards
received from a pass-through entity to carry out a Federal program, but does
not include an individual that is a beneficiary of such a program. A
subrecipient may also be a recipient of other Federal awards directly from a
Federal awarding agency. Guidance on distinguishing between a subrecipient
and a vendor is provided in § .210.
Types of compliance requirements refers to the types of compliance
requirements listed in the compliance supplement. Examples include:
activities allowed or unallowed; allowable costs/cost principles; cash
management; eligibility; matching, level of effort, earmarking; and,
reporting.
Vendor means a dealer, distributor, merchant, or other seller providing
goods or services that are required for the conduct of a Federal program.
These goods or services may be for an 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.
((I) 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
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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;
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(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.
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(c) Request for a program to be audited as a major program. A Federal
agency may request an auditee to have a particular Federal program audited as
a major program in lieu of the Federal agency conducting or arranging for the
additional audits. To allow for planning, such requests should be made at
least 180 days prior to the end of the fiscal year to be audited. The
auditee, after consultation with its auditor, should promptly respond to such
request by informing the Federal agency whether the program would otherwise be
audited as a major program using the risk-based audit approach described in
• .520 and, if not, the estimated incremental cost. The Federal agency
shall then promptly confirm to the auditee whether it wants the program
audited as a major program. If the program is to be audited as a major
program based upon this Federal agency request, and the Federal agency agrees
to pay the full incremental costs, then the auditee shall have the program
audited as a major program. A pass-through entity may use the provisions of
this paragraph for a subrecipient.
§ .220 Frequency of audits.
Except for the provisions for biennial audits provided in paragraphs (a)
and (b) of this section, audits required by this part shall be performed
annually. Any biennial audit shall cover both years within the biennial
period.
(a) A State or local government that is required by constitution or
statute, in effect on January 1, 1987, to undergo its audits less frequently
than annually, is permitted to undergo its audits pursuant to this part.
biennially. This requirement must still be in effect for the biennial period
under audit.
(b) Any non-profit organization that had biennial audits for all.
biennial periods ending between July 1, 1992, and January 1, 1995, is
permitted to undergo its audits pursuant to this part biennially.
§ .225 Sanctions.
No audit costs may be charged to Federal awards when audits required by
this part have not been made or have been made but not in accordance with this
part. In cases of continued inability or unwillingness to have an audit
conducted in accordance with this part, Federal agencies and pass-through
entities shall take appropriate action using sanctions such as:
(a) Withholding a percentage of Federal awards until the audit is
completed satisfactorily;
(b) Withholding or disallowing overhead costs;
(c) Suspending Federal awards until the audit is conducted; or
(d) Terminating the Federal award.
§ .230 Audit costs.
(a) Allowable costs. Unless prohibited by law, the cost of audits
made in accordance with the provisions of this part are allowable charges to
Federal awards. The charges may be considered a direct cost or an allocated
indirect cost, as determined in accordance with the provisions of applicable
OMB cost principles circulars, the Federal Acquisition Regulation (FAR) (48
CFR parts 30 and 31) , or other applicable cost principles or regulations.
12
(b) Unallowable costs. A non-Federal entity shall not charge the
following to a Federal award:
(1) The cost of any audit under the Single Audit Act Amendments
of 1996 (31 U.S.C. 7501 et 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
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(iv) Follow up on prior audit findings, perform procedures
to assess the reasonableness of the summary schedule of prior audit findings
prepared by the auditee, and report, as a current year audit finding, when the
auditor concludes that the summary schedule of prior audit findings materially
misrepresents the status of any prior audit finding in accordance with the
requirements of § .500(e) .
(4) The auditor's report (s) may be in the form of either
combined or separate reports and may be organized differently from the manner
presented in this section. The auditor's report (s) shall state that the audit
was conducted in accordance with this part and include the following:
(i) An opinion (or disclaimer of opinion) as to whether
the financial statement (s) of the Federal program is presented fairly in all
material respects in conformity with the stated accounting policies;
(ii) A report on internal control related to the Federal
program, which shall describe the scope of testing of internal control and the
results of the tests;
(iii) A report on compliance which includes an opinion (or
disclaimer of opinion) as to whether the auditee complied with laws,
regulations, and the provisions of contracts or grant agreements which could
have a direct and material effect on the Federal program; and
(iv) A schedule of findings and questioned costs for the
Federal program that includes a summary of the auditor's results relative to
the Federal program in a format consistent with § .505(d) (1) and findings
and questioned costs consistent with the requirements of § .505(d) (3) .
(c) Report submission for program-specific audits.
(1) The audit shall be completed and the reporting required by paragraph
(c) (2) or (c) (3) of this section submitted within the earlier of 30 days after
receipt of the auditor' s report (s) , or nine months after the end of the audit
period, unless a longer period is agreed to in advance by the Federal agency
that provided the funding or a different period is specified in a program-
specific audit guide. (However, for fiscal years beginning on or before June
30, 1998, the audit shall be completed and the required reporting shall be
submitted within the earlier of 30 days after receipt of the auditor' s
report (s) , or 13 months after the end of the audit period, unless a different
period is specified in a program-specific audit guide. ) Unless restricted by
law or regulation, the auditee shall make report copies available for public
inspection.
(2) When a program-specific audit guide is available, the
auditee shall submit to the Federal clearinghouse designated by OMB the data
collection form prepared in accordance with § .320(b) , as applicable to a
program-specific audit, and the reporting required by the program-specific
audit guide to be retained as an archival copy. Also, the auditee shall
submit to the Federal awarding agency or pass-through entity the reporting
required by the program-specific audit guide.
(3) When a program-specific audit guide is not available, the
reporting package for a program-specific audit shall consist of the financial
statement (s) of the Federal program, a summary schedule of prior audit
findings, and a corrective action plan as described in paragraph (b) (2) of
this section, and the auditor's report (s) described in paragraph (b) (4) of
this section. The data collection form prepared in accordance with
14
§ .320(b) , as applicable to a program-specific audit, and one copy of this
reporting package shall be submitted to the Federal clearinghouse designated
by OMB to be retained as an archival copy. Also, when the schedule of
findings and questioned costs disclosed audit findings or the summary schedule
of prior audit findings reported the status of any audit findings, the auditee
shall submit one copy of the reporting package to the Federal clearinghouse on
behalf of the Federal awarding agency, or directly to the pass-through entity
in the case of a subrecipient. Instead of submitting the reporting package to
the pass-through entity, when a subrecipient is not required to submit a
reporting package to the pass-through entity, the subrecipient shall provide
written notification to the pass-through entity, consistent with the
requirements of § .320(e) (2) . A subrecipient may submit a copy of the
reporting package to the pass-through entity to comply with this notification
requirement.
(d) Other sections of this part may apply. Program-specific audits
are subject to § .100 through § .215(b) , § .220 through § .230,
§ .300 through § .305, § .315, § .320(f) through § .320(j) , § .400
through § .405, § .510 through § .515, and other referenced provisions
of this part unless contrary to the provisions of this section, a program-
specific audit guide, or program laws and regulations.
Subpart C--Auditees
§ .300 Auditee responsibilities.
The auditee shall:
(a) Identify, in its accounts, all Federal awards received and
expended and the Federal programs under which they were received. Federal
program and award identification shall include, as applicable, the CFDA title
and number, award number and year, name of the Federal agency, and name of the
pass-through entity.
(b) Maintain internal control over Federal programs that provides
reasonable assurance that the auditee is managing
Federal awards in compliance with laws, regulations, and the provisions of
contracts or grant agreements that could have a material effect on each of its
Federal programs.
(c) Comply with laws, regulations, and the provisions of contracts or
grant agreements related to each of its Federal programs.
(d) Prepare appropriate financial statements, including the schedule
of expenditures of Federal awards in accordance with § .310.
(e) Ensure that the audits required by this part are properly
performed and submitted when due. When extensions to the report submission
due date required by § .320(a) are granted by the cognizant or oversight
agency for audit, promptly notify the Federal clearinghouse designated by OMB
and each pass-through entity providing Federal awards of the extension.
(f) Follow up and take corrective action on audit findings, including
preparation of a summary schedule of prior audit findings and a corrective
action plan in accordance with § .315(b) and § .315(c) , respectively.
§ .305 Auditor selection.
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(a) Auditor procurement. In procuring audit services, auditees shall
follow the procurement standards prescribed by the Grants Management Common
Rule (hereinafter referred to as the "A-102 Common Rule") published March 11,
1988 and amended April 19, 1995 [insert appropriate CFR citation] , Circular
A-110, "Uniform Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals and Other Non-Profit
Organizations, " or the FAR (48 CFR part 42) , as applicable (OMB Circulars are
available from the Office of Administration, Publications Office, room 2200,
New Executive Office Building, Washington, DC 20503) . Whenever possible,
auditees shall make positive efforts to utilize small businesses, minority-
owned firms, and women's business enterprises, in procuring audit services as
stated in the A-102 Common Rule, OMB Circular A-110, or the FAR (48 CFR part
42) , as applicable. In requesting proposals for audit services, the
objectives and scope of the audit should be made clear. Factors to be
considered in evaluating each proposal for audit services include the
responsiveness to the request for proposal, relevant experience, availability
of staff with professional qualifications and technical abilities, the results
of external quality control reviews, and price.
(b) Restriction on auditor preparing indirect cost proposals . An
auditor who prepares the indirect cost proposal or cost allocation plan may
not also be selected to perform the audit required by this part when the
indirect costs recovered by the auditee during the prior year exceeded $1
million. This restriction applies to the base year used in the preparation of
the indirect cost proposal or cost allocation plan and any subsequent years in
which the resulting indirect cost agreement or cost allocation plan is used to
recover costs. To minimize any disruption in existing contracts for audit
services, this paragraph applies to audits of fiscal years beginning after
June 30, 1998 .
(c) Use of Federal auditors . Federal auditors may perform all or part
of the work required under this part if they comply fully with the
requirements of this part.
§ .310 Financial statements.
(a) Financial statements . The auditee shall prepare financial
statements that reflect its financial position, results of operations or
changes in net assets, and, where appropriate, cash flows for the fiscal year
audited. The financial statements shall be for the same organizational unit
and fiscal year that is chosen to meet the requirements of this part.
However, organization-wide financial statements may also include departments,
agencies, and other organizational units that have separate audits in
accordance with § .500(a) and prepare separate financial statements.
(b) Schedule of expenditures of Federal awards . The auditee shall
also prepare a schedule of expenditures of Federal awards for the period
covered by the auditee's financial statements. While not required, the
auditee may choose to provide information requested by Federal awarding
agencies and pass-through entities to make the schedule easier to use. For
example, when a Federal program has multiple award years, the auditee may list
the amount of Federal awards expended for each award year separately. At a
minimum, the schedule shall :
(1) List individual Federal programs by Federal agency. For
Federal programs included in a cluster of programs, list individual Federal
programs within a cluster of programs. For R&D, total Federal awards expended
shall be shown either by individual award or by Federal agency and major
subdivision within the Federal agency. For example, the National Institutes
of Health is a major subdivision in the Department of Health and Human
Services.
16
(2) For Federal awards received as a subrecipient, the name of
the pass-through entity and identifying number assigned by the pass-through
entity shall be included.
(3) Provide total Federal awards expended for each individual
Federal program and the CFDA number or other identifying number when the CFDA
information is not available.
(4) Include notes that describe the significant accounting
policies used in preparing the schedule.
(5) To the extent practical, pass-through entities should
identify in the schedule the total amount provided to subrecipients from each
Federal program.
(6) Include, in either the schedule or a note to the schedule,
the value of the Federal awards expended in the form of non-cash assistance,
the amount of insurance in effect during the year, and loans or loan
guarantees outstanding at year end. While not required, it is preferable to
present this information in the schedule.
§ .315 Audit findings follow-up.
(a) General. The auditee is responsible for follow-up and corrective
action on all audit findings. As part of this responsibility, the auditee
shall prepare a summary schedule of prior audit findings. The auditee shall
also prepare a corrective action plan for current year audit findings. The
summary schedule of prior audit findings and the corrective action plan shall
include the reference numbers the auditor assigns to audit findings under
§ .510(c) . Since the summary schedule may include audit findings from
multiple years, it shall include the fiscal year in which the finding
initially occurred.
(b) Summary schedule of prior audit findings . The summary schedule of
prior audit findings shall report the status of all audit findings included in
the prior audit's schedule of findings and questioned costs relative to
Federal awards. The summary schedule shall also include audit findings
reported in the prior audit's summary schedule of prior audit findings except
audit findings listed as corrected in accordance with paragraph (b) (1) of this
section, or no longer valid or not warranting further action in accordance
with paragraph (b) (4) of this section.
(1) When audit findings were fully corrected, the summary
schedule need only list the audit findings and state that corrective action
was taken.
(2) When audit findings were not corrected or were only
partially corrected, the summary schedule shall describe the planned
corrective action as well as any partial corrective action taken.
(3) When corrective action taken is significantly different from
corrective action previously reported in a corrective action plan or in the
Federal agency's or pass-through entity's management decision, the summary
schedule shall provide an explanation.
(4) When the auditee believes the audit findings are no longer
valid or do not warrant further action, the reasons for this position shall be
described in the summary schedule. A valid reason for considering an audit
finding as not warranting further action is that all of the following have
occurred:
(i) Two years have passed since the audit report in which
17
the finding occurred was submitted to the Federal clearinghouse;
(ii) The Federal agency or pass-through entity is not
currently following up with the auditee on the audit finding; and
(iii) A management decision was not issued.
(c) Corrective action plan. At the completion of the audit, the
auditee shall prepare a corrective action plan to address each audit finding
included in the current year auditor's reports. The corrective action plan
shall provide the name(s) of the contact person(s) responsible for corrective
action, the corrective action planned, and the anticipated completion date.
If the auditee does not agree with the audit findings or believes corrective
action is not required, then the corrective action plan shall include an
explanation and specific reasons.
§ .320 Report submission.
(a) General . The audit shall be completed and the data collection
form described in paragraph (b) of this section and reporting package
described in paragraph (c) of this section shall be submitted within the
earlier of 30 days after receipt of the auditor's report (s) , or nine months
after the end of the audit period, unless a longer period is agreed to in
advance by the cognizant or oversight agency for audit. (However, for fiscal
years beginning on or before June 30, 1998, the audit shall be completed and
the data collection form and reporting package shall be submitted within the
earlier of 30 days after receipt of the auditor's report(s) , or 13 months
after the end of the audit period. ) Unless restricted by law or regulation,
the auditee shall make copies available for public inspection.
(b) Data Collection. (1) The auditee shall submit a data collection
form which states whether the audit was completed in accordance with this part
and provides information about the auditee, its Federal programs, and the
results of the audit. The form shall be approved by OMB, available from the
Federal clearinghouse designated by OMB, and include data elements similar to
those presented in this paragraph. A senior level representative of the
auditee (e.g. , State controller, director of finance, chief executive officer,
or chief financial officer) shall sign a statement to be included as part of
the form certifying that: the auditee complied with the requirements of this
part, the form was prepared in accordance with this part (and the instructions
accompanying the form) , and the information included in the form, in its
entirety, are accurate and complete.
(2) The data collection form shall include the following data
elements:
(i) The type of report the auditor issued on the financial statements of
the auditee (i.e. , unqualified opinion, qualified opinion, adverse
opinion, or disclaimer of opinion) .
(ii) Where applicable, a statement that reportable conditions 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 reportable conditions 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 S .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 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 for:
(1) The Federal clearinghouse to retain as an archival copy;
and
(2) Each Federal awarding agency when the schedule of findings
and questioned costs disclosed audit findings relating to Federal awards that
the Federal awarding agency provided directly or the summary schedule of prior
audit findings reported the status of any audit findings relating to Federal
awards that the Federal awarding agency provided directly.
(e) Additional submission by subrecipients . (1) In addition to the
requirements discussed in paragraph (d) of this section, auditees that are
also subrecipients shall submit to each pass-through entity one copy of the
reporting package described in paragraph (c) of this section for each pass-
through entity when the schedule of findings and questioned costs disclosed
audit findings relating to Federal awards that the pass-through entity
provided or the summary schedule of prior audit findings reported the status
of any audit findings relating to Federal awards that the pass-through entity
provided.
(2) Instead of submitting the reporting package to a pass-
through entity, when a subrecipient is not required to submit a reporting
package to a pass-through entity pursuant to paragraph (e) (1) of this section,
the subrecipient shall provide written notification to the pass-through entity
that: an audit of the subrecipient was conducted in accordance with this part
(including the period covered by the audit and the name, amount, and CFDA
number of the Federal award(s) provided by the pass-through entity) ; the
schedule of findings and questioned costs disclosed no audit findings relating
to the Federal award(s) that the pass-through entity provided; and, the
summary schedule of prior audit findings did not report on the status of any
audit findings relating to the Federal award(s) that the pass-through entity
provided. A subrecipient may submit a copy of the reporting package described
in paragraph (c) of this section to a pass-through entity to comply with this
notification requirement .
(f) Requests for report copies . In response to requests by a Federal
agency or pass-through entity, auditees shall submit the appropriate copies of
the reporting package described in paragraph (c) of this section and, if
requested, a copy of any management letters issued by the auditor.
(g) Report retention requirements . Auditees shall keep one copy of
the data collection form described in paragraph (b) of this section and one
copy of the reporting package described in paragraph (c) of this section on
file for three years from the date of submission to the Federal clearinghouse
20
designated by OMB. Pass-through entities shall keep subrecipients'
submissions on file for three years from date of receipt.
(h) Clearinghouse responsibilities . The Federal clearinghouse
designated by OMB shall distribute the reporting packages received in
accordance with paragraph (d) (2) of this section and § .235(c) (3) to
applicable Federal awarding agencies, maintain a data base of completed
audits, provide appropriate information to Federal agencies, and follow up
with known auditees which have not submitted the required data collection
forms and reporting packages.
(i) Clearinghouse address. The address of the Federal clearinghouse
currently designated by OMB is Federal Audit Clearinghouse, Bureau of the
Census, 1201 E. 10th Street, Jeffersonville, IN 47132 .
(j) Electronic filing. Nothing in this part shall preclude electronic
submissions to the Federal clearinghouse in such manner as may be approved by
OMB. With OMB approval, the Federal clearinghouse may pilot test methods of
electronic submissions.
Subpart D--Federal Agencies and Pass-Through Entities
§ .400 Responsibilities.
(a) Cognizant agency for audit responsibilities . Recipients expending
more than $25 million ($50 million for fiscal years ending after December 31,
2003) a year in Federal awards shall have a cognizant agency for audit. The
designated cognizant agency for audit shall be the Federal awarding agency
that provides the predominant amount of direct funding to a recipient unless
OMB makes a specific cognizant agency for audit assignment.
Following is effective for fiscal years ending on or before December 31, 2003:
To provide for continuity of cognizance, the determination of the predominant
amount of direct funding shall be based upon direct Federal awards expended in
the recipient's fiscal years ending in 1995, 2000, 2005, and every fifth year
thereafter. For example, audit cognizance for periods ending in 1997 through
2000 will be determined based on Federal awards expended in 1995. (However,
for States and local governments that expend more than $25 million a year in
Federal awards and have previously assigned cognizant agencies for audit, the
requirements of this paragraph are not effective until fiscal years beginning
after June 30, 2000.)
Following is effective for fiscal years ending after December 31, 2003:
The determination of the predominant amount of direct funding shall be based
upon direct Federal awards expended in the recipient's fiscal years ending in
2004, 2009, 2014, and every fifth year thereafter. For example, audit
cognizance for periods ending in 2006 through 2010 will be determined based on
Federal awards expended in 2004. (However, for 2001 through 2005,the
cognizant agency for audit is determined based on the predominant amount of
direct Federal awards expended in the recipient's fiscal year ending in 2000) .
Notwithstanding the manner in which audit cognizance is determined, a Federal
awarding agency with cognizance for an auditee may reassign cognizance to
another Federal awarding agency which provides substantial direct funding and
agrees to be the cognizant agency for audit. Within 30 days after any
reassignment, both the old and the new cognizant agency for audit shall notify
the auditee, and, if known, the auditor of the reassignment. The cognizant
agency for audit shall:
(1) Provide technical audit advice and liaison to auditees and
auditors.
(2) Consider auditee requests for extensions to the report
21
submission due date required by § .320(a) . The cognizant agency for audit
may grant extensions for good cause.
(3) Obtain or conduct quality control reviews of selected
audits made by non-Federal auditors, and provide the results, when
appropriate, to other interested organizations.
(4) Promptly inform other affected Federal agencies and
appropriate Federal law enforcement officials of any direct reporting by the
auditee or its auditor of irregularities or illegal acts, as required by GAGAS
or laws and regulations.
(5) Advise the auditor and, where appropriate, the auditee of
any deficiencies found in the audits when the deficiencies require corrective
action by the auditor. When advised of deficiencies, the auditee shall work
with the auditor to take corrective action. If corrective action is not
taken, the cognizant agency for audit shall notify the auditor, the auditee,
and applicable Federal awarding agencies and pass-through entities of the
facts and make recommendations for follow-up action. Major inadequacies or
repetitive substandard performance by auditors shall be referred to
appropriate State licensing agencies and professional bodies for disciplinary
action.
(6) Coordinate, to the extent practical, audits or reviews
made by or for Federal agencies that are in addition to the audits made
pursuant to this part, so that the additional audits or reviews build upon
audits performed in accordance with this part.
(7) Coordinate a management decision for audit findings that
affect the Federal programs of more than one agency.
(8) Coordinate the audit work and reporting responsibilities
among auditors to achieve the most cost-effective audit.
(9) For biennial audits permitted under § .220, consider
auditee requests to qualify as a low-risk auditee under § .530(a) .
(b) Oversight agency for audit responsibilities . An auditee which
does not have a designated cognizant agency for audit will be under the
general oversight of the Federal agency determined in accordance with
§ .105. The oversight agency for audit:
(1) Shall provide technical advice to auditees and auditors as
requested.
(2) May assume all or some of the responsibilities normally
performed by a cognizant agency for audit.
(c) Federal awarding agency responsibilities . The Federal awarding
agency shall perform the following for the Federal awards it makes:
(1) Identify Federal awards made by informing each recipient
of the CFDA title and number, award name and number, award year, and if the
award is for R&D. When some of this information is not available, the Federal
agency shall provide information necessary to clearly describe the Federal
award.
(2) Advise recipients of requirements imposed on them by
Federal laws, regulations, and the provisions of contracts or grant
agreements.
(3) Ensure that audits are completed and reports are received
22
in a timely manner and in accordance with the requirements of this part.
(4) Provide technical advice and counsel to auditees and
auditors as requested.
(5) Issue a management decision on audit findings within six
months after receipt of the audit report and ensure that the recipient takes
appropriate and timely corrective action.
(6) Assign a person responsible for providing annual updates
of the compliance supplement to OMB.
(d) Pass-through entity responsibilities . A pass-through entity shall
perform the following for the Federal awards it makes:
(1) Identify Federal awards made by informing each
subrecipient of CFDA title and number, award name and number, award year, if
the award is R&D, and name of Federal agency. When some of this information
is not available, the pass-through entity shall provide the best information
available to describe the Federal award.
(2) Advise subrecipients of requirements imposed on them by
Federal laws, regulations, and the provisions of contracts or grant agreements
as well as any supplemental requirements imposed by the pass-through entity.
(3) Monitor the activities of subrecipients as necessary to
ensure that Federal awards are used for authorized purposes in compliance with
laws, regulations, and the provisions of contracts or grant agreements and
that performance goals are achieved.
(4) Ensure that subrecipients expending $300,000 ($500, 000 for
fiscal years ending after December 31, 2003) or more in Federal awards during
the subrecipient's fiscal year have met the audit requirements of this part
for that fiscal year.
(5) Issue a management decision on audit findings within six
months after receipt of the subrecipient's audit report and ensure that the
subrecipient takes appropriate and timely corrective action.
(6) Consider whether subrecipient audits necessitate
adjustment of the pass-through entity's own records.
(7) Require each subrecipient to permit the pass-through
entity and auditors to have access to the records and financial statements as
necessary for the pass-through entity to comply with this part.
.405 Management decision.
(a) General. The management decision shall clearly state whether or
not the audit finding is sustained, the reasons for the decision, and the
expected auditee action to repay disallowed costs, make financial adjustments,
or take other action. If the auditee has not completed corrective action, a
timetable for follow-up should be given. Prior to issuing the management
decision, the Federal agency or pass-through entity may request
additional information or documentation from the auditee, including a request
for auditor assurance related to the documentation, as a way of mitigating
disallowed costs. The management decision should describe any appeal process
available to the auditee.
(b) Federal agency. As provided in § .400(a) (7) , the cognizant
agency for audit shall be responsible for coordinating a management decision
for audit findings that affect the programs of more than one Federal agency.
23
As provided in § .400(c) (5) , a Federal awarding agency is responsible for
issuing a management decision for findings that relate to Federal awards it
makes to recipients. Alternate arrangements may be made on a case-by-case
basis by agreement among the Federal agencies concerned.
(c) Pass-through entity. As provided in § .400(d) (5) , the pass-
through entity shall be responsible for making the management decision for
audit findings that relate to Federal awards it makes to subrecipients.
(d) Time requirements . The entity responsible for making the
management decision shall do so within six months of receipt of the audit
report. Corrective action should be initiated within six months after receipt
of the audit report and proceed as rapidly as possible.
(e) Reference numbers . Management decisions shall include the
reference numbers the auditor assigned to each audit finding in accordance
with § .510(c) .
Subpart E--Auditors
§ .500 Scope of audit.
(a) General . The audit shall be conducted in accordance with GAGAS.
The audit shall cover the entire operations of the auditee; or, at the option
of the auditee, such audit shall include a series of audits that cover
departments, agencies, and other organizational units which expended or
otherwise administered Federal awards during such fiscal year, provided that
each such audit shall encompass the financial statements and schedule of
expenditures of Federal awards for each such department, agency, and other
organizational unit, which shall be considered to be a non-Federal entity.
The financial statements and schedule of expenditures of Federal awards shall
be for the same fiscal year.
(b) Financial statements . The auditor shall determine whether the
financial statements of the auditee are presented fairly in all material
respects in conformity with generally accepted accounting principles. The
auditor shall also determine whether the schedule of expenditures of Federal
awards is presented fairly in all material respects in relation to the
auditee's financial statements taken as a whole.
(c) Internal control . (1) In addition to the requirements of GAGAS,
the auditor shall perform procedures to obtain an understanding of internal
control over Federal programs sufficient to plan the audit to support a low
assessed level of control risk for major programs.
(2) Except as provided in paragraph (c) (3) of this section,
the auditor shall :
(i) Plan the testing of internal control over major
programs to support a low assessed level of control risk for the assertions
relevant to the compliance requirements for each major program; and
(ii) Perform testing of internal control as planned in
paragraph (c) (2) (i) of this section.
(3) When internal control over some or all of the compliance
requirements for a major program are likely to be ineffective in preventing or
detecting noncompliance, the planning and performing of testing described in
paragraph (c) (2) of this section are not required for those compliance
requirements. However, the auditor shall report a reportable condition
(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 reportable
conditions 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 reportable
conditions 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) Reportable conditions in internal control over major
programs. The auditor's determination of whether a deficiency in internal
control is a reportable condition 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 reportable conditions 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 S .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
reportable conditions in internal control or compliance problems as discussed
in § .525(b) (1) , § .525(b) (2) , and § .525(c) (1) , a single criteria in
§ .525 would seldom cause a Type B program to be considered high-risk.
(2) The auditor is not expected to perform risk assessments on
relatively small Federal programs. Therefore, the auditor is only required to
perform risk assessments on Type B programs that exceed the larger of:
(i) $100, 000 or three-tenths of one percent ( .003) of
total Federal awards expended when the auditee has less than or equal to $100
million in total Federal awards expended.
(ii) $300, 000 or three-hundredths of one percent ( .0003)
of total Federal awards expended when the auditee has more than $100 million
in total. Federal awards expended.
(e) Step 4 . At a minimum, the auditor shall audit all of the
following as major programs:
(1) All Type A programs, except the auditor may exclude any
Type A programs identified as low-risk under Step 2 (paragraph (c) (1) of this
section) .
(2) (i) High-risk Type B programs as identified under
either of the following two options:
(A) Option 1. At least one half of the Type B
programs identified as high-risk under Step 3 (paragraph (d) of this section) ,
except this paragraph (e) (2) (i) (A) does not require the auditor to audit more
high-risk Type B programs than the number of low-risk Type A programs
identified as low-risk under Step 2 .
(B) Option 2 . One high-risk Type B program for
each Type A program identified as low-risk under Step 2.
(ii) When identifying which high-risk Type B programs to
audit as major under either Option 1 or 2 in paragraph (e) (2) (i) (A) or (B) ,
the auditor is encouraged to use an approach which provides an opportunity for
different high-risk Type B programs to be audited as major over a period of
time.
(3) Such additional programs as may be necessary to comply
with the percentage of coverage rule discussed in paragraph (f) of this
section. This paragraph (e) (3) may require the auditor to audit more programs
as major than the number of Type A programs.
(f) Percentage of coverage rule . The auditor shall audit as major
programs Federal programs with Federal awards expended that, in the aggregate,
encompass at least 50 percent of total Federal awards expended. If the
auditee meets the criteria in § .530 for a low-risk auditee, the auditor
need only audit as major programs Federal programs with Federal awards
expended that, in the aggregate, encompass at least 25 percent of total
Federal awards expended.
(g) Documentation of risk. The auditor shall document in the working
30
papers the risk analysis process used in determining major programs.
(h) Auditor's iudqment. 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
PLEASE COMPLETE THE ENTIRE FORM. (fjl!
Choose Funding Program: (Circle all applicable) CDBG HOME ESG SHP Other
CITY OF OMAHA-TENANT SURVEY FORM
20
A. GENERAL INFORMATION
Tenant Name(s) Telephone
Address Apt.No.
Initial Date of Lease Recertification Lease Date
DEMOGRAPHICS&ANTICIPATED INCOME OF ALL HOUSEHOLD MEMBERS
Head of Household is: Male ❑ Female ❑ Elderly❑
Number of Occupants: Total No. Adults No. Children Under 18
Please enter ethnicity and race for each household member in accordance with the attached definitions.
Ethnicity—Choose either H or NH. Enter H for Hispanic or Latino. Enter NH for Not Hispanic or Latino.
Race Categories—Choose all that apply for each household member. Enter one or more of the following
abbreviations: W, B,A,AI,PI, O.
White(W); Black or African American(B);Asian(A);American Indian or Alaska Native(AI);
Native Hawaiian or Other Pacific Islander(PI)
Other(0)(Please specify)
Anticipated Anticipated
Name of Household Member (H or NH) (See Above) Monthly Annual
Age Ethnicity Race Handicap Income Income
— $ $
— $ $
$ $
— $ $
TOTAL $ $
100%MEDIAN FAMILY INCOME(MFI)FOR HH SIZE $
%OF MFI FOR HH SIZE
B. HOUSING CHARACTERISTICS
Housing Costs HUD Rent Limits
Monthly Housing Cost:
Actual Contract Rent $
Average Monthly Utility Cost $
Total Monthly Housing Cost $ $
Subsidized Rent Assistance Received(Please list source and amount): Section 8: $
Other Assistance: Source Amount $ No Assistance
Unit Type: Efficiency❑ 1BR LI 2 BR❑ 3 BR❑ Other❑
Handicap Accessible Unit: Yes ❑ No ❑ Check one: 50% Unit❑ 60%Unit❑ 80%Unit❑
C. TENANTS IN-PLACE AT TIME OF LOAN CLOSING -Non-disclosure Form Required
D. REMARKS:
Owner or Authorized Representative Phone Date
Please attach utility allowance determination form, City of Omaha Computing Annual Income Form and
current lease agreement with each Tenant Survey.
101
EtrUA.HCUSIFG
Cr'ron TJ1111?
Revised 5/1/08
Page 1 of 2
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.
Revised 5/1/08
Page 2 of 2
CITY OF OMAHA PLANNING DEPARTMENT
COMPUTING ANNUAL INCOME
Borrower Name Address
Tenant's Name Address
Income Limit (FY )
50%Income Limit (FY )
Actual Rent for the Tenant (FY )
Low HOME Rent Limit (FY ) High HOME Rent Limit (FY )
Fair Market Rent (FY ) Fair Market Rent (FY )
Utility Allowances (FY ) Utility Allowances (FY )
ASSETS
Name of Family Member and Age Asset Description Current Cash Actual Income
Value of Assets from Assets
Net Cash Value of Assets
(A)Total Actual Income from Assets
(B)If Net Cash Value of Assets is greater than$5,000,multiply by 0%(Passbook Rate)and enter results here;otherwise leave blank
ANTICIPATED ANNUAL INCOME
Name of Family Members Wages Benefits/Pensions Public Assistance Other Income Asset Income
Enter greater of A or B
Totals
Grand Total
Based on the grand total income,the applicant is: Income Eligible(❑) Not Eligible(❑)
Date of Initial Income Eligibility Established:
Date of Annual Recertification Completed: SIGNATURE(Property Owner/Agent) Date
SIGNATURE(Tenant Head of Household) Date
A
COUAL HOUSING
OPPORTUNITY - Revised and approved 10/28/2011
Race and Ethnic Data U.S.Department of Housing OMB Approval No.2502-0204
Reporting Form and Urban Development (exp. 03/31/2011)
Office of Housing
Name of Property Project No. Address of Property
Name of Owner/Managing Agent Type of Assistance or Program Title
Name of Head of Household Name of Household Member
Date(mm/dd/yyyy):
Select
Ethnic Categories One
Hispanic or Latino ❑
Not-Hispanic or LatinoEl
Select
Racial Categories* all that Apply
• American Indian or Alaska Native
Asian ❑
Black or African American El
Native Hawaiian or Other Pacific Islander El
White
Other
*Definitions of these categories may be found on the reverse side.
There is no penalty for persons who do not complete the form.
Signature Date
Public reporting burden for this collection is estimated to average 10 minutes per response, including the time for reviewing instructions,
searching existing data sources,gathering and maintaining the data needed,and completing and reviewing the collection of information. This
information is required to obtain benefits and voluntary. HUD may not collect this information,and you are not required to complete this form,
unless it displays a currently valid OMB control number.
This information is authorized by the U.S.Housing Act of 1937,as amended,the Housing and Urban Rural Recovery Act of 1983 and Housing
and Community Development Technical Amendments of 1984. This information is needed to be in compliance with OMB-mandated changes to
Ethnicity and Race categories for recording the 50059 Data Requirements to HUD. Owners/agents must offer the opportunity to the head and co-
head of each household to"self certify"during the application interview or lease signing. In-place tenants must complete the format as part of
their next interim or annual re-certification. This process will allow the owner/agent to collect the needed information on all members of the
household. Completed documents should be stapled together for each household and placed in the household's file. Parents or guardians are to
complete the self-certification for children under the age of 18. Once system development funds are provided and the appropriate system
upgrades have been implemented,owners/agents will be required to report the race and ethnicity data electronically to the TRACS(Tenant Rental
Assistance Certification System). This information is considered non-sensitive and does not require any special protection.
O 1
EQUAL HOUSING
OPPORTUNITY revised and approved 7/7/10
Instructions for the Race and Ethnic Data Reporting(Form HUD-27061-H)
A. General Instructions:
This form is to be completed by the head of household for those wishing to be served
(applicants) and those that are currently served (tenants/owner-occupants) in housing
assisted by the Department of Housing and Urban Development.
If the assisted property is a rental unit, the owner or agent is required to offer the
applicant/tenant the option to complete the form. The form is to be completed at initial
application or at lease signing. In-place tenants must also be offered the opportunity to
complete the form as part of the next interim or annual recertification. Once the form is
completed, it need not be completed again unless the head of household changes. There is
no penalty for persons who do not complete the form. However, the owner or agent may
place a note in the tenant file stating the applicant/tenant refused to complete the foiiu.
Completed documents should be placed in the household's file.
The Office of Housing has been given permission to use this form for gathering race and
ethnic data in assisted housing programs.
1. The two ethnic categories you should from are defined below. You should check one of
the two categories.
A. Hispanic or Latino. A person of Cuban, Mexican, Puerto Rican, South or Central
American or other Spanish culture or origin, regardless of race. The term of"Spanish
origin" can be used in addition to "Hispanic" or"Latino".
B. Not Hispanic or Latino. A person not of Cuban, Mexican, Puerto Rican, South or
Central American, or other Spanish culture or origin, regardless of race.
2. The five racial categories to choose from are defined below: You should check as many as
apply to you.
A. 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.
B. 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.
C. Black or African American. A person having origins in any of the black racial
groups of Africa. Terms such as "Hatian" or "Negro" can be used in addition to
"Black" or "African American".
D. Native Hawaiian or Other Pacific Islander. A person having origins in any of the
original peoples of Hawaii, Guam, Samoa, or other Pacific Islands.
E. White. A person having origins in any of the original peoples of Europe, the Middle
East or North Africa.
2
EQUAL HOUSING OPPORTUNITY revised and approved 7/7/10
AFFIDAVIT
Applicant— Income
State of Nebraska )
) §
County of Douglas )
TO: Whom It May Concern:
I, 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.
EQUAL 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
AFFIDAVIT
Applicant—No Income
State of Nebraska )
) §
County of Douglas )
TO: Whom It May Concern:
I, 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 (including income from sources such as Avon, Mary
Kay, Shaklee, Amway, etc.);
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.
EQUAL HOUSING
OPPORTUNITY Revised and approved 1/10/2012
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).
Additional Information
1. How do you pay the rent/mortgage and utilities?
2. How do you pay for food and clothes?
3. How do you pay for medical expenses?
4. How do you pay for your transportation expenses/car payments?
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
FINANCIAL STATUS REPORT FORM �Kfif(/fir T-
(Please attach AIA G702 form and other comparable supporting documentation for expenditures)
Developer Name: Program: CDBG ❑
ESG ❑
Developer's Contractor: HOME ❑
NAHTF ❑
Project Address: NSP ❑
SHP ❑
Project Type: Acquisition ❑
Loan#: New Constr ❑
Rehab ❑
Reporting Period: From: to
DEVELOPMENT PROJECT % BUDGET
COSTS BUDGET COMPLETE REMAINING
Hard costs $ % $
Soft costs:
Developer's overhead * $ % $
Property Taxes $ % $
Property Insurance $ % $
Real Estate Transfer Fees $ % $
Recording Fees $ % $
Appraisal Fee(s) $ % $
Title Insurance $ % $
Omaha 100 Loan Fee $ % $
FHAS Counseling Fee $ % $
Advertising $ % $
Utilities $ % $
Grounds Maintenance $ % $
Other(explain: $ % $
Other(explain: ) $ % $
Other: $ % $
TOTALS $ % $
* Developer's overhead percentage is based on the percent of hard cost work completed in the attached in AIA or comparable document.
TOTAL PAY REQUEST: $
Amount Amount
City Funds Other Funds
$ $
FUNDING SOURCES PROJECT % BUDGET
BUDGET COMPLETE REMAINING
$ % $
$ % $
$ % $
Other: $ % $
Other: $ % $
Other: $ % $
TOTALS: $ % $
I certify to the best of my knowledge that the above information is correct and complete and is for the purpose set forth in the award
documents. Financial records are available for audit or review.
Authorized Certifying Officer Title Date
Printed Name:
Revised and approved 11/5/2009
e?cdo6fr J
Appendix to Certifications
INSTRUCTIONS CONCERNING LOBBYING AND DRUG-FREE WORKPLACE
REQUIREMENTS:
A. Lobbying Certification
This certification is a material representation of fact upon which reliance was placed
when this transaction was made or entered into. Submission of this certification is a
prerequisite for making or entering into this transaction imposed by section 1352, title 31,
U.S. Code. Any person who fails to file the required certification shall be subject to a
civil penalty of not less than$10,000 and not more than$100,000 for each such failure.
B. Drug-Free Workplace Certification
1. By signing and/or submitting this application or grant agreement, the grantee is
providing the certification.
2. The certification is a material representation of fact upon which reliance is placed
when the agency awards the grant. If it is later determined that the grantee
knowingly rendered a false certification, or otherwise violates the requirements of
the Drug-Free Workplace Act, HUD, in addition to any other remedies available
to the Federal Government, may take action authorized under the Drug-Free
Workplace Act.
3. For grantees other than individuals,Alternate I applies. (This is the information to
which jurisdictions certify).
4. For grantees who are individuals, Alternate II applies. (Not applicable
jurisdictions.)
5. Workplaces under grants, for grantees other than individuals, need not be
identified on the certification. If known, they may be identified in the grant
application. If the grantee does not identify the workplaces at the time of
application, or upon award, if there is no application, the grantee must keep the
identity of the workplace(s) on file in its office and make the information
available for Federal inspection. Failure to identify all known workplaces
constitutes a violation of the grantee's drug-free workplace requirements.
6. Workplace identifications must include the actual address of buildings (or parts of
buildings) or other sites where work under the grant takes place. Categorical
descriptions may be used (e.g., all vehicles of'a mass transit authority or State
highway department while in operation, State employees in each local
unemployment office,performers in concert halls or radio stations).
7. If the workplace identified to the agency changes during the performance of the
grant, the grantee shall inform the agency of the change(s), if it previously
identified the workplaces in question(see paragraph five).
8. The grantee may insert in the space provided below the site(s) for the
performance of work done in connection with the specific grant:
Place of Performance(Street address,city,county, state, zip code)
403 Willow Avenue,Council Bluffs, IA 51503
209 Pearl Street,Council Bluffs, IA 51503
Check_ if there are workplaces on file that are not identified here; The certification
with regard to the drug-free workplace required by 24 CFR part 24, subpart F.
9. Definitions of terms in the Nonprocurement Suspension and Debarment common
rule and Drug-Free Workplace common rule apply to this certification. Grantees'
attention is called,in particular,to the following definitions from these rules:
"Controlled substance" means a controlled substance in Schedules I through V of
the Controlled Substances Act (21 U.S.C.812) and as further defined by
regulation (21 CFR 1308.11 through 1308.15);
"Conviction" means a finding of guilt (including a plea of nolo contendere) or
imposition of sentence, or both, by any judicial body charged with the
responsibility to determine violations of the Federal or State criminal drug
statutes;
"Criminal drug statute" means a Federal or non-Federal criminal statute involving
the manufacture, distribution, dispensing, use, or possession of any controlled
substance;
"Employee"means the employee of a grantee directly engaged in the performance
of work under a grant, including: (i) All "direct charge" employees; (ii) all
"indirect charge" employees unless their impact or involvement is insignificant to
the performance of the grant; and (iii) temporary personnel and consultants who
are directly engaged in the performance of work under the grant and who are on
the grantee's payroll. This definition does not include workers not on the payroll
of the grantee (e.g., volunteers, even if used to meet a matching requirement;
consultants or independent contractors not on the grantee's payroll; or employees
of subrecipients or subcontractors in covered workplaces).
K
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.
EQUAL HOUSING
OPPORTUNITY Rev.5/7/08
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:
EQUAL HOUSING
OPPORTUNITY Created and approved 10/26/2009
ff6&i M
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
El
EQUAL HOUSING
OPPORTUNITY Approved 6/1/10
E (6fi IV
City of Omaha Planning Department
Housing and Community Development Division
2012 HOME Program Rents
Omaha,NE—IA MSA
(Effective February 9,2012)
HUD HOME Number of Bedrooms
Program Limits Efficiency 1 2 3 4 5 6
Low HOME Rent Limit $540 $614 $766 $930 $1,037 $1,144 $1,251
(effective 2/9/12)
High HOME Rent Limit $540 $614 $766 $1,023 $1,053 $1,211 $1,369
(effective 2/9/12)
FOR INFORMATION ONLY
Fair Market Rent
_(effective 1/1/12) $529 $602 $751 $1,003 $1,031 $1,186 $1,340
50%Rent Limit $626 $670 $805 $930 $1,037 $1,144 $1,251
_(effective 1/1/12)
NOTE: HOME Program Rent Limits and Fair Market Rents (FMR) include utilities. Attached are the
utility allowances for HOME Rents and Fair Market Rents. Deduct utility allowance from the
rents to determine maximum rents to be paid by tenants who pay their own utilities. Tenant
rents must not be adjusted until their leases are renewed. If on a month-to-month lease,
please indicate MTM after the Recertification Lease Date on Tenant Survey Form)
Revised and approved 1/20/2012
- ,BPT 0
MINORITY BUSINESS & WOMEN BUSINESS
ENTERPRISE PLAN
March 2011
OMAHA,MF
p• sca�m{.cw.
*RD FE10- PLANNING • OMAHA
Jim settle,Mayor PLANNING DEPARTMENT RE.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: I 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.
EOUAL HOUSING
OPPORTUNITY
8 Reviewed and approved 3/28/2011
EXHIBIT " P "
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
Revised and approved 5/23/2012
enter into such litigation as is necessary to protect the interests of the 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.
(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
� U ( C
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) Perfouus at least 25 percent of the work and is contractually entitled to
compensation proportionate to its work.
HI/5/ A_
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.
CITY OF OMAHA- DEFINITION OF INCOME
Annual Income Includes:
1. Wages, salaries, tips, commissions, etc.;
2. Self-employment income from owned non-farm business, including proprietorships and partnerships;
3. Farm self-employment income;
4. Interest, dividends, net rental income, or income from estates or trusts
5. Social security or railroad retirement;
6. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance or
public welfare programs;
7. Retirement, survivor or disability pensions;
8. Any other sources of income received regularly including Veterans' (VA) payments, unemployment
compensation, child support and alimony; and
9. Income from assets, as shown below:
a. Amounts in savings certificates, money market funds and other investment accounts.
b. Stocks, bonds, savings certificates, money market funds and other investment accounts.
c. Equity in real property or other capital investments. Equity is the estimated current market value of the
asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker
fees) that would be incurred in selling the asset. Do not include equity in principle residence (home
equity).
d. The cash value of trusts that are available to the household.
e. IRA, Keogh and similar retirement savings accounts, even though withdrawal would result in a penalty.
f. Contributions to company retirement/pension funds that can be withdrawn without retiring or
terminating employment.
g. Assets which, although owned by more than one person, allow unrestricted access by the applicant.
h. Lump sum receipts such as inheritances, capital gains, lottery winnings, insurance settlements and
other claims.
i. Personal property held as an investment such as gems,jewelry, coin collections, antique cars, etc.
j. Cash value of life insurance policies.
k. Assets disposed of for less than fair market value during two years preceding certification or re-
certification.
10. Actual income from assets if total assets are$5,000 or less.
11. If assets are more than $5,000, the greater of (a) actual income from assets, or (b) total assets times
passbook rate.
Annual Income Does Not Include the Following Assets:
1. Necessary personal property, except as noted in 9 (i).
2. Interest in Indian trust lands.
3. Assets that are a part of an active business or farming operation. NOTE: Rental properties are
considered personal assets held as an investment rather than business assets unless real estate is the
applicant's/tenant's main occupation.
4. Assets not accessible to the family and which provide no income for the family.
5. Vehicles especially equipped for the handicapped.
6. Equity in owner-occupied cooperatives and manufactured homes in which the family lives.
7. Equity in principle residence (home equity).
EQUAL HOUSING
CITC,IIT UNITY
Revised and approved 7/12/2011
INTEROFFICE N ENIOR J'IDUM
Law Department
r.ha._.�._. u._rr_c^•s.:a..__.. �u-r._-__r:._.. -: :,r�^mK•.r__�r. r.--'r...x it:_...z.ems. ._..._..:._.-vr__.._,---..._._,..__._....-....__.__._.....,......-...-.x._:_.._._,
DATE: July 31, 2002
TO: Reginald Young, Human Relations Director
Daisy Burton, Planning Department
FROM: Paul Kratz, City Attorney •
SUBJECT: OMR Circular A-1 l0
•
•-.��_1;3"�x'_^.t::i-,+r. e;us: -4=:aaiTt==11asLG�.: .r M. �a:a.�.,•.__.s•-CC.:'.._..__,.a
In a review of the proposed Interlocal Agreement between the City of Omaha and the •
City of Council Bluffs regarding the allocation of Federal funds received by the City from HUD,
the issue arose of contract compliance. After .discussions with Daisy Burton, Contract
• Administration and Compliance Manager, Sharon Oamek, City Planner and Reginald Young,
. Director Human Relations, the Law Department has advised that the provisions of 10-196 will .
not apply to this Interlocal Agreement. The Interlocal agreement provides that the City will
receive funds allocated by HUD that will be passed through to Council Bluffs to use for its Low •
-
. Moderate income housing projects. The City of Council Bluffs will award the contracts and will
be required to comply with the Federal Regulations but will not be held to the provisions of 10-
196.
•
PDK:skz
c: Sharon Oamek, Compliance Officer
•
P;\PAUL-K;GENCORRS\Young-Buxton Memo.doc
4 p-i4c -1 M cz 3
U.S.Department of Housing and Urban Development
COMMUNITY PLANNING AND DEVELOPMENT
Special Attention of: Notice CPD-00-9
All Secretary's Representatives
All State/Area Coordinators Issued: December 26,2000
All CPD Office Directors Expires: December 26,2001
All HOME Coordinators
All HOME Participating Jurisdictions
All CDBG Grantees
All FHEO Field Directors
SUBJECT: Accessibility Notice: Section 504 of the Rehabilitation Act of 1973 and The Fair Housing
Act and their applicability to housing programs funded by the HOME Investment
Partnerships Program and the Community Development Block Grant Program
I. PURPOSE
The purpose of this Notice is to remind recipients of Federal funds in the HOME Investment Partnerships
Program(HOME)or the Community Development Block Grant(CDBG)Program of their obligation to
comply with Section 504 of the Rehabilitation Act of 1973,the Fair Housing Act,and HUD's
implementing Regulations(24 CFR Parts 8 and 100,respectively),which prohibit discrimination based
on disability and establish requirements for program accessibility and physical accessibility in connection
with housing programs. This Notice describes key compliance elements for housing assisted under the
HOME and CDBG programs. However,recipients should review the specific provisions of the Fair
Housing Act, Section 504,and their respective regulations in order to assure that their programs are
administered in full compliance. Note with respect to Section 504,this Notice does not address the
applicability of Section 504's physical accessibility requirements to homeownership programs financed
with HOME/CDBG assistance.
The Notice also recommends that recipients conduct updated self evaluations as a useful tool for
enhancing efforts to comply with accessibility requirements in HOME/CDBG programs,as well as to
document those efforts.
Applicability
This Notice applies to new construction and rehabilitation of housing under the HOME and CDBG
programs. Each primary recipient of Federal funds from the HOME or CDBG program is responsible for
providing this notice to each organization or other entity participating in the construction or rehabilitation
of projects receiving such funding and for establishing policies and practices that it will use to monitor
compliance of all covered programs,activities,or work performed by subrecipients,contractors,
subcontractors,management agents, etc.
Distribution: W-3-1
2
II. SECTION 504 OF THE REHABILITATION ACT OF 1973
Background
The HOME and CDBG programs,through State and local governments,provide assistance that may be
used for the construction or rehabilitation of affordable housing. HOME and CDBG funds may be used
to construct or rehabilitate rental housing,to rehabilitate owner occupied housing, and to finance
homeownership programs.
Section 504 of the Rehabilitation Act of 1973 prohibits discrimination against persons with disabilities in
the operation of programs receiving Federal financial assistance. HUD regulations implementing Section
504 contain accessibility requirements for new construction and rehabilitation of housing as well as
requirements for ensuring that the programs themselves are operated in a manner that is accessible to and
usable by persons with disabilities.(See 24 CFR Part 8)
For the purposes of this Notice,the references to multifamily housing projects covered by Section 504
only apply to multifamily rental housing projects.
The Section 504 regulations define "recipient" as any State or its political subdivision,any
instrumentality of a state or its political subdivision, any public or private agency, institution,
organization,or other entity, or any person to which Federal financial assistance is extended for any
program or activity directly or through another recipient, including any successor,assignee, or transferee
of a recipient,but excluding the ultimate beneficiary of the assistance. (24 CFR§8.3)A family that will
receive CDBG or HOME funds for the rehabilitation of an owner-occupied unit is not subject to the
requirements of Part 8 since it is the ultimate beneficiary of the funds,and not a recipient of Federal
financial assistance.
New construction
HUD regulations implementing Section 504 at 24 CFR§8.22(a)require that new construction of
multifamily projects be designed and constructed to be readily accessible to and usable by persons with
disabilities. Multifamily housing projects are defined at 24 CFR§8.3 as "projects containing five or
more dwelling units". Both the individual units and the common areas in the building must be accessible.
For new construction of multifamily rental projects,a minimum of 5 percent of the dwelling units in the
project(but not less than one unit)must be accessible to individuals with mobility impairments. An
additional 2 percent of the dwelling units(but at a minimum,not less than one unit)must be accessible to
individuals with sensory impairments(i.e.hearing or vision impairments),unless HUD prescribes a
higher number pursuant to 24 CFR§8.22(c).
Rehabilitation
Substantial alterations- Section 504 requires that if alterations are undertaken to a housing project that
has 15 or more units, and the rehabilitation costs wall be 75 percent or more of the replacement cost of
the completed facility,then such developments are considered to have undergone"substantial alterations"
(24 CFR§8.23 (a)). For substantial alterations of multifamily rental housing,the accessibility
3
requirements contained in 24 CFR§8.22 must be followed--a minimum of 5 percent of the dwelling
units in the project(but not less than one unit)must be accessible to individuals with mobility
impairments, and an additional 2 percent,at a minimum(but not less than one unit),must be accessible to
individuals.with sensory impairments.
Other alterations--When other alterations that do not meet the regulatory defmition of substantial
alterations are undertaken in multifamily rental housing projects of any size,these alterations must,to the
maximum extent feasible,make the dwelling units accessible to and usable by individuals with
disabilities,until a minimum of 5 percent of the dwelling units(but not less than one unit)are accessible
to people with mobility impairments,unless HUD prescribes a higher number pursuant to 24 CFR
8.23(b)(2).If alterations of single elements or spaces of a dwelling unit,when considered together,
amount to an alteration of a dwelling unit,then the entire dwelling unit shall be made accessible. For this
category of rehabilitation the additional 2 percent of the dwelling units requirement for individuals with
sensory impairments does not apply. Alterations to common spaces must,to the maximum extent
feasible,make those areas accessible. A recipient is not required to make a dwelling unit,common area,
facility or element accessible, if doing so would impose undue financial and administrative burdens on
the operation of the multifamily housing project. (24 CFR§8.23(b))Therefore,recipients are required to
provide access in covered alterations up to the point of being infeasible or an undue financial and
administrative burden.
Accessibility Standards
Dwelling units designed and constructed in accordance with the Uniform Federal Accessibility Standards
(UFAS)will be deemed to comply with the Section 504 regulation. For copies of UFAS,contact the
HUD Distribution Center at 1-800-767-7468;hearing or speech-impaired persons may access this
number via TTY by calling the Federal Information Relay Service at 1-800-877-8339. Accessible units
must be,to the maximum extent feasible,distributed throughout the projects and sites,and must be
available in a sufficient range of sizes and amenities so as not to limit choice.
FAIR OUSING ACT
Background
The Fair Housing Act,applies to almost all housing sold or rented in the United States. The Fair
Housing Act prohibits discrimination in housing practices on the basis of race, color,religion, sex, and
national origin. The Fair Housing Act was amended in 1988 to provide protections from discrimination
in any aspect of the sale or rental of housing for families with children and persons with disabilities. The
Fair Housing Act also establishes requirements for the design and construction of new rental or for sale
multifamily housing to ensure a minimum level of accessibility for persons with disabilities. (See 24 CFR
100.200 et. seq.)
Section 804(f)(3)(C)of the Fair Housing Act requires that covered multifamily dwelling units designed
and constructed for first occupancy after March 13, 1991,be designed and constructed in a manner that:
(i) the public and common use portions of such dwellings are readily accessible to and usable by
disabled persons;
4
(ii) all the doors designed to allow passage into and within the premises within such dwellings
are sufficiently wide to allow passage by disabled persons in wheelchairs; and
(iii)all premises within such dwellings contain the following features of adaptive design:
(I) an accessible route into and through the dwelling;
(II) light switches,electrical outlets,thermostats,and other environmental controls in
accessible locations;
(al) reinforcements in bathroom walls to allow later installation of grab bars;and
(N) usable kitchens and bathrooms such that an individual in a wheelchair can
maneuver about the space.
Covered multifamily dwelling units are:
® dwelling units in buildings consisting of 4 or more units served by one or more elevators,or
® ground floor dwelling units in other buildings with 4 or more units.
Information about housing designs that provide accessible features in compliance with the Fair Housing
Act can be found in the HUD's Fair Housing Accessibility Guidelines which were published in the
Federal Register on March 6, 1991 (56 F.R.9472)and in HUD's Fair Housing Act Design Manual.
These can be obtained from the HUD Distribution Center at 1-800-767-7468. Deaf,hard of hearing or
speech-impaired individuals also may access this number via TTY by calling the Federal Information
Relay Service at 1-800-877-8339.
The design and construction requirements in the Fair Housing Act apply only to a building designed and
constructed for first occupancy after March 13, 1991.The Fair Housing Act regulations define a building
for first occupancy as a building that has never been used for any purpose. Thus,the design and
construction requirements in the Fair Housing Act will not apply to rehabilitation projects or activities.
Illustrations
It must be noted that, in many cases,new construction of rental projects funded in the HOME/CDBG
Programs must meet both the Fair Housing Act and the Section 504 new construction requirements.
Where two or more accessibility standards apply,the housing provider is required to follow and apply
both standards, so that maximum accessibility is obtained. The following examples illustrate how these
requirements will(or will not)apply.
® A rental building with an elevator constructed with HOME/CDBG funding would be
required to have 5%of its dwelling units meet the Section 504 accessibility requirements at
24 CFR 8.22 and the remaining 95% of the dwelling units would be required to comply with
the Fair Housing Act design and construction requirements at 24 CFR 100.205.Note: An
additional 2%of the dwelling units are required to be accessible for people with vision and
hearing impairments.
▪ A newly constructed 100 unit two-story garden apartment development with no elevator
constructed with HOME/CDBG assistance with half(50)of its dwelling units on the ground
floor and half(50)on the second floor would be required to have 5 of its ground floor
5
dwelling units built to comply with the Section 504 accessibility requirements at 24 CFR
8.22,and the remaining 45 ground floor dwelling units built to comply with the Fair Housing
Act design and construction requirements at 24 CFR 100.205.Note:An additional 2%of the
dwelling units are required to be accessible for people with vision and hearing impairments
in accordance with Section 504.
A development consisting entirely of multistory rental townhouses constructed with Federal
financial assistance is not a covered multifamily dwelling for purposes of the design and
construction requirements of the Fair Housing Act at 24 CFR 100.205 since none of the
dwelling units qualify as ground floor units,but would still have to meet the Section 504 5%
+2%accessibility requirements at 24 CFR 8.22.(A townhouse development of 5 or more
single story dwelling units would still have to comply with both Section 504 and the Fair
Housing Act design and construction requirements at 24 CFR 100.200 et. seq.)
IV. Increasing Program Accessibility
HUD's Section 504 regulations require that a recipient of Federal financial assistance ensure that its
program,when viewed in its entirety,is accessible to persons with disabilities. (24 CFR 8.20)In order to
meet this obligation,participants in the HOME/CDBG program must:
• To the maximum extent feasible,distribute accessible units throughout the projects and
sites,and make them available in a sufficient range of sizes and amenities so as not to limit
choice.
® Adopt suitable means to assure that information regarding the availability of accessible
units reaches eligible individuals with disabilities. They must also take reasonable
nondiscriminatory steps to maximize use of such units by eligible individuals.
® When an accessible unit becomes vacant,before offering the unit to an individual without
a disability,offer the unit:first,to a current occupant of the project requiring the
accessibility feature;and second,to an eligible qualified applicant on the waiting list
requiring the accessibility features.
• When an applicant or tenant requires an accessible feature or policy modification to
accommodate a disability,a federally assisted provider must provide such feature or
policy modification unless doing so would result in a fundamental alternation in the
nature of its program or an undue financial and administrative burden. See 24 CFR 8.4,
8.24, and 8.33 for further requirements and guidance.
® Providers are required to ensure that information about their programs is disseminated in a
manner that is accessible to persons with disabilities. For example, special
communication systems can greatly increase the effectiveness of outreach and ongoing
communication(e.g.,Telecommunications Devices for the Deaf(TTY),materials on tape
or in Braille).
® Providers must ensure that activities and meetings are conducted in accessible locations.
6
Participants in the HOME/CDBG program may:
® Ask applicants for information that can demonstrate that they can meet the obligations of
tenancy including financial information,references;prior tenancy history,etc. However,
housing providers may not inquire into the nature and severity of an applicant or tenant's
disability,nor may they ask persons with disabilities questions not asked of all applicants,
apply different types of screening criteria, or assess an applicant's ability to live
independently.
® Ask if the applicant qualifies for a housing program or unit designed for persons with a
disability,when the housing program or unit is designed for such persons.
® Consider including a lease provision that requires a nondisabled family occupying an
accessible unit to move if a family with a disability needing that size unit applies and
there is an appropriately sized nonaccessible unit available for the relocating family.
V. Self-Evaluation
The Section 504 regulations required recipients of Federal financial assistance to conduct a self-
evaluation of their policies and practices to determine if they were consistent with the law's requirements.
This self evaluation was to have been completed no later than July 11, 1989. The regulatory deadlines
are long past. However,self-evaluation continues to be an excellent management tool for ensuring that a
recipient's current policies and procedures comply with the requirements of Section 504.
Involving persons with disabilities in the self-evaluation process is very beneficial. This will assure the
most meaningful result for both the recipient and for persons with disabilities who participate in the
recipients programs and activities. It is important to involve persons and/or organizations representing
persons with disabilities, and agencies or other experts who work regularly with accessibility standards.
Important steps in conducting a self-evaluation and implementing its results include the following:
® Evaluate current policies and practices and analyze them to determine if they adversely affect
the full participation of individuals with disabilities in its programs, activities and services.
Be mindful of the fact that a policy or practice may appear neutral on its face,but may have a
discriminatory effect on individuals with disabilities.
® Modify any policies and practices that are not or may not be in compliance with Section 504
regulations.
® Take appropriate corrective steps to remedy those policies and practices which either are
discriminatory or have a discriminatory effect. Develop policies and procedures by which
persons with disabilities may request a modification of a physical barrier or a rule or practice
that has the effect of limiting or excluding a person with a disability from the benefits of the
program.
e Document the self-evaluation process and activities. The Department recommends that all
recipients keep the self-evaluation file for at least three years, including records of the
7
a individuals and organizations consulted, areas examined and problems identified, and
document modifications and remedial steps.
The Department also recommends that recipients periodically update the self-evaluation,particularly, for
example, if there have been changes in recipient owned housing stock,such as demolition of housing
units and construction and/or alteration of housing,or changes in the programs and services of the
agency.
VI. Visitability
Visitability Concept
Although not a requirement, it is recommended that all design,construction and alterations incorporate,
whenever practical,the concept of visitability in addition to the requirements under Section 504 and the Fair
Housing Act.
Visitability is a design concept,which for very little or no additional cost,enables persons with disabilities to
visit relatives,friends,and neighbors in their homes within a community.
Design Considerations
Visitability design incorporates the following in all construction or alterations, in addition to the applicable
requirements of Section 504 and the Fair Housing Act,whenever practical and possible for as many units as
possible within a development:
a Provide a 32"clear opening in all bathroom and interior doorways
a Provide at least one accessible means of egress/ingress for each unit.
Benefits
Visitability also expands the availability of housing options for individuals who may not require full
accessibility. It will assist project owners in making reasonable accommodations and reduce,in some
cases,the need for structural modifications or transfers when individuals become disabled in place.
Visitability will also improve the marketability of units.
HUD Technical Assistance Concerning these Requirements
Further information concerning compliance with any of these requirements may be obtained through the HUD
web page(http://www.hud.gov/fhe/504/sect504.html). Additional assistance and information may be
obtained by contacting the local Department of Housing and Urban Development Offices of Community
Planning and Development(CPD)and Fair Housing and Equal Opportunity(FHEO)listed below:
CPD FHEO
Boston,MA 617 565-5345 617 565-5310
Hartford,CT 806 240-4800 x3059 860 240-4800
New York,NY 212 264-0771 x3422 212 264-1290
8
Buffalo,NY 716 551-5755 x5800 716 551-5755
Newark,NJ 973 622-7900 x3300 973 622-7900
Philadelphia,PA 215 656-0624 x3201 215 656-0661
Pittsburgh,PA 412 644-2999 412 355-3167
Baltimore,1VID 410 962-2520 x3071 410 962-2520
Richmond,VA 804 278-4503 x3229 804 278-4504
Washington,DC 202 275-0994'x3163 202 275-0848
Atlanta,GA 404 331-5001 x2449 404 331-1798
Birmingham,AL 205 290-7630 x1027 205 290-7630
South Florida 305 5364431 x2223 305 536-4479
Jacksonville,FL 904 232-1777 x2136 904 232-1777
San Juan,PR 787 766-5400 x2005 787 766-5400
Louisville,KY 502 582-6163 x214 502 582-6163 x230
Jackson,MS 601 965-4700 x3140 601 965-4700 x2435
Knoxville,TN 865 545-4391 x121 865 545-4379
Greensboro,NC 336 547-4005 336 547-4050
Columbia,SC 803 765-5564 803 765-5936
Chicago,IL 312 353-1696 x2702 312 353-7776
Minneapolis,MN 612 370-3019 x2107 612 370-3185
Detroit,MI 313 226-7908 x8055 313 226-6280
Milwaukee,WI 414 297-3214 x8100 414 297-3214
Columbus,OH 614 469-5737 x8240 614 469-5737 x8170
Indianapolis,IN 317 226-6303 x6790 317 226-7654
Little Rock,AK 501 324-6375 501 324-6296
Oklahoma City,OK 405 553-7569 405 553-7426
Kansas City,KS 913 551-5485 913 551-5834
Omaha,NE 402 492-3181 402 492-3109
St.Louis,MO 314 539-6524 314 539-6327
New Orleans,LA 504 589-7212 x3047 504 589-7219
Fort Worth,TX 817 978-5934 x5951 817 978-5870
San Antonio,TX 210 475-6820 x2293 210 475-6885
Albuquerque,NM 505 346-7271 x7361 505 346-7327
Denver,CO 303 672-5414 x1326 303 672-5437
San Francisco,CA 415 436-6597 415 436-6569
Los Angeles,CA 213 894-8000 x3300 213 894-8000 x3400
Honolulu,HI 808 522-8180 x264 808 522-8180
Phoenix,AZ 602 379-4754 602 379-6699 x5261
Seattle,WA 206 220-5150 x3606 206 220-5170
Portland,OR 503 326-7018 503 326-3349
Manchester,NH 603 666-7640 x7633
Anchorage,AK 907 271-3669
Houston,TX 713 313-2274
QvcomrD tiD
g` 01}111 °z U.S. Department of Housing and Urban Development
* lib 1
RAN Do"
COMMUNITY PLANNING AND DEVELOPMENT
Special Attention of: Notice CPD-02-03
All Secretary's Representatives
All State/Area Coordinators Issued: May 2,2002
All CPD Office Directors Expires: December 26,2003
All HOME Coordinators
All HOME Participating Jurisdictions
All CDBG Grantees
All FHEO Field Directors
SUBJECT: Accessibility Notice: Section 504 of the Rehabilitation Act of 1973 and The Fair Housing
Act and their applicability to housing programs funded by the HOME Investment Partnerships Program
and the Community Development Block Grant Program
This Notice extends the provisions of Notice CPD 00-09 (originally issued December 26,2000)
through December 26, 2003.
Distribution:W-3-1
U.S.Department of Housing and Urban Development
COMMUNITY PLANNING AND DEVELOPMENT
Special Attention of: Notice CPD-00-10
All Secretary's Representatives
All State/Area Coordinators Issued: December 26,2000
All CPD Office Directors Expires: December 26,2001
All FHEO Field Offices
All CDBG Grantees
Subject: Accessibility for Persons with Disabilities to Non-Housing Programs funded by Community
Development Block Grant Funds--Section 504 of the Rehabilitation Act of 1973,the
Americans With Disabilities Act, and the Architectural Barriers Act
I. Purpose
The purpose of this Notice is to remind recipients of Federal funds under the Community Development
Block Grant(CDBG)Program of their obligation to comply with Section 504 of the Rehabilitation Act of
1973,HUD's implementing regulations(24 CFR Part 8),the Americans with Disabilities Act,(ADA)and
its implementing regulations,(28 CFR Parts 35,36), and the Architectural Barriers Act(ABA)and its
implementing regulations(24 CFR Parts 40,41)in connection with recipients'non-housing programs.
This Notice describes key compliance elements for non-housing programs and facilities assisted under
the CDBG programs. However,recipients should review the specific provisions of the ADA, Section
504,the ABA,and their implementing regulations in order to assure that their programs are administered
in full compliance.
Applicability
This Notice applies to all non-housing programs and facilities assisted with Community Development
Block Grant Funds(e.g.public facilities and public improvements, commercial buildings,office
buildings, and other non-residential buildings)and facilities in which CDBG activities are undertaken
(e.g.,public services). A separate Notice is being issued concerning Federal accessibility requirements
for housing programs assisted by recipients of CDBG and HOME program funds.
II. Section 504 of the Rehabilitation Act of 1973
Section 504 of the Rehabilitation Act of 1973,as amended,provides "No otherwise qualified individual
with a disability in the United States ... shall,solely by reason of his or her disability,be excluded from
the participation in,be denied the benefits of, or be subjected to discrimination under any program or
activity receiving Federal financial assistance...". HUD's regulations implementing the Section 504
requirements can be found at 24 CFR Part 8.
Distribution: W-3-1
2
Part 8 requires that recipients ensure that their programs are accessible to and usable by persons with
disabilities. Part 8 also prohibits recipients from employment discrimination based upon disability.
The Section 504 regulations define "recipient" as any State or its political subdivision,any
instrumentality of a State or its political subdivision,any public or private agency,institution
organization, or other entity or any person to which Federal financial assistance is extended for any
program or activity directly or through another recipient, including any successor,assignee,or transferee
of a recipient,but excluding the ultimate beneficiary of the assistance. (24 CFR§8.3)For the purposes of
Part 8, recipients include States and localities that are grantees and subgrantees under the CDBG
program,their subrecipients,community-based development organizations,businesses,and any other
entity that receives CDBG assistance,but not low and moderate income beneficiaries of the program.
CDBG grantees are responsible for establishing policies and practices that they will use to monitor
compliance of all covered programs, activities,or work performed by their subrecipients,contractors,
subcontractors,management agents,etc.
Non-housing Programs
New Construction--Part 8 requires that new non-housing facilities constructed by recipients of Federal
financial assistance shall be designed and constructed to be readily accessible to and usable by persons
with disabilities. (24 CFR§8.21(a))
Alterations to facilities--Part 8 requires to the maximum extent feasible,that recipients make
alterations to existing non-housing facilities to ensure that such facilities are readily accessible to and
usable by individuals with disabilities. An element of an existing non-housing facility need not be made
accessible, if doing so,would impose undue financial and administrative burdens on the operation of the
recipients program or activity. (24 CFR§8.21 (b))
Existing non-housing facilities-A recipient is obligated to operate each non-housing program or
activity so that,when viewed in its entirety,the program or activity is readily accessible to and usable by
persons with disabilities. (24 CFR§8.21 (c))
Recipients are not necessarily required to make each of their existing non-housing facilities accessible to
and usable by persons with disabilities if when viewed in its entirety,the program or activity is readily
accessible to and usable by persons with disabilities.24 CFR§8.21(c)(1)Recipients are also not required
to take any action that they can demonstrate would result in a fundamental alteration in the nature of its
program or activity or cause an undue administrative and financial burden. However,recipients are still
required to take other actions that would not result in such alterations, but would nevertheless ensure that
persons with disabilities receive the benefits and services of the program. (24 CFR§8.21(c)(iii))
Historic Preservation-Recipients are not required to take any actions that would result in a substantial
impairment of significant historic features of an historic property,However, in such cases where a
physical alteration is not required,the recipient is still obligated to use alternative means to achieve
program accessibility,including using audio-visual materials and devices to depict those portions of
3
an historic property that cannot be made accessible, assigning persons to guide persons with disabilities
into or through portions of historic properties that cannot be made accessible,or otherwise adopting other
innovative methods so that individuals with disabilities can still benefit from the program.(24CFR
§8.21(c)(2)(ii))
Accessibility Standards
Design,construction,or alteration of facilities in conformance with the Uniform Federal Accessibility
Standards(UFAS)is deemed to comply with the accessibility requirements for nonhousing facilities.
Recipients may depart from particular technical and scoping requirements of UFAS where substantially
equivalent or greater accessibility and usability is provided. (24 CFR§8.32) For copies of UFAS,
contact the HUD Distribution Center at 1-800-767-7468; deaf,hard of hearing,or speech-impaired
persons may access this number via TTY by calling the Federal Information Relay Service at 1-800-877-
8339.
Where a property is subject to more than one law or accessibility standard,it is necessary to comply with
all applicable requirements. In some cases, it may be possible to do this by complying with the stricter
requirement,however,it is also important to ensure that meeting the stricter requirement also meets both
the scoping and technical requirements of overlapping laws or standards.
Employment
Section 504 also prohibits discrimination based upon disability in employment. See 24 CFR Part 8,
Subpart B.
Section 504 Self Evaluations
The Section 504 regulations required recipients of Federal financial assistance to conduct a self-
evaluation of their policies and practices to determine if they were consistent with the law's requirements.
This self evaluation was to have been completed no later than July 11, 1989. Title II of the ADA
imposed this requirement on all covered public entities. The ADA regulations required that ADA self
evaluations be completed by January 26, 1993,although those public entities that had already performed
a Section 504 self evaluation were only required to perform a self-evaluation on those policies and
practices that had not been included in the Section 504 review.
The regulatory deadlines are long past. However,self-evaluation continues to be an excellent
management tool for ensuring that a recipient's current policies and procedures comply with the
requirements of Section 504 and the ADA.
Involving persons with disabilities in the self-evaluation process is very beneficial. This will assure the
most meaningful result for both the recipient and for persons with disabilities who participate in the
recipient's programs and activities. It is important to involve persons and/or organizations representing
persons with disabilities, and agencies or other experts who work regularly with accessibility standards.
4
Important steps in conducting a self-evaluation and implementing its results include the following:
® Evaluate current policies and practices and analyze them to determine if they adversely
affect the full participation of individuals with disabilities in its programs,activities and
services. Be mindful of the fact that a policy or practice may appear neutral on its face,but
may have a discriminatory effect on individuals with disabilities.
® Modify any policies and practices that are not or may not be in compliance with Section 504
or Title II and Title III of the ADA regulations. (See 24 CFR Part 8 and 28 CFR Parts 35,
36.)
® Take appropriate corrective steps to remedy those policies and practices which either are
discriminatory or have a discriminatory effect. Develop policies and procedures by which
persons with disabilities may request a modification of a physical barrier or a rule or
practice that has the effect of limiting or excluding a person with a disability from the
benefits of the program.
® Document the self-evaluation process and activities. The Department recommends that all
recipients keep the self-evaluation on file for at least three years,including records of the
individuals and organizations consulted,areas examined and problems identified, and
document modifications and remedial steps,as an aid to meeting the requirement at 24 CFR
Part 8.55.
The Department also recommends that recipients periodically update the self-evaluation,particularly,for
example, if there have been changes in the programs and services of the agency. In addition,public
entities covered by Title II of the ADA should review any policies and practices that were not included in
their Section 504 self-evaluation and should modify discriminatory policies and practices accordingly.
III. The Americans With Disabilities Act of 1990
The Americans With Disabilities Act of 1990(ADA)guarantees equal opportunities for persons with
disabilities in employment,public accommodations,transportation, State and local government services,
and telecommunications. Unlike Section 504 which applies only to programs and activities receiving
Federal financial assistance,the ADA applies even if no Federal financial assistance is given.
The U.S. Department of Justice enforces Titles I,II, and III of the ADA,although the Equal Employment
Opportunity Commission investigates administrative complaints involving Title I.
Title I prohibits discrimination in employment based upon disability. The regulations implementing
Title I are found at 29 CFR Part 1630. The Equal Employment Opportunity Commission(EEOC)offers
technical assistance on the ADA provisions applying to employment.
These can be obtained at the EEOC web site www.eeoc.gov, or by calling 800-669-3362 (voice)and 800-
800-3302(TTY).
5
Title II prohibits discrimination based on disability by State and local governments. Title II essentially
extended the Section 504 requirements to services,programs,and activities provided by States,local
governments and other entities that do not receive Federal financial assistance from HUD or another
Federal agency. CDBG grantees are covered by both Title II and Section 504. The Department of
Justice Title II regulations are found at 28 CFR Part 35.
Title II also requires that facilities that are newly constructed or altered,by, on behalf of, or for use of a
public entity,be designed and constructed in a manner that makes the facility readily accessible to and
usable by persons with disabilities. (28 CFR§35.151 (a)&(b))Facilities constructed or altered in
conformance with either UFAS or the ADA Accessibility Guidelines for Buildings and Facilities
(ADAAG)(Appendix A to 28 CFR Part 36)shall be deemed to comply with the Title II Accessibility
requirements,except that the elevator exemption contained at section 4.1.3(5)and section 4.1.6(1)(j)of
ADAAG shall not apply. (28CFR§35.151(c))
•
Title II specifically requires that all newly constructed or altered streets,roads, and highways and
pedestrian walkways must contain curb ramps or other sloped areas at any intersection having curbs or
other barriers to entry from a street level or pedestrian walkway and that all newly constructed or altered
street level pedestrian walkways must have curb ramps at intersections .Newly constructed or altered
street level pedestrian walkways must contain curb ramps or other sloped areas at intersections to streets,
roads, or highways. (28CFR§35.151(e))
The Title II regulations required that by January 26, 1993,public entities(State or local governments)
conduct a self-evaluation to review their current policies and practices to identify and correct any
requirements that were not consistent with the regulation. Public entities that employed more than 50
persons were required to maintain their self-evaluations on file and make it available for three years. If a
public entity had already completed a self-evaluation under Section 504 of the Rehabilitation Act,then
the ADA only required it to do a self-evaluation of those policies and practices that were not included in
the previous self-evaluation. (28 CFR§35.105)
The Department of Justice offers technical assistance on Title II through its web page at
www.usdoj.gov/crt/ada/taprog.htm,and through its ADA Information Line, at 202 514-0301 (voice
and 202-514-0383 (TTY). The Department of Justice's technical assistance materials include among
others,the Title II Technical Assistance Manual with Yearly Supplements,the ADA guide for.Small
Towns, and an ADA Guide entitled The ADA and City Governments:Common Problems.
Title HI prohibits discrimination based upon disability in places of public accommodation(businesses
and non-profit agencies that serve the public)and"commercial"facilities(other businesses). It applies
regardless of whether the public accommodation or commercial facility is operated by a private or public
entity, or by a for profit or not for profit business. The Department of Justice Title III regulations are
found at 28 CFR Part 36. The Department of Justice also offers technical assistance concerning Title III
through the web page cited above and the ADA Hotline cited above.
6
Justice also offers technical assistance concerning Title III through the web page cited above and the ADA Hotline
cited above.
IV. The Architectural Barriers Act of 1968
The Architectural Barriers Act of 1968 (ABA)(42 U.S.C. 4151-4157)requires that certain buildings financed with
Federal funds must be designed, constructed, or altered in accordance with standards that ensure accessibility for
persons with physical disabilities. The ABA covers any building or facility financed in whole or in part with
Federal funds,except privately-owned residential structures. Covered buildings and facilities designed,
constructed, or altered with CDBG funds are subject to the ABA and must comply with the Uniform Federal
Accessibility Standards(UFAS). (24 CFR 570.614)In practice,buildings built to meet the requirements of Section
504 and the ADA,will conform to the requirements of the ABA.
V. HUD Resources Available Concerning Section 504
Further information concerning compliance with Section 504 may be obtained through the HUD web page
(http://www.hud.gov/fhe/504/sect504.htnal).Additional assistance and information may be obtained by
contacting the local Department of Housing and Urban Development Office of Fair Housing and Equal
Opportunity field office. Below is a list of the phone numbers for these offices.
CPD >N 11EO
Boston,MA 617 565-5345 617 565-5310
Hartford,CT 806 240-4800 x3059 860 240-4800
New York,NY 212 264-0771 x3422 212 264-1290
Buffalo,NY 716 551-5755 x5800 716 551-5755
Newark,NJ 973 622-7900 x3300 973 622-7900
Philadelphia,PA 215 656-0624 x3201 215 656-0661
Pittsburgh,PA 412 644-2999 412 355-3167
Baltimore,MD 410 962-2520 x3071 410 962-2520
Richmond,VA 804 278-4503 x3229 804 278-4504
Washington,DC 202 275-0994 x3163 202 275-0848
Atlanta,GA 404 331-5001 x2449 404 331-1798
Birmingham,AL 205 290-7630 x1027 205 290-7630
South Florida 305 536-4431 x2223 305 536-4479
Jacksonville,FL 904 232-1777 x2136 904 232-1777
San Juan,PR 787 766-5400 x2005 787 766-5400
Louisville,KY 502 582-6163 x214 502 582-6163 x230
Jackson,MS 601 965-4700 x3140 601 965-4700 x2435
Knoxville,TN 865 545-4391 x121 865 545-4379
Greensboro,NC 336 547-4005 336 547-4050
Columbia,SC 803 765-5564 803 765-5936
Chicago,IL 312 353-1696 x2702 312 353-7776
Minneapolis,MN 612 370-3019 x2107 612 370-3185
7
Detroit,MI 313 226-7908 x8055 313 226-6280
Milwaukee,WI 414 297-3214 x8100 414 297-3214
Columbus,OH 614 469-5737 x8240 614 469-5737 x8170
Indianapolis,IN 317 226-6303 x6790 317 226-7654
Little Rock,AK 501 324-6375 501 324-6296
Oklahoma City, OK 405 553-7569 405 553-7426
Kansas City,KS 913 551-5485 913 551-5834
Omaha,NE 402 492-3181 402 492-3109
St.Louis,MO 314 539-6524 314 539-6327
New Orleans,LA 504 589-7212 x3047 504 589-7219
Fort Worth,TX 817 978-5934 x5951 817 978-5870
San Antonio,TX 210 475-6820 x2293 210 475-6885
Albuquerque,NM 505 346-7271 x7361 505 346-7327
Denver,CO 303 672-5414 x1326 303 672-5437
San Francisco,CA 415 436-6597 415 436-6569
Los Angeles,CA 213 894-8000 x3300 213 894-8000 x3400
Honolulu,HI 808 522-8180 x264 808 522-8180
Phoenix,AZ 602 379-4754 602 379-6699 5261
Seattle,WA 206 220-5150 x3606 206 220-5170
Portland,OR 503 326-7018 503 326-3349
Manchester,NH 603 666-7640 x7633
Anchorage,.AK 907 271-3669
. Houston,TX 713 313-2274
Distribution: W-3-1
,4?7T4 , d
2009 Home Investment Partnership Program (HOME) - Council Bluffs
Low and
2009 Moderate Other Total
Unit HOME Income Public Private Project
Program Description Goals Budget Benefit Funds Funds Costs
Direct Downpayment assistance to first-time low and 5 $117,000 $234,000 $0 $117,000 $234,000
Homeownership moderate income homebuyers through the
Assistance provision of second mortgages to purchase 8
newly constructed single family homes.
Multi-Family Land acquisition, demolition and/or construction 3 $132,300 $132,300 $0 $0 $132,300
Housing related costs for 1 or 2 multi- family housing
Development development projects.
Project
$249,300 $366,300 $0 $117,000 $366,300
11/8/2011
2010 Home Investment Partnership Program (HOME) - Council Bluffs
Low and
2010 Moderate Other Total
Unit HOME Income Public Private Project
Program Description Goals Budget Benefit Funds Funds Costs
Direct Downpayment assistance to first-time low and 5 $135,000 $135,000 $0 $0 $135,000
Homeownership moderate income homebuyers through the
Assistance provision of second mortgages to purchase 5
newly constructed single family homes.
Multi-Family Land acquisition,demolition and/or construction 3 $161,180 $161,180 $0 $0 $161,180
Housing related costs for 1 or 2 multi- family housing
Development development projects.
Project
8 $296,180 $296,180 $0 $0 $296,180
Revised 3-7-11
CITY OF COUNCIL BLUFFS
SUBSIDY LAYERING STANDARDS FOR THE HOME PROGRAM
Standard: Before committing funds to a project, the City of Council Bluffs will evaluate the project in
accordance with the following guidelines and will not invest any more HOME Funds, in combination with
other, private and/or governmental assistance, than is necessary to provide affordable housing. This standard is
established in accordance with Cranston Gonzalez National Affordable Housing Act, Section 212(F) as
amended and 24 C.F.R. Part 91.
Layering Guidelines: Generally, there will be multiple levels of review of the assistance received on a project.
The City of Council Bluffs will rely on the determinations of the Iowa Foundation Authority and Iowa
Department of Economic Development, as appropriate in evaluating such assistance.
City of Council Bluffs Community Development staff will review the project pro-forma in assessing whether or
not the proposed HOME Fund allocation is necessary to ensure feasibility of the project. All sources and uses
of funds will be detailed in applications and reviewed to determine that funding sources are committed, an
evaluation of all costs associated with the development will be conducted and the reasonableness and
appropriateness of the development costs will be assessed. All costs will be compared to industry standards as
to their reasonableness and certified by the Rehabilitation Inspector. The City shall ensure that costs being
funded by HOME are eligible and that per unit assistance does not exceed the maximum.
Developers will be required to provide a project pro forma to the City of Council Bluffs. The aggregate amount
of assistance from the U.S. Department of Housing and Urban Development and all other sources will be
considered to ensure the viability of the project. Factors relevant to the feasibility of the project will include,
among other things, rates of returns to owners and investors relative to current interest rates, long-term needs of
the project and the usual and customary fees charged to the project. The target population and the needs of
tenants will also be considered when reviewing a project.
The City's policy is that projects serving extremely low-income persons will generally require a higher subsidy
than projects serving low-income persons, and that projects serving low-income persons will require a higher
subsidy than projects serving moderate-income persons, and so forth. Other factors may include whether or not
the project serves primarily persons with physical or mental disability, elderly persons, or others with special
needs. Additionally, non-profit organizations will generally require a higher subsidy that for-profit businesses.
Project cash flow and rate of return will also be evaluated. The City of Council Bluffs normally will not allow
an excessive gain or profit to be derived from a project. The specific standard governing the pre-tax rate of
return is the return on investment shall not exceed sixteen percent(16%).
Certification:
The project located at has been
evaluated in accordance with the City of Council Bluffs Subsidy Layering Standards for the HOME Program, as
approved by the Community Development Department. After review and submission of appropriate
documentation, we find that the project is consistent with the policy and eligible for HOME funding.
Donald D. Gross, Director
Community Development Department
(Revised 4-5-02)
c 2sA CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha, Nebraska
RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:
WHEREAS, under Title II of the National Affordable Housing Act of 1990, the
City of Omaha annually receives a HOME Investment Partnerships Program entitlement for the
purpose of providing affordable housing opportunities for low-income households; and,
WHEREAS, on June 19, 2012 by Resolution No. 812, the Omaha City Council
approved a Home Investment Partnerships Program Consortium Cooperation Agreement
(Cooperation Agreement) between the City of Omaha and the City of Council Bluffs for the
purposes of receiving an increased HOME Fund allocation from the U.S. Department of Housing
and Urban Development and administering the HOME Program as a single grantee; and,
WHEREAS, the HOME Consortium Cooperation Agreement is in full force and
effect until September 30, 2015; and,
WHEREAS, the Consortium Cooperation Agreement provided for the transfer of
a portion of the HOME Funds received by the City of Omaha to the City of Council Bluffs, less
ten percent to be used by the City of Omaha for administrative purposes; and,
WHEREAS, the Mayor, City of Omaha, recommended various projects in the FY
2009 and FY 2010 Consolidated Submission for Community Planning and Development
Programs (Consolidated Plans), including the City of Council Bluffs, Iowa, Multi-Family Rental
Projects; and,
WHEREAS, the City Council, City of Omaha, approved the FY 2009
Consolidated Plan on October 28, 2008 by Resolution No. 1492, as amended April 14, 2009 by
Resolution No. 235, and as amended again June 9, 2009 by Resolution No. 494 and the FY 2010
Consolidated Plan was approved by the City Council, City of Omaha on December 15, 2009 by
Resolution No. 1347, as amended; and,
By
Councilmember
Adopted
City Clerk
Approved
Mayor
C-25A CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha,Nebraska
Page 2
WHEREAS, the Consolidated Plan allocates $293,480.00 to the City of Council
Bluffs (comprised of $132,300.00 in FY 2009 funds and $161,180.00 in FY 2010 funds) for
partial financing for land acquisition and/or new construction-related costs for nine (9) rental
units to be located in two (2) or four (4) multi-family housing projects to be constructed on sites
yet to be determined; and of the six (6) rental units funding with FY 2009 funds, five (5) shall be
rented to eligible families whose annual household incomes are 80% and below the Median
Income By Family Size (MFI) and one (1) shall be rented to a family whose annual household
income is 50% and below the MFI; and with the FY 2010 funds, three (3) units shall be rented to
families whose annual household incomes are 80% and below the MFI and one (1) unit shall be
rented to a family whose annual household income is 50% and below the MFI throughout the
twenty-year Affordability Period in which these units shall remain affordable (hereinafter
referred to as "the Project"); and,
WHEREAS, it is in the best interest of the City of Omaha and the residents
thereof to enter into an Agreement with the City of Council Bluffs to make affordable housing
opportunities available to low- and moderate-income residents of Council Bluffs, Iowa.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF OMAHA:
By
Councilmember
Adopted
City Clerk
Approved
Mayor
C-25A CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha, Nebraska
Page 3
THAT, as recommended by the Mayor, the attached Inter-Local HOME
Agreement between the City of Omaha and the City of Council Bluffs, 209 Pearl Street, Council
Bluffs, Iowa 51503, authorizing the City of Omaha to provide to the City of Council Bluffs a
total of $293,480.00 in HOME funds comprised of$132,300.00 in FY 2009 HOME funds and
$161,180.00 in FY 2010 HOME funds for acquisition of land and/or for new construction-related
costs of six (6) HOME-assisted units with FY 2009 funds and three (3) HOME-assisted units
with FY 2010 funds within two (2) or four (4) multi-family housing projects for nine (9)
qualified low- and moderate-income households, whose annual household incomes are 80% and
below of the Median Income By Family Size (MFI) and two (2) units shall be rented to families
whose annual household incomes are 50% and below the MFI located on sites to be determined
at a later date within the City of Council Bluffs, is hereby approved. Funds in the amount of
$132,300.00 shall be payable from the FY 2009 and $161,180.00 shall be payable from the FY
2010 HOME Housing Development Program, Fund No. 12179, Organization No. 128042.
APPROVED AS TO FORM:
fs1 CI Y A TORNEY DAT
1827 dlh
'ft900477/414 •
By
C un ilmember
Adopted PR — 920� f'O
ity Clerk 17(4/43
Approved ,. '
Mayor
1 ry
'v..J
NO. '5 0
Resolution by
RES. that, as recommended by the Mayor, the the amount of $132,300.00 shall be payable
attached Inter-Local HOME Agreement from the FY 2009 and $161,180.00 shall be
between the City of Omaha and the City of payable from the FY 2010 HOME Housing
Council Bluffs, 209 Pearl Street, Council Development Program, Fund No. 12179,
Bluffs, Iowa 51503, authorizing the City of Organization No. 128042.
Omaha to provide to the City of Council
Bluffs a total of $293,480.00 in HOME funds 1827 dlh
comprised of$132,300.00 in FY 2009 HOME
funds and $161,180.00 in FY 2010 HOME
funds for acquisition of land and/or for new
construction-related costs of six (6) HOME-
assisted units with FY 2009 funds and three
(3) HOME-assisted units with FY 2010 funds
within two (2) or four (4) multi-family
housing projects for nine (9) qualified low-
and moderate-income households, whose
annual household incomes are 80% and
below of the Median Income By Family Size
(MFI) and two (2) units shall be rented to
families whose annual household incomes are
50% and below the MFI located on sites to be
determined at a later date within the City of
Council Bluffs, is hereby approved. Funds in
Presented to City Council
APR — 9 2013
Adopted
ettiifer grown
City Clerk