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RES 2004-0068 - Agmt with Bethel Missionary Baptist Church for Your Mart convenience store (- i1�4,s� ' {1 Greater Omaha �� Workforce Development aVriV JAN`SA Q�� 10: 04 2421 N 24th St o'F` .. Omaha,NE 68110-2282 O�'�ED FEBR��sy CITY CLERK (402)444-4700 OMAHA{ NECRAS 'A Telefax(402)444-3755 City of Omaha Maria Vazquez Mike Fahey,Mayor Director President and Members of the City Council, The purpose of the attached Resolution is to approve an agreement between the City of Omaha and Bethel Missionary Baptist Church for it's Your Mart Convenience Store operation for a period of approximately 12 months ending on December 31, 2004. The contract amount of $52,760.00 will be paid from the Enterprise Zone Social Services Block Grant. This proposal was recommended for funding by the Enterprise Zone Board of Directors. i Respe lly s b ' , Ola Anderson rector Greater Omaha Workforce Development Approved as to Funding: Referred to City Council for Consideration: ,,/ // f -- 6-- °V Stanley P. Date Mayor's Office/Title Date Acting Finance Director b1411,4 P:\Lawl\5085sap.doc 1 AGREEMENT This Agreement is hereby made and entered into this day o , 200,/ , by and between the CITY OF OMAHA, municipalcorporation a organized and under the laws of the State of Nebraska located in Douglas County, Nebraska, (hereinafter referred to as "City") and BETHEL MISSIONARY BAPTIST CHURCH D/B/A YOUR MART CONVENIENCE STORE (hereinafter referred to as "Contractor"). WHEREAS, in 1994 the City of Omaha received Enterprise Zone designation from the State of Nebraska and Enterprise Community designation from the United Sates Department of Housing and Urban Development and qualified for approximately $2,900,000.00 in Enterprise Zone funds; and, WHEREAS, the City of Omaha has appointed an Enterprise Zone Board; and, WHEREAS, such Enterprise Zone Board, with the approval of the Stakeholders, has recommended that $600,000.00 of such funds be used to fund innovative programs and projects meeting the goals and objectives of the Enterprise Zone/Community legislation; and, WHEREAS, such Enterprise Zone Board advertised for proposals for such innovative programs and projects; reviewed the responses thereto; and recommended to the City that the proposal of Contractor be funded; and, WHEREAS, it is necessary for the City to enter into an Agreement with Contractor to provide Enterprise Zone funding in the amount of$52,760.00 for such program. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, the City and Contractor do hereby mutually undertake, promise, agree and contract each for itself and its successors and assigns as follows: SECTION 1. PURPOSE The purpose of this Agreement is to specify the terms and conditions upon which Contractor will receive $52,760.00 of Enterprise Zone funds from the City of Omaha for the purpose of Your Mart Convenience Store operation. SECTION 2. DEFINITIONS—ABBREVIATIONS 2.1 "City" shall mean—the City of Omaha, a Nebraska Municipal Corporation. 2.2 "Contractor" shall mean—Bethel Missionary Baptist Church d/b/a Your Mart Convenience Store 2.3 "Director" shall mean—the Greater Omaha Workforce Development (GOWD) Director. 2.4 "Enterprise Community" shall mean — the area of Omaha designated by the U.S. Department of H.U.D. as an enterprise community, shown on the map in Exhibit «A„ 2.5 "Recipient" shall man—the City of Omaha. 2.6 "Subrecipient" shall mean — an organization receiving SSBG funds to undertake eligible activities. In this Agreement, the Subrecipient is Bethel Missionary Baptist Church db/a Your Mart Convenience Store 2.7 "Social Service Block Grants (SSBG)" — shall mean the program administered by the City of Omaha and funded under the Empowerment Zones/Enterprise Communities program of the Omnibus Budget Reconciliation Act of 1993. The program purpose is to empower American communities to create jobs and opportunity, take effective action to solve difficult and pressing economic, human, physical and community development challenges of today, and to build for tomorrow as part of a Federal-State-Local and private sector partnership in accordance with Federal Regulations in 45 CFR Part 96 Subpart C (Exhibit B) and the program objectives, priorities, and strategies as stated in the Omaha Enterprise Community Application. 2.8 "SSBG Funds" shall mean — the portion of the Social Service Block Grant program awarded to the City for the use specified herein, in an amount not to exceed $52,760.00 subject to the terms, conditions, and requirements of said Grant. 2.9 "Grant" shall mean — non-repayable SSBG funds made subject to terms, conditions and provisions of the grant agreement under which said grant is made. 2.10 "Facility" shall mean — Bethel Missionary Baptist Church d/b/a Your Mart Convenience Store, located at 5424South 30th Street, Omaha, Nebraska 68107. 2.11 "Program Income" shall mean — gross income received by the Recipient or Subrecipient directly generated from the use of SSBG funds. When such income is generated by an activity that is only partially assisted with SSBG funds, the income shall be prorated to reflect the percentage of SSBG funds used. (See Exhibit "C") SECTION 3. DUTIES AND CONDITIONS OF CITY 3.1 Subject to and conditioned upon actual receipt of same, the City agrees to make available to the Contractor$52,760.00 in SSBG funds, Fund No. 188, in the form of a grant for the purposes set forth in this Agreement, and as detailed in Exhibit "E" incorporated herein by this reference. 2 3.1.1 City funding pursuant to this Section shall be contingent upon receipt of and subject to the availability of SSBG funds in amounts adequate to meet any contractual obligations in force upon the date of execution of this Agreement, as well as, this proposed obligation. Should adequate funding not be available, the City shall notify the Contractor as soon as reasonably possible. At such time, the responsibilities of the Contractor under Section 4 of this Agreement shall be released, the provisions of Section 6, Paragraph 6.10 will be exercised and the Agreement will be terminated. 3.1.2 Reimbursement shall be on a monthly basis for the budget items. Payments shall be made on the basis of monthly requests for payment and shall be reimbursements for actual expenditures. The budget is identified as Exhibit "D". 3.1.3. Monthly billing will be submitted to the Director by Contractor. The monthly billing is due no later than fifteen (15) days following each monthly reporting period. 3.2 The City shall review and monitor the required monthly progress reports that identify the progress/accomplishment of Contractor on the activities included in this Agreement and on contracts entered into with third parties pursuant thereto. Monthly progress reports are due no later than fifteen (15) days following each monthly reporting period. 3.3 The City prepare are shall re monthly payment vouchers for Contractor based upon the Contractor's monthly progress report and monthly request for payment. SECTION 4.DUTIES AND RESPONSIBILITIES OF THE CONTRACTOR 4.1 The Contractor does hereby certify, contract and agree that any and all funding obtained or made available hereunder shall be used solely and exclusively for the express purposes set forth in this Agreement, and as detailed in Exhibit "E", Scope of Work. Contractor further certifies, contracts and agrees that any profit from the operation of the Your Mart Convenience Store as a result of the use of the EZ funds shall be used only operation. such o eration. 4.2 The Contractor shall provide services as required in the scope of work as attached hereto. (See Exhibit "E".) Clients shall be residents of the Enterprise Community area. (See Exhibit "A") 4.3 The Contractor shall submit monthly progress reports to the Director delineating the Contractor's accomplishments for the previous 30 day period specified in the scope of work (See Exhibit "E".) This monthly report shall be due no later than fifteen (15) days following each monthly reporting period. 3 4.4 The Contractor shall submit monthly financial reports (income statements) to the Director delineating the revenue and line item expenditures for Contractor. In addition, a monthly check register is to be submitted listing each expenditure by check number, payee, date, and amount for all expenditures for which reimbursement is requested. These reports shall include all program income. 4.5 The Contractor shall have an annual audit completed in compliance with OMB Circular A-133. A copy of the audit shall be provided to the Director. OMB Circular A-133 is attached as Exhibit "F". 4.6 The Contractor 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 purpose stated, and the Contractor further agrees to indemnify and hold harmless the City of Omaha for any liability arising out of the improper use by the Contractor of information provided. 4.7 The Contractor and any Subcontractors shall maintain such records and accounts, including property, personnel and financial records, as are deemed necessary by the City to assure a proper accounting for all expenses. The Comptroller General of the United States, or any of their duly authorized representatives, or any duly authorized representatives of the City of Omaha, as approved by the GOWD Director, shall have access to any books, documents, papers, records and accounts of the Contractor or Subcontractors which are directly pertinent to this project for the purpose of making audit, examination, excerpts and transcriptions. Such records and accounts shall be retained for five years from the contract period completion. Any contract entered into by the Contractor with any Subcontractors shall include this Section to ensure said access. 4.8 Any program income received will be applied to the support of the Your Mart Convenience Store operation only. 4.9 The Contractor shall comply with all requirements and acknowledges, by execution of this Agreement, receipt of Department of Health and Human Services Regulations 45 CFR Part 96 Subpart C. 4.10 The contractor shall acquire bonding in the amount of $5,000 for the board of directors, officers, and employees entrusted with the handling of funds pursuant to this Agreement. 4 SECTION 5. TERM This Agreement will be in full force and effect and will continue for a period of approximately twelve (12) months commencing on the date of favorable consideration by the City Council and execution by the Mayor and ending on December 31, 2004. SECTION 6. PROVISIONS OF THE AGREEMENT 6.1 EQUAL EMPLOYMENT OPPORTUNITY CLAUSE Annexed hereto as Exhibit "G" and made a part thereof by reference are the equal employment provisions of this Agreement. Refusal by Contractor to comply with any portion of this program as therein stated and described will subject the offending party to any or all of the following penalties: A. Withholding of all future payments under the involved contracts to the contractor in violation until it is determined that Contractor is in compliance with the provisions of the contract; B. Refusal of all future bids for any contracts with the City or any of its departments or divisions until such time as Contractor demonstrates that it has established and shall carry out the policies of the program as herein outlined. 6.2 NONDISCRIMINATION Contractor shall not, in the performance of this Agreement, discriminate or permit discrimination in violation of federal or state laws or local ordinances because of race, color, sex, age, political or religious opinions, affiliations or national origin. 6.3 CAPTIONS Captions used in this Agreement are for convenience and are not used in the construction of this Agreement. 6.4 APPLICABLE LAW Parties to this Agreement shall conform with all existing and applicable City ordinances, resolutions, state and local laws, federal laws, and all existing and applicable rules and regulations. Nebraska law will govern the terms and the performance under this Agreement. 6.5 INTEREST OF THE CITY Pursuant to section 8.05 of the Home Rule Charter, no elected official or any officer or employee of the City shall have a financial interest, direct or indirect, in any City contract. Any violation of this section with the knowledge of the person or corporation contracting with the City shall render the contract voidable by the Mayor or Council. 5 6.6 MERGER This contract shall not be merged into any other oral or written contract, lease or deed of any type. This is the complete and full agreement of the parties. 6.7 MODIFICATION This Agreement contains 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 hereof unless done in writing and signed by an authorized officer of the respective parties. 6.8 ASSIGNMENT Neither Contractor nor City may assign its rights under this Agreement without the express prior written consent of the other. 6.9 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 except upon written direction from an authorized representative. 6.10 TERMINATION This Agreement may be terminated by either party upon thirty (30) days written notice to the other party. Said notice shall be given when received by certified mail at the other party's usual place of business. This Agreement may be suspended or terminated in accordance with 24 CFR 85.43, Enforcement or 24 CFR 85.44. Termination for Convenience (Exhibit "H"). 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. 6.11 INDEMNIFICATION The Contractor shall indemnify and hold the City harmless from and against: (1) any and all claims arising from contracts between the Contractor 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. 6.12 DEFAULT If, through any cause, the Contractor shall fail to fulfill in a timely and proper manner any obligations under this Agreement, or violate any of the covenants, representations or agreements hereof, the City may upon written notice terminate this Agreement or such parts thereof as to this Agreement, and may hold the Contractor liable for any damages caused to the City by reasons of such default and termination. 6 6.13 NEBRASKA LAW This Agreement shall be a contract made under and governed by the laws of the State of Nebraska. 6.14 UNENFORCEABLE PROVISIONS Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition of enforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 6.15 DISCLOSURE OF LOBBYING The Contractor shall certify and disclose, to the best of its knowledge and belief, that: (a) No Federal appropriated funds have been paid or will be paid, by or on behalf of the Contractor, to any person for influencing or attempting to influence an officer or employee of Congress, or any 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. (b) 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 Contractor shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying", in accordance with its instructions. (c) The language of this certification be included in the award documents for all subawards at all tiers (including subcontractors, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. 6.16 SUBRECIPIENTS The Contractor shall comply with the requirements and the standards of OMB Circular No. A-122, "Cost Principles for the Nonprofit Organizations" (Exhibit "I"), and with the requirements of Attachments A, B, C, F, H. N and 0 to OMB Circular A-110 (Exhibit"J") 7 6.17 OTHER PROGRAM REQUIREMENTS The Contractor shall be required to carry out each activity of this Agreement in compliance with all Federal laws and regulations described in 45 CFR Part 96 Subpart C (Exhibit B), and in Subpart K of the CDBG Program Entitlement Grant Regulations Handbook 6500 (Exhibit "K"). 6.18 TERMINATION OF ASSISTANCE If an individual or family who receives assistance from a recipient or subrecipient violates program requirements, the recipient or subrecipient may terminate assistance in accordance with a formal process established by the recipient or subrecipient that recognizes the rights of individuals affected, which may include a hearing. 6.19 INTEREST OF THE CONTRACTOR Contractor covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict with the performance of services required to be performed under this Agreement; it further covenants that, in the performance of this Agreement, no person having any such interest shall be employed. 6.20 APPROVAL OF AMENDMENTS The parties hereto acknowledge that, as of the date of the execution of this agreement, Section 10-142 of the Omaha Municipal Code provides as follows: "Any amendment to contracts or purchases which taken alone increases the original bid price as awarded (a) by ten percent, if the original bid price is one hundred fifty thousand dollars ($150,000) or more, or (b) by seventy-five thousand dollars ($75,000) or more, shall be approved by the City Council in advance of the acceptance of any purchase in excess of such limits or the authorization of any additional work in excess of such limits. However, neither contract nor purchase amendments will be split to avoid advance approval of the City Council. "The originally approved scope and primary features of a contract or purchase will not be significantly revised as a result of amendments not approved in advance by the City Council. The provisions of this Section will be quoted in all future City contracts. Nothing in this Section is intended to alter the authority of the Mayor under Section 5.16 of the City Charter to approve immediate purchases." 6.21 SUCCESSORS AND ASSIGNS BOUND BY COVENANTS All covenants, stipulations and agreements in this Agreement shall inure to the benefit of the parties hereto and extend to and bind the legal representatives, successors, and assigns of the respective parties hereto. 8 6.22 INDEPENDENT CONTRACTOR It is understood and agreed by and between Contractor and City that any and all acts that Contractor or its personnel, employees, agents, contractors, or servants, perform pursuant to the terms of this Agreement shall be undertaken as independent contractors and not as employees of the City. The City and Contractor shall each act in their individual capacities and not as agents, employees, partners, joint venturers or associates of the other. An employee or agent of one shall not be deemed or construed to be the employee or agent of the other for any purpose whatsoever. Neither Contractor nor its personnel, employees, agents, contractors, or servants shall be entitled to any City benefits. The City shall not provide any insurance coverage to Contractor or its employees including, but not limited to, workers' compensation insurance. Contractor shall pay all wages, salaries and other amounts due its employees and shall be responsible for all reports, obligations, and payments pertaining to social security taxation, income tax withholding, workers' compensation, unemployment compensation, group insurance coverage, collective bargaining agreements or any other such similar matters. Contractor shall have no authority to bind the City by or with any contract or agreement, nor to impose any liability upon the City. All acts and contracts of Contractor shall be in its own name and not in the name of the City, unless otherwise provided herein. SECTION 7 AUTHORIZED REPRESENTATIVES In further consideration of the mutual covenants herein contained, the parties hereto expressly agree that for purposes of notice, including legal service of process, during the term of this Agreement and for the period of any applicable statute of limitations thereafter, the following named individuals shall be the authorized representatives of the parties: A. City of Omaha Ola Anderson, Director Greater Omaha Workforce Development 2421 North 24th Street Omaha, NE 68110 B. Bethel Missionary Baptist Church d/b/a Your Mart Convenience Store 5424 South 30th Street Omaha, NE 68107 9 IN WITNESS WHEREOF, the parties have executed this Agreement as of the dated indicated below:EXECUTED this tP day of (January , 2004. ATTEST: BETHEL MISSIONARY BAPTIST CHURCH D/B/A YOUR MART CONVENIENCE STO CA114 By J,L,&.(0-t,e4rni 7 r..i.e, , Title EXECUTED this L:,4 day of 4 , 2004. CITY OF OMAHA, a Municipal Corporation ATTEST: L -"_ - By City E'ierk, ity.of. Omaha Mike Fahey Mayor of the City of Omaha APPIW D A 'o F RM: Asst City Attorney P:\Lawl\5086sap.doc 10 SCHEDULE OF EXHIBITS Exhibit Description A Enterprise Community Map B 45 CFR Part 96 Subpart C C Definition—Program Income D Budget E Scope of Work F OMB Circular No. A-133 G Equal Employment Opportunity Clause H Termination—CFR 85.43 and CFR 85.44 I OMB Circular No. A-122 J OMB Circular No. A-110, Attachments A, B, C, F, H, N, 0 K Subpart K of the CDBG Program Entitlement Grant Regulations Handbook 6500 PALaw 1\5086sap.doc 11 �xh► b.(--- A • EXHIBIT • • - I A . \\,\ ... ___,„ .. _____v ,.. ...... ......._ ...„..„:==........„_ _i k.E.----. -.,-;:::=2„,.,,,..i.,..., . 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O r' O-w 3 < aC m ,o^3 _ - G 0 7 G O m O o R 0 - ce=o O.o- m,'p 3 7 3 G W m 7 _ C o ° e?.. p, '' o.C o - ; = m m -1 m -0 7 = , o G c O.7 c, 7 e.3 7°q 0 0 ^G O m ? 0 N m 0 -e: O -O m m 'J p -0 W C 0 0 m 0 - ..� + O 0 0 m m 0 , C 0t = r0-0 G e•0 ,. ee--.R 0 S 3 p .. 0 W m - 3 ° v m -O m G *. w x 4 0 r' 7 P > G N ?P 3 > e+W 7 p m 'P'{ O •-•C as 0 0 0 0 G e' P •m1 O 0 7 rp•0 0 P O 0'7 rP- m ^° p .t m PO e•,0 m a 0- W . '-... In e 0 7 m �< 0 r- p R ._0 -t G. m ' O G`< m o 0 0 ^m O F, C m O 0 0 m 0 3 0 0 R ° r O C W m 7 C r-0 O r-0 -° R o cC = 0 0 C -p 0 m G 0 7 0040 , oo P CC0wm -0 •_-, % ° O002p0c0 << C00P. Gx = ?<O�eey3Aa n_a, om -, r,Co • =3m-- p 0 p0 r-0 C G city G.co C G C c R c1 ^ 0' W Ot m P m ram-„m • Do m.0 0 r„city 0 3 W y Q ' ■ 0p UØE G m 0 0 0 -17 wr,, .t 7 .1 C O 00 0 7 R W -t m 0' 7 R O'G -t -C ? W -� G C m W _m _ P m << •, N m r- P o p -Ti 0 0 0 m --t m r`, o..t ° rG.C 0 W 7 .�E W O O O .1 3 0 .8 3 0 G^P -t o 0M ... 000 0 - 7 R W m O O K.,- O O aty 0 0 < m o P P O- 0 -P O 0 p 0 g 7 1 0 �O m o - 0 n r' .e 3 O O P r0� 7 -1 Q r'0 770 ' O 0 0 -+ G C G P Gm r-,0 o .0 R e--• =0 =0 Kp G 7a 0 -t O. Ci m 7-R r- G m --O 7 „1 p m G O f 7 mC.< p m 3 R m P C O -1 city -, O =0 0 city C0.r P m 0 ^ G O n O 7 -.f R , ar,^ O. C R .1 7 < O o 0 , C M O P r- CRC -1 P -1 0 m O C C .t P -r-0 - pty m o G ° O P p C 0 -m O m -i O p O eT 0 m -e x° O < o R C m P m R P W W p O W o .t m o G 0 f R 0 W 2 G-.-m 0'G P o O_ .1 -1 0 -t O m m r. ^ m P - p -'t G G- -,�< o ^ C m P -- c7., 7 R R C m 0 0 1 C R P c-C S O R re C 'Wt o .t m e-m << u'< - 3 < r-m 0 m G e..R o 3 O cG0 -C .e+0.?m1 C m -,.m m -i o O ep^?_ - a 0 C y--, F... ,-.0_ G p -1 C G op A = • 000 o Goa O'0Ri m G m o p 7 p C 2 m m-0 O'm of m,m 7 0 •Rt . ... .. 9 ° g q 7 C m p C' ?7 2 m G G W C- ED 0 C � f--G C O m 0 tf� 3 m t F.". p O p m t m p0 m m 3 C r-m m m °0 D.-0-�'m O r7- C -m m �e C c0.Oi 1 - 0 P 7 G N m -1 O N m 6 O c< --, _ m G-.v m P y e.. = -, W ., m N M O m m 3 - r• , m 0 r- 00040 m ..� C -7R'O = .W, O 00 0 .. 7'° 0 0 •7 m 0 oq O O P r0-P m u m m mt pI „q a m 7:1 r7,7 m O P 0 ^m 7 m 0 7 m m - m -1 m - m O 0 -city . n 0 40 71 -, mo7 ..ar�av -, R mo4tac `.< .e .1- ^ P3a � 3w �c4m ° o �_ ° VcPi �wm001 .00�� , o .' - V G W m e o ,. m a=o -1 e- ' c P m 0 7 r- m O o•O C a i m ° � � � .0 .o m ° O Q p -m m m R C R j O -t ? ., P G u 41 C.O `< 0p - '< m m G W •-0 -1 m -, CO.C P S R m O 0 rm-P• m u. -1 c P m 3 r� =m R -� ?3 o R ; m - , • � � 3 -, W 7 -0 0 o cr- r- Gc�p 3 P• p P N .7 m �� 0 0. OGm N O•G 7 e. 0 e. 0 m > o a ° p7ty m =3 a ^.3 °° °� m m < m� .. C,. 0.° m -t �c� � _r0, 04 .. -•" m r. m x o ° . 4 P R P ° -, -1 0p = 3 9 m -1 c. m o city C ,.. .0 m • .., _ m 6(233 . 060 -1 a O 7 `< < m m Z. O O C r• «0 P O R e O Cp a O P O '1 0 O r• 7 n 0 G O p .. C m O. G S G G 7 Z O g .t o 0'.-. -o - O 0 C 0 e+ e+ P°ty ° 3. 0p a -t r e- 3 0 C- O -t r• " c•c • ,- m 0' G - 0 1 C 0 m 0 r- P m ' n 7 O - W -, R W 9 cG Rt -} f C P 00 C '< 7 L m 0 G`< 3_ R „1 GN x -<< r- o mm •< m p70 °•- O 5-30 m O o � m '< �3 NP,. rW- _>o o e+ m £ C0 O O '-' , r-'i = city C W o - p m C - 0 °° ,t p e- P R C. _ - -, t7•.c- j p O O P C. .. .1 P P --R P 0 O -O. `s `Z u m CO 7 city r. W O ° .t p m .1 G , city O .. - o r. R C �° O - R`C m - P ° "+ F W -' m e- E m ° O 0 CO o c` ° m 7 a .1 m 0 -t 0 _ m - O• 2. 4 0 ., 7 R o c m 7 R W W 0 e+ G m -p1 Cp^ • OR P m P , 0 o W 7 r- 0•� ' C C... 0 .0.. r. 0 ..9 7 ... 7 �. E m 0 SP 0 7 ° W 7 m m r' O mi m 7,, o G 0 C C. - g m c< 3 G m > R m 9 p E m `' < - 7 m?Oi ^ °- a c- C R m cr G 0 0 ° O , 0 0 C r• c- C Q o_G m n o v 4 ti m, -, m 0 C ,, '4 0 R 7 0 o G si - O O r' m m -. 1 3 C r- O city P 3 O R W 7 m 0 S m 3 t - e- R `- m 7 v A R o p O -t o 0 P CO O C o rW. V p p 3 = 4 0 W y _ R 4 e•• m O m p „ e- ".c '' 0 4 )00..07.04 Oi p o - C ° co 0 m m G° .< 7 m 0 .. 3 m < O r„ a m m P o < P £ •-. O O o 1 G m 0 m n m o G o O `- ." O .-.m .1 O 0 W ^ o P_0 m ° ..; . C G - r- I - O W O r- r 7 e m - r- - x - = -1 'O -t Q 0 p o R - -1 P, t01 w U w E P- .^.. e'• _ -1 e+ m C G op .. __op-O .'.7. CY r• -city p m m m Oty p ° y; - `O �S _ -- 3 - o u 0. - C CO C _ m o O W m CO -- o f "1 G _ - 0 _>a ^ O -7 -- < -- c r R = • N O - w _ - 7 P _ - N ^ -3 a0 7 m 7 _t - 0 o O -^ - _ - - _ o . c� y o 0 0 0 G > - o `� C " ,- o _ P 7 0 m C: = a C s e0- 0 3. o -- , > `< - 7 0 - '� (.+ • • • 1 t' BSc..' • i EXHIBIT Community Development Block Grant Program Handbook OD u Entitlement Grant Regulations September 1988 ' "Program income" means gross income received by the Recipient or a Subrecipient directly generated from the use of CDBG funds . When such income is generated by an activity that is only partially assisted with CDBG funds, the income shall be prorated to reflect the percentage of CDBG 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 funds : (ii) Proceeds from the disposition of equipment purchased with CDBG funds ; (iii) Gross income from the use or rental of real or personal property acquired by the Recipient or a Subrecipient with CDBG 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 funds , less the costs incidental to the generation of such income ; (v) Payments of principal and interest on loans made using CDBG funds; (vi) Proceeds from the sale of loans made with CDBG funds; (vii) Proceeds from the sale of obligations secured by loans made with CDBG 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 portion of a public improvement. • (2) Program income does clot include interest earned (except for interest described in § 570.513) on cash advances from the U.S. Treasury. Such interest shall be remitted to HUD for transmittal to the U.S. 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 assistance; funds collected through special assessments used to recover the non-CDBG portion of a public improvement ; and proceeds from the disposition of real property acquired or improved with CDBG 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. O , /6 / Proposed Budget for Employees and Equipment Type of positions: Cashier Stocking Clerk I Personnel Total 2- Cashier Stocking Clerks to work 5 to 8 38 to 40 hours per week x $11.00 per hour Ihours shifts Monday through Friday, 4 hour x 2 employees = $880.00 per week x 52 shift on Saturday, and 3.5 hour shift on weeks= $45,760 per year. 1 I Sunday Other non personnel related expenses $ 3. 500.00 _Store Security System (Camera) I Sub Totals Payroll and taxes $49,260.00 Equipment 3,500.00 Total: I Proposed Budget for Employees and $52,760.00 equipment I Job Training Skills Includes: Reconcile daily cash receipts, Cashing, Handling Inventory, Management Development, &Maintenance. I Job Training Skills Includes: Training and Responsibilities includes: Opening and closing the store, prepare cash drawer for sales,handling of cash sales, good customer service attitude, general maintenance, ordering merchandise from vendors, receiving Imerchandise from vendors, signing invoices, authorizing payment to vendors who requires payment on delivery, and stocking merchandise. I 1 1 i EXHIBIT :22. ---D i s Bethel Missionary Baptist Church D/B/A Your Mart Convenience Store 5424 South 30th Street I Omaha, NE 68107 (402) 731-3973 Store (402) 731-1840 Church I August 15, 2003 i Dear City of Omaha Enterprise Community Board of Directors: I The Bethel Missionary Baptist Church D/B/A Your Mart Convenience Store is South I Omaha is a non-profit organization and is presently being operated by a group of volunteers who are members of the Church. For the last five years that the store has operated with both paid and un-paid workers. The Store has had a more immediate Iimpact on local communities that are not driven by businesses. The primary focus and purpose of Your Mart Convenience Store is to provide a more I— convenient food service location; create a social, economic, revitalized environment; create new employment opportunities and job training skills for low to moderate income individuals. Also,provide a more secure place for people friendly services by promoting I a positive alternative to gangs, drugs users, and violence that bias infected this area. The employment and job training opportunities will promote positive alternatives to help reach young men and women and teach them to be independent not dependent. IYour Mart Convenience Store is unique because there is a need for providing new job opportunities for at risk youth, young adults, and socially deprived families in the South I Omaha Community. In order to provide a safe, secure, social environment, new job opportunities, and job training skills for this area, we are requesting$52,760.00. The funding will help with providing an integrated comprehensive program and tools needed I to assist with the employment opportunities and job training skills needed for South Omaha Community. II We would like to thank you for your consideration and we look forward to hearing a decision from your committee soon. I. 4 S' erely, i v.):;,eg441,11,44) 11 Rev. John F. Willi for llConrad Dayd, Operational ager11 .EXHIBIT D E.. 3 z/ • Proposal Summary 1 , Due to the credible work done by the professional and community representatives who I have been collaborating on the Bethel Missionary Baptist Church (BMBC) Supplemental Enrichment Program,the Omaha Enterprise Community has been successful in working with the city to secure the BMBC Supplemental Enrichment Program approval for participation in a special Summer Enrichment Program. BMBC has been successful in Iimplementing economic development projects through its ministry. BMBC d/b/a Your Mart Convenience Store is one of the many projects BMBC has embarked upon. The I ultimate goals of this project are to provide a more convenient food services location and employment opportunities and job training skills for individuals in the South Omaha Community. Phase I of this project has already been accomplished. Phase II is to I provide adequate employment opportunities and job training. The Omaha Enterprise Community has committed to continue to work with the community to help explore options for moving projects as such forward with the ultimate goal of providing services Iand viable economic development. The funding we are requesting through the City of Omaha for tteerprisehe Omaha Community will be 1 used to fund new employment,job training opportunitieso Community, and a security,system. Security equipment will be purchased totomere e.a more productive and safe environment for the employer, employees, 11 With the collaboration of the Omaha Enterprise Community,we will have our existing board monitor the progress of recruiting and training staff to operate the store. A comprehensive training package will be in place and hands on training will be conducted III to ensure meaningful employment opportunities developed for the neighborhood and community. To ensure, a check and balance system of accountability, a financial grant evaluator will perform a semi-annual audit and report on proposal performance. He or 1111 she will give a final report on the outcome of the program. The two evaluators contacted are: Pamela Huges, Accounting Officer,Mutual of Omaha and Dr.Natalie Adkins, Assistant Professor of Marketing/Management, (College of Business/Administration) a Creighton University. d d I III _. i; Ii 11 •• j N J '� .EXECU iV= OFFCE OF: i HE F=E 73E? T EXHIBIT �'L, CFT-7CE Cr= MA.(`-LA GE.'kei a\17 ANC 00-777 woNGT CN.O.C.2.-s 1 I F Mach 24 , 1990 • 0243 C irc l ar No. • A-13 3 TO TEE EIS OF EXECUTIVE DEPARTMENTS AND ES AB i,TSE y'TS SUBJECT: Audits of Institutions of Eigher Education and Other Nonprofit Institutions • 1 . pur7cse. Circular A-I33 establishes audit recuirerent,_s and • defines Federal responsibilities for implementing and acnitoring such requirements for institutions of higher education and other nonprofit institutions receiving Federal awards. 2 . j�t2tth4ri tv. Circular A-I33 is issued t rider the authority, of the Budget and Accounting Act of 1921, as amended; the Budget and Accounting Procedures Act of 1950, as emended; Reorganization Plan No. 2 of 1970 ; and Executive Order No. 11541. 1 _ 3 . 5uper-session. Circular A-133 supersedes Attachment F, subparagraph 2h, of Circular A-110, "Uniform Administrative Requirements for Grants and other Agreements with Institutions of Higher Education, Eosaitals, and other Nonprofit Organizations. " 4 . Tpolicability. The provisions of Circular •A-133 apply to: a. Federal departments and agencies responsible for administering programs that involve grants, cast-type contracts and other agreements with institutions of higher education and other nonprofit recipients. b. Nonprofit institutions, whether they are recipients, receiving awards directly from Federal agencies, or •are sub • - recipients, receiving awards indirectly through other recipients. These principles, to the extent permitted by law, constitute guidance to be applied by agencies consistent with and within the discretion, conferred by the statutes governing agency action. 1 . • 5 . Feauir -ents and Resvnsibilities. The specific requirements and responsibilities of Federal departments and agencies and institutions of higher education and other nonprofit institutions are sat forth in the attachment. • 6 . P.ffe Live D.at@. The provisions of Circular A-133 are effective upon publication and shall apply to audits of nonprofit institutions for fiscal years that begin on or after January 1, I 1990 . Earlier implementation is encouraged. However, until this • Circular-is implemented, the audit provisions of Attachment F to Circular A-110 shall continue to be observed. 7 . P91ic7 R vi.. * LUnZet1 Datt. circular A-133 will have a policy review three years from the date of issuance. . 8 . - Zncuirie.a. Further information concerning Circular A-133 may be obtained by contacting. the Financial Management Division, Office .of Management and Budget, Washington, D.C. 20503 , telephone (202) 395-3993 . . Ri chard G. Darman Director • • • • • i • C?"B c c`J'.rr R . -1 3 AL'�]i TTS OF ?vCa O1.: - AND OTEZR HG=GF''_' A T2 - 4 7. • 1 �firi;ti 4� For the p 'z cSas cf " 3 Circular, the fancying definiticns apply: a. "Award" means financial assistance, and Fed-ra? cost-type Contracts used to buy services Cr CCCdS for the u.ze c= the Federal Government. It includes awards received directly f_c- the Federal agencies cr indirectly th rcugh r ecipis..r_ts . It does not include prCC.2re e::t c:nt=ac _s to vendors under c- is or contracts, used to buy gccd3 cr services . Audis cf such vendors stall be CC-IVer -d by the terms and camel ==ors of the contract. b . " izant ag cv" =ears the Fad$-'-=' agency assigned by the Office of Management and Budget to carry out the resmonsibilities described in paragraph 3 of this Attar-~,arit. • C. 'Coordinated ^-7-,e-i t a"C`'.. .^—x •Lean.s a_T: al i d t Smiler ein t�► i ndeT.,endant au&;tor, and other Federal and flan-federal auditors iwork, in 'determining rg the nature, timing, ca..s_der each other' s and extent of his or her twin ' auditing prccadur es. A cccr dinated audit must be conducted in acccrdnce with ent ?Slzd:tinc .S tndards and meet the objectives and raperting requirements set forth in paragraph 12 (b) -and 15, respectively, of this Attachment. The obi ective of tha cocrdinated audit aporcach is to minimize nimize duplication of audit e.ff crt, but not to limit the scone of the audit work so as to preclude the independent auditor from meeting the objectives at fcrth in paragraph 12 (h) or issuing the reports required in paragraph 15 in a timely manner. d. "Federal agency" has the same .-=i ng as the. ter ' agency' in Section 551 (1) of Title 5 , United States Code. e. "Federal FI n,,ncia1 Assistance. " (1) "Federal financial assistance" =sans assistance provided by a Federal agency to a recipient or sub-recipient to • carry out a program. Such assistance may be in the form of: • -- grants; -- ccntracts; -- cooperative agreements ; -- loans ; loan guarantees ; • -- property; interest subsidies; -- insurance; 1 -- direct appropr iaticns ; o then.+ non-cash assistance . • (2) Such assistance does riot include direr" :ederal cash assistance to individuals. (3) Such assistance includes awards received d i;ect v fro= Federal agencies, er indirectly when sub-recipients receive funds identified as Federal funds by recipients. (4 ) The granting agency is responsible far identifvi.nc the source of funds awarded to recipients ; the recipient is responsible for identifying the source of funds awarded to sub- recipients . f. "Ger.erally ace m Y g principles" has the meaning specified in the Government Standarts. g. "Indeoendent anri i t1^T" means : (1) A Federal, State, or local govern e.nt auditor who meets the standards specified in the r nr ram. t Auditirri 5t ndaT-ds; or (2) A public accountant who meets such standards. h. "Intear,11 rol st:-uct-u�-a" means the policies and • • procedures established to provide reasonable assurance that: (1) Resource. use is consistent with laws, regulations, and award tars; (2) Resources are safeguarded against waste, loss, and mi sus e; and • (3) Reliable data are obtained, maintained, and fairly disclosed in reports. i. "Y.a j or program" means an individual award or a number • of awards in a category of Federal assistance or support for which total e.x-anditurss are the larger. of three percent of total . Federal funds expended or $100,000, on which the auditor will be recuired to express an opinion as to whether the major program is being act-sir{ stared in c.aplirnce with laws and regulations. Fach of to following categories of Federal awards shall constitute a :.ajar program where total ex enditures are .the lager of three percent of total Federal funds expended or $100 , 000 : • Research and Development. - Student Financial Aid. • - Individ.- 1 awards rct ti studz_,t a d cr, researC`h and develcc=ent categc . .., the y evaluation b t , dew-=si �n" ,,._Q ::s �e narage✓ent of an es- lish;.e't of the =;'.d=•Ss and reto—enda'i nS iy Cluded iyi an audit retort Z'r+d the c a dec±sia by C C.I1C '71Ln -Z-S z aS:C;Se to s c findings r:dings and recta=e_ndZ't._Cns , including actions concluded to be necessary. k_ "Itor profit env CC_p crest!cri, trust, association, cooperative or other organization vhic'c 1) is overated pr-=z=i 1y for scientific, educational, sarvic? , charitable, or similar pure:caes Jr_ the public interest; 2) is not c,c.�-Li Zea_ pr�L;Iy for o_ofit; and 3) uses its net proceeds to =ai_n=ain, i;^_eve, end/or e^ _d its op-erations . The to "non=rofit instit12.t1cnSM includes ? titutior_s of higher e'.'_ucat'_CII, e..:Ce.ut those institutions t _ t ars. audited as Ca_:. of single audits in accordance with circular A-128 "Audits of State and Lncal Gove-rr*+.ents . " The terra dc-es not include. hos-pitzls which a, not e.ffil iatad with an institution of hi then e=ucaticn, or State and lccal gcve_=ents and Indian t=�ib - cover --1 by Circular A-12 3 +"Audits of State and Local Gcv3. erlt5. " l , "C;+ tz Sight" ace_�ci means the Fad zr al agency t",, t provides the pr.edc inapt amount of di act funding to a recipient not assigned a cognizant agency, unless no ,3 i trace- furzing is received. WIe-a there is no direct funding, the Federal ace_ncy with the predominant. indirect funding will aist--e the general oversight responsibilities. Ma dutiSS of the oversight agency a, s-e decribs �r d in paasrap .ac h 4 of this Atth-.-aant. a, "Recipient" means an organization rec3iving financial assistance to tinny cut a program directly fron Fade a1 agencies. n. " and devalomment" includes all remaaich. activities, both basic and applied, and all develop cent - i�.; � d i colleges, an activities that a_s supported at un_v - eg other nonprofit in.stituticrs. "Rese_a_Tch" is defined as a systeratic s�dy dirracted toward fuller ,scientific knowledge or trnder4t3IIdinC of the subs ect studied. I}av4 lapsent is systematic use of knowledge and understanding gained from resear-ch dirac-ted tcward the production of useful materials, devices, sysy-�-^z, or method, including design and develcanent of p=o ctypes and. processes . a . "Student Finalicial Lid" includes those prima=s of genestudent assistance in which institutions participate, such al those iTitleIVof the Ei her Education Act sup� as au�hn__zed by g a,. 1965 which is administered by the U.S . C-epa.._went of Education and similap-ograms provided by other Federal agenci .S . It does not include prc-gr which provide fellowships or simile= aw"--=`s 3 • to students cn a competitive tive basis, or for specified studies or research. p . "Sub-recipient" means any parson or government derma-ment, agency, establishment, or nonprofit organize-ion tha'- receives financial assistance to carry cut a program through a primary recipient or other s b-rrcir;ent, but does not include an individual that is a beneficiary cf such a program. A s - rec_pient may also .be a direct recipient cf Federal awards under other agreements . c. "Vendor" means an organization nrovidinc a recipient or sub-recipient with generally recui red goods or services that are. related to the ac'-1 nisi ative support of the Federal assistance prcg7am. 2 . audit c f N r.c of it Institutiors. a. P:Y,i=ent,s sod 4Il Av r.. (1) Nonprofit ir*Istitntions that receive $100 , 000 or more a year in Federal awards shall have an audit made in accordance with tha provisions of this Circular. However, ncnrrofit institutions receiving $100, 000 or more but recsivirig awards under only one program have the option .of having an audit of their institution prepared in accordance with the provisions of the Circular or having an audit made of the one program. For prior or subsequent years, when an frs`..itutian has only loan guarantees or outstanding loans that were made previously, the institution nay be recuired to conduct audits for those prcgrams, in accordance with regulations of the Feda.ta? 'agencies providing those guarantees or loans. (2) Nonprofit institutions that receive at least $25 , 000 but lass th'+' $100 , 000 a year in Federal awards shall hive an audit made in accord nca with this .Circular or have an audit made of 'each Federal award, in accordance with Federal laws and regulations governing the programs in which they participate. (3) Nonprofit institUti one receiving less than $25,000 a year in Federal awards are exempt from Federal .audit . requirements, but recur s !must be available for review by appropriate officials of the Federal grantor agency or subcranting entity. b. Qver-sieht b-v Federal Acencies. (1) To each of the larger nonprofit institutions the office of Management and Eudget (0 ) will assign a Federal agency as the cognizant ' agency far monitoring audits and ensuring the resolution of audit findings that affect the programs of more than one agency. • .- (2) Smaller institutions not assigned a ccc::izan y agency will be under the general oversight of the Federal agerc-/ th`t pry rides the= with the most (3 ) Assi-rnents to Federal cogn{z-n t agencies for c .—;4 ng out responsibilities in this section are Set fC in a separate suptl eme_iit to this Circil_r. • (4) Federal Government-owned, contracts=-operated facilities es at institutions or operated p_i-? r iiy L Q c. the Government are not included in the e cognizance assignments . These will remain the responsibility of the contracting agencies . The listed assignments cover all of� the functions in this • Cir� lar unless otherwise i_ndi cated. The o_y?cn and Budget will coordinate changes in agency assi , rents . • 3 . z AC A cognizant ace-,cr shall: a. Ensure that audits a.r 2 de and retorts .era rec_ivad i r a timely manna- and iZ accordance with the •requirenanits o f this Circular. ' a • b . 'Provide technical advice andliaison to institutions and inderrendent auditors. • c. obtain or make quality control reviews of selected- audits made by non-Federal and i t organizations, and provide the results, wham appropriate, to other interested organizations. d. Pr otly inform other affected Federal agencies and aooroariate Federal law enforcement officials of any reported illegal acts or irregularities. A cognizant agency should also inform State or local law enforcement and prosecuting authorities, if not advised by tha recipient, of any violation of law within their jurisdiction. " e. Advise the recipient of audits that have been found not to have met the requirements sat forth in this Circular. In such instances, the recipient will work with the auditor to take corrective action. If corrective action on is not taken, the cognizant •agency shall notify the recipient and Federal awarding agencies of the facts and make recommendations for follow-up • action. Major inadequacies or rep-etitive substandard performance of independent auditors shall be referred to appropriate professional bodies for disciplinary action. f . Coordinate, to the al.-tent practicable, audits .or reviews made for Federal agencies that are in addition to the audits made =- suant to this Circular, so that the additional 5 J audits or reviews build urcn audits perfer ed in accordance "41-1 the C rcu ar. g. ?n_s:ra the rescl uti cn of audit find{ngsTht a�yect the prccrans cf more than cnn agency. h. Seek the views cf Other interested_ agencies bursae completing a coordinated program. i Eel p coordinate the audit nark and reporting resmonsibil ities among L dau-e.rdent public accountants, State auditors, an . both resident and ncn-resident Federal auditors tro ac ieve the Last cost-effactive audit. 4 . kenov- Fes-coro;bii;ti=eo. An cve=sight acerzcy shall provide technical advice and counsel to in ti.uticns and independent auditors when recua-:tad by the recipient. 'rhe oversight .acaacy may asz-umA all or SCMA cf the responsibilities ities r_cr-...ally performed by a —S'nizant acencl. 5 . pe.cii arIt Res-flor . i ities. A recipient that receives a Federal award and provides $25, 000 or more of it during its fiscal year to a sub-recipient hro ?: t a. Ensure that the nonprofit institution sub-recipients that receive $25,000 or acre have met the audit r8qu r`ents-of this Circular, and that sub-racip ieat3 subject to CM3 Circular A-128 have Let the audit soul_ ents of that Circular; b. Ensure that aa_ nrcpriate correcttive' ac ion is taken within six ronth.s attar receipt of the sub-recipient audit retort in instances of nonco oliance with Federal laws and regulations; c. Consider whether sub-recipient audits necessitate adjustment of the racipisnt'3 own records; and d. Require each sub-recipient to permit indQp ndent auditors to have access to the records and financial state:lents as necessary for the recipient to c... sly with this Circular. • 6 . gelation to attar ?A, dit Rai n . a. An audit a.ade in accordance with this Circular shall be in lieu Of any financial audit required under individual Federal awards. To the extent that an audit made in accordanCe with this Circular provides Federal carry out the information and assurances they need to out their overall responsibilities, they shall rely upon and use such information. However, a Federal agency stall .make any additional audits or reviews nacersary to carry Out rZSp.dno?bi itiee Lndar Federal law and r e' ulatic Any addlt;c: =1 F:adarml audits or ,-eavie-,;z stall be pl m n d and carried cut in such a vav as to build upcn work peo—crmid by the irrdap-endent auditor. • b. „�i t planing by Federal audit agencies s';culd consider the 41.:ttant to which ral ia_nca crn b-e placid upon; work performed by other auditors. Such auditors include Stats, loca 1 Federal, mnd other independent auditors, and a recipient ' s internal auditors . Rs1ianca placid u,cn the work of other auditors should be doc-_^anted amend . irn accordance with. ccverrtr.ent 1.ad t i nc S�-=-*^�y �• c. The provisions of this Circular do not authority of Fedoral ace.ncies to ma' cr contract for audits and evaluations cf Federal awards, nor do thsy 1{ {.t t`as author i tv a" a_ y F ed e_rzl agency IIl ector General or other Federal c'f.icj.al. d. The provisions cf this circular do not. authorize any institution cr sub-raciri -nt thereof to c-- t n Fie4e--1 agencies, in any manner, from cm ryi g cut addition.l audits, evaluationS cr reviews. e. A Federal agency. that rakes or contracts for audits , in addition to tie audits :made by recipients pursuant to this circular, shall, consistent with cthe.r appliclhla laws and regulations , a_ nga for funding the cost of such additional audits. Such additional audits or reviews include financial, performance audits and program evaluations_ 7 . Tre ueb—nC•.i 4f ? dy. . Audits shall usually be performed annually but not less frequently than every two years. 8 . Sancti arts. No audit costs may b-a ch�yed to Federal awards when audits required by this Circular have not been ode or have been made but net in accardar,,c3 with this Circular. In cases of continued inability or unwillingness to have a proper audit in accordance with the Circular, Federal agencies Bust consider appropriate sanctions including: • -- wit`).1olding a percasrtage of awards until the audit is c==pleted satisfactorily • ; — withholding or disallowing overhead costs; or s-;.s- dfng Federal award's until trs audit is =d$_ 9 . cam"`-. The cost of audits made in accordance with the provisions of this Circular are allowable Charges to Federal awards. The c-hT yea at.ay b-a considered a direct cost or an allocated indirect cost, determined in accordance with the Circular A-21, "Cost Principles for Universities" provisions of P' "Cost Principles for Nonprofit Organizations, " l or Ciycula.r A-122 , 7 FAR subpart 31, Or C t"' er applicable cost principles or r egul.atfcn . 10 . j:L' aelecticrl. In arranging for audit fig_'vicL1' institutions shall fellow the pro=re ,ant standards prescribed b,r Circular A-11 G, 'Uniform Pa4ui_e.ents for Grants and Agreements with Institutions of Higher Education, Ecspitals and cthe_r Nonprofit Organizations . * 11. all m_.d Minoru' ?.r dit a. SrL11 audit firs and alai` fi-ms owned Z'nd contro11e-3 by socially and economically disadvantaged individuals shall have the maximum practicable c .,a •n ty to participate in contracts awarded to fulfill the recuir nan'..s cf t"" s Circular. b . Recipients of Federal awards shall take the fol?cuinc stems to f�:r h this goal: • (1) Ensure that small audit firms and audit firs owned and controlled by socially and economically disadvantaged individuals a.rs used to the fullest a_`r`..ant practicable; (2) Mak: information an forthcoming ammortunit4es available and arrange tiiefr- for the audit to encourage and facilitate participation by small audit t firms and audit firms • owned and controlled by socially and ecoacically disadvantaged individuals ; (3 ) Consider in the contract press whether fires co;±aeting far larger audits intend to aii cont�-act with small audit firs and audit firms coned and controlled by socially and • economically disadvantaged individuals; (4) Encourage contracting with small audit firs or audit firms owned and controlled by socially and economically disadvantaged individuals which have traditionally audited 1 government pros-rams, and in cases where this is not possible, assure that those firms are given_ consideration for audit subcontracting opportunities; ities; (5) Encourage contracting with consorti u;s of srti audit firms. as described in section (1) , above, when a contract • is too large far an individual small audit fir or audit fir owned and controlled by socially and economically disadvantaged individuals ; and ( 6 ) . Use the services and assistance, as appropriate, of such o_ganizaticr..s as the Small Business Administration in the Sal1C:.. +'a ••t i o^ and ut_14 ..,,a•i oit of small audit firms or audit f, owned and controlled by socially and econ=-' oa11y disadvantaged , ;.,,d;y; ' 1 s 12 . ,SCOC of Aud_it aid- A.udit a. The audit shall be ;_ade by a;-: ?-:dap--dent aLd{tnr. ?r- accordance with Gover=ent sditinc 5tzn ands developed .by t`�e Cc_mtrol ls.r General of the United Sates covering fi:n nci z1 au�4ts. An audit under this Ciro -?a_ shcu_d be an organization.-wide audit of the institution. Ecwever, there r 'v be ir_star.ces wtere Fedora?. auditors air$ performing audits or are planning to perform audits at ncrprof1t institutions . In these cases, to zij n rL ze duplication_ of audit work, a coordinate . audit approach may b-e agreed a on between the independent suditcr, the recipient and the cognizant acencr cr the oversight agency. Those auditory who as 3u.c responsibility for any or all of the • rezerts called for by paragraph 15 should follow guidance set forth ir: Gov e'-^o nt Audi 4 i nc S a d a rt s in using work p-e-f c_ad b y o t r.e.rs. b. The auditor shall dst ..r! s whether: • (1) The financial statement.; of the institution_ present fairly its financial position and the rasu?is of its operations in gccordance with generally accepted accounting principles; • (2) The institution has an internal control structure to provide reasonable asSL'ance that the Lnstitut on is managing Fade-al aw-arr s in compliance with atmli cable laws and regulations, and controls that ensue c.z .liance with the laws and regulations that could have a material i- act on the financial statements; and (3) The institution has ccmpliad with laws and regulations that may have a direct and material effect on its financial stat4mant amounts and on each major Federal program. 13 . Internal Con- ols Over Federal Awzrd : li?nc ?evi . a. Tha indepandarrt auditor shall determine and report on whether the recipient has an internal control structure . to provide. reasonable assurance that it is 'managing Federal awards is L ilianca with applicable laws, regulations, and . contract tar , and that it safeguards Federal funds. In per forming these reviews, independent auditors should rely upon work performed by a recipient's internal auditors to the maximum extent possible. The extant of such reliance should be based upon the Gcrrerrcent Auditing Starda s. b. Internal Control R viei. . (1) In order to provide this assurance on internal controls, the auditor must obtain an understanding of th 1 9 . • i me-iai -cant=ol structure and assess levels of intarnA i control risk. After obtaining an understanding cf the controls, the assessment ust be made whether or not the auditor intends to enlace reliance cn the internal control structure. • (2) As par` of this review, the auditor shall: (a) Perform testa of controls to evaluate the effectiveness of the design and operation of the policies and procedures in preventi.nc or detecting material nonccr.,plienca. Tests of controls will not be required for these areas where th internal control structure policies and procedures are li elv to be ineffective in preventing or detecting ncncomplianca, in which case a reportable cord;tien or a material wee na33 should be re-carted in accordance with paragraph 15 c (2) of this Circ'l ar. (b) Review the recipient's system for ncr_itorirng sub-recipients and cb t?inI ng and acting cn sub-recipient 'ark i.t • report-S. • • (c) Determine whetter controls are in effect to ensure direct. and in --ec t costs were cz_p xtsd- and billed in accordance with the guid'nca provided in the general req 1 i rem nts section of the conpliarca srupplerant to this Circular. c. Co lience Rai ex. • -(1) The auditor shall determine whether the recipient has ccapl ied with laws and reculaticns that may have a direct and material effect an any of its major Federal programs. In addition, transactions selected for non-major programs shall be tested for conplianca with Federal laws and regulations that apply to such transactions. • (2) in order to determine. which major programs are to be tested for compliance, recipients shall . ide tify, in their accounts, all Federal funds received and expended and the programs under which they were received: This shA1 l include funds received d i ractly from Federal agencies, through other State and local governm.ents or other recipients. To assist recipients in identifying Federal awards, Federal agenci�and. • primary recipients shall provide the Catalpa of Federen.2. a (C D.A) nears to tha recipients when making the awards. 1 the selection o f en review -� a (3 ) The �aL _ew must include �; cis' • ad er-uate n�.-.`'er of transactieni from each major Federal fines assistance progra= so that the auditor obtains sufficient evidence to support the opinion on compliance required by }�^ paragraph I5c ( 3 ) of this Attachment. The selection and testing c' transactions shall b-e ba3ad cn the anditcr ' professional jud-pent ccside_ing factcri as t.h3 amcL:.t of g .e di t�lres • for the pros-ram; the newness cf the .more- or changes in its cord_f.tions; prior eai fence with the program particularly as rnv�aled�n ariciits and other evaluations (e ,c , , in.s-mectionspr , rev-laws, or sr -an r r iev3 required by Feder a? Ac�sitioa Fsg UT at cnn) ; the e.., ant to which the pracra= is. r-r 7,7ried cat through su -r ecipien� ; t* &.ant to which the contracts for goods or sery cas; t hay level to v�,.i oh th. program is already sub J act to p_Y o4J-an rsviaws cr other forms o' inde_endent cve might the - adagoacr of tre controls for c_pliance the ex. -ectat_cn of adherence or lack of adherence t; the applicable laws and regulations ; and the pctsntial i✓rnac-t cf adve--ss findings. (4) In making the tact of transactions, the auditor. shall determine vhathar: • • -- the amounts as er-endit".r es vera for allowable sa_vica. , and — the records show that those vhc_receive,4 sarvicas or benefits v ra ci;gibls to rece4 va them. (5) 4In addition to transaction tasting, the auditor shall determine whether: — matching ragus.re=anti, levels of effort and earmarking 1ir;.tatiars wars mat, — Federal financial reports and claims for advances and reimbursement contain information that is su ported by mks and records from which the basic financial statemAxits have been prepared, and • — amounts clais.ed or used far r..ato i'ig were dsterm ned in accordance with 1) 024 Circular • A-21, "Cos` Principles-for Educational Ins ti.tutio " ; 2) n.atch.ing or cost sharing reg 1i r�^gin}ems in Circular A-110, w i{for R.equ.irzaents for Grants and Agreeen is with Institutions of Eighar Education, Ecspita 1s and Other Nonprofit Organizations" ; 3) • Circular A-122 "Cost. Principles for Nonprofit OrgaLzati ors" ; 4) FAR subpart 31. cost principles ; and ,5) other applicable cost principles or relations. (6) The principal compliance requirements of the largest �. Federal p=off ems uav be ascertained by referring to the jrc� � �dts vi Pti4nat "Ccliances Svle=ent �_-�- Institutions and 4t1er KQrrorofit Or-ani'4ionl, " and the • 11 n C r 14 e�"o i ncl A':d it 9 i ''"` n S d Tara 1 GcrvG_rr zrt-3, " issued by 02"3 and available from the Government Printing Office. For these programs not covered in the Ccnpliancs Supplements , the auditor should ascertain c—ZiaZ'2 rer-ui re✓en s by reviewing the statutes, regulations,ations, and• agreements governing individual pro s. (7) Transactions related to other awards that are selected in connection with examinations of financial statements and evaluations of internal controls shall be tested for compliance with Federal laws and regulations that apply to such transactions. 14 . I?Ie l Acts. If, during or in connection with the audit of a nonprofit institution, the auditor b-eco es aware of illegal acts, such acts shall be reported i_n accordance with • prcaisions of 'the c rr=- -nt -da17723. 15 . 11udit R e=rts. a. audit raper is must b.e prz:grad at the corn_ laticn of the audit. b. The audit report shall state to- t the audit vas made in accordance with the mrcvis{ors of th;s Circular. c. The report sh7.1.1 be made up of at least the following th+e e p arts: (1) The financial st...atp-" "its and a schedule of Federal awards and the auditor's report on the s;,.aterAnts and the schedule. The schedule of Federal awards should identify major • programs and show the total —`-'endituras • for each program. • Individual major programs other than Research and Developnt and Student Aid should be listed by catalog rumba=' as identifled in the C taloa of Federal Inc Msi5ncs. enditures for Federal programs other than major shall be shown under the caption "other Federal assistarc.a. " Also, the value of non-cash assistance such as loan gcarantses, food commodities or • donated surplus properties or the outstanding balance of loans should ha disclosed in the Schedule. . (2 A written report of the indepemdant auditor' s understanding of the internal control structure and the assessment c. control risk. The auditor's report should include as a minimum: 1) the scope of the work in obtaining understanding of the internal control structure and in assessing the control risk, 2) the nonprofit institution' s significant internal controls or control structure including the controls eitablished to ensure compliance with laws and regulations that have a material i.oact on the financial statements and those that provide reascn hle ass=ar.ca that Federal awards a_-a bairng managed in ComoliaPCe with aool L cab 1 z'1s and regul a tons n 3) the report 'n e conditions , including the i dent i.f'icat i e c an of material weaknesses , identified as a result of the auditor s wcr.c in unders;� nr f rg and assessing the control risk. 11--t is his/her consideration of the internal control st-r.uct�, eV for any reason, the dire,=stances shcul d be di sclased 4 -7 t .e report. (3) The auditor' s =eoor on Comoli ance -- An °pinion as to whether each major Federal program was being administered in 'canDl iance laws and relations emolicable to the mattr.s- described in paragr?_h 13 (c) (3 ) of this Attachment, including coyoliance with laws and regulations . pertain?nc to financial -.eports and claims for advances and reirb':rsements; -- A statement of pasitiy e assurance on those ite_s that were tested for corm_ l ia_nce and negative assurance an those items not tested; -- Material findings of noncompliance presented in their prone= persmective: o The size of the universe in number o7 itP�+s and dollars, • • o The number and dollar amount of transactions • tested by the auditors, o The number-and corresponding dollar amount of instances of noncompliance; • -- Where findings are smecific to a particular Federal 1 award, an identification of tota l amounts ifaward,i any, for each Federal as a result of noncompliance and the auditor' s ki recommendations for necessary corrective action. d. The three parts of the audit report may be bound into a single document, or presented at the same time as separate documents e. Nonmaterial findings need not be .disclased with the compliance reaort but should be reported iz writing to the recipient in a separate communication. The recipient, in turn, should forward the findings to the Federal grantor agencies or • subgrantor sources. f. All fraud o= illegal acts or indications of such acts, including all questioned costs found as the result of these acts 13 • that auditors become aware of, may be covered in a separate *a:itten remc t submitted i-i ac^.o;.daT'ca i, i th the Gave, ant Aud itync 5 _ndzr± . g. The auditor ' s report should disclose the status known but unccr ected sigmifica.rt material findings and o recommendations from prior audits mat affect the C'.:2 It audit objective as specified in the Gcve en 5t , dards h. In addition to the audit remora, the recipiemt shall provide a report of its comments on the findincs and recommendations in the report, including a plan for corrective action taken or planned and camme_n`s on the status of corrective action taken on prior findings . ;f corrective action is not necessary, a statement describing the reason it is not should • acccmmanv the audit recant:. • • i Ccoies of the audit retort shah be submitted in accordance with the reporting standards for financial audits contained in the GCvern_rent Standar- Sub-r2Cioient • auditors shall submit copies to recipients that provided Federal awards. The report shall be due within 30 days after the corn_ letion cf the audit, but the audit should be completed and the report submitted not later than 13 ncnths after the end of the recipient ' s fiscal Year unless a longer period is acr e_d to with the cognizant or oversight agency. • j . Recipients of more than $100, 000 in Federal awards shall submit one cagy of the audit report within 30 days after issuance to a central clearinghouse to be designated by the • Office of Management and Budget. The clearinghouse will keen completed audit reports an file. k. Recipients shall keep audit retorts, including sub- . recipient reports, on file for three years from their issuance. • 16 . Audit Resolution. a. As provided in paragraph 3 , the cognizant agency shall be responsible for ensuring the resolut{cn of audit findings that affect the programs of more than one Federal agency. Resolution of findings that relate to the programs of a single Federal agency will be the, responsibility of the recipient and the agency. Xlternate arrangements may ba made on case-by-case basis . by agreement among the agencies concerned. ' . b . A management decision shall be made within six Months after receipt of the report by the Federal agencies responsible fa_ audit resolution . Corrective action should proceed as radidly as possible . 1 17 . Audit_ WcitM/.zr^rz and Res-orts. 7.;ork=apers and reports s;-lzi/ be retained for a mini u= of th.rae years f_. .. the data of the audit report, unless the auditor is rct1f1 d in writing by th,e cognizant- agency to extend the reta.ntion period. Audit . workioapers Qr.7111 he cads availah e uron raquest to the cognizant agency or its. design* or the Ganarml Acco rating. O fica, at a coletion of the audit. • • • • • • • • • • • • • 1.5 6+ G 1 i l EXHIBIT EQUAL EMPLOYMENT OPPORTUNE T Y CLAUSE During the performance of this contract, the contractor agrees as follows: ( 1 ) The contractor shall not discriminate against any employee applicant for employment because of race, religion, color, sex or national origin. The contractor shall take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, religion, color, sex or national origin. As used herein, the ward "treated' shall mean and include, without limitation, the following: Recruited, whether 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 for . employment, notices to be provided by the 'contracting officers setting forth the provisions of this nondiscrimination clause. ( 2 ) The contractor shall, in all solicitations of advertisements for employees-placed by or on behalf of the contractor, state that all qualified applicants will receive consideration far employment without regard to race, religions, color, sax or national origin. ( 3 ) The contractor shall send to each labor union or 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 shall furnish to the contract compliance officer all federal forms containing the information and reports required by the federal government for federal contracts under federal rules and regulations, and including the information required by Section 1 C-192 to 10-194, inclusive, and shall permit reasonable access to his records. Records accessible to the contract compliance officer shall be those which are • related to Paragraphs (1) through (7) of this subsection and only after reasonable notice is given the contractor. The purpose of this provision is to provide far investigation to ascertain, compliance with the program provided for herein. • ( 5 ) The contractor shall take such actions with respect to any subcontractor as the city may direct as a means of enforcing the provisions of Paragraphs (1) through (7) herein, including penalties and sanctions for noncompliance; however, in the event the contractor becomes involved in or is threatened with litigation as the result of such directions by the city, the city will enter into such litigation as 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 Sates. ( 6 ) The contractor shall file and shall cause his subcontractors, if any, to file compliance reports with the contractor in the same farm and to the same extent as required by the federal government far federal contracts under federal rules and regulations. Such compliance reports shall be filed with the 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. `dual =molcvment Occertunity Clause', and Section 1C-193 in every Exkbi-1- .14 EXHIBIT 1k-i • _ 24 CFR 85.43 ENFORCEMENT (a) Remedies for noncompliance. If a grantee or subgrantee 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 is the circumstances : (1) Temporarily withhold cash payments pending correction of the deficiency by the grantee or subgrantee 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 subgrantee '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 subgrantee an opportunity for such hearing, appeal, or other administrative proceeding to which the grantee or subgrantee is entitled under any statute or regulation applicable to the action involved. (c) Effects of suspension and termination. Costs of grantee or subgrantee resulting from obligations incurred by the grantee or subgrantee 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 subgrantee 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 subgrantee before the effective date of suspension or termination, are not in anticipation of it, and, in the case of a termination, are noncancellable, 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 subgrantee from being subject to "Debarment and Suspension" under E.O. 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 subgrantee 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 subgrantee 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. 9124u • • .xk 4- I 1 1 EXHIBIT Thursday November 3, 1983 _7_71 • • sr_ - j Part. lil • Office of Management and Budget - Department of. Defense General Services Administration • is Circular A-122: Cast Principles for �` Nonprofit.Organizations; Lobbying and . • Related Activities • _ —=Y 5418BO Fedwtak RBgister / Vol. 48: No. 214 / Thursday. November 3. 1983 / Notices OFFICE OF MANAGEMENT AND. • to use a more limited definition of compliance with a myriad of statutory BUDGET . . unallowable coats: and provisions mandating that no federal • to clarify and limit reporting and funds be used far lobbying purposes. Circular A-122 Cast Principle-for recardkeeping repuirer„ent3 in the spirit and to comply, in balanced fashion, with Nonprofit Creanlzatlons;LabbyinQ and of the Paperwork Reduction Act. fundamental First Amendment Related Activities • Ill.Background of Circular A-122 irsperatives. AGENCY: Office of Mar,agemen2 arrd Far contractors or grantees to use ©GENC Circular A-122. "Cost Principles for federal monies to engage in lobbying is • Nonprofit Organizations." establishes an inappropriate use of federal funds for acTtan:Notice. uniform rules for determining the casts • of grants, contracts, and other a Yurpcse that was not intended. Such 1. Summary agreements. Like other OMBcoat misuse of funds diverts precious This notice offer, interested parties an principle circulars for state and local resources from the Moue mission of the opportunity to comment an the Office of governments and for educational pant or contract.Moreover, government Management and Budget's(0i 8} institutions. A-122 is a management subsidy of the lobbying efforts of its proposed revision to Circular A-122. directive addressed to the Heads of pc: tica! rs caod . favors dthtepo the "Cost Principles for Nonprofit Federal Departments and Agencies and politico! process. It the political Organizations.- The proposed revisicn is the legal basis for defining allowable e'nressicp of some---or;;r.:7a:in fs with makes unallowable the costs associated casts and setting forth procedures for contracts or grants—at the c ;:e ue of with lobbying and related activities. recovering them. when. who must carry on their political Parallel revisions are being proposed for Circular A-i was first issued in expression at their awn expe:se.1 defense and civilian contractors by the June. 1980. It was developed by an Despite the frequently worthwhile Department of Defense(DOD or interagency team made up of the major Content of the lobbying conducted by Defense), the General Serrices •. grant-making agencies and led by OM such organizations.it runs against the • B. Administration (GSA). and NASA. Before issuance. public comments were grain of First Amendment government These proposed revisions follow the A- sought and received and consultations neutrality in political debate for federal 122 revision text, were held with the General Accounting funds to be used in this mariner. The comments printed in the text of Office.The cost principles built upon • 1G°verZment neutrality in the democratic the proposed revision are for accounting rules previously in use by process is especially endangered by the explanatory purposes.They will not be federal agencies is their dealings with practice of using grant or co'tract funds printed in the Circular after the nonprofit crgaeizta ions.The Circular far lobbying and related activity recisions are final. • • standardized and simplified these rules. because. as a general rule. only one side Generally, the circular provides that.to u the debate is funded.Those favoring 11. Supplementary Information be recovered from the federal grant programs and contracting activity OMB published a proposal on January government,coats must be necessary, have the grants and contracts: those 24. 1983. to revise Circular A-122'3 reasonable, and related to the federally- opposed do not.Nat to control this treatment of the costa of lobbying and sponsored activity. In addition,coats practice. then, is not only to subsidize related activities. Following publication, must be legaL proper, and consistent national debate over the extent and OMB received approximately 48,300 with the policies that govern the desirability of government spending. comments from the general public organization's other expenditures. domestic and military,but to subsidize private and public organizations, and The disallowance of lobbying and systematically but ape side of those federal agencies.Approximately 16.500 related costs in the proposed revision is debates. a'mments opposed the proposed comparable to the disallowance by Moreover, use of federal funds for revisions. and approximately 31.8C0 Circular A-122 of other costa which are private lobbying and related political supported them.Many of the opposing disallowed an grounds of public policy: activity can give the appearance of comments expressed support for the far example.advertising,fundraising federal support of one political position general principle that federal tax dollars coats, and entertainment.In each of over another.It can create should not be used for lobbying and these examples, a determination has misunderstanding and interfere with the related purposes, but objected that the been made that it would not be an neutral, non-ldsolcgical administration means proposed in the January 24 notice appropriate or cost-efficient practice to of federally-funded programs.All would disrupt the legitimate activities of permit federal tax dollars to be used far ctizens have the right to receive the federal nonprofit grantees and these purposes.In this notice, costs of benefits of federally-funded programs 1 contractors. On the other hand. many of lobbying and related activities are without being made the captive the supporting comments have implied proposed to be similarly disallowed, audience for a grass roots lobbying • s.I or stated a need for regulations campaign, and without fear that delvery significantly more restrictive than thoseIV Purpose of the Revisions of services is accompanied by federally • -proposed in January. In order to accord . The purpose of these revisions is to funded partisanship in political or public the issues raised by these comments establish a comprehensive government- policy controversies. further study, and to permit a new round wide set of cast principles to ensure that This proposal is designed to balance of public comments an a revised . federally-appropriated funds are not the Fret Amendment rights of federal • proposal. OMB withdrew the January 24 used by contractors or grantees for grantees and contractors with the proposal at the end of a 45-day public lobbying or related activities.The intent ccrrespanding FL-it Amendment comment period.The current proposal is is not to discourage or in any way obligation and legitimate governmental significantly changed from the January penalize organizations for lobbying • interest of ensuring that the government 24 proposal. the most important changes efforts conducted with their awn funds, does not subsidize the political have been: but to ensure that the federal advocacy activities of private groups or • to adopt an allocation method government does not subsidize such institadons.No person or group has a urenunting far the costs of lobbying end activities. In-addition. as later noted.the First Amendment right to receive related activities: revision is for the purpose of assuring governmental funding for political Federal Register / Vol. 48, No. 214 / Thursday, November' 3. 1983 / Notices 508fi1 expression: requiring grantees and fostered, or"presc:ibe(dj (as) orthodox" • 'publicity'and propaganda.'Thus.there contractors to bear the casts of their a particular view on such issues. West apecars to be no 6c-n di tir,c:sun belwren lhr awn lobbying efforts does not infringe Vir3inia State Board of education V. conduct which is prectiasible and that which upon their constitutional rights. Free Barnette. 319 U.S.624. 545 (194'3). s ;mh hated. speech does not mean subsidized OMB has received thousands of Moreover. in the absence of clear and speech. The Supreme Count emphasized letters from members of the public who fair guidelines enforceable across the this point in a recent unanimous opinion. are understandably concerned when board. agency officials have been when it stated that the federal they see their tax money involved in reluctant to make ¢oliticnlly-sensitive government "is not required by the First projects that involve political organizing determinations in particular cases.This Amendment to subsidize lobbying. . . . for causes they may not support. problem is especially serious where We again reject the notion that First Furthermore. numerous cages have been there •is a natural conjunction of interest Amendment rights are somehow not cited and documented—by federal between'agency officials and their fully realized unless they are subsidized agencies, the Comptroller General. contractors and grantees. as where by the State." Regan V. Taxation with Congress, and the general public—of grantees or contractors lobby for Representation of Washington. 133 S. federal grant and contract funds that additional appropriations to the agency Ct. 1997. Mal (198-1). were used for lobbying or related ic.•:olved.The thousands of grantees and On the other hand. there are serious ante.it:es. Nevertheless, due to prior cuntractors who receive federal money constitutional problems with a syatem insufficient regulatory restrictions and are a strong lobbying force in t.tat permits tax money to be used for limited enforcement effort:. the true Washington. and can use grant and of these abuses has never the political expcessicn of private magnitude contract funds to help pe.retuate their individuals nr groups. Americans have been quantified.Many organizations pruerams,irrespective of the programs' the First Amendment right both to receiving federal grants eneegc in merit cr effectiveness. engage freely in speech and political extensive lobbying and related political The improper use of federal funds for expre ssion, and to refrain from activity, but in many instances the lobbying and related activities has been expression. speaking. without interference or control financial and performance reports filed perceived as a problem for many years on the part of the government or its by the organizations are insufficiently In 1919. Congress passed legislation aagents. aooley v. Maynard. 430 U.S. detailed to permit the federal agency to making certain uses of federal funds for 7u5. 714 (1977).The proposed revision is determine whether federal funds have lobbying purposes a criminal offense for intended to ensure that the use of been used for those purposes and, c therefore, misused.The problem has Federal grants, contracts and other federal employees: as early as 1948. the General Accounting Office began to agreements by private organizations been exacerbated by the tack of any unearth instances of federal grantees clear definitions of lobhying. and, in engaging in lobbying does not erode or using federal funds for lobbying infringe these constitutional rights,or particular.aloe. of exactly what activities are purposes. Over the past ten years. unallowable. distort the political process by Moth criminal statutes—IS U.S.C. ongress has attached over fifty riders encouraging or discouraging certain to appropriations bills addressing parts Section 1913—and appropriations forms of political activity. of the problem.In the past few years. restrictions—including Section 507(a) of pressure has increased for further steps. The activities of government in a p•• the Treasury. Postal Service, and As a result: democracy necessarily involve a degree General Government Appropriations of political advocacy,since government Act—currently.prohibit the use of • On December 18.1931. the officials are expected to communicate federal funds for certain types of Department of Defense issued revisions with the people. explain their programs. lobbying,but there is no clear, uniform to its Defense Acquisition Regulations and provide leadership and direction to definition of prohibited activities to (DAR). addressing for the first time the the nation.Thus.Members of Congress whir., grantees.contractors, auditors, issue of lobbying costs, and making such and their staffs. the President and his agency officials,or the public can refer. caste unallowable under DOD contracts. political appointees.necessarily The clear signal from Congress through • On April 27,1982 and October es participate in forms of political • 'Mithe appropriations laws and other disc, DOD further toughened its rules • ;tdvucacy. However.it is a distortion of acticrs has not been translated into, certain loveing lobbying costs. eliminating the marketplace of ideas for the r certain exceptions from coverage. • effective management controls. • On MayZ8,1982 NASA issued a government ca rt tent to use its financial power to The vagueness of existing anti- "tip the electoral process," EI: new cost principle in the NASA • od v. lobbying restrictions has hampered the. Un:rrta. 4_7 U S.3:13.356(1975). by Procurement Regulations (NASAPR) ability of contractors and grantees to j suhsiciizing the political advocacy comply voluntarily with the restrictions, making lobbying costs unallo e For t' ecti.•ities ofprivate organizations and NASA contractors.This was revised it r8 and has made the jab of auditors August 16.1982 I corporations.This proposal will ensure, difficult, if not impossible. For example. • On November r 2.1982.. the General to the extent consistent with the in recent General Accounting Office communications function of the (GAO) investigations of improper Services Administration issued a new government. that taxpayers are not lobbying expenditures. the contracture cost principle in the Federal required. directly or indirectly. "to and grantees were able to urge that Procurement Regula unallowabletions making contribute to the support of art current rules did not ban the lobbying costs for civilian ideological cause(they) may oppose." expenditures.As the Investigations contracts with commercial li^eor./v Detroit Board of Education. Subcommittee of the House Armed or hose ions. •1a1 U.S. 209. 235-228(1977).The Services Committee recently concluded: only developments, n canter. affect proposal also seeks to avoid the only defense and civilian contracts with I�lher.i.a deficiency in the commercial organizations. No gene appearance that,by awarding Federal appropriations acts'prohibition of lobbying applicable cost principle has been grants. contracts.or other agreements to c,,;ih appropriated funds.A review of the nr anizations engaged in political le tslatt.e history of the uaicit issued to control the federal funding of 1 uc •scary on particular sides of public priitpaganda sppropaations tors restrtGiona lobbying under contracts and grants to ;ashes. the government has endorsed. pro%iiles no definition of the critical terns nonprofit organizations. 50882 Federal Register / Vol. 48, No. 27.4 / Thursday, November 3. 1983 / Notices • This proposal thus addresses the anal preamble. the proposals are in fact nonetheless be required to maintain major ureafederal in which federal cast identical save for the inclusion in the fully documented time records in order principles have nut yet adopted DAR proposal of more restrictive to rebut auditor assertions of disbelief of •restrictions on the use of federal funds definitions of lobbying and related their claims.The A-122 proonsaI for lobbying and relatedl aact'itti n by activities than are proposed for all other includes specific prcvisior,s to safeguard p 6 covered parties.) Against this potential problem and prepared in active consultation with the 2. Existing rules have foiled to stop or exempts indirect cost employees from General Accounting Office. which identify abuses:Cases have been cited documentation requirements, including supperts this initiative.The proposal is and documented of federal grant and the creation of time logs, calendars, or similar in critical respects to the current contract funds that were used for similar records,if they self-certify that Defense. NASA. and GSA procurement 'lobbying and related activities. they spent less than 25:-;of their time on • regulations. Parallel revisions now being ,moreover. insufficient regulatory lobbying or related activities.The proposed by GSA and NASA will guidance under the current A-122 has proposed revision also mandates that ,eliminate all differences: revisions now limited enforcement efforts so that the agency documentation guidance be being prorased by Defense will true magnitude of actual abuses has not restricted further by review pursuant to eliminate these differences save for been quantified.Such audits as now the Paperwork Reduction Act. to ensure certain pruv;sions late:described in this take place regarding the use of federal it is the least burdensome necessary to notice which ,retain more restrictive funds for lobbying purposes can easily satisfy the documentation requirement definitions of lobbying contained in .he bog down into disputes between • present O. R. objectives.The selF•cer;ification rights attorneys and accountants regarding and protections of the proposal are only V. Nece9sity for the a-12.2 Revision definitions• rules and standards.Thus, possible because of the clear definitions many agencies choose not to commit of lobbying and related activities that There is little disagreement regarding limited auditing resources to an effort are elsewhere set forth.It is impossible. the inappropriateness of using federal grant and contract funds fur lobbying which, whatever its importance.can risky for grantees and ultimately and related activities.Still, home have often be limited or even thwarted meaningless to self-certify to • and eel that no regulations should be in because existing standards arc vague compliance with a vague a:d ultimately effect for contractors: alternatively, and unclear, meaningless standard. others have agreed that none sely, be • 3. the vagueness of existing. 3. The A-122 proposal explicitly standards impose administrative and protects many activities presently • in r ffcra for nonprofit grantees. (Often. ,„d without even appreciating the irony interpretative problems on nonprufit subject Co claims of uno/lc 4', bility:A- ni their positions, those arguing fur self- grantees:The corollary to the above 122's comprehensive tieatrnent of :,nptiun strenuously assert the need problem for auditing agencies is that 'lobbying makes many activities i, r strung regulation torestrict the use many nonprofit grantees—often the allowable that auditors might currently „f Federal funds for lobbying purposes least financially endowed—are deem unallowable.Examples of the • i my everyone other than themselves.) The particularly disadvantaged if and as above include: actually audited.Many grantees may.; —Lobbying at the state level to enhance procurement agencies have property !ejected the nation of no regulation for lack the resources or access to outside the organization's ability or cost to civilian. space and defense contractors. professional assistance to effectively •i him revision of the Ogee Circular is in resist forced,questionable or subjective recognition the grant orci contract:also.federalism.in furtherance of the view that fair. construction by euditors of the presently tates no or may, t r u • col,:ii.:•nt f;:gulntiun makes setise for undefined"lobbying" term.Moreover. • state suborsnton may, through :innis i;:the i,,:u-:ut of.he gnverrement the absence of clearly defined standards appropriate state processes.waive the well ;;„n,gr,:fit grantees.The ensures that all grantees are now disallowance provision for state !'i it..•,'::.:,t points huip explain that necessarily uncertain of the allowability lobbying by state subgia rich pose::iris • of many intended expenditures— —AlI federal Executive Branch con!acts ! I it •, ;n,G Buz ible Gr cover whatever their good faith desire not to • except attempts to influence the • :,,r,trur.nr, err::ter tou,l:guidelines spend grant funds for lobbying purposes. signing or veto of legislation. r'h%ie"!'recti:•vIy e.vemp:i;•g nonprofit The A-I22 proposal clearly defines what —Employee activity related to serrice foram',..",;from anyn:.1.:'rfctsuns During the types of lobbying and related activities • as an elected or appointed official,or t :s: :•.:::ye,.;:s. lobbying provisions far are unallowable and, further and member of a governmental advisory more r,•sh ic:,ve than the proposed A- critically, provides for binding advance panel. 122 re:•isic'n h:,'.e been added to the cost guidance from agencies in situations —Providing technical advice to principl.:s,;nv.:rning all defense arid where grantees are in doubt as to the legislative bodies in response to r,iv,lr.u:,:,:,III_;:tiles. lThesr provisic:rs meaning of the Circular. specific written requests. .rrc d:•:•r r'!•,•re :•i.e.mhcrc in the 4. The.'t-12?pr oosal also safeguards a. The Internal Revenue Gdde and prear:i o I is ac of federal funds for c,ainst pcpervor.4 requirements to other restrictions on lobbying have no luhbuci,,}.;and re!e,ed purposes is no less which grantees are presently subject_ bearing on preventing the use of grantee an nbti:e •.vhen engaged in by grantees Aside from the current absence of fu:dv,rar lobbying purposes:The nation than by contractors, and OMB knows of definitions of lobbying and related that Code lobbying provisions for tax • no b:Isis for differential, much less activities, audited grantees are, further, exempt organizations preempt or highly diffr••-ential treatment of the two. effectively subject to the requirement other.vise make unnecessary the Since p:er•Iliel revisions are being issued that they document certain allowable promulgation of cast standards in this for A-122. the EPR.and the NASAPR expenses charged to the government area is belied by the fact that those sets of cost principles. the present This requirement is particularly onerous provisions are far the purpose of initiative guarantees uniformity of with indirect cost("overhead") defining the character and status of lobbying cost rules for both nonprofit employees who frequently spend limited such organizations.Under the Cade, as and profit-making recipients of federal amounts of time engaged in lobbying or long as an organization's lobbying fund.9. (.'.s is elsewhere described in the related activities—but who may expenditures da riot exceed a certain Federal Register / Vol. 48. No. 214 / Thursday. November 3. I983 / Notices Jf386,3 portion of its revenues, it is eligible for 7. The Comptroller Ccnerr/supports Efforts to emplot tax exempt status. The Code lobbying the need forA-122 revision:As officials to lobby ConygressSate oror state local provisions are only determinative. indicated elsewhere in the preamble. the • legislatures; however. of wherther an organization is A-t''? proposal was pre?;lred in active Legislai,e liaisr activities, but sufficiently devoted to a public purpose consultation with the Ge.^.cral only to the extent thcat they are directly related to unallowable lobbying • to justify preferential tax treatment-Toe Accounting Office. which supports the provisions do not address the issue of initiative and believes that the proposal activities as otherwise defined by the whether federal grant monies should be satisfies the concerns which it had Circular. (All legislative liaison used to subsidize lobbying—the sole expressed earlier. activities are covered by DAR. purpose of cost standards. Indeed. the And. as noted elsewhere. after a CAC The roposal wi , P it raa� unallowable fact that the code lobbying provisions investigation at lobbying activities by only the portion c:costs attributable to do not address the use of grant monies grantees under Title X of the Public lobbying and related activities—rot.as for lobbying has been implicitly Health Services Act, the Comptroller in the January 2;proposal. entire cost recognized by Congress on numerous General stated in September 1982 items used in part for political advocacy. occasions through appropriation bill CleHr federal guidanc.e is needed both to Further, and critically. thep p rulers prohibiting such expenditures. ensure that Title X program foods are not will provide relief from proposal See. e.g.. Pub. L.97-377. section 5,09:Puh. used for lnbhying and to preclude audit problems such as those and L.96-74. section 507. unnecessary controversy over whether experienced under the current OAR. • It is clear that because expenditures grantees are violating federal :estrictions. - FPR. and NASAPR: far the purposes of by nonprofits are permissible under the The prove to revise and ma.'re more specific Code does not mean that federal grant the cost principles appliccd/e to all federal complyingune with this indirect employees monies should be spent for those grrnteCs is the appropriate mechanism to accounted for ar, an indirect basis will Code does achieve these end,. (Emphasis added.{ purposes. For example. theno: he required to maintain time lags or similar records if they lobby less than not prohibit tax exempt organizations VI. Summary Description of Fropasal 2% of the time.The federal government from spending their revenues on • will rely upon their good faith advertising or entertainment. Circular This proposal uses the tern"lobbying and related activities" to describe certification of lobbying time below 25%. A-I2°. however. allows only certain er.cept for organizations that have been advertisingcasts. and disallows all unallowable activities instead of the expansive term"political advocacy found to have materially misstated entertainment costs. Another example is P P y,. section 503 of the Code, which denies used in the January 24 proposal.This allowable or unallowable costs within reflects.a significant tightening of the the preceding five-year period. Under tax exempt status in certain instances to g' g the proposal. the absence of time lags or organizations using their revenues for definition of unallowable activity in the similar records not kept pursuant to the private gain of controlling• new proposal. Unlike the January Z4 .� proposal, this proposal will not cover. contesting grantee or contractor discretion will no individuals.The regulatory scheme longer serve as a basis for cont or embodied in section 503 does not imply, • • Lobbying at the local level(covered disallowing claims for indirect cast however, that the federal government under the current OAR and FPR): employees. should not have more stringent - Appearances before Congress or In order to provide even-handed. restrictions on the use of federal grant state legislatures at their written request government•wide rules for paperwork monies for private gain.This paint is (covered under the current OAR): • and audits.Defense. GSA. and NASA best understood by the fact that nothing - Contracts with Executive Branch are proposing parallel revisions in their in the Code would prevent many officials,other than in connection with procurement regulations. • grantees from spending all of their grant the veto or signing of enrolled bills.or VII_Variances With the Lobbying funds for lobbying purposes. attempts to use state or local officials as Correlatively. the fact that the Code conduits for unallowable lobbying • Provision of Defense Acquisition • and other provisions of law regulate the (covered under the January 24 proposal): Regulations(DAR) business community in its lobbying . - Litigation an behalf of others not A standardized lobbying provision activrttt•s. e.g..Section 162(e). IRC: directly authorized by grant or contract that will govern grantees and Federal Election Campaign Act. .?U.S.C. (covered under the January 24 proposal): contractors alike resulted from Sectiuns 421--456. does not mean that • Lobbying at the state level that extensive negotiations among the four there should be no provisions in the would affect the organization's ability or agencies which are responsible far the OAR. l-PR or NASAPR regarding such cost of perforininri a grant or contract • major sets of cost principles affecting .+ctivi:tP5. Sume in the business (covered under the current OAR. FPR, grants and contracts: the Federal cornm%:nity have suggested that current and NASAPR): Procurement Regulations (FPR). which provisions regarding the ur.allcwabil:ty - The entire cost of membership dues covers civilian contractors and which is of lob ing expenditures should be administered by GSA: the NASA to tra..e associations or other superseded by definitions of lobbying Procurement Regulations (NASAPR): the • set forth in the Federal Regulation of organizations which have lobbying as a DAR.which covers defense contractors "substantial organizational purpose" Labbyind Act. 2 U.S.C.sections 281-Z70. s and is administered by the Departmentwhich That p. :ition has been properly (covered under ti:c January 24 proposal)_ of Defense;and Circular A-122..which Unallowable activities will consistof: rejected. and no Congressional intent orcovers nonprofit organ[zatiors and is operative theory can seriously support • Federal,state or local electioneering implemented under the guidance of the n:t:pn that the Code. sus and support of campaign organizations. OMB. registr.::[an laws or any other like PACS. and the like: Although exact conformity was s::,u:;es p-r nit the government to avoid - Direct lobbying of Congress and, to reached between the lobbying its responsibility to assure that federal the degree noted above. state provisions in the FPR. NASAPR, and the c:ant ,nil ut•ntract funds are spent far legtsla'.ures: A-1 2 proposal. four exempted activities authorized purposes and intended and • Gass roots lobbying concerning under these regulations are restricted best uses. state or federal legislation: under the OAR proposal.The activities • • • 50864 Federal Register / Vol. 48. Na. 214 / Thursday, November 3. 1083 / Notices allowable under the proposed A-122_ Institutions of Higher Education. spent in lobbying by such employees.or FPR. and NASA.PR. but unallowable Hospitals. and Other Nonprofit upon other evidence not precluded under the proposed DAR are as follows: Organizations: Uniform Administrative above. As earlier noted. the absence of (a) Local lobbying activities to Requirements." (See. e.g.Circular A-110. time logs or comparable records fur influence officials on.local concerns. Attachments C and F.)The Circular, indirect cost employees not kept (b) Providing technical advice or utter alio. generally requires grantees to pursuant to the discretion of th grantee e .uasistance to Congress or state keep for a period of three years. or contractor will not serve as a basis legislatures. or members or committees "[financial records. supporting thereof. in response to a specific written documents, statistical records and all Onlyr if contesting or disallowing ssta m claims. request: and other recordspertinent to rant; . and o if a material ern eviderce to rent isn found • (c) Lobby-in and related activities at (g 1 on the basis of other evi can an tthe 'o -i g I for the purpose of to access for audit purposes "pertinent agency require the keeping of time logs estate llegislation he purp seohooks, documents, papers and records fur such employees.This avoids the influencing 3 Y affecting of ' ' ' recipient organization:." nrcessity of employeesengage the ability of the organization or cost to As later described in the preamble. hafig to e: c in the organization of performing the grant the proposal also modifies, in certain incidental of lobbying time toaedel agencie or contract: or(Z) in the case of states' situations. the ability of auditors to for all of their time federal agencies. subgrantees. if the restrictions are require the creation of certain Subparagraph a(5) requires agencies waived by the state(the subgrantor) documents and records.See paragraph to ?'taht'sh procedures for advance through appropriate state processes. t.a.(4) of the proposal. resolution of definitional issues arising (d) Legislative liaison activities that As with the DAR. EPR. and NAS 'oR. under this revision.This will alleviate are unrelated to unallowable lobbying and as is already the case under A-122's the inevitable problems of inter retation ac:ivitics. as orherwise defined in the general ruies for unallowable costs, the a+t the margin and will avoid creating a proposal. costs identified as unallowable by these disincentive for ar2ah-izations to engage Viil. Analysis revisions include not only costs of the in borderline activity merely because of direct activity but also the costs of other the uncertainty of applicability of the The proposed revision comprises activities supporting provisions. three paragraphs.The first creates a such direct activity. Under the proposal, for Subparagraph b defines five new paragraph in Attachment 8 to example, if a lobbyist spends four hours categories of lobbying and related Circular A-t22_ to be called "82i lobbying the Congress and an additional activities that are unallowable.It should Lobbying and Related Activities." eight hours in study,consultation. and. be read in conjunction with Paragraph 821 consists of three preparation for the lobbying• the lull subparagraph c, which establishes yubp ac:igraphs. twelve hours are disallowed, along with exceptions to these prohibitions. • Subparagraph a establishes an the cost of any support services and administrative framework for the overall any Subparagraphain elionb(1)makes iesatt unallowable revision. Subparagraph a(1) represents other costs attributable to the lobbying certain electioneering activities at the re from the current principles activity. federal. state, or local levels.It applies ofo cost departure f on familiarthe grantees As emphasized in the comment to referenda as well as to elections of one contractors. While the precise detail published along with the proposal's text candidates to office.The restrictions only the portion of cost items allocable should be familiar to nonprofit of reporting procedures will necessarily to the lobbying activity is unallowable_ he set according to individual establishes ageney a cy This departs from the approach taken in by Zt3lU.S.C.section atons. since fc)(3)praF.ibiter! p•aractice. this the January 24. 1983. proposal which general format similar to, and no more made the entire cast of any coot item Subparagraph b(21 makes unallowable onerous than. that now applicable to used for lobbying activities unallowable. the financial or administrative support comparable unallowable activities. See. Subparagraph a(2) makes clear that of political entities-including political for example the IdH-(S"Guide for the certification required as a parties. campaigns,political action ai Nur.profit Organizations"(May 1983). at q part of the financial status report required under committees. or other organizations— : p. 73 (Sample Indirect Cast Proposal Attachment C of Circular A-no is with the purpose of influencing Format—Direct Allocation Method). deemed a certification of compliance elections.Thus, it bars indirect support Indirect cost rate negotiations are with this revision (paragraph B2I. of electioneering activities through conducted between an organization and "Lobbying and Related Activities"). It is intermediaries• • a single cognizant agency on art imoortant that a responsible official of . - Subparagraph b(3)makes unallowable crgatiiiiation-by-organization rather than the contractor or grantee investigate and the costs of attempts to influence state 1I un a grant by-grant basis.This approach ensure compliance with.these or federal legislation.Unlike the January will save agencies and recipient provisions: however, no new paperwork ZI.1983,proposal. this proposal confines it a,rganixi,ti.:na considerable time and is cequirad_ the reach of tanalIawable,lobbying to it "front in cases where the organization Subparagraph a(3) restates the general legislative. but not executive. receives more than one grant or rule for cost documentation.but is dui;isionmaking.This is the traditianal contract.Further, the subparagraph modified by subparagraph a(4).which understanding of lobbying and was follows existing accounting practice and provides that for the purposes of strongly urged by many commenters. emphasizes that lobbying and related complying with this revision. Many commenting organizations • costs must he identified and dealt with organizations are not required to stressed the necessity and .ipporpriately. in actor:lance with the prepare or mRintain time logs. appropriateness of contacts with (.irc:ul;:r's provisions. calendars. or like records to document officials charged riot with passing laws Nu detailed record keeping the time spent by indirect cost but with executing them.Thus the only requirements have been included in this employees who suite in good faith that Executive Branch lobbying made proposal, as such ,requirements are they spend less than 23;of their time on unallowable are attempts to influence a { generally set forth for all nonprofit lobbying and related activities.This decision to sign or veto enacted organizations in OM8 Circular A-Ito: means that the agency and auditor must legislation. and attempts to use state "Grant: And A,grermer.ts with n•iv on the good.iaith rshmatc3 of time and local officials as conduits far Federal Register 1 Vol. 48. No. 214 / i nursday. :November 3. 1983 I Notices J4863 grantee and contractor lobbying of unallowable. Under the O .R.a all lobbying exempted from unall ity Congress or state legislatures. legislative liaison activities are deemed under this section must be "di°warn The coverage of subparagraph h(3) un:.11owable. related" to lower costs or better has been limited to state and federal Subparagraph r,sets forth Five performance of grants or contracts. Legislation in these proposals. unlike the exceptions to subparagraph b.The costs Lobbying in the case pi secondary. of activities described in subparagraph c prohibitions in the Internal Revenue tangential or speculative links bet Code. the DAR. the FPR. and the _ are not unallowable under this proposal. proposed state laws and grant or ween NASAPR, because it is difficult to Note that this does not necessarily make con tr,tct costs or performance will distinguish between legislative and such costs u/1uwaLlr: alluwttbility or rcni;iin unallowable. executive lobbying at the local level. unullawability of such costs will be • to recognition oft e principles of Many of the comments received from determined by the terms of the grant, federalism.states which are subgrantnrs organizations critical of the January 24, contract, or other agreement involved• fcr federal grants may. through 1983 proposal gave examples of Circular A-122 does not authcrize casts appropriate state processes. waive the contacts with local officials that areor expenditures:it exclusively limits the disallowance provision for state vital to carrying out grants or allowa'oility of costs or exoer..ditures. lobbying by state subg antees. contracts—for example. obtaining Subparagraph c(1) exempts the final exception. subparagraph zoning changes.police protection. or provision of technical advice or c( .The for anyex opt on. ins subparagraph perriits. At the local level. there is no assistance to a legislature upon a authorized statute activity to be undertaken ally rigorous separation between legislative specific written request.This includes pursuanth to the federal giant,contract. and Executive Branches. and it would not merely testimony. but also or other agreement.The provisions of be difficult to construct or enforce a rile conferences with legislators and staff this Circular do not override statutory regarding legislative lobbying at the when requested.The exer.,pticn is law local level. meant to be permitted on a limited paragraph 2 renumber] paragraphs As indicated.however. in keeping basis. to fulfill the specific informational B,1 through B50 of Circular A-122's • Kith the intent of the revision.b(3) needs of legislatures. and members and Attachment B..:Since the cost items includes a phrase clarifying that efforts staffs thereof. covered under Attachment B are expended to influence state and local Subparagraph c(2),patterned after 28 r in order. officials to accomplish the lobbying U.S.C. 4911(d)(2)(E).makes clear that umb numbered alphabeticalb is activities defined in b(3) ace likewise communications with Executive Branch "Lobbying ro ying andy Activities"paragraph unallowable.Under the proposal. the officials are not unallowable. with two •app. necessitatingpelydesignated the renumbering parag of government would not reimburse the exceptions:(1) to influence a decision to paragraphs 82ti through Bum as ng cost of meeting with mayors or city sign or veto legislation or(2) to influence through 851. council representatives if the purpose is state or local officials to serve as • Paragraph 3,like paragraph Z.is a to convince them to lobby the Congresa conduits for unallowable lobbying -r technical language change.a changes for legislation that the grantee or activities, as defined by this revision. the former g "lobbying"Ito the new contractor favors. Subparagraph c(3) ensures that the terme "lobbying and related activities." Subparagraph b(4)deals with grass salary of an employee does not become used in this revision. roots lobbying,and is applicable only to unallowable because of participation in as grass roots campaigns concerning civic affairs as an elected or appointed IX. Legal Authority legislation.This provision is riot meant official or member of a governmental The responsibility for implementing to disallow associations from informing advisory panel. t p _ y g grant programs. the power of their membership about legislative Subparagraph c 4)exempts lobbying administration,pprograms. includings been delegated by developments or soliciting their or related activity at the state level Congress to the grant- contract - developing views as a basis for where it directly affects the ability of or makings to the g ant-Thoseand agencieshave the associations' own cost to the organization of performing me direct legal authority to establish legislative positions. the grant or contract.Such lobbying can thcost hint lea and, prior to the ie • The proposal's definition of grass directly benefit the federal government 1970s.didprinciples in a piecemeal fashion roots lobbying is less inclusive than the The proposed exception does not permit 1 70' - piecemeal Internal Revenue Code definition.in that the use of federal funds to lobby state . without coordinateds.OMB's government-wide this the IRC includes local lobbying:and legislatures to promote the ideological processr derives's legal the authorityin President's restricts "any attempt to influence any objectives of the organization, merely uderiv authority th "Take Care • legislation through an attempt to affect because those objectives are consonant that the Laws be Faithfullyoriytoe • the ooi.::ons of the general public or any with the purposes of the grant or U.S. Constitution. Article II.Section Executed."as segment thereof."This subparagraph contract. A recipient of a grant for well as from general supervisory restricts only efforts to obtain specified services to the elderly cannot thereby responsibilities vested by Congress in lobbying actions on the part of the engage in lobbying on behalf of the the President and in OMB.sI public. (See 2fi U.S.C.4911(d)(I)(A)). concerns of the eldery.Rather,the i Grants management responsibility dl Subparagraph b(5) makes unallowable lobbying must relate to the placed in "eMBrn by Executive Order the cost of legislative liaison activities orgnr.ization's direct performance of the waso 541 (July 1.1970), pursuant to when they relate to unallowable grant or contract.Fur example.a grantee lobbying and related activities as in a drug rehabilitation program might Reorganization Plan No. 2 of 1970.S defined in paragraph b.This distinction be able to lobby a state legislature for U.S.C.App. ubsh uen tly.grants transferredt recognizes that while the primary laws permitting the prescription of management GS by thoriOrder No_t 17 purpose of an organization's "legislative methadone to heroin addicts.or a to 9.1y and Executiveetrar_der No.back to liaison" unit is ordinarily to direct and grantee distributing dairy products to (May prepare for what has been defined in the needy might lobby against an OMB by Executive Order No.11593 this revision as unallowable lobbying, increased excise tax an milk that would (December 31. 1975). Relevant statutory n costs.It authorities thane arerev si tnther doesunctions not make be incroase be understs tood.tho however. that state Accounting Account ngtnclude the Act of 192.1_. ch318.Section et �: that t^n ... • 50866 Federal Resister / Vol. 48. No. 214 / Thursday, No:ember 3. 1983 / Notices 209, 31 U.S.C. Section la: the 3udget and years. Although it has never enacted would be classified as unallowable Accounting Procedures Act of 1950, ch. comprehensive legislation to address the under these revisions.Subparagraph c(5) g4t1 Section 1C4. 31 U.S.C.Section 18a: use of federal funds for lobbying of the proposal makes anysuch Pull. L No. 97-258. Section 1.31 U.S.0 purposes on a government•ide hasis. specifically authorized activity Section 3507: Psb. L No.93-400, Section Congress has used the vehicle of allowable: thus, this revision does not 3. 41 U.S.C. Section 407_ Under these and appropriations acts to curb some of the conflict with any enacted statutes but is other general management authorities, more flagrant abuses and to prod the consistent with the broad thrust of OMB may develop plans for Executive Branch into action.Over the can implementin better management with congressional policy in the area. 3 g past ten years. some 40 to 50 riders have As noted. this proposal has been "a view to efficient and economical been attached to appropriations bills to prepared in active consultation with the r service" and may issue supplementary address some aspects of the problem. General Accounting Office. which interpretative nto pre ative uidefeli nt use nes �Eromote These appropriations riders use many supports this initiative and believes that condifferent formulations. but have as a procurement Contracts,grant � this proposal satisfies the concernsccmrrion element the prohibition of the which the GAO had expressed earlier. agreements. and cooperative use of appropriated funds for publicity agreements." In its capacity of or propaganda purposes designed toy X. Enforcement e\ercising the President's general support or defeat legislation. One such Circular A-127 is a mana management functions over the appropriations cider. Section 507(a) of directive to federal agencies meat Executive 3rac: OMBch. OMB has the power Et uuervise and direct the mana ement the Treasury. Postal Service, and establishing cast principles for use in g General Coverrunent Appropriations connection with grants and contracts activities of federal agencies. Act, applies across the board to all with nonprofit organizations. It does not Agencies, in turn, incorporate the federal agencies: provisions and requirements of contain its own enforcement Napart of any appropriation contained in mechanism, though its terms are applicable Ozti{B circulars into grant and this°tons ocher tor.or of the funds incorporated in grants and contracts contract agreements through regulations, grant or contract terms.°rather means. available for expenditure by corporation or through agency regulations or grant i ants contra. the Circular thermions agency,shall be used far"publicity or instruments.The degree and nature of propaganda"purposes designed to support or enforcement of these anti-lobbying become legally binding upon contractors defeat Legislation before Cungress.(Emphasis provisions will depend.therefore, an and grantees. Moreover, it has been held added). hat the provisions of OMB Circular A- operational experience and competing t tinzhe are legally applicable to grants even The Department of Interior demands on enforcement resources. when the grant-making agency has not Appropriations Acts use the following This analysis of enforcement is r cpin itlythe implemented the Circular. formulation, which is more restrictive descriptive rather than prescriptive: it is than the Treasury formulation: presented to provide a context for public Qonnar Corporation v.Metropolitan Atlanta Rapid Transit Authority, 441 F. No part of any appropriation contained in understanding of the proposal. Supp. 1 tfi8. 1172 (N.D.Ca.1977). this Act shall be available far any activity or 1. Voluntary Compli•snce,The the publication or distribution of literature bedrock for enforcing these provisions is Circular A-I22 is on the same legal footing. that in arty way tends to promote"public voluntary compliance by grantees and In summary, the legal authority for support or opposition"to any legislative contractors. In the past,restrictions an OMB cost principles derives from proposal on which congressional action is not the use of federal funds for lobbying and OMB's d':legated authority from complete,in accprdance with la U.S.C.ts13. related activities have been The Labor. Health and Human inadequately communicated and Congress and the President to manage the Executive Branch with a view Services, Education, and Related defined.Neither agencies nor recipient toward economy and efficiency, as it Agencies Appropriations Act states: organizations devoted much attention to affects the agencies' exercise of their No part of any appropriation contained in them.This proposal is expected to •gran' administration functions, this Act shall tie used to pay the salary or improve compliance significantly by. rnis proposed revision,like coat expenses of any grant or contract recipient or • Defining unallowable activities.so r'.anciples disallowing advertising costs, agency acting for such recipient to engage in that organizations can comply in good fundraising costs, and entertainment any activity designed to influence legislation faith. and costs, is directly related to the efficient or appropriations pending before the • Providing formats(indirect cost rate Cogre and economical administration ofs negotiations, certification of financial grunts. contracts, and other agreements_ Other agencies and entities affected • status report) in which responsible By prohibiting the use of grant and by appropriations riders(in addition to officials of the grantee or contractor will ! contract monies for lobbying or related the generally applicable provision in the confront the issue of the organization's activities (unless specifically authorized Treasury appropriation) include compliance. • to be conducted with grant or contract Defense, State: Justice. Commerce, To assist organizations in cohplying, f:nd.s by st;itutt,l, funds can be directed District of Columbia. Legal Services agencies shall be prepared to resolve :award their proper uses, thereby Corporation. ACTION,Community definitional questions concerning achieving greater public benefit.As the Services Administration,and Health potential expenditures in advance: this Comptroller General has noted."The Systems Agencies.Taken as a whale, procedure should reduce the inevitable rust principles applicable to all federal these provisions indicate a far-ranging difficulty of interpretations at the Rrnnte.es is the appropriate mechanism Congressional concern to control the use margin. tri ;achieve these ends (of ensuring that of federal funds for lobbying purposes. Z.Surrctians. Penalties far violations prrigrnin funds are not used fur Neither legislation nor legislative history of this revision are the same as for I'rtihyin4)." CAO/FIRD-82-tali suggests any deliberate departure by the violations of existing A-122 provisions. It.•pt,•ml,er a.1. 1982). at 27. Congress from this principle. The principal sanction in the event of • 'J'he legal basis for the proposed In serveral specific instances, minor or unintentional violations of revision is further supported by a series Congress has directly authorized the use these restrictions is cost recovery. tie. of congressional actions over the last Z of appropriated funds ,or activities that the federal agency will obtain Federal R?Qister / Vol. 48, Na. 214 / Thursday. November S. 1983 / Notices 50867 reimbursement from the contractor or activities and 4.0% on federal grant On the other hand. considerable grantee of misspent funds. In mare activities. 413%of the salary may be • problems of definition and interpretation serious cases. contracts and grants can allocated to the grant.This approach is arise when terms such as "substantial" be suspended or terminated. or consistent with the OAR. E R. and are used to define the paint at which the contractors and grantees can be NASAPR lobbying cost treatment entire cost of a meeting or conference is debarred from further awards.The provisions. as well as the traditional to became wholly unallowable. availability of these sanctions for accounting method of prorating costs Given the inheres; difficulties in using violating the iationslle anti-lobbying has been betweens allowable and unallowableon cost principles to attempt to deal with appropriations g activities. this problem. it appears that the better confirmed by the Office of Legal An alternative method of allocating approach would be for a gentles to adopt Coursel of the Department of justice' costs of items used for both lobbying more stringent policies regarding the 3. Advc.^ce screening. One of the most activities and grant/contract purposes funding of meetings and conferences effective means of enforcing these that was considered and rejected was when they are restrictions is to ensure that grants and the concept that no federal moneycan otherwise supportlikely to Finance or contracts officers are aware of the past clear lobbying be used to pay for any portion of a cost performance of organizations seeking activities.(See Office of Management item that is used for lobbyingactivities and Budget Memorandum. M-82—:: new or continued funding. If an (1 er organization has not devoted past ti in any way, or(2) over 5% of the "Improper Uses of Federal Funds," April appropriations to the grant or contract trine' 6. t982.) purposes. and has materially diverted The OMB proposal published on Z. Definition of Lobbying Activities. them to lobbying(or other extraneous January 24. 1983 followed this approach. One of the weaknesses of current activities). questions can legitimately be Commenters argued that it would restrictions on tax-funded lobbying is raised as to whether additional grants or increase the cost of performing federal the lack of a clear and detailed contracts would be appropriate. Once grants and contracts because it would definition of exactly what is and what is uniform and understood cost principles effectively require them to separate their not covered.In_constrtcting the are in place. it is expected that agencies lobbying activities from their grant or definition in this proposal. OMB has will take steps to ensure more thorough contracts activities.This could lead to • drawn upon experience and language advance screening of grant and contract inefficient duplication of equipment and from Internal Revenue Code definitions. applications. facilities—with attendent increased statutory provisions. Defense. GSA.and'" • 4.Audis. Contractors and grantees costs to the taxpayer.They also argued NASA procurement regulations. and are currently subject to audit that it would burden the First similar sources.Care has been taken not requirements. and to the passibility of Amendment rights of contractors and to prohibit activities that are audit by agency Inspectors General or grantees because engaging in lobbying. legitimately necessary to the fulfillment the Comptroller General: However,most activities could result in disallowance of . of the grant or contract. audits have not focused on compliance otherwise legitimate casts.The purpose The proposal addresses the various with anti-lobbying provisions. Audit of this proposal,however. is to enforce categories of lobbying (e.g.. grass roots strategy and priority will continue to be governmental neutrality by preventing lnhhying),and defines the unallowable established by the independent the use of federally appropriated funds activities.A separate section is devoted judgment of these enforcement bodies. for lobbying and related activities.To to activities which are exceptions to the: After uniform cost principles are the extent that an approach would general rest:ictions. promulgated. it will become possible for significantly increase rest= or burden The following alternative definitions more vigorous and effective audit First Amendment expression. it is of unallowable activities have been enforcement to take place. Stratified inappropriate. considered and rejected: audits and other strategies can be used Some commenters have urged d that to create an incentive for greater a. The definitions rise_d in 0h111"s nonprofit organizations should be January 24, 1983.proposal could be compliance among all grantees and r.e ili isle to receive any federal funding ontractors. Alternatively, promulgation gb used:.This would result in disallowing. c • ofco a defined set of rules can and will if they engage in any lobbying activities. among others.the following categories Such an approach would be more of activity not covered in this proposed serve as a protective barrier against restrictive then OMB's January 24.1S83. P P audit harassment. and will and should revision: make fur fairer and simpler audits far proposal and would be strongly opposed - Lobbying an local concerns at the tr. and contractors.This should be by many affected groups. Furthermore.a local level. granters wholesale preclusion of participation in of particular benefit to smaller grantees grants and contracts as a result of even • Lobbying at the state level.even ant contractors who lack the means and a modest amount of lobbying would when the lobbying is directly related to • support staff to contend with audits raise difficult questions of legality and the cost to or ability of the organization under the vague.ambiguous. and efficiency in a ease where the applicant to perform the grant or contract. differential rules now in effect.With was otherwise the most qualified • Attempts to influence "licensing. expanded Inspector General and agency applicant. grants.ratemaking. formal or informal audit staffs now in place. the protections adjudications,guidelines, and policy Oneiati from thellocation variation a afforded by the proposal are manifest. staterrients." principle considered by OMB related to XI. Alternative Approaches to Major the costs of conducting meetings and • Contacts with Executive Branch Issues in The Revision conferences that are held in "substantial officials concerning any governmental t. Ge ercl Cost Treatment. This part" to promote lobbying. decisions. proposal makes unallowable only the The practice of partisan meeting Litigation on behalf of others not portion of a cost item that is actually sponsors scheduling large blocks of directly authorized by meant or contract. used in lobbying activities. as opposed "open time" to facilitate lobbying during E^.couragement of grass roots to the entire item.Thus. if art employee Washington meetings s ould make the lobbying to influence notice and spends Gd'%of his time on lobbying allocation approach impractical. comment rulemakir.g. 508.68 Federal Register / Vol. 48, No. 214 / Thursday. November 1 1385 / Notices • • • Membership dues or contributions included -making available the results activity—rather than to identify specific to organizations which have lobbying as of nonpartisan analysis. study• or activities that should not be subsidized a "substantial organizational purpose.- research. the distribution of which is not by the federal government.The result of Many commenters on the )anuary 24 primarily designed to influence the adopting any of those previously proposal felt that the scope of outcome of any federal. state. or local established definitions in whole would unallowable lobbying activities in that election. referendum.initiative. or be to disallow certain activities that are proposal was too broad and would similar procedure.or any governmental properly allowable. and to allow certain rusult in disallowing certain legitimate decision."The current proposal's activities that are not prooer purposes activities appropriately funded under a revised lobbying definition and fur the expenditure of federal funds. grant =r contract. For example. many accounting treatment do not make such Therefore, the approach of this contracts with Executive Branch activity unallowable in the first place. so proposal has been to use concepts and officials at the local.state, and federal the inclusion of such exception-is not definitions from the OAR. EPR, levels are considered necessary to only unnecessary but confusing. NASAPR, and Internal Revenue Cade performance of the grant or contract. b. Lobbying could be defined us ((RC) where appropriate. and to deviate and. often. compliance with the law. broadly cs possible. with a detailed list from them where appropriate.The ;•toreover, the concept of lobbying has of the unallowable activities:Some "Analysis•' section of this preamble traditionally been understood to be an criticism was made of OMB's January 24 identifies the areas of deviation and the • attempt to influence legislative rather proposal far nut being comprehensive r::tinnaie for them.Several areas of than executive actions. Departure from enough in its restrictions en lobbying particular interest.however.e-. should be this understanding appears to create activities.Com,c.enters felt that because noted. Unlike the DAR. EPS. NASAPR. uncertainty and uneasiness among of the ambiguous nature of lobbying and and IRC. this proposal does not include affected parties.Thus. OMB has rejected quasi-lobbying activities. it was more local lobbying.because of the difficulty as too broad a definition of lobbying efficient to restrict the broadest scope of in distinguishing legislative from that would deem Executive Branch these activities. As noted above, this executive lobbying at the local level and contacts (other than in connection with argument was rejected in rewriting the the necessity of frequent contact by the signing or veto of legislation) as proposal: in fact. the definitions have contractors and grantees with local unallowable. been made less expansive. officials or matters of administrative Unlike the January 24 proposal, the C. The lobbying restriction could concern to the contract and grant. current draft does not disallow the consist of a broad, but undefined. On the issue of legislative liaison promotion of grass roots lobbying to prop i:itit:n on lobbying activities:This .activity. this proposal basically adapts infiuence notice and comment is essentially the approach being used the FPR and NASAPR position in nilem:eking.The reason for the original currently in the grants area through making such activity unallowable only inclusion of this provision was that such assorted appropriation bill riders, and it when related to otherwise unallowable ru tenttikings are quasi-legislative in has not been effective.By not specifying lobbying. When legislative liaison character and that it is inappropriate for which activities are restricted, agencies activity is performed in preparation for the government to be financing march are required to do much more lobbying, it would contradict the captains. rally orgainizers and other interpretative and negotiation work to revision's intent to make such activity :itch persons for the performance of implement the restriction.Grantees and completely allowable.On the other such activities in connection wiih grass contractors arc uncertain as to what is hand, legislative liaison can serve other • loots campaigns regarding such restricted, and whether the govenment is functions not made unallowable by this regulations. On the other hand, the serious in enforcing those restrictions. In revision. consultation preness relative to the addition, such an approach would 3. Documentation Requirements: current ili aft disclosed serious concerns complicate audits conducted to When the method of cost treatment was about .iie possible applicability of any determine whether funds had been used changed from total disallowance of cost prnvi:ion regarding regulations to joint for lobbying purposes. and would be partially involved in lobbying(the or collaborative efforts by grantees or particularly burdensome to smaller items ms y 24 proposal) to the typical contractors to share information and grantees and contractors. "proportional"cost treatment used for thereby to improve the comments made d. The lobbying restriction could be cost items related to both unallowable. by thciui ,tt federal agencies. It is OM'B's made identical in coverage to that of and allowable activities, documentation intention. in light of the above, that t-`:is current Defense. GSA, oriV.AS,q matter should be studied duringtheof amounts of allowable and procurement regulations.or to the unallowable casts became a necessity. II course of the coming year to determine definition of"influencing legislation"in The principal alternative considered whether i. can be known,and if so to the Internal Revenue Cade:There would was to adapt the documentation what extent. the federal government be substantial advantages to this now finances grass roots lobbying '� philosophy of the GSA.Defense. and approach, since current OAR.FPR. NASA procurement regulations'activities of march captains,rally NASAPR. and IRS restrictions are well- restrictions on lobbying.i.e., to place the organizers and the like in connection established and, in the case of the burden on the contractor ar grantee to with notice and comment ruletaaking. Internal Revenue Code, reasonably well- prove in all instances the Agency auditors and others will defined. However, the CAR.FPR. and appropriateness of a cost.This ' examine this maitter so as to determined NASAPR provisions are unfamiliar to approach, while consistent with the cost whether additional language is needed the nonprofit community, while the IRS principles in general.would entail an in the Circular to deal with this matter. restrictions on lobbying by 301(c)(3) implied burden on indirect cast The exception in the fanuary proposal organizations are unfamiliar to defense employees to maintain records (time fur di:trtbutiun of nonpartisan analysis and civilian contractors. Moreover. the legs, calendars, or the like) to establish fur nun•Iohbying purposes is made IRS definition of-influencing the proportion of their time spent on superfluous by changes in the current legislation" is intended to identify the lobbying or related activities.This draft, and thus has been deleted. As ' character of the organization—whether would be particularly onerous for high previously stated. the exception it is engaged in •substantial" lobbying level officials who, in the ordinary Federal Register I Vol. 4.8, No. 27,4 / Thursday, November 3. 1983 / Notices • course of business, frequently engage in the federal funds corporate grunt funds ed e pps organizational documents: audit only a small amount of lobbying. OMB re that were un intendeareusd. and got th tour fa ocili estate (along with Defense. GSA. and NASA) publications, newsletters. periodicals, lobbying campaigns. As noted above. etc issued by the recipient oraniation: current financial control procedures do therefore proposes to allow grantees and contractors to certify in good faith and/or other information relating to a not permit an accurate estimate of the the amout of lobbying and related recipient organization's activities? amount of tax dollars now diverted to activities performed by indirect cast (3) is the broad exclusion of local • lobbying efforts by grantees and employees (i.e.. those who do not level lobbying from coverage of these contractors: whether large or small. already 'nave to account for their timeprovisions necesaa;j or desirable? cer-ection of this problem will produce a spent directly on a grant or contract). (4) Are arty additional exceptions net gain to the intended beneficiaries of Only if the employee is engaged necessary or desirable?Are any of the federal programs.The costs to be (according to the organization's own exceptions provided in this proposal considered are primarily accounting and estimate or outside evidence) in unnecessary or undesirable? recordkceping costa for g=ar,tees and lobbying or related activities more than (5) Restrictions on the enccuragement contractor, as well as federal agencies. Z%of his time could further of grass coots lobbying inherently These new costs-however. are minimal documentation be required. if a require an understanding of the in both absolute and relative amounts. contractor or grantee is determined to disrn::lion between providing and in many instances the revisions ha,ve materially misstated allowable or information and encouraging lobbying. should reduce audit and compliance unallowable costs within the prece.ding T'ne ir.:ent of the section or, grass roots casts. Furthermore, much of the five-year period. more extensive lobbying (subparagraph b(t)) is that accounting work that the revision documentation could be required_ internal communications between an requires is already mandated by other OMB also considered and rejected organization and its bona tide .members sections of Circular A-122, or Circular more extensive "sunshine" provisions to provide legislative information is A-110.This proposal has nonetheless which would have called for full allt owable, but the promotion of been prepared in accordance with the disclosure by recipient organization of membership lobbying is not. In light of analytical requirements of Executive detailed information concerning their the above. is it desirable to add 0-der 12291. personnel. public policy positions. language to the Circular retarding such • affiliations of officers and diiec:ors. internal communications: if so. what XIV. Paperwork Reduction Act publications, and other such form should this language take? Requirements information. OMB believes such (6) Is the allocation method the proper (n accordance with the requirements • reporting requirements would exceed accounting method for disallowing costs of the Paperwork Reduction Act of 1980. those necessary to achieve the purpose related to sponsoring meetings and 44 U.S.C.3501 et seq.- and 5 CFR Part of these proposals.i.e.. to erieure that conferences when these are used to •- 1320. the collection of information federally appropriated funds are not promote lobbying? Would it be possible requirements contained in this proposed used for lobbying or related activities by to disallow the entire cost of a meeting revision have been submitted for review grantees and contractors.However, or conference if a"substantial part"is to OMB's Office of Information and -OMB has explicitly sought comments on devoted to promoting lobbying? U.so. Regulatory Affairs. ibis issue- (See Issues for Comment how should the term"substantial"be Comments about the appropriateness paragraph Z.) defined? of collection of information 4. Penalties:OMB considered and (7) Are there are any cases where the requirements in this proposal should be rejected as too stringent a penalty explanatory comments in the proposal prevision which would require the and the preamble are not sufficiently addressed to Edward C. Springer.Office return to the federal government of all clear or detailed to enable of Information and Regulatory Affairs. grant or contract funds received by a understanding of the proposal's Office of Management and Budget. nonprofit organization found to be meaning? Washington.D.C.2t7502. (202)395-4814. engaged in lobbying or related activities. XV. Comment Submittal and Further Instead. OMB has opted to fallow the XIIl. Designation as"Non-major"Rule Information st,i.ndard A-122 penalties of cost OMB has determined that the recovery and. in certain cases. proposed revision to A-122.does not Comments should be submitted in it;pen.:irn. termination. and debarment. qualify as a "major rule" under the duplicate to the Financial Management XII.Issues for Comment criteria as listed in Executive Order Division.Office of Management and 12:g�: }Budget.Washington.D.C. ?359'3.All In addition to any other comments. (h) "Major rule" means any regulation comments should be received within 43 the pubitc is specifically invited to that is likely to result in: days of this notice. comment on the following issues: (t) An annual effect un the economy FOR FURTHER INFORMATION et7NTAC' Y (II Do ti a provisions of Subparagraph of Slt?0 million or more: John J.Lordan.Financial Management a(4)(concerning the maintenance of time (2) A major increase in costs or prices Branch. Office of Management and i • logs and similar records) adequately for consumers,individual industries. Budget_Washington.D.C.20503(202) protect against unreasonable federal. state-or local government 395-6821 recnrdkeepiltg burdens without agencies.or geographic regions: or (sued in Wnahingtoa D.C-November t. rendering these provisions (3) Significant adverse effects an toga unenforceable? What changes. if any. competition. employment, investment. are recommended? productivity. innovation-or un the Darrell (ohrsoa, , (2) Shnuld broader disclosure ability of United States-based Sur s3er and Management Officer. requi.rr fit:nts for recipient organizatiuns enterprises to compete with foreign- (Circular A-1221 he included to facilitate the monitoring based enterprises in domestic or export Cast Principles for Nonprofit of their activities? For example. should markets. Organizations l recipient organizations be required to The principal effect of the proposed provide the agency granting or awarding revisions will be to ensure that federal Circular A-172 is revised as follows: 50.870 Federal Register / Vol. 48. No. 214 / Thur-day, November 3. 1983 / ;1otices 1. insert a new paragraph in (5) Agencies ;hall estubiish Jri nropv:ands purposes designed to sup or Sn p Attachment B. as follows:"821 procedures for resolving in advance.. in ur oC:rat legislation pending before Lnboyrng cad r?aieted 4c:i:ities.•' consultation with OMIa. any tigr,t`icar.t ceiegreO. . Eg.. Pub.L 74, Sec:icn aC7.93 a. (1) Organizations shall include. as questions or disagreements concerning Stet. 5:.i. i^e internal Revenue Code detlnes part of their annual iciirect cost the interpretation or application of "'tluecc::t j legislation"as including"any proposal. a statement identifying by subparagraphs a or b. Any such a lva.^.Ce 1i -n;t :u influence any(federal. state.or cafe nr casts attributable in whole or l,t.�Il fie;•section through communication with 3 yresolution. if in writing, that! be binding ' metnwit or employee lest,„alive in part to activities made unallowable in any subsequent set:!ements. audits.or body.or .vith any government'ait tnhe or by subparagraph 'a. and stating how investigations with rescer.t to that grant m.alcyce who may they are accounted for. or contract for purposes of formulation of the legislation." !3 U.S.C. Comment.:The fact that a Cost included in interpretation of this Circular. Scr:ion 4011(d)fl)(3).This provision is the proposal discussed in subparagraph all) b. Notwithstanding other prov sions of narrower than the Internal Revenue Cede (each as an employees a lary.an item of this Circular. costs associated with the pre:we:es because it does not apply to equipment.or the cost of a facility)may be following activities ere unallowable: influencing legislation at the local level. used in part far lobbying or related activities, (I) Attempt; to influence the outcomes titc•reacer. subparagraph c(5)excludes from as defined by suboaragreph 321 b.does eat the cover ge of this provision any lobbying or at anyFederal. State.or local election.m:ike the ri:.mu:ader unallowable. rviated act:oily at the state lecul directly referendum. initiative. or similar (Zl The certification required as a part procedure, through in kind or cash related to :he ability aforcost to the at the Financial Status Report required contributions. endoreen;enrs,publicity. contract. :atran of performing the grant or under Attachment G of Circular A-11t7 A f Contract• or similar activity: shall be deemed to be a certfication that (4) Preparation.distribution. or use of the requirements and standards of thisComment•The intwnal Revenue Code publicity or propaganda designed to prohibits tax-exempt char;::.ble organizations paragraph. and of other paragraphs of frorn"Interven(in31 in(including the influence legislation pending before Circular A-1Z2 ,respecting"lobbying and puiilishing or distributing of statcmenis),any C:sngreee or a State legislature by urging rc.ated activities." have been compiled political cemoaign on behalf of any candidate members of the general public or any with• for public uffice."28 U.S.C.Section 501(c)(3). segment thereof to contribute to or (.11 Organizations shall maintain In addition.for purposes of defining participate in any masa demonstration. adequate records to demonstrate that "influencing legislation."the Internal march rally, or fundraising drive. the, determination of costs as being Re•venee Code defines"legislation"to include lobbying campaign.or letter•writing or allot-a'sle or unallo vaale bursa nt to "action with respect to Acts.bills. subpar:tgraph a(1) above complies with resolut:ocs.or similar items. . .by the public telephone campaign, for the purpose of in a referendum:initiative.constitutional influencing such legislation:or the requirements of this circular. amendment.or similar ruce.in'e."I0,U.S.0 p Camnrent The Tresaury,Postal Service, C'urrrntena As with other costs under this Section 4911(e)(2). uric General Government Appropriations Act Ci:cular.to the extent that such In one respect.this subparagraph is tradi:ionally contains a rider providing:"No documentation is not provided by the narrower than the Internal Revenue p"rt of any appropriation contained in this or organization.the amount that cannot provisions,because it is cur fined to any attic:-Act...shall be used for publicity reasonably be demonstrated to be allowable. "contributions.endorsements,publicity,or or propaganda purposes designed to support uup ottthveed.entire cast in question.shrill be similar activity."in contrast t.r the bruadur or defeat legislation pending before proscription of"participatlianl or Congress:Eg.,P.L 96-74,Section e07.9a (4) For the purposes of complying with interven(tionl,directly or.indirectly ' "' Stat.575.The Internal Revenue Cade defines subparagraph a. there will be no (2) Establishing, administering. -influencing legislation"to include: any requirement for time logs.calendars, or contributing to, or paying the expenses attempt to influence any(federaL state.or • similar records documenting the of a political party, campaign.political local) legislation through an attempt to affect activities of aft employee whose salary action committee,or other organization the opinions of the general public or any is trer.ted as an indirect cost.and the established far the purpnce of segment thereof."Z9 U.S.0 Section 4711 ohs rice of time logs or comparable influencing the outcomes of clectiaa3: (dirt)(A).This subparagraph is more records for indirect cost employees not because ly tailored than these provisions. obtain Comment-The Internal Revenue Service because it is limited to efforts to obtain kept pursuant to the discretion of the has included within the list of disqualifying concerted actions on the part of the public ?,ranleC or contractor will not serve as a a,:rivities under 25 U.S.C.Sactian sat(c)(3) the and does riot. therefore.include mere basis for contesting or disallowing following:"participa(tion)or inter/el-titian). attempts"to affect the opinions of the general • claim,, unless: (a) the employee engages directly or indirectly.in any political public or arty segment thereof."if such. • in lobbying or related activities mere c:,mpoigr.on behalf of or in nopocitio:, to any attempts do not lead to concerted action.This • than Z.51 of the time or(b) the candidate for public office.-28 CFR Section is coesistent with the GAO's interpretation of ncgnniz:Lien has rtatariolly misstated !.sot(c)(3)-(c)(7)(iii). the"publicity or propsgande"appropriations altn•.vable or unallowable costs within (3) Attempts to influence legislation r'dCr.Sea e-m25 5(Nov.!,that). the preceding five year period.Agency pending before Congress ar a State (5) Legislative liaison activities. guidance regarding the extent anti legislature by communicating with any including attendance at legislative n-lure of documentation required member or employee of the Congress or sessions or committee hearings. p:trsuunt to subparagraph a(3) shall be legislature. (including effect, to gathering information regarding pending i e ie:vcd under the criteria of the influence state or local official-3 to legislation, and analyzing the effect of l'aperwori' P.r.durtion Act. to encore that engage in similar lobbying activity),or pending legislation, except to the extent requirements are the least burdenocrte with any government official or that such activities do sot relate to net:cssari to satisfy the objectives of employee in connection with a decision lobbying or related activities as defined leis sulrparaaraph. to sign or veto enacted legislation: by paragraph 1.b.hereof. Conti,•^t:This provision is for the purpose Conrment:The Treasury.Postal Service. Comment:The casts of all legislative of assuring that agencies and auditors must and General Cav':rnment Appropriatior-s Act •liaison activities are made unallowable for rely on the good fa,th estimates of time spent traditionally contains a rider providing:"No contractors under the current Oefenae on :uuhvmg by such eatplay++s.or upon part of any appropriation contained!n this er Acquisition Regulations(DAR). Section 15- nut,..iv ,stde.nce. any other Ac:. . . shall be'shed for uhiicit• '^S 3t b � 1 -- � but are allowable for civilian • Federal Register / Vol. 48. No. 214 / Thursday, November 3. 1983 / Notices 543871 contractors under the current Federal enrolled bills,or attempts to use slate and aflects the ability of or cast to the grantee or Procurement Regulations(FPR).Section 1- local officials as conduits for grantee and contractor of performing the grant or 15.2115-17_ contractor lohbyinst of Congress or state contract:ccr(I+)when states choose to • This subparagraph is narrower than the leginla wren. noses waiving such restrictions for their DAR provisions.because it only makes legislative liaison costa unallowable if they (3) Any activity in connection with an tede l 3rnm subgranteas. relate to otherwise unallowable lobbying employee's service as an elected or (5) Any activity specifically activities. appointed official or member of a authorized by statute to be undertaken C. Notwithstanding subparagraph b. governmental advisory panel: pursuant to the federal grant. contract. costs associated with the following (4) Any lobbying or related activity at or other agreernent. activities are not unallowable under this the state level for the purpose of influencinglegislation directlyaffectingComa:enc:This circular does not.nor could paragraph: 8 it.limit the ability of Con (1) Providing technical advice or the ability of the organization or cost to gross subject to assistance to the Congresa or a State the organization of performing :he grant. Cnnstttutionalcnnstraias, to appropriate agreement: contract. or other however, funds fore use by contractors or granteris legislature or to a member, committee. contract. fur lobbying or related activities. or other subdivision thereof, in response state governments acting as subgrantars to a specific written request by such may. through appropriate state 2. Renumber subsequent paragraphs member. legislative body.or processes, waive the current practice of Attachment B. subdivision; under OMB Circular A-I172 making a. Insert language in subparagraph Comment.:This tracks the exception at z5 Circular A-122.applicable to nonprofit 8.4.b of Attachment A. so that it reads U.S.0 Section-Olt(d)(Z)(3). subgrantees with regard to such as follows: lobbying activities at the state level as b. Promotion.lobbying or related (2) Any communication with an are deemed appropriate. activities(as defined by subparagraph executive branch official or employee. CummerrThe(ntermal Revenue Code 321(b) of Attachment B), and public other than a communication made rovisinrs defining expressly unallowable by paragraph P R-influencing legislatiun" relations. ex P J cover lobbying at the state and local level,en Comment This i�a technical Ian �a r t.h.(3) hereof. do the current Defense Acquistiun g g Comment:This is identical in substance to Re;slatiorts(LIAR),Section IS-ZOS.51 and the change,which amends the former term the exception at U.S.C.Secls°n 4911 current Federal Procurement Regulations loblsytng to"lobbying and related (d)(:)1FI.Reud in conjunction with (FPR).Section 1-15.205--52.This activities."The added language is"or related subparagraph bp).the effect is to make clear subparagraph is narrower than those activities(as defined by subparagraph 821th1 that the only contacts with executive branch provisions because(1)lobbying at the local of Attachment Sr officials made unallowable are those in level is not covered.and(Z)lobbying at the I}'floc.st—ba Fiud lt—r 10.-=seal connection with the signing or veto state level is not covered if it (a)directly "' 3,—LING woe siia-as F • EXHIBIT EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT ANC 3UOGc7 APR 4 I994 WISHINGTON, C.C. r'1"1 • N ov emb e. 19 , 1 g c 3 Q.R4t4O U THE OIRECTOR ittfauiD • CIRCULAR NO . A-110 Revised TO THE HEADS OF EXECUTIVE DEPAR .rat S AND ESTABLIS'- `ITS SUBJECT: Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals , and Other Non-Profit Organizations 1 Put-Dose. This Circular sets forth standards far obtaining consistency and uniformity among Federal agencies in the administration of grants to and agreements with institutions of higher education, hospitals, and other non-profit organizations. 2 . Authority. Circular A-110 is issued under the authority of 31 U. S .C. 503 (the Chief Financial Officers Act) , 31 U.S.C. 1111, 41 U. S.C. 405 (the Office of Federal Procurement Policy Act) , Reorganization Plan No • 2 of 1970 , and E.O. 11541 ("Prescribing the Duties of the .Office of Management and Budget and the Domestic Policy Council in the Executive Office of the President") . 3 . policy. Except as provided herein, the standards set forth in this Circular are applicable to all Federal agencies. If any statute specifically prescribes policies or specific requirements that differ from the standards provided herein, the provisions of the statute shall govern. The provisions. of the sections of this Circular shall be applied by Federal agencies to recipients. Recipients shall apply the provisions of this Circular to and subrecipients that performing substantive work under grantsagreements • are passed through or awarded by the primary recipi , if j; such subrecipients are organizations described in paragraph This Circular does not apply to grants, contracts, or other agreements between the Federal Government and units of State or local governments covered by O; Circular A-102 , nts and Cooperative Agreements with State and ae Loclmanagement G r_;Ttments , " and the Federal agencies' grants cocoon rule which stae ementszFederaled and cagenciesodified �impose on State administrative regain and local grantees. In addition, subawards and contracts to State or local governments are not covered by this Circular . However, this Circular applies to subawards made by St and local governments to organizations covered by this Circular . Federal agencies may apply the provisions of this Circular to commercial organizations , foreign' governments, organizations under the jurisdiction of foreign governrents, and international organizations. 4 . Definitions . Definitions of key terms used in this Circular ' are contained in Section . 2 in the Attachment. 5 . Re'ufired Action. The specific requirements and ` responsibilities of Federal agencies and institutions of higher education, hospitals, and other non-profit organizations are set forth in this Circular. Federal agencies responsible for awarding and administering grants to and other agreements with organizations described in paragraph 1 shall adapt the language in the Circular unless • different provisions are required by Federal statute or are approved by OMB. • 6 . OMB Resvons{bilities. 0MB will review agency regulations and implementation of this Circular, and will provide interpretations of policy requirements and assistance to insure effective and efficient implementation. Any exceptions will be subject to approval by OMB, as indicated in Section .4 in the Attachment. Exceptions will only be made in particular cases where adequate justification is presented. 7 . Information Contact. Further information concerning this Circular may be obtained by contacting the Office of Federal Financial Management, Office of Management and Budget, Washington, DC 20503 , Telephone (202) 395-3993 . 8 . Termination Review Date. This Circular, will have a policy review three years from date of issuance. 9 . Effective Date. The standards set forth in this Circular which affect Federal agencies will be effective 30 days after publication of the final revision in the LgslftrAl Register. Those standards which Federal agencies impose eions on grantees will be adopted by agencies in codified regu s within six months after publication in the ede*-a Register. Earlier implementation is encoura E. Panetta hector Attachment Grants and Agreements with Institutions of Higher Education, Hospitals , and Other Non-Profit Organizations SUBPART A - GENERAL Sec . 1 Purpose . . 2 Definitions . . 3 Effect on other issuances . . 4 Deviations . . 5 Subac;ards . SUBPART B - PRE-AWARD REQUIREMENTS . 10 Purpose . . 11 Pre-award policies. . 12 Foes for applying for Federal assistance. . 13 Debarment and suspension. 14 Special award conditions . . 15 Metric system of measurement. . 16 Resource Conservation and Recovery Act. . 17 Certifications and representations. • SUBPART C - POST-AWARD REQUIREMENTS Financial and Program Management . 20 Purpose of financial and program management. . 21 Standards far financial management systems. . 22 Payment. . 23 Cast sharing or matching. . 24 Program income. . 25 Revision of .budget and program plans . . 26 Non-Federal audits. • . 27 Allowable costs. . 28 Period of availability of funds . . PropertY Standards .30 Purpose of property standards. • . 31 Insurance coverage. . 32 Real property. .33 Federally-owned and exempt prope_--ty. . 34 Equipment. . 35 Supplies and other expendable property. . 36 Intangible property. . 37 Property trust relationshLp. 3 • Procurement Standards . 40 Purpose of procurement standards . . 41 Recipient responsibilities . . 42 Codes of conduct. . 43 Competition. . 44 Procurement procedures . . 45 Cost and price analysis . . 46 Procurement records . . 47 Contract administration. . 48 Contract provisions . • Reports and Records . 50 Purpose of reports and records . . 51 Monitoring and reporting program performance. . 52 Financial reporting . . 53 Retention and access requirements for records . Termination and Enforcement . 60 Purpose of termination and enforcement. . 61 Termination. . 62 Enforcement. SUBPART D - ArTER-THE-AWARD REQUIREMENTS . 70 Purpose. . 71 Closeout procedures . • . 72 Subsequent adjustments and continuing responsibilities. . 73 Collection of amounts due. - APPENDIX A —CONTRACT PROVISIONS SUBPART A - General • . 1 Purpose. This Circular establishes uniform administrative requirements for Federal grants and agreements awarded to institutions of higher education, hospitals , and other non-profit organizations . Federal awarding agencies shall not impose additional or inconsistent requirements, except as provided in Sections . 4 , and . 14 or unless specifically required by Federal statute or executive order. Non-profit organizations that implement Federal programs for the States are also subject to State requirements. . 2 Definitions . ( a) p,ccrued exmenditures means the charges incurred by the recipient during a given period requiring the provision of 4 • funds for: (1) goods and othe—' tangible property Teceived; (2) services performed by employees, contractors , subrecipients , and other payees ; and, ( 3 ) other amounts becoming owed under programs for which no current services or performance is required. (b) Accrued income means the sum of : ( 1) earnings during a given period from ( i) services performed by the recipient, and ( ii ) goods and other tangible property delivered to purchasers , and ( 2) amounts becoming awed to the recipient for which no current services or perfOr'mance is required by • the recipient.. (c) Ac is� tion cost of equipment means the net invoice price of the equipment, including the cast of modifications , attachments , accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges, such as the cast of installation, transportation, taxes , duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the recipient' s regular accounting practices. (d) Advancz+ means a payment made by Treasury check or other appropriate payment mechanism to a recipient upon its request either before outlays are made by the recipient or through the use of predetermined pa4raent schedules . (e) , ward means financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property in lieu of money, by the Federal Government to an eligible recipient. The term does not include: technical assistance, which provides services instead of money; other assistance in the form of loans, loan guarantees , interest .subsidies , or insurance; direct payments of any kind to individuals; and, contracts which are required to be entered into and administered under procurement laws and regulations . ( f) Cash contributions means the recipient' s cash outlay, including the outlay of money contributed to the recipient by third parties . (g) Closeout means the process by which a Federal awarding .�. agency determines that all applicable administrative actions and ail required work of the award have been completed by the recipient and Federal awarding agency. (h) Contract means a procurement contract under an award or subaward, and a procurement subcontract under a recipient' s or subreCipient' s contract. 5 ( i) t a'1nc qr matching means that portion of project or Cosy_ program casts not borne by the Federal Government. (j ) pate ocam f et� on means the date on which all work under an award is completed or the date an the award document, or any supplement or amendment thereto , on which Federal sponsorship ends . (k) pisa, lowed casts means those charges to an award that the Federal awarding agency determines to be unallowable, in accordance with the applicable Federal cost principles or other terms and conditions contained in the award. ( 1) Egg ipment means tangible nonexpendable personal property including exempt property charged directly to the award having a useful life of more than one year and an acquisition cost of $5000 or more per unit . However, consistent with recipient policy, lower limits-may be established. (m) Excess oroaerty means property under the control of any Federal awarding agency that, as determinedsed byrtheee head thereof , is no longer re ired for itsdischarge of its responsibilities . • (n) Exemat aropertY means tangible personal property acquired in whole or in part with Federal funds , where the Federal awarding agency has statutory authority to vest title in the recipient without further obligation the Federal . Government. An example of exempt property a is contained in the Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306) , for property acquired under an award to conduct basic or applied research by a non-profit institution of higher education or non-profit organization whose principal purpose is conducting scientific research. (a) Federal awarding agency means the Federal agency that provides an award .to the recipient. (p) Federal funds authorized means the total amount of Federal funds obligated by the Federal Government far use by the recipient. This amount may include any authorized carryover of unobligated funds froth prior funding p lswhecenng permitted by agency regulations or agency imp instructions. • equipment, or supplies means (q) Federal shale of real property, that percentage of the property' s acquisition costs and any improvement expenditures paid with Federal funds. (r) ;undinq oeriod means the period of time when Federal funding is available far obligation by the recipient. 6 ( s) intangible property and debt -instruments means , but is not limited to, trademarks , capy=_ghts , patents and patent applications and such property as loans , notes and other debt instruments , lease agreements , stock and other instruments of property ownership , whether considered tangible or intangible. means the amounts of orders placed, contracts (t) and grants awarded, services received and similar transactions during a given period that require payment by the recipient during the same or a future period. (u) Outlays or expenditures means charges made to the project or program. They may be reported on a cash or accrual basis . Fcr reports prepared an a cash basis , outlays are the sum of cash disbursements far direct charges far goods and services, the amount of indirect expense charged, the value of third party in-kind contributions applied and the amount of cash advances and payments made to subrecipients . For reports prepared on an accrual basis , outlays are the sum of cash disbursements for direct charges for goods and services , the amount of indirect expense incurred, the value of in-kind contributions applied, and the net increase (or decreae) in the amounts owed by the recipient for goods and other property received, far services performed by employees , contractors , subrecipients and other payees and other amounts becoming owed under programs for which no current services or performance are required. (v) Personal property means property of any kind except real property. It may be tangible, having physical existence, or intangible, having no physical existence, such as copyrights, patents, or securities . (w) prior approval means written approval by an authorized official evidencing prior consent. (x) Program income means gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award (see exclusions in paragraphs • . 24 (e) and (h) ) . Program income includes, but is nouse limited to, income from fees forse eices performed, the or rental of real or personal property q ued er federally-funded projects, the sale of commodities or items fabricated under an award, license fees and royalties on patents and copyrights, and interetast on loansFinadeale ifhnds award funds. Interest earned on is not program income. Except as otherwise provided in Federal awarding agency regulations or the terms and conditions of the award, program income does not include the receipt of principal on loans, rebates , credits, discounts, etc. , or interest earned on any oLF them. 7 (y) Protect costs means all allowable costs , as set forth in the applicable Federal cast principles, incurred by a recipient and the value of the contributions made by third parties in accomplishing the objectives of the award during the oroje period. ( z) Project period means the period established in the award document during which Federal sponsorship begins and ends . (aa) ProDerty means , unless otherwise stated, real property, equipment, intangible property and debt instruments . (bb) Real property means land, including land improvements, structures and appurtenances thereto, but excludes movable. machinery and equipment. (cc) Recipient means an organization receiving financial assistance directly from Federal awarding agencies to carry out a project or program. The term includes public and private institutions of higher education, public and private hospitals, and other quasi-public and private non-profit organizations such as, but not limited to, community action agencies , research institutes, educational associations, and health centers . The term may include commercial organizations , foreign or international organizations (such as agencies of the United Nations) which are recipients, subrecipients , or contractors or subcontractors of recipients or subrecipients at the discretion of the Federal awarding agency. The term does not include government-owned contractor-operated facilities or research centers providing continued support for mission-oriented, large-scale programs that are government-owned or controlled, or are designated as federally-funded research and development centers. (dd) Research and development means all research activities , both • basic and applied, and all development activities that are supported at universities, colleges , and other non-profit institutions . "Research" is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. "Development" is the systematic use 1 of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. The 'term research also includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function. ( ee) Small awards means a grc�aset rthresholdjfixed atm4ltUns`C• exceeding the small pur 403 ( 11) (currently $25 , 000) . 8 ( ff) Subaward means an award of financial assistance in the of money, or property in lieu of money, made under an award by a recipient to an eligible subrecipient or by a subrecipient to a lower tier subrecipient. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, does not include procurement of goods and services nor does it include any farm of assistance which is excluded from the definition of "award" in paragraph ( e) . (gg) Subrecioient means the legal entity to which a subaward is made and which is accountable to the recipient far the use of the funds provided. The term may include foreign or • international organizations (such as agencies of the United Nations) at the discretion etion of the Federal awarding agency . (hh) Sumolies means all personal property excluding equipment, intangible property, and debt instruments as defined in this section, and inventions of a contractor conceived or first actually reduced to practice in the performance of work under a funding agreement ("subject inventions" ) , as defined in 37 CFR part 401 , "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants , Contracts , and Cooperative Agreements . " ( ii) Suspension means an action by a Federal awarding agency that temporarily withdraws Federal sponsorship under an award, pending corrective action by the recipient or pending a decision to terminate the award by the Federal awarding agency. .' Suspension of an award is a separate action from suspension under Federal agency regulations implementing E.O. s 12549 and 12689 , "Debarment and Suspension. " (jj ) Termination means the cancellation of Federal sponsorship, in whole or in part, under an agreement at any time prior to the date of completion. (kk) Third party in-kind contributions means the value of non- cash contributions provided by non-Federal third parties. Third. party in-kind contributions may be in the .form of real property, equipment, supplies and other expendable property, and the value of goads and services directly benefiting and specifically identifiable to the project or program. (11) UnliQuidated obligations , for financial reports prepared on a cash basis , means the amount of obligations incurred by the recipient that have not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations incurred by the recipient far which an outlay has not been recorded. 9 (mm) Unob1igated balance means the portion of the funds authorized by the Federal awarding agency that has not been obligated by the recipient and is determined by deducting the cumulative obligations from the cumulative funds authorized. (nn) Unrecovered indirect cost means the difference between the amount awarded and the amount which could have been awarded under the recipient' s approved negotiated indirect cast rate . (oo) Workinc capital advance means a procedure where by funds are advanced to the recipient to cover its estimated disbursement needs far a given initial period. . 3 Effect an other issuances . For awards subject to this Circular, all administrative requirements of codified program • regulations , program manuals, handbooks and other nonregulatory materials which are inconsistent with the requirements of this Circular shall be superseded, except to the extent they are required by statute, or authorized in accordance with the deviations provision in Section . 4 . . 4 deviations . The Office of Management and Budget (OMB) may grant exceptions for classes of grants or recipients subject to the requirements of this Circular when exceptions are not prohibited by statute. However, in the interest of maximum uniformity, exceptions from the requirements of this Circular shall be permitted only in unusual circumstances. Federal awarding agencies may apply more restrictive requirements to a class of recipients when approved by OMB. Federal awarding agencies may apply less restrictive requirements when awarding small awards, except for those requirements which are statutory- Exceptions on a case-by-case basis may also be made by Federal awarding agencies. . 5 Subawards . Unless sections of this Circular specifically exclude subrecipients from coverage, the provisions of this Circular shall be applied to subrecipients performing work under awards if such subrecipients are institutions of higher education, hospitals or other non-profit organizations. State and local government subrecipients are subject to the provisions of regulations implementing the grants management common rule, "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, " published at 53 FR 8034 (3/11/88) - SUBPART B - Pre-Award Requirements . 10 Purpose. Sections I1 through . 17 prescribes forms and instructions and other pre-award matters to be used in • applying for Federal awards. 10 . 11 Pre-award policies . ( a) Use of Grants and Cooperative Lents , and Contracts . 'n _at_ve Agreements , each instance, the Federal awarding agency shall decide on the appropriate award instrument ( i . e . , grant, cooperativ=_ agreement, or contract) . The Federal Grant and Cceaerat_ve Agreement Act ( 31 U. S . C. 6301-08 ) governs the use of grants , cooperative agreements and contracts . A grant or cooperative agreement shall be used only when the principal purpose of a transaction is to accomplish a public purpose of support or stimulation authorized by Federal statute. The statutory criterion for choosing between grants and cooperative agreements is that for the latter, "substantial involvement is expected between the executive agency and the State, local government, or other recipient when carrying agreement. " Contracts out the activity contemplated in the a g shall be used when the principal purpose is acquisition of property or services for the direct benefit or use of the Federal Government. (b) Public Notice and Priority Setting. Federal awarding agencies shall notify the public of its intended funding priorities for discretionary grant programs , unless funding priorities are established by Federal statute. . 12 Forms for applying for Federal- assistance. (a) Federal awarding agencies shall comply with the applicable report clearance requirements of 5 CFR part 1320 , "Controlling Paperwork Burdens on the Public, " with regard to all forms used by the Federal awarding agency in place of or as a supplement to the Standard Form 424 (SF-424) series. (b) Applicants shall use the SF-424 series or those forms and instructions prescribed by the Federal awarding agency. (c). For Federal programs covered by E.O. 12372 , "Intergovernmental Review of Federal Programs , " the applicant shall complete the appropriate sections of the SF- 424 (Application for Federal Assistance) indicating whether the application was subject to review by the State Single Point of Contact (SPOC) . The name and address of the SPOC far a particular State can be obtained from the Federal awarding agency or the Catalog of Federal Domestic Assistance. The SPOC shall advise the applicant whether the program far which application is made has been selected by . that State for review. (d) Federal awarding agencies that do not use the SF-424 form should indicate whether the application is subject to review by the State under E.O. 12372 . 11 • . 13 Debarment and suspension. Federal awarding agencies and recipients shall comply with the nonprocurement debarment and suspension common rule implementing E.O . s 12549 and 12689 , "Debarment and Suspension. ". This common rule restricts subawards and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible far participation in Federal assistance programs or activities . . 14 Special award conditions. If an aiplicantor ient : (a) has a history of poor performance, (b) financially stable, (c) has a management system that does not beet the standards prescribed in this Circular, (d) has not conformed to the terms and conditions of a previous award, or (e) is not otherwise responsible, Federal awarding agencies may impose • additional requirements as needed, provided that such applicant or recipient is notified in writing as to : the nature of the additional requirements , the reason why the additional requirements are being imposed, the nature of the corrective action needed, the time allowed for completing the corrective actions , and the method far requesting reconsideration of the additional requirements imposed. Any special conditions shall be promptly removed once the conditions that prompted them have been corrected . . 15 Metric system of measurement. The Metric Conversion Act, as amended by the Omnibus Trade and Competitiveness Act (15 U. S .C. 205) declares that the metric system is the preferred measurement system for U. S . trade and commerce. The Act requires each Federal agency to establish a date or dates in consultation with the Secretary of Commerce, when the metric system of measurement will be used in the agency' s procurements, grants, and other business-related activities. Metric implementation may take longer where the use of the system is ihiitially impractical or likely to cause ,significant inefficiencies in the accomplishment of federally-funded activities . Federal awarding agencies shall follow the provisions of E.O . 12770 , "Metric Usage in Federal Government Programs. " . 16 Resource Conservation and Recovery Act (RCRA) (Pub. L. 94-580 codified at 42 U. S .C. 6962) . Under the Act, any State agency or -agency of a political subdivision of a State which is using appropriated Federal funds must comply with Section 6002 . Section 6002 requires that preference be given in procurement programs to the purchase of specific products containing recycled materials identified in guidelines developed by the Environmental Protection Agency (EPA) (40 CFR parts 247-254) . Accordingly, State and local institutions of higher education, hospitals , and non-profit organizations that receive direct Federal awards or other Federal funds shall give preference in their procurement programs funded with Federal funds to the purchase of recycled products pursuant to the EPA guidelines . 12 Certifications and representations . Unless prohibited a Federal awarding agency statute or codified regulation, each = e byrecipients to submit is authorized and encouraged to allow certifications and representations required by statute, executive or , if the recipients have der, or regulation on an annual basis , ongoing and continuing relationships with the agency . Annual certifications and representations shall be signed by responsible officials with the authority to ensure recipients ' corpliance with the pertinent requirements . SUBPART C - Poet-Award Requirements Financial and Program Management 20 Purpose of financial and program management. Sections _ 21 through . 28 prescribe standards for financial management systems , methods for making payments and rules far: _ satisfying cost sharing and matching requirements , accounting for program income, budget revision approvals , making audits , determining allowability of cast, and establishing fund availability. . 21 Standards for financial management systems . 4 ( a) Federal awarding agencies shall require recipients to relate financial data to performance data and develop unit cost information whenever practical. (b) Recipients' financial management systems shall provide for the following. ( 1) Accurate, current and complete disclosure of the financial results of each federally-sponsored project or program in accordance with the reporting requirements set forth in Section . 52. If a Federal awarding agency requires reporting on an accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient shall not be required to establish an accrual accounting system. These recipients..may develop such accrual data far its reports on the basis of an • analysis of the documentation on hand. (2) Records that identify adequately the source and application of funds far federally-sponsored activities. These records shall contain information pertaining to Federalawards , authorizationoutlays, . obligations, unobligated. ba_ances , income and interest. ( 3 ) Effective control over and accountability for all funds, property and other assets . Recipients. shall 13 adequately safeguard all such assets and assure they are used solely far authorized purposes . (4) Comparison of outlays with budget amounts far each award. Whenever appropriate, financial information should be related to performance and unit cost data . (5) Written procedures to minimize the time elapsing between the transfer of funds to the recipient from t_he U. S. Treasury and the issuance oa redemption of checks , warrants or payments by other means far program purposes by the recipient. To the extent that the provisions of the Cash Management Improvement Act (CMIA) (Pub . L. 101-453 ) govern, payment methods of State agencies , instrumentalities , and fiscal agents shall be consistent with CHIA Treasury-State Agreements • or the CMIA default procedures codified at 31 CFR par t 205 , "Withdrawal of Cash from the Treasury far Advances under Federal Grant and Other Programs . " ( 6) Written procedures for determining the reasonableness, allocability and allowability of costs in accordance with the provisions of the applicable Federal cost principles and the terms and conditions of the award. (7) Accounting records including cast accounting records that are supported by source documentation. (c) Where the Federal Government guarantees or insures the repayment of money borrowed by the recipient, the Federal awarding agency, at its discretion, may require adequate bonding and insurance if the bonding and insurance requirements of the recipient are not degmed adequate to protect the interest of the Federal Government. (d) The Federal awarding agency may require adequate fidelity bond coverage where the recipient lacks sufficient coverage to protect the Federal Government' s interest. (e) Where bonds are required in the situations described above, the bonds shall be obtained from companies holding certificates of authority as acceptable sureties , as prescribed in 31 CFR part 223 , "Surety Companies Doing Business with the United States . " 14 . 22 Payment. • (a) payment methods shall minimize the time elapsing between tno transfer of funds from the United States Treasury and the issuance or redemption of checks , warrants , or payment by other means by the recipients . Payment methods of State agencies or instrumentalities shall be consistent with Treasury-State CMIA agreements or default procedures codified at 31 CFR part 205 . (b) Recipients are to be paid in advance, provided- they maintain or demonstrate the willingness to maintain: (1) written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient, and ( 2) financial management systems that meet the standards far fund control and accountability as� e tablisedainoSection be . 21 . Cash advances to a recipient g h l limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the recipient organization in carrying out the_purpose of the approved program or project. The timing and amount of cash advances shall be as close as is administratively feasible to the actual disbursements by the recipient organization for direct program or project costs and the proportionate share of any allowable indirect costs . (c) Whenever possible, advances shall be consolidated to cover anticipated cash needs for all awards made by the Federal awarding agency to the recipient. (1) Advance payment mechanisms include, but are not limited to , Treasury check and electronic funds transfer. (2) Advance payment mechanisms are subject to 31 CFR part 205 . (3) Recipients shall be authorized to submit requests for advances and reimbursements at least monthly when electronic . fund transfers are nat used. (d) Requests for Treasury check advance payment shall be submitted an SF-270 , "Request far Advance or Reimbursement, " or other forms as may be authorized by eck ab OMBnce paymentsThis farm is made not to be used when Treasury through the use of a to the recipient automatically g predetermined payment schedule or' if precluded by special Federal awarding agency instructions for electronic funds transfer. (e) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met. Federal awarding agencies may also use this method an any construction agreement, or 15 if the major portion of the construction project is accomplished through private market financing or Federal loans , and the Federal assistance constitutes a minor portion of the project. (1) When the reimbursement method is used, the Federal awarding agency shall make payment within 30 days after receipt of the billing, unless the billing is improper. (2) Recipients shall be authorized to submit recuest for reimbursement at least monthly when electronic- funds transfers are not used. (f) If a recipient cannot meet the criteria for advance payments and the Federal awarding agency has determined that reimbursement is not feasible because the recipient lacks sufficient working capital, the Federal awarding agency may provide cash on a working capital advance basis . Under this procedure, the Federal awarding agency shall advance cash to . the recipient to cover its estimated disbursement needs far an initial period generally geared to the awardee' s disbursing cycle. Thereafter, the Federal awarding agency shall reimburse the recipient far its actual cash disbursements . The working capital advance method of payment shall not be used for recipients unwilling or unable to provide timely advances to their subrecipient to meet the subrecipient' s actual cash disbursements._ (g) To the extent available, recipients shall disburse funds available from repayments to and interest earned on a revolving fund, program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments. (h) Unless otherwise required by statute, Federal awarding agencies shall not withhold payments for proper charges made by recipients at any time during the project period unless (1) or (2) apply. ( 1) A recipient has failed to comply with the project objectives, the terms and conditions of the award, or Federal reporting requi_-ements. • (2) The recipient or subrecipient is delinquent in a debt to the United States as defined in OMB Circular A-129 , "Managing Federal Credit Programs. " Under such conditions, the Federal awarding agency may, upon reasonable notice, inform the recipient that payments shall not be made far obligations incurred after a specified date until the conditions are corrected or the indebtedness to the Federal Government is liquidated. 16 ( i) Standards governing the use of banks and other institutions as depositories of funds advanced under awards are as follows . ( 1) Except for situations described in paragraph ( i) ( 2) , Federal awarding agencies shall not require separate depository accounts for funds provided to a recioien: or establish any eligibility requirements for depositories for funds provided to a recipient. However, recipients must be able to account for the .receipt, obligation and expenditure of funds . (2) Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible. (j ) Consistent with the national goal of expanding the opportunities for women-owned and minority-owned business enterprises , recipients shall be encouraged to use women- owned and minority-owned banks (a bank which is owned at least 50 percent by women or minority group members) . (k) Recipients shall maintain advances of Federal funds in interest bearing accounts , unless ( 1) , (2) or ( 3 ) apply. ( 1) The recipient receives less than 5120 , 000 in Federal awards per year. (2) The best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances. (3) The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources. ( 1) For those entities where CHIA and its implementing regulations do not apply, interest earned on Federal advances deposited in interest bearing accounts shall be remitted annually to Department of Health and Human Services, Payment Management System, Rockville, MD 20852 . Interest amounts up to $250 per year may be retained by the recipient for administrative expense. State universities and hospitals shall comply with CMIA, as it pertains to interest. If an entity subject to CHIA uses its own funds to pay pre-award costs far discretionary awards without +y prior written approval from the Federal awarding agency, waives its right to recover the interest under CMIA. (m) Except as noted elsewhere in this Circular, only the following forms shall be authorized for the recipients in requesting advances and reimbursements. Federal agencies l7 shall not require more than an original and two copies o these forms . ( 1) SF-270 , Request far Advance or Reimbursement . Each Federal awarding agency shall adopt the SF-270 as a standard form for all nonconstruction mracrams when electronic funds transfer or predetermined advance methods are not used. Federal awarding agencies , however, have the option of using this form for construction programs in lieu of the SF-271,. "Outlay Report and Request far Reimbursement for Construction Programs . " (2) SF-271, Outlay Report and Recuest for Reimbursement for- Construction Programs . Each Federal awarding agency shall adopt the SF-271 as the standard form to be used for requesting reimbursement far construction programs . . However, a Federal awarding agency may substitute the SF-270 when the Federal awarding agency. determines that it provides adequate information to meet Federal needs . . 23 Cost sharing or matching. ( a) All contributions , including cash and third party in-kind, shall be accepted as part of the recipient' s cast sharing or matching when such contributions meet all of the following criteria. • (1) Are verifiable from the recipient' s records. (2) Are not included as contributions for any other federally-assisted project or program. (3 ) Are necessary and reasonable for proper and efficient accomplishment of project or program objectives. (4 ) Are allowable under the applicable cost principles. (5) Are not paid by the Federal Government under another • award, except where authorized by Federal statute to be used far cost sharing or matching. (6) Are provided for in the 'approved budget when required • by the Federal awarding agency. (7) Conform to other provisions of this Circular, as applicable. (b) Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency. 1.5 (c) Values for recipient contributions of services and prooertti shall be established in accordance with the applicable cos: principles . If a Federal awarding agency authorizes recipients to donate buildings or land for construction/ facilities acquisition projects or long-term use, the value of the donated property for cost sharing or matching shall be the lesser of ( 1) or ( 2) . ( 1) The certified value of the remaining life of the property recorded in the recipient' s accounting records at the time of donation. ( 2) The current fair market value. However, when there is sufficient justification, the Federal awarding agency may approve- the use of the current fair market value a the donated property, even if it exceeds the certified value at the time of donation to the project . (d) Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program. Rates for volunteer services shall be consistent with those paid for similar work in the recipient' s organization. In those instances in which the required skills are not found in the recipient organization, rates shall be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved. In either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation. (e) When an employer other than the recipient furnishes the services of an employee, these services shall be valued at the employee' s regular rate of pay (plus an amount of fringe benefits that are reasonable, allowable, and allocable, but exclusive of overhead costs) , provided these services are in the same skill far which the employee 'is normally paid_ • ( f) Donated supplies may include such items as expendable equipment, office supplies , laboratory supplies or workshop and classroom supplies . Value assessed to donated supplies included in the cost sharing or matching share shall be reasonable and shall not exceed the fair market value of the property at the time of the donation. (g) The method used far determining cost sharing or matching for donated equipment, buildings and land for which title passes to the recipient may differ according to the purpose of the award, if ( 1) or ( 2) apply . 19 • ( 1) If the purpose of the award is to assist the recipient in the acquisition of equipment, buildings or land, the total value of the donated property may be claimed as cost sharing or matching. ( 2) If the purpose of the award is to support activities that require the use of equipment, buildings or land, normally only depreciation or use charges for equipment and buildings may be made. However, the full value of equipment or other capital assets and fair rental charges for land may be allowed, provided that the Federal awarding agency has approved the charges . (h) The value of donated property shall be determined in accordance with the usual accounting policies of the recipient, with the following qualifications . ( 1) The value of donated land and buildings sYrall not exceed its fair market value at the time of donation to the recipient as established b_v an independent appraiser ( e.g. , certified real property appraiser or • General Services Administration representative) and certified by a responsible official of the recipient. (2) The value of donated equipment-shall not exceed the fair market value of equipment of the same age and condition at the time of donation. (3) The value of donated space shall not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality. (4) The value of loaned equipment shall not exceed its fair rental value. (5) The following requirements pertain to the recipient' s supporting records for in-kind contributions from third parties. ( i) Volunteer services shall be documented and, to the extent feasible, supported by the same methods used by the recipient for its own employees . ( ii) The basis far determining the valuation far personal service, material, equipment, buildings and land shall be documented. 20 . 24 Program income . Federal awarding agencies shall apply the standards sec (a) forth in this section in rec,Jiring recipient organization to account for program ' income related to projects finance_ in whole or in part with Federal funds (b) Except as provided in paragraph (h) below, program income earned during the project period shall be retained by the recipient and, in accordance with Federal awarding agency regulations or the terms and conditions of the award, sh`il be used in one ar more of the ways listed in the following . ( 1) Added to funds committed to the project by the Federal awarding agency and recipient and used to further eligible project or program objectives . . (2) Used to finance the non-Federal share of the project or program. (3) Deducted from the total project or program allowable cost in determining the net allowable costs on which the Federal share of costs is based. (c) When an agency authorizes the disposition of program income as described in paragraphs (b) ( 1) or (b) (2) , program income in excess of any limits stipulated,.. shall be used in accordance with paragraph (b) ( 3 ) . (d) In the event that the Federal awarding agency does not • specify in its regulations or the terms and conditions of the award how program income is to be used, paragraph (b) (3) shall apply automatically to all projects or programs except research. For awards that support research, paragraph (b) ( 1) shall apply automatically unless the awarding agency indicates in the terms and conditions another alternative on the award or the recipient is subject to special award • conditions , as indicated in Section . 14 . • (e) Unless Federal awarding agency regulations or the terms and conditions of the award provide otherwise, recipients shall have no obligation to the Federal Government regardig program income earned after the end of the project period. (f) If authorized by Federal awarding agency regulations or the terms and conditions of the award, casts incident to the generation of program income may be deducted from gross income to determine program income, provided these casts have not been charged to the award. 21 (g) Proceeds from the sale of property shall be handled in accordance with the requirements of the Property Standards (See Sections . 30 through . 37) . (h) Unless Federal awarding agency regulations or the terms and condition of the award provide otherwise, recipients shall have no obligation to the Federal Government with respect to program income earned from license fees ees and royalties for copyrighted material , patents , patent applications , trademarks, and inventions produced under an award . However, Patent and Trademark Amendments (35 U. S . C . 18 ) apply to inventions made under an experimental, developmental, or research award. . 25 Revision of budget and program plans . (a) The budget plan is the financial expression of the project or program as approved during the award process. It may include either the Federal and non-Federal share, or only the Federal share , depending upon Federal awarding agency requirements . It shall be related to performance for program evaluation purposes whenever appropriate. (b) Recipients are required to report deviations from budget and program plans , and request prior approvals far budget and program plan revisions , in accordance with this section. (c) For nonconstruction awards, recipients shall request prior approvals from Federal awarding agencies far one or more of the following program or budget related reasons. (1) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval) . (2) Change in a key person specified in the application or award document. (3 ) The absence for more than three months , or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator. (4) The need for additional Federal funding. (5) The transfer of amounts budgeted far indirect costs to absorb increases in direct casts , or vice versa, if approval is required by the Federal awarding agency. ( 6) The inclusion, unless waived by the Federal awarding agency, of costs that require prior approval in accordance with OMB Circular A-21, "Cost Principles for Institutions of Higher Education, " OMB Circular A-122 , 22 "Cost Principles for Non-Profit Organizations , " ar 45 CFR part 74 Appendix E, "Principles _cr Determining Casts Applicable to Research and Develoomenr Grants and Contracts with Hospitals , " or 8 CFR part 31 , "Contract Cast Principles and procedures , " as applicable. (7) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of expense. Unless described in the application and funded in the (8) approved awards , the subaward, transfer or contracting out of any work under an award. This provision does not apply to the purchase of supplies , material , equipment or general support services . • (d) No other prior approval requirements far specific items may be imposed unless a deviation has been approved by OMB . ( e) Except for requirements listed in paragraphs (c) ( 1) and (c) (4) of this section, Federal awarding agencies are authorized, at their option, to waive cost-related and administrative prior written approvals required by this Circular and OMB Circulars A-21 and A-122 . Such waivers may include authorizing recipients to do any one or mare of the following. ( 1) Incur pre-award costs 90 calendar days prior to award or more than 90 calendar days with the prior approval of the Federal awarding agency. All pre-award casts are incurred at the recipient' s risk ( i. e. , the eral awarding agency is under no obligation to reimburse such costs if far any reason the recipient does not receive an award or if the award is less than anticipated and inadequate to cover such casts) . (2) Initiate a one-time extension of the expiration date of • the award of up to 12 months unless one or more of the following conditions aptly. For one-time extensions, the recipient must notify the Federal awarding agency in writing with the supporting reasons and revised expiration date at least 10 days before the exp iradate specified in the award. This one-time extension i • may not be exercised merely far the pure of using unabligated balances. (i) The terms and conditions of award prohibit the extension. ( ii) The extension requires additional Federal funds . 21 ( iii) The extension involves any change in the approved objectives or scope of the project . (3 ) Carry forward unobligated balances to subseouent funding periods . (4) For awards that support research, unless the Federal awarding agency provides otherwise in the award or in the agency' s regulations , the prior approval requirements described in paragraph (e) are automatically waived ( i . e. , recipients need not obtain such prior approvals) unless one of the conditions included in paragraph (e) (2) applies . ( f) The Federal awarding agency may, at its option, restrict the transfer of funds among direct cost categories or programs, functions and activities for awards in which the Federal share of the project exceeds $100 , 000 and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by the Federal awarding agency . Na Federal awarding agency shall permit a transfer that would cause any Federal appropriation or part thereof to be used far purposes other than those consistent with the original intent of the appropriation. (g) All other changes to nonconstructian budgets, except for the changes described in paragraph (j ) , do not require prior approval . (h) For construction awards , recipients shall request prior written approval promptly from Federal, awarding agencies for budget revisions whenever ( 1) , (2) or (3 ) apply. (1) The revision results from changes in the scope or the objective of the project or program. (2) The need arises for additional Federal funds to complete the project. • (3) A revision is desired which involves specific casts far which prior written approval requirements may be imposed consistent with applicable OMB cast principles . listed in Section . 27 . ( i) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB . (j ) When a Federal awarding agency makes an award- that provides support for bath construction and noncor.struction work, the Federal awarding agency may require the recipient to request prior approval from the Federal awarding agency before 3 7 i • making any fund or budget transfers between the two t-yes of work supported. (k) For both construction and nonconstruction awards , Federal awarding agencies shall require recipients to notify the Federal awarding agency in writing promptly whenever the amount of Federal authorized funds is expected to exceed the needs of the recipient for the project period by more than $5000 or five percent of the Federal award, whichever is greater. This notification shall not be required if an application for additional funding is submitted for a continuation award. ( 1) When requesting approval far budget revisions , recipients shall use the budget farms that were used in the application unless the Federal awarding agency indicates a letter of request suffices . (m) Within 30 calendar days from the date of receipt of the request far budget revisions , Federal awarding agencies shall review the request and notify the recipient whether the budget revisions have been approved. If the revision i= still under consideration at the end of 30 calendar days, the Feaeral awarding agency shall inform the recipient in writing of the date when the recipient may expect the decision. . 26 Non-Federal audits. (a) Recipients and subrecipients that are institutions of higher education or other non-profit organizations shall be subject to the audit requirements contained in OMB Circular A-133 , "Audits of Institutions of Higher Education and Other Non- profit Institutions. " (b) State and local governments shall be subject to the audit requirements contained in the Single Audit Act (31 U. S.C. 7501-7) and Federal awarding agency regulations implementing OMB Circular A-128 , "Audits of State and Local Governments. " • (c) Hospitals not covered by the audit provisions of OMB Circular A-133 shall be subject to the audit requirements of the Federal awarding agencies . (d) Commercial organizations shall be subject to the audit requirements of the Federal awarding agency or the prime recipient as incorporated into the award document. . 27 Allowable costs. For each kind of recipient, there is a set of Federal principles for determining allowable costs . Allowability of costs shall be determined in accordance with the 25 • cast principles applicable to the entity incurring the costs . Thus , allowability of costs incurred by State, local or federally-recognized Indian tribal governments is determined in accordance with the provisions of OMB Circular A-87 , "Cost Principles for State and Local Governments . " The allowability of costs incurred by non-profit organizations is determined in accordance with the provisions of OM3 Circular A-122 , "Cost Principles for Non-Profit Organizations . " The allowability of costs incurred by institutions of higher education is determined in accordance with the provisions of OMB Circular A-21, "Cost Principles far Educational Institutions . " The allowability of costs incurred by hospitals is determined in accordance with the provisions of Appendix E of 45 CFR part 74 , "Principles for Determining Costs Applicable to Research and Development Uncle,- Grants and Contracts with Hospitals . " The allowability of casts • incurred by commercial organizations and those non-profit organizations listed in Attachment C to Circular A-122 is determined in accordance with the Bprovisions FR part 3of the Federal Acquisition Regulation (FAR) at 1. • . 28 Period of availability of funds . Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency. Property Standards . 30 Purpose of property standards . Sections . 31 through . 37 set forth uniform standards governing management and disposition of property furnished by the Federal Government whose cost was charged to a project supported by arFederal award. Federal awarding agencies shall require recipients to observe these standards under awards and shall not impose additional requirements, unless specifically required by Federal statute. The recipient may use its own property management standards and procedures provided it observes the provisions of Sections . 31 through . 37 . . 31 Insurance coverage. Recipients shall , at a minimum, provide the equivalent insurance coverage for real property and equipment acquired with Federal funds as provided to property owned by the recipient. Federally-owned property need not be insured unless required by the terms and conditions of the award. Each Federal awarding agency shall .32 Real property. prescribe requirements far recipients theonin cerling or in use and disposition of real propertyacquired awards . Unless otherwise provided by statute, such requirements, at a minimum, shall contain the following. 26 (a) Title to real property shall' vest in the recipient subject to the condition that the recipient shall use the real property for the authorized purpose of the project as long as it is needed and shall not encumber the property without approval of the Federal awarding agency. (b) The recipient shall obtain written approval by the Federal awarding agency for the use of real property in other federally-sponsored projects when the recipient determines that the property is no longer needed far the -purpose of the original project. Use in other projects shall be limited to those under federally-sponsored projects ( i. e. , awards) or programs that have purposes consistent with those authorized for support by the Federal awarding agency. (c) When the real property is no longer needed as provided in. paragraphs (a) and (b) , the recipient shall request disposition instructions from the Federal awarding agency or its successor Federal awarding agency. The Federal awarding agency shall observe one or more of the following disposition instructions. (1) The recipient may be permitted to retain title without further obligation to the Federal Government after it compensates the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project. (2) The recipient may be directed to sell the property under guidelines provided by the Federal awarding agency and pay the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds) . When the recipient is authorized or required to sell the property, proper sales procedures • shall be established that provide for competition to • the extent practicable and result in the highest possible return. • (3) The recipient may be directed to transfer title to the property to the Federal Government or to an eligible third party provided that, in such cases, the recipient shall be entitled to compensation for its attributable • percentage of the current fair market value of the property. 27 • . 33 Federally-awned and exempt property . (a) Federally-owned property . ( 1) Title to federally-owned property remains vested in t:he Federal Government. Recipients shall submit annually an inventory listing of federally-owned property in their custody to the Federal awarding agency. Upon completion of the award or when the property is no longer needed, the recipient shall report the property to the Federal awarding agency for further Federal agency utilization. (2) If the Federal awarding agency has no further need for the property, it shall be declared excess and reported to the General Services Administration, unless the Federal awarding agency has statutory authority to dispose of the property by alternative methods ( e.g. , the authority provided by the Federal Technology Transfer Act ( 15 U. S.C. 3710 (I) ) to donate research equipment to educational and non-profit organizations in accordance with E.G . 12821, "Improving Mathematics and Science Education in Support of the National Education Goals. ") Appropriate_ instructions shall be issued to the recipient by the Federal awarding agency. (b) Exempt property. When statutory authority exists, the Federal awarding agency has the option to vest title to property acquired with Federal funds in the recipient without further obligation to the Federal Government and • under conditions the Federal awarding agency considers appropriate. Such property is "exempt property. " Should a Federal awarding agency not establish conditions, title to exempt property upon acquisition shall vest in the recipient without further obligation to the Federal Government. . 34 Equipment. (a) Title to equipment acquired by a recipient with Federal funds shall vest in the recipient, subject to conditions of this section. (b) The recipient shall not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less -than private companies charge for equivalent services, unless specifically authorized by Federal statute, for as long as the Federal Government retains an interest in the equipment. (c) The recipient shall use the equipment in the project ohehey program far which it was acquired as long as needed, or not the project or program continues to be supported by 28 Federal funds and shall not encumber the property without approval of the Federal awarding . agency . When no Lange,- needed for the original project or program, the recipient shall use the equipment in connection with its other federally-sponsored activities , in the following order of priority: ( i) Activities sponsored by the Federal awarding agency which funded the original project, then ( ii) activities sponsored by other Federal awarding agencies . (d) During the time that equipment is used on the .troject or program far which it was acquired, the recipient shall make it available for use an other projects or programs if such other use will not interfere with the work on the project or program far which the equipment was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by the Federal awarding agency that financed the equipment; second preference shall be given to projects or programs sponsored by other Federal awarding agencies . If the equipment is awned by the Federal Government, use on other activities not sponsgred by the Federal Government shall be permissible if authorized by the Federal awarding agency. User charges shall be treated as program income. (e) When acquiring replacement equipment, the recipient may use the equipment to be replaced as trade-in. or sell the equipment and use the proceeds to offset the casts of the replacement equipment subject to the approval of the Federal awarding agency. (f) The recipient' s property management standards for equipment acquired with Federal funds and federally-owned equipment shall include all of the fallowing. ( 1) Equipment records shall be maintained accurately and shall include the fallowing information. ( i) A description of the . equipment. ( ii) Manufacturer' s serial n or, model s number, • Federal stock n or other identification .ntnmher. ( iii) Source of the equipment, including the award • number. ( iv) Whether title vests in the recipient or the Federal Government. (v) Acquisition date (or date received, if the equipment was furnished by the Federal Government) and cost. 29 • (vi) Information from which one can calculate the percentage of Federal participation in the cost of the equipment ( not applicable to equipment furnished by the Federal Government) . (vii) Location and condition of the equipment and the date the information was reported . (viii) Unit acquisition cost. ( ix) Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates the Federal awarding agency for its share. (2) Equipment owned by the Federal Government shall be identified to indicate Federal ownership. (3 ) A physical inventory of equipment shall be taken and the results reconciled with the equipment records at least once every two years . Any differences between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the difference. The recipient shall, in connection :with the inventory, verify the existence, current utilization, and continued need far the equipment. (4) A control system shall be in effect to insure adequate safeguards to prevent loss, damage, or theft of the equipment. Any loss, damage, or theft of; equipment shall be investigated and fully documented; if the equipment was owned by the Federal Government, the recipient shall promptly notify the Federal awarding agency. (5) Adequate maintenance procedures shall be implemented to keep the equipment in goad condition. ( 6) Where the recipient is authorized or required to sell the equipment, proper sales procedures shall be established which provide far competition to the extent practicable. and result in the highest possible return. (g) When the recipient no longer needs the equipment, the equipment may be used for other activities in accordance equipment with a currento_r with the following standards. p per unit fair market value of ot5000rma , the reci recipient may retain the equipment for usesher - revided compensation is made to the original Federal awarding agency 30 or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the equipment. If the recipient has no need for the equipment, the recipient shall request disposition instructions from the Federal awarding agency. The Federal awarding agency shall determine whether the equipment can be used to meet the agency' s recuirements . If no requirement exists within that agency, the availability of the equipment shall be reported to the General Services Administration by the Federal awarding agency to determine whether a requirement for the equipment exists in other Federal agencies . The Federal awarding agency shall issue instructions to the recipient no later than 12C calendar days after the recipient' s request and the following procedures shall govern. • (1) If so instructed or if disposition instructions are not issued within 120 calendar days after the recipient' s request, the recipient shall sell the equipment and reimburse the Federal awarding agency an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the recipient shall be permitted to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for the recipient' s selling and handling expenses. (2) If the recipient is instructed to ship the equipment elsewhere, the recipient shall be reimbursed by the Federal Government by an amount which is computed by applying the percentage of the recipient' s • participation in the cost of the original project or program to the current fair market value of the equipment, plus any reasonable shipping or interim storage costs incurred. (3) If the recipient is instructed to otherwise dispose of the equipment, the recipient shall be reimbursed by the Federal awarding agency for such costs incurred in its disposition. (4) The Federal awarding agency may reserve the right to. transfer the title to the Federal Government or to a • third party named by the Federal Government when such third party is otherwise eligible under existing statutes. Such transfer shall be subject to the following standards. 31 ( i} The equipment shall be appropriately identified in the award or otherwise made known to the recipient in writing . ( ii ) The Federal awarding agency shall issue disposition instructions within 120 calendar tr days after receipt of a final inventory . T`e final inventory shall list all equipment acquired with grant funds and federally-owned equipment. If the Federal awarding agency fails to issue disposition instructions within the 120 calendar day period, the recipient shall apply the standards of this section, as appropriate. ( iii) Then the Federal awarding agency exercises its right to take title , the equipment shall be subject to the provisions for federally- owned equipment. . 35 Supplies and other expendable property . (a) Title to supplies and other expendable property shall vest in the recipient upon acquisition. If there is a residual inventory of unused supplies exceeding $5000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed far any other federally-sponsored project or program, the recipient shall retain the supplies for use on non-Federal sponsored activities or sell them, but shall, in either case, compensate the Federal Government for its share. The amount of compensation shall be computed in the same manner as for equipment. (b) The recipient shall not use supplies acquired with Federal funds to provide services to non-Federal outside organizations far a fee that is less than private companies charge for equivalent services , unless specifically authorized by Federal statute as long as the Federal Government retains an interest in the supplies . 1j . 36 Intangible property. j (a) The recipient may copyright any work that is subject to copyright and was developed, or for which ownership was purchased, under an award. The Federal awarding agency(ies) reserve a royalty-free, nonexclusive and irrevocable right to reproduce , publish, or otherwise use the work for Federal purposes , and to authorize others to do so. Recipients are subject to applicable regulations governing (b) patents and inventions , including government-vide 32 regulations issued by the Department of Commerce at 37 CF? mart 401 , "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants , Contracts and Cooperative Agreements . " (c) Unless waived by the Federal awarding agency, the Federal rd Government has the right to ( 1) ) ( 1) Obtain, reproduce, publish or otherwise use the data first produced under an award. (2) Authorize others to receive, reproduce, publish, or otherwise use such data for Federal purposes . (d) Title to intangible property and debt instruments acquired under an award or subaward vests upon acquisition in the • recipient. The recipient shall use that property for the • originally-authorized purpose, and the recipient shall not encumber the property without approval of the Federal awarding agency. When no longer needed far the originally authorized purpose, disposition of the intangible property shall occur in accordance with the provisions of paragraph - 36 (g) . 37 Property trust relationship. Real property, equipment, intangible property and debt instruments that are acquired or improved with Federal funds shall be held in trust by the recipient as trustee for the beneficiaries of the project or program under which the property was acquired or improved. Agencies may require recipients to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with Federal funds and that use and disposition conditions apply to the property. Procurement Standards • . 40 Purpose of procurement standards . Sections . 41 through . 47. set forth standards for use by recipients in establishing procedures for the procurement of supplies and other . expendable property, equipment, real property and other services with Federal funds . These standards are furnished to ensure that such materials and services are obtained in an effective manner and in compliance with the provisions of applicable Federal statutes and executive orders. No additional procurement standards or requirements shall be imposed by the Federal awarding agetaCute upon executivetorderlor5 approved cbylOMSe�ired by Federal s • . 41 Recipient responsibilities. The standards contained in this section do not relieve the recipient of the contractual responsibilities arising un�er th out recoursets (to. thehFede,.rapient is the responsible authority, 33 awarding agency, regarding the settlement and satisfaction of all contractual and administrative issues arising cut of procurements entered into in support of an award or other agreement. This includes disputes , claims, protests of award, source evaluation or other matters of a contractual natu—e . Hatters concerning violation of statute are to be referred to such Federal , State or local authority as may have proper jurisdiction. . 42 Codes of conduct. The recipient shall maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts . No employee, officer, or agent shall participate in the selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers , employees , and agents of the recipient shall neither solicit nor accept gratuities , favors , or anything of monetary value from contractors, or parties to subagr=_events . However, recipients may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct shall provide far disciplinary actions to be applied for violations of such standards by officers , employees, or agents of the recipient. . 43 Competition. All procurement transactions shall be conducted in a manner to provide, to the maximum extent practical, open and free competition. The recipient shall be alert to organizational conflicts of interest as well as noncompetitive practices among contractors that may restrict or eliminate competition or otherwise restrain trade'. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors •that develop or draft specifications, requirements , statements of work, invitations for bids and/or requests for proposals shall be excluded from competing for such procurements . Awards shall be made to the bidder or offeror whose bid or offer is responsive to the solicitation and is most advantageous to the recipient, price, quality and other factors considered. Solicitations shall clearly set forth all requirements that the bidder or offeror shall fulfill in order for the bid or offer to be evaluated by the recipient. Any and all bids or offers may be rejected when it is in the recipient' s interest to do so. . 44 Procurement procedures . (a) All recipients shall establish written procurement procedures . These procedures shall provide for, at a minimum, that ( 1) , (2) and (3 ) apply. 34 ( 1) Recipients avoid purchasing unnecessary items . (2) Where appropriate., an analysis is made of lease and purchase alternatives to determine which would be the most economical and practical procurement for the Federal Government. (3 ) Solicitations for goods and services provide for all of the following. (i) A clear and accurate description of the technical requirements far the material , product or service to be procured. In competitive procurements, such a description shall not contain features which unduly restrict competition. ( ii) Requirements which the bidder/offeror must fulfill and all other factors to be used in evaluating bids or proposals . : (iii) A description, whenever practicable, of technical requirements in terms of functions to be performed or performance required, including the range of acceptable characteristics or minimum acceptable standards . :(iv) The specific features of "brand name or equal" descriptions that bidders are required to meet when such items are included in the solicitation. • (v) The acceptance,, to the extent practicable and economically feasible, of products and services dimensioned in the metric system of measurement. • (vi) Preference, to the extent practicable and . economically feasible, far products and services that cons erve e na tural resourc es and protect the environment and are energy efficient. efforts• shall be made by recipients to utilize positive bbusiness ( ) small businesses , minority-owned firms, and women s enterprises, whenever possible. Recipients of Federal awards 'shall take all of the following steps to further this goal. • • 35 ( 1) Ensure that small businesses, minority-owned firms , and women' s business enterprises are used to the fullest extent practicable. (2) Make information on for thcc Ling opportunities available and arrange time frames for bLirchases and contracts to encourage and fac:l_tate participation by small businesses , minority-owned firms , and woman' s business enterprises . (3 ) Consider in the contract pr. cess whether firms competing for larger contracts intend to subcontract with small businesses, minority-o--ned firms , and women' s business enterprises- ( 4 ) Encourage contracting with ccnsortiums of small businesses , minority-owned firms and women' s business enterprises when a contract is too large for one of these firms to handle individually . ( 5) Use the services and assistance , as appropriate, of such organizations as the Sm'-1 Business Administration and the Department of Cc.m=.e= e' s Minority Business Development Agency in the solicitation and utilization of small businesses , minority-" owned firms and women' s business enterprises . (c) The type of procuring instruments used ( e. g . , fixed price contracts, cost reimbursable contracts , purchase orders, and incentive contracts) shall be determined by the recipient but shall be appropriate far the particular procurement and for promoting the best interest of the pirogram or project involved. The "cost-plus-a-percentage-of-cost" or "percentage of construction cost" methods of contracting shall not be used. (d) Contracts shall be made only with responsible contractors who possess the potential ability to perform successfully under the terms and conditions of the proposed procurement. Consideration shall be given to such matters as contractor . integrity, record of past performance, financial and technical resources or accessibility to other necessary resources. In certain circumstances, contracts with certain parties are restricted by agencies' implementation of E.O. s • 12549 and 12689 , "Debarment and Suspension. " (e) Recipients shall , an request, make available for the Federal awarding agency, p re-award review and procurement documents, such as request far proposals or invitations for bids, when any of the fallowing independent cast estimates , etc• , -�•h conditions apply . . 36 ( 1) A recipient' s procurement procedures or operation to comply with the procurement standards in the Federal awarding agency' s, implementation of this Circular . (2) The procurement is expected to exceed the small purchase threshold fixed at 41 U. S .C. 403 ( 11) (currently $25 , 000) and is to be awarded without competition or only one bid or offer is received in response to a solicitation. (3) The procurement, which is expected to exceed the small purchase threshold, specifies a "brand name" product. ( 4) The proposed award over the small purchase threshold is to be awarded to other than the apparent low bidder under a sealed bid procurement. (5) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the amount of the small purchase threshold. . 45 Cost and price analysis. Same form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action . Price analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts . Cost analysis is the review and evaluation of each element of cost to determine reasonableness , allocability and allowability. . 46 Procurement records. Procurement records and files for purchases in excess of the small purchase threshold shall include the following at a minimum: (a) basis for contractor selection, (b) justification for lack of competition when competitive bids or offers are not obtained, and (c) basis for award cast or price. . 47 Contract administration. A system for contract administration shall be maintained to ensure contractor conformance with the terms, conditions and specifications of the contract and to ensure adequate and timely follow up of all purchases . Recipients shall evaluate contractor performance and document, as appropriate, whether contractors have met the terms , conditions and specifications of the contract. .48 Contract provisions. The recipient shall include, in addition to provisions to define a sound and complete agreement, the following provisions in all contracts. The following provisions shall also be applied to subcontracts. (a) Contracts in excess of the small purchase threshold shall contain contractual provisions or conditions that allow far 37 • administrative, contractual, or legal remedies in instances in which a contractor violates or breaches the contract terms , and provide for such remedial actions as may be appropriate. (b) All contracts in excess of the small _purchase threshold shall contain suitable provisions for termination on by th recipient, including the e, which termination shall morn_ by be effected and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may be terminated for default as well as conditions where • the contract may be terminate: because of circumstances beyond the control of the contractor . (c) Except as otherwise required by statute, an award that requires the contracting (or subcontracting) far construction or facility imprcV_itnts shall provide for the • recipient to follow its own requirements relating to bid guarantees, performance bonds, and payment bonds unless the construction contract or subcontract exceeds 5100 , 000 . For those contracts or subcontracts exceeding $100 , 000 , the Federal awarding agency may accept the bonding policy and requirements of the recipient, provided the Federal awarding agency has made a determination that the Federal Government' s interest is adequately_ protected. If such a determination has not been made, the minimum requirements shall be as follows . (1) A bid guarantee from each bidder equivalent to five percent of the bid price. The "bid guarantee" shall. consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder shall, upon acceptance of his bid, execute such contractual documents as may be required within the time specified. (2) A performance bond on the part of the contractor for 100 percent of the contract price. A "performance bond" is one executed in connection with a contract to secure fulfillment of all the contractor' s obligations under such contract. . (3 ) A payment bond, an the part of theA contractornt b fornd" 00one • percent of the contract price. executed in connection with a contract to assure payment as required by statute of all persons supplying labor and material in the execution of the work provided for in the contract. (4 ) Where bonds are required in the situations described herein, the bands shall be obtai ned from companies • holding certificates of authority as acceptable 32 sureties pursuant to 31 CFR part 223 , "Surety Compan1es Doing Business with the United States . " (d) All negotiated contracts (except those for less than the small purchase threshold) awarded by recipients shall include a provision to the effect that the recicient , the Federal awarding agency, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books , documents , papers and records of the contractor which are directly pertinent to a specific program for the purpose of making audits, examinations, excerpts and transcriptions . (e) All contracts , including small purchases , awarded by recipients and their contractors shall contain the procurement provisions of Appendix A to this Circular, as applicable. Reports and Records . 50 Purpose of reports and records. Sections . 51 through . 53 set forth the procedures for monitoring and reporting on the recipient' s financial and program performance and the neca.ssary standard reporting forms. They also set forth record retention requirements. . 51 Monitoring and reporting program-- performance. (a) Recipients are responsible for managing and monitoring each protect, program, subaward, function or activity supported by the award. Recipients shall monitor subawards to ensure subrecipients have met the audit requirements as delineated in Section . 26. (b) The Federal awarding agency shall prescribe the frequency with which the performance reports shall be submitted. Except as provided in paragraph . 51 (f) , performance reports shall not be required mare frequently than quarterly or, less frequently than annually. Annual reports shall be due 90 calendar days after the grant year; quarterly or semi-annual reports shall be due 30 days after the reporting period. The Federal awarding agency may require annual reports before the anniversary dates of multiple year awards in lieu of these requirements. The final performance reports are due 90 calendar days after the expiration or termination of the award. (c) Zf inappropriate, a final technical or performance report shall not be required after completion of the project. (d) When required, performance reports shall generally contain, for each award, brief information an each of the following. 39 (1) A comparison of actual accomplishments with the goals and objectives established for the period, the findincs of the investigator, or both. whenever aaaroariate an-4 the output of programs cr Projects can be r�a-dily quantified, such quantitative data should be related to cost data for computation cf unit costs . (2) Reasons why established goals were not met, ; f appropriate. (3 ) Other pertinent information including, when appropriate, analysis and explanation cf cost overruns or high unit costs . ( e) Recipients shall not be required to submit more than the original and two copies of performance reports . ( f) Recipients shall immediately notify the Federal awarding agency of developments that have a significant impact on the award-supported activities . Also , notification shall be given in the case of problems, delays , or adverse conditions which materially impair the ability to meet the objectives of the award. This notification shall include a statement of the action taken or contemplated-i,- and any assistance needed to resolve the situation. (g) Federal awarding agencies may make site visits, as needed. (h) Federal awarding agencies shall comply with clearance requirements of 5 CFR part 1320 when requesting performance data from recipients. . 52 . Financial reporting. (a) The following forms or such other forms as may be approved by OMB are authorized for obtaining financial information from recipients . (1) SF-269 or SF-269A, Financial Status Report. ( i) Each Federal awarding agency shall require recipients to use the SF-269 or SF-269A to report the status of funds for all nonconstruction projects or programs. A ._.Federal awarding agency may, however, have the option of not requiring the SF-269 or SF- 269A when the SF-270 , Request far Advance or Reimrursement, or SF-272 , Report of Federal Cash Transactions , is determined to provide adequate information to meet its needs , except that a final SF-259 or SF-269A shall 40 • be required at the completion of the project when the SF-270 is used only for advances . ( ii) The Fed4ral awarding agency shall prescribe whether the report shall be on a cash or accrual basis. If the Federal awarding agency requires accrual information and the recipient' s accounting records are not normally kept on the accrual basis , the recipient shall not be required to convert its accounting system, but shall develop such accrual information through best estimates based on an analysis of the documentation on hand. ( iii) The Federal awarding agency shall determine the frequency of the Financial Status Report far each project or program, considering the size and complexity of the particular project or program. However, the report shall not be required more frequently than quarterly or less frequently than annually . A final report shall be required at the completion of the agreement. ( iv) The Federal awarding agency shall require recipients to submit the SF-269 or SF-269A (an original and rio more than two copies) no later than 30 days after the end of each specified reporting period for quarterly and semi-annual reports , and 90 calendar days for annual and final reports. Extensions of reporting due dates may be approved by the Federal awarding agency upon request of the recipient. (2) SF-272 , Report of Federal Cash Transactions. (i) When funds are advanced to recipients the Federal awarding agency shall require each recipient to submit the SF-272 and, when necessary, its continuation sheet, SF-272a. • The Federal awarding agency shall use this report to monitor cash advanced to recipients and to obtain disbursement information for each agreement with the recipients. (ii) Federal awarding agencies may require forecasts of Federal cash requirements in the "Remarks" section of the report. 41 ( iii) When practical and deemed necessary , Federal awarding agencies may require recipients to report in the Remarks" section the amount c= cash advances received in excess of three days . Recipients shall provide short narrative explanations of actions taken to reduce the excess balances . ( iv) Recipients shall be required to submit not more than the original and two copies of the SF-272 15 calendar days following the end of each quarter. The Federal awarding agencies may require a monthly report from those recipients receiving advances totaling S1 million or nora pe: ear . (v) Federal awarding a�.enc i es may waive the requirement for submission of the SF-272 for any one of the following reasons : ( 1) When monthly. advances do not exceed S25 , 000 per recipient, provided that such advances are monitored through other forms contained in this section; (2) in the Federal awarding agency' s opinion, the recipient' s accounting controls are adequate to minimize excessive Federal advances ; or, (3 ) When the electronic payment mechanisms provide adequate data. (b) When the Federal awarding agency needs additional information or mare frequent reports , the following shall be observed. (1) When additional information is needed to comply with legislative requirements, Federal awarding agencies shall issue instructions to require recipients to submit such information under the "Remarks" section of the reports. (2) When a Federal awarding agency determines that a recipient' s accounting system does not meet the { standards in Section . 21, additional pertinent information to further monitor• awards may be obtained upon written notice to the recipient until such time as the system is brought up to standard. The Federal awarding agency, in obtaining this information, shall comply with report clearance requirements of 5 CFR part 1320 . (3 ) Federal awarding agencies are encouraged to shade cut any line item an any report if not necessary . .2 (4 ) Federal awarding agencies may accept the identical information from the recipients in machine readable format or computer printouts or electronic outputs in lieu of prescribed formats . (5) Federal awarding agencies may provide computer or electronic outputs to recipients when such expedites or contributes to the accuracy of reporting. r i . 53 Retention and access requirements for records . (a) This section sets forth requirements for record retention and access to records far awards to recipients. Federal awarding agencies shall not impose any other record retention or access requirements upon recipients . (b) Financial records , supporting documents, statistical records , and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, as authorized by the Federal awarding agency. The only exceptions are the following. (1) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records shall be retained until all litigation, claims ar audit findings. involving the records have been resolved and final action taken. (2) Records for real property and equipment acquired with Federal funds shall be retained for 3 years after final disposition. (3 ) When records are transferred to or maintained by the • Federal awarding agency, the 3-year retention requirement is not applicable to the recipient. (4 ) Indirect cast rate proposals , cost allocations plans, etc. as specified in paragraph . 53 (g) . (c) Copies of original records may be substituted for the original records if authorized by the Federal awarding agency. The Federal awarding agency shall request transfer of (d) recipients when• i from certain records to its custody n term retention determines that the records possess long ete However, in order to avoid duplicate recordkeeping, value . fora .-T ments makee may arrangements awardingagency Federal g Y a r. 43 recipients to retain any records that are continuously needed for joint use. ( e) The Federal awarding agency, the inspector General , Comptroller General of the United States , or any of their duly authorized representatives , have the right of timely and unrestricted access to any books , documents , capes , Cr other records of recipients that are pertinent to the awards , in order to make audits, examinations , excerpts , transcripts and copies of such documents . This right also includes timely and reasonable access to a recipient' s personnel for the purpose of interview and discussion related to such documents . T`!e rights of access in this paragraph are not limited to the required retention period, but shall last as long as records are retained. (f) Unless required by statute, no Federal awarding agency shall place restrictions an recipients that limit public access to the records of recipients that are pertinent to an award, except when the Federal awarding agency can demonstrate that such records shall be kept confidential and would have been exempted from disclosure pursuant to the Freedom of Information Act (5 U. S . C. 552) it the records had belonged to the Federal awarding agency. (g) Indirect cost rate proposals, cost allocations plans , etc. Paragraphs (g) (1) and (g) (2) apply to the following types of documents , and their supporting records : indirect cast rate computations or proposals , cast allocation plans , and any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates) . • ( 1) If submitted far negotiation. If the recipient submits to the Federal awarding agency or the subrecipient submits to the recipient the. proposal, plan, or other computation to form the basis for negotiation of the rate, then the 3-year retention period for its supporting records starts on the date of such submission. i (2) If not submitted for negotiation. If the recipient is not required to submit to the Federal awarding agency or the subrecipient is not required to submit to the recipient the proposal, plan, or other computation far negotiation purposes, then the 3-year retention period for the proposal, plan, or other computation and its supporting records starts at the end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation, 44 Tennir tk on and %nforce;nent 60 Purpose of termination and enforcement. Sections _. 61 and . 62 set forth uniform suspension, termination and enforcement procedures . . 61 Termination. (a) Awards may be terminated in whole or in part only if ( 1) (2) or (3) apply . (1) By the Federal awarding agency, if a recipient materially fails to comply with the terms and conditions of an award. (2) By the Federal awarding agency with the consent of the recipient, in which case the two parties shall agree • upon the iv termination conditions , and, inthe including caseofpartial termination, effective d the portion to be terminated. ( 3 ) By the recipient upon sending to the Federal awarding agency written notification setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if the Federal awarding agency determines in the case of partial termination that the reduced or modified portion of the grant will not accomplish the purposes for which the grant was made, it may terminate the grant in its entirety under either paragraphs (a) (1) or (2) . (b) If costs are allowed under an award, the responsibilities of the recipient referred to in paragraph ng those for property management as applicable, shall be considered in the termination of the award, and provision shall be made for continuing responsibilities of the { recipient after termination, as appropriate. . 62 Enforcement. Remedies for noncompliance. If a recipient materially fails (a) Reme with the terms and conditions of an award, whether , to comply , stated in a Federal statute, regulation, , lat the ion, assurance, awarding agency 1.! application or notice of award, in addition to imposing any of the special conditions in Section may, .14 , take one or more of the outlined following actions, as appropriate in the circumstances. Temperarily withhold cash payments pending correction (1) the recipient or mare severe of the deficiency by the Federal awarding agency. enforcement action by 45 (2) Disallow (that is , deny both use of funds and any applicable matching credit for) all or par` o: the cost of the activity or action not in compliance. ( 3 ) Wholly or partly suspend or terminate the current award. (4 ) Withhold further awards for the project or prograr, . (5) Take other remedies that may be legally available. . (b) Hearings and appeals . In taking an enforcement action, the awarding agency shall provide the recipient an opportunity far hearing, appeal, or other administrative proceeding to which the recipient is entitled under any statute or regulation applicable to the action involved. (c) Effects of suspension and termination. Casts of a recipient resulting from obligations incurred by the recipient during a suspension or after termination of an award are not allowable unless the awarding agency expressly authorizes them in the notice of suspension or termination or subsequently . other recipient costs during suspension or after termination which are necessary and .not reasonably avoidable are allowable if (1) and-(2) apply. (1) The casts result from obligations which were properly incurred by the recipient before the effective date of suspension or termination, are not in anticipation of it, and in the. case of a termination, are noncancellable. (2) The costs would be allowable if th4 award were not suspended or expired normally at the end of the funding period in which the termination takes effect. • (d) Relationship to debarment and suspension. The enforcement remedies identified in this section, including suspension and termination , do not preclude a recipient from being subject to debarment and suspension under E.o. s 12549 and 12689 and the Federal awarding agency implementing regulations (see Section . 13) . SUBPART D - After-the-Award Requirements . 70 purpose. Sections .71 through .73 contain closeout procedures and other procedures far subsequent disallowances and adjustments. i . 46 . 71 Closeout procedures . • ( a) Recipients shall submit, w__hin 90 calendar days after the date. of completion of the award , all financial, performance, and other reports as required by the terms and conditions of the award. The Federal awarding agency may approve extensions when requested by the recipient. (b) Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award not later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in agency implementing instructions. • (c) The Federal awarding agency shall make prompt payments to a recipient for allowable reimbursable costs under the award being closed out. (d) The recipient shall promptly refund any balances of unobligated cash that the Federal awarding agency has advanced or paid and that is not authorized to be retained by thq recipient for use in other projects . OMB Circular A- 129 governs unreturned amounts that become delinquent debts . ( e) When authorized by the terms and conditions of the award, the Federal awarding agency shall make a settlement for any upward or downward adjustments to the Federal share of costs after :closeout reports are received. ( f) The recipient shall account for any real and personal property acquired with Federal funds or received from the Federal Government in accordance with Sections . 31 through . 37 . (g) In the event a final audit has not been performed prior to the closeout of an award, the Federal awarding agency shall • retain the right to recover an appropriate amount after fully considering the recommendations on disallowed casts resulting from the final audit. .72 Subsequent adjustments and continuing responsibilities. ( a) The closeout of an award does not affect any of the following . ( 1) The right of the Federalnw�e=ng basisagency ato lateraaud.it llow costs and recoverr funds o or other review. • 47 (2) The obligation of the recipient to return any funds due as a result of later refunds , corrections , or other transactions . (3 ) Audit requirements in Section . 26 . ( 4) Property management requirements in Sections . 31 through . 37 . (5) Records retention as required in Section - . 53 . (b) After closeout of an award, a relationship created under an award may be modified or ended in whole or in part with the consent of the Federal awarding agency and the recipient, . provided the responsibilir"=s of the recipient rA`=,-red to in paragraph . 73 (a) , including those far property management as applicable, are considered and provisions made for continuing responsibil1 *ios of the recipient, as appropriate. . 73 Collection of amounts due. (a) Any funds paid to a recipient in excess of the amount to which the recipient is finally determined to be entitled under the terms and conditions of the award constitute a debt to the Federal Government. Zf not paid within a reasonable period after the demand for payment, the Federal awarding agency may reduce the debt by ( 1) , (2) or (3 ) . ( 1) Making an administrative offset against other requests for reimbursements . (2) Withholding advance payments otherwise due to the recipient. (3) Taking other action permitted by statute.. (b) Except as otherwise provided by law, the Federal awarding agency shall charge interest on an overdue debt in accordance with 4 CFR Chapter IT_, "Federal Claims Collection Standards . " 171 • 48 • Appendix A • Contract Provisions All contracts , awarded by a recipient including small purchases, shall contain the following provisions as applicable: 1 . Equal �„n_l ovnent Opportunity - All contracts shall contain a provision requiring compliance with E.O . 11246 , "Equal 'molovment Opportunity, as amended by E.O. 11375 , "Amending Executive Order 11246 Relating to Equal Employment Opportunity, " and as supplemented by regulations at 41 CFR part 60 , "Office of FedA7-a1eral Contract Compliance Programs, Equal Employment opportunity, Department of Labor. " • 2 . Cooeland "Anti-Kickback" Act ( 18 U. S . C. 874 and 40 U. S . C. 276c) - All contracts and subgrants in excess of 52000 for construction or repair awarded by recipients and subrecipients shall include a provision for compliance with the Copeland "Anti- Kickback" Act (18 U. S . C. 874) , as supplemented by Department of Labor regulations (29 CFR part 3 , "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States" ) . The Act provides that each contractor or subrecipient shall be prohibited from inducing, by any means , any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to ,which he is otherwise entitled. The recipient shall report all suspected or reported 'violations to the Fedaral awarding agency. 3 . Davis-Bacon Act , as amended (40 U. S . C. 276a to a-7) - When required by Federal program legislation, all construction contracts awarded by the recipients and subrecipients of more than 52000 shall include a provision for compliance with the Davis-Bacon Act (40 U. S. C. 276a to a-7) and as supplemented by Department of Labor regulations (29 CFR part 5 , "Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction") . Under this Act, contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified dintaowage determinators ion Greta of In Labor. the Secretary made by be required to pay wages not less than once a week. The recipient shall place a copy of the current prevailing wage determination issued by the Department of Labor in each • solicitation and the award va a determinatiof a contract shan bTheorecipient aned upon the acceptance of g shall report all suspected or reported violations to the Federal • • awarding agency. 4 . Co tract Wok ou s and of etv Standad dedY cb 4 0 U. S ents3 7- . 333 - Whereere applicable all con-- acts a in excess of 52000 for construction contracts and in excess of $2300 • 49 • for other contracts that involve the employment of mechanics o_ laborers shall include a provision for compliance with Sections 102 and 107 of the Contract Work Hours and Safety Standards Act (40 U. S . C. 327-333 ) , as supplemented by Department of Labor regulations (29 CFR part .5) . Under Section 102 of the Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours . Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than 1 1/2 times the basic rate of pay far all hours worked in excess of 40 hours in the work week. Section 107 of the Act is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous' or dangerous . These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence . 5 . Rights to Inventions Made Under a Contract or Agreement - Contracts or agreements far the performance of experimental, developmental , or research work shall provide for the rights of the Federal Government and the recipient in any resulting invention in accordance with 37 CFR part 401 , "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements , " and any implementing regulations issued by the awarding agency. 6 . Clean Air Act ( 42 U. S .C. 7401 et seg . ) and the Federal Water Pollution Control Act (33 U. S . C. 1251 et sea . ) , as amended - Contracts and subgrants of amounts in excess of $100 , 000 shall contain a provision that requires the recipient to agree to comply with all applicable standards, orders' or regulations issued pursuant to the Clean Air Act (42 U.S. C. 7401 et seq. ) and the Federal Water Pollution Control Act as amended (33 U. S .C. 1251 et seq. ) . Violations shall be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA) . • 7 . Byrd Anti-Lobbvincr Amendment (31 U. S .C. 1352) - Contractors who apply or bid far an award of $100 , 000 or more shall file the required certification. Each tier certifies to the tier above _ that it will not and has not used Federal appropriated funds to pay anyorganization for influencing or attempting to person or influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, employee Yee of . a member of Congress in connection with obtaining any Federal contract, grant or any other award covered b 31 1o. S.C. 1352funds anyal Federal ard. Such disclosures are forwarded from tier to tier up to the recipient. 1 50 • � 8 . o_ba�-.-lent and Suspension (7 . 0 . s 12549 and 689) - No i� shall be made to parties listed on `�heGeneral Services contract Administration' s List of Parties Excluded from Federal procurement or Nonprocuremert Programs in accordance with E.O . s 12549 and 12689 , "Debarment and Suspension. " This list contains the names of parties debarred, suspended, or otherwise excluded and contractors declared ineligible under statutory by agencies ,or regulatory authority other than E.O . , ?5:�9 . Contractors w�ti'� awards that exceed the small purchase threshold shall provide the tification regarding its exclusion status and that of reGui*-'ed ce:- its principal employees . • 51 Ek; b;4- 11 EXHIBIT HananooK •00 r * o ION ' U_3. D.c.,rtrnent c! `41., Naualrsq and Urban Development yi' CiMca of Corrmunirf Planning and Development Program Participants and Departmental Staff September 1988 Community Development Block Grant Program Entitlement Grant Regulations • CCSE: Clztributlon: W-t,W-3-i, R-t, R-E, Special (CPO Field Cirectors) DEPARTMENT OF ROUSING AND URBAN DEVELOPMENT OEfice of the Assistant Secretary for _ Community Planning and Development 24 CFR Part 570 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FINAL RULE as pubLished in the FEDERAL REGISTER • [53 FR 34437; September 6 , 19881 1 orE THE �OL�L' v r.1G ( i) The subrecipient does not assume the recipient ' s environmental responsibilities described at § 570 .604; and ( ii ) The subrecipient does not assume the recipient ' s responsibility for initiating the review process under Executive Order 12372 . • • 7 . Subpart K of Part 570 is revised to read as Eo.11ows : Subpart K -- Other Program Requirements. Sec. 570 . 600 General . 570 . 601 Public Law 88-352 and Public Law 90-284 ; affirmatively furthering fair housing ; and Executive Order 11063 . 570 . 602 Section 109 of the Act . 570 . 603 Labor standards . 570 . 604 Environmental standards. 570 . 605 National Flood Insurance Program. 570 . 606 Relocation , displacement and acquisition . 570 . 607 Employment and contrating opnortunitieri . 570 . 608 Lead-based paint . 570 . 609 Use of debarred , suspended , or ineligible contractors or subrecipients . 570 . 610 Uniform administrative requirements and cost principles . 570 . 611 Conflict of interest . 570 . 612 Executive Order 12372. Subpart g -- Other Program Requirements. S 570.600 General. (a) Section 104 (b) of the Act provides that any grant under section 106 of the Act shall be made only if the grantee certifies to the satisfaction of the Secretary , among other things, that the grant 'will be conducted and administered in conformity with Public Law 88-352 and Public Law 90-284, " and, further , that the grantee "will comply with the other provisions of this title and with other applicable laws. " Section 104 (e) (1) of the Act requires that the Secretary determine with respect to grants made pursuant to section 106 (b) (Entitlement Grants) and 106 (d) (2) (B) (HUD-administered • Small Cities Grants) , at least on an annual basis , among other • things, "whether the grantee has carried out ( its) certifications in compliance with the requirements and the primary objectives of this title and with other applicable laws. . . . " Certain other statutes are expressly made applicable to activities assisted under the Act by the Act itself , while other laws not referred to in the Act may be applicable to such activities by their own terms. Certain statutes or Executive Orders which may be applicable to activities assisted under the Act by their own terms are administered or enforced by governmental departments or agencies other than the Secretary or the Department. This Subpart K enumerates laws which the Secretary will treat as applicable to grants made under section 106 of the Act, other than grants to States made pursuant to section 106 (d) of the K-I 9/88 Act , for purpo_ea of the determinations described above to be made by the Secretary under section 104 (e) ( 1) of the Act, including statutes expressly made applicable by the Act and certain other statutes and Executive Orders for which the Secretary has enforcement responsibility . The absence of mention herein of any other statute for which the Secretary does not have direct enforcement responsibility is not intended to be taken as an indication that, in the Secretary ' s opinion , such statute or Executive Order is not applicable to activities assisted under the Act. For laws which the Secretary will treat as applicable to grants made to States under section 106 (d) of the Act for purposes of the determination required to be made by the Secretary pursuant to section 104 (e) (2) of the Act, see 3 570 . 496 . (b) This subpart also sets forth certain additional program requirements which the Secretary has determined to be applicable to grants provided under the Act as a matter of administrative discretion . (c) In addition to grants made pursuant to section 106 (b) and 106 (d) (2) (8) of the Act (Subparts D and F, respectively) , the requirements of this Subpart K are applicable to grants made pursuant to sections 107 and 119 of the Act (Subparts E and G, respectively) , and to loans guaranteed pursuant to Subpart M. S 570. 601 Public Law 88-352 and Public Law 90-284 ; affirmatively :) furthering fair housing ; Executive Order 11063. Section 104 (b) of the Act provides that any grant under section 106 of the Act shall be made only if the grantee certifies to the satisfaction of the Secretary that the grant "will be conducted and administered in conformity with Public Law 88-352. and Public Law 90-284 and the grantee will affirmatively further fair housing . " Similarly, section 107 provides that no grant may be made under that section (Secretary 's Discretionary Fund) or section 119 (UDAG) without .satisfactory assurances that the grantee ' s program will be conducted and administered in conformity with Public Law 88-352 and Public Law 90-284. • (a) "Public Law 88-352" refers to title VI of the Civil Rights Act of 1964 ( 42 U.S.C. 2000d et sue. ) , which provides that no person in the United States shall on the ground of race , color , or national origin , be excluded from participation in , be denied the benefits of , or be subjected to discrimination under any program or activity receiving Federal financial assistance . Section 602 of the Civil Rights Act of 1964 directs each Federal department and agency empowered to extend Federal financial assistance to any program or activity by way of grant to effectuate the foregoing prohibition by issuing rules , regulations , or orders of general applicability which K-2 9/88 shall he consistr:nt with achievement of the statute authorizing the financial assistance . HUD regulations implementing the requirements of Title VI with respect to HUD programs ace contained in 24 CFR part I. (b) "Public Law 90-254" refers to title VIII of the Civil Rights Act of 1968 (:2 U . S .C . 3601 et sec . ) , popularly known as the Fair Housing Act , which provides that it is the policy of the United States to provide , within constitutional limitations , for fair housing throughout the United States and prohibits any person from discriminating in the sale or rental of housing , the financing of housing , or the provision of brokerage services , including otherwise -making unavailable or denying a dwelling to any person , because of race , color , religion , sex , or national origin . Title VIII further . requires the Secretary to administer the programs and activities relating to housing and urban development in a manner affirmatively to further the policies of Title vIII . Pursuant to this statutory direction , the Secretary requires that L, cantees administer all programs and activities related to housing and community development in a manner to affirmatively further the policies of Title VIII ; Furthermore , section 104 (b) (2) of the Act requires that each grantee receiving funds under section l08 of the Act (entitlement or small cities grantees) certify to the satisfaction of the Secretary that it will affirmatively further fair housing . (c) Executive Order 11063 , as amended by Executive Order 12259 , directs the Department to take all action necessary and appropriate to prevent discrimination because of race , color , religion (creed) , sex , or national origin , in the sale , leasing , rental , or other disposition of residential property and related facilities ( including land to be developed for residential use) , or in the use or occupancy thereof , if such property and related facilities are , among other things , provided in whole or in part with the aid of loans , advances , grants , or contributions agreed to be made by the Federal Government. HUD regulations implementing Executive Order 11063 are contained in 24 OFR Part 107 . S 570.602 Section 109 of the Act. 1' (a) Section 109 of the Act requires that no person in the United • States shall on the ground of race , color , national origin or sex, be excluded Erom participation in, be denied .the benefits of , or be subjected to discrimination under any program or activity funded in whole or in part with community development funds made available pursuant to the Act. For purposes of this section "program or activity" is defined as any function conducted by an identifiable administrative unit of the recipient , or by any unit of government , subcecipient, or \ K-3 9/SS 1 private contractor receiving community development funds or loans from the recipient. "Funded in whole or in part with ` .community development funds" means that community development funds in any amount in the form of grants or proceeds from HUD guaranteed loans have been transferred by the recipient or a subrecipient to an identifiable administrative unit and disbursed in a program oc activity. in subsection (b) of this section , " recipient' means recipient as defined in 24 CFR 1. 2 (f) . (b) Specific discriminatory actions prohibited and corrective actions . (1) A recipient may not, under any program or activity to which the regulations of this part may apply , directly or through contractual or other arrangements , on the ground of race , color , national origin , or sex : ( i) Deny any individual any facilities, services , financial aid or other benefits provided under the program or activity. ( ii) Provide any facilities, services , financial aid or other benefits which are different, or are provided in a different form, from that provided to others under the program or activity. (iii) Subject an individual to segregated or separate to treatment in anyfacilityp in or in any matter of process related to receipt of any service or benefit under the program or activity . • (iv) Restrict an individual in any way in access to, or in the enjoyment of, any advantage or privilege enjoyed by others in connection with facilities, services , financial aid or other benefits under the program or activity . (v) Treat an individual differently from others in determining whether the individual satisfies any admission , enrollment, eligibility, membership, or other requirement or condition which the individual must meet in order to be provided any facilities, services or other benefit provided under the program . or activity . (vi) Deny an individual an opportunity to participate in a program or activity as an employee . ( 2) A recipient may not use criteria or methods of administration which have the effect of subjecting persons to discrimination on the basis of race , color , national R-4 9/39 origin , or sex , or have the F ELect of deEeatina cc substantially impairing accamp ishment of the objectives of the program or activity with respect to persons o`; a particular race , color , national origin , or sex . (3) A :ecipient , in determining the site location of housing or Facilities provided in whole or in part with funds under this part , may not maXe Selections of such site or Location which nave the eff•'-Ct of excludinc persons from , denying them the benefits of , or subjecting • them to discrimination on the ground of race , color , national origin , or sex ; or which have the puroos• oc effect of defeating or substant-ially impairing the accomplishment of the objectives of the Act and of this section . (4) (1) in administering a program or activity funded in �ho.lc: or in part with CDEC, funds regarding whisk; the recipient has previously discriminated against r::",rsons on the ground of race , color , national origin Or sex , or if there is sufficient evideoc:- to conclude that such discrimination ex_sted , the recipient must take remedial affirmative action to overcome the effects of prior discrimination . The word "previously` does not exclude current discririnatory"eractices . • ( ii) In the absence of discrimination , a recipient, in administerin.j a program or activity funded in w•t,ale or in part with funds made available under this pact , may take any nondiscriminatory affirmative action necessary to ensure that the program or activity is open to all without ceg:=rd to race , color , national origin or sex , ( iii) After a . finding of noncompliance cc after a recipient has a firm basis to conclude that discrimination has • occurred , ' a recipient shall not be prohibited by this section from taking any action el_gibin under Subpart C to ameliorate an imbalance in services cc facilities provided to any geographic area or specific group of persons within its jurisdiction , where the purpose of such action is to. remedy prior discriminatory practice or usage. (5) Natvithstanding anything to the contrrcy in this section , nothing contained' herein shall be construed to prohibit any recipient from maintaining or constructing separate living facilities or rest room facilities for the different sexes . Furthermore , selectivity on the basis of sex is not prohibited when institutional or custodial 9/0S services can properly be pec , ormed only by a member of the same sex as the recipients of the services . (c) Section 109 of the Act further provides that any prohibition against discrimination on the basis of age under the Ace Discrimination Act of 1975 ( 42 U . S .C. 6101 et seg. ) or with respect to an otherwise qualified handicapped person as provided in section 504 of the Rehabilitation Act of 1973 (29 U . S.C. 794) shall also apply to any program or activity funded in whole or in part with funds made available pursuant to the Act. HUD regulations implementing the Age Discrimination Act are contained in 24 CFR Part 146 and the regulations - implementing section 504 are contained in 24 CFR Part 8 . S 570 . 603 Labor standards . Section 110 of the Act requires that all laborers and • mechanics employed by contractors or subcontractors on construction work financed in whole or in part with assistance received under the Act shall be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act , as amended (40 U. S.C. 276a - 276a-5) . By reason of the foregoing requirement, the Contract Work Hours and Safety Standards Act (40 U.S .C. 327 et sea. ) also applies. However , these requirements apply to the red b,ilitation of residential property only if such property contains not less than 8 units . With respect to the labor standards specified in this section, the Secretary of Labor has the authority and functions set forth in Reorganization Plan Number 14 • of 1950 (5 U. S .C. 1332-15) and section 2 of the Act of June 13 , 1934 , as amended (40 U.S.C. 276cj . S 570 .604 Envirommental standards. Section 104 (g) expresses the intent that "the policies of the National Environmental Policy Act of 1969 and other provisions of law which further the purposes of such Act (as specified in regulations issued by the Secretary) . . . (bel most effectively implemented in connection with the expenditure of funds under" the Act. Such other provisions of law which further the purposes of the National Environmental Policy Act of 1969 are specified in regulations issued pursuant to section 104 (g) of the• Act and contained in 24 CFR Part 58 . Section 104 (g) also provides that, in lieu of the environmental protection procedures otherwise applicable , the Secretary may under regulations provide for the release of funds for particular projects to grantees who assume all of the responsibilities for environmental review, decisionmaking , and action pursuant to the National Environmental Policy Act of 1969 , and the other provisions of law specified by the Secretary as described above , that would apply to the Secretary were he/she to K-6 9/88 undertake such pro',,ects as Federal. projects . Grantee, assume such environmental review , decisionrnaking , and action responsihiLitic's by execution of grant agreements with the Secretary . The procedures for carrying out such environmental responsibilities arP contained in 24 CFR Part 58 . 5 570.605 National Flood Insurance Program. • Section 202 (a) of the Flood D.i:;aster Protection Act of 1.973 (42 U .S .C . 4106) provides that no Federal. ofice: or agency shall approve any financial assistance far acquisition or construction purposes (as defined under section 3 (a) of said Act (42 (; . S .r . 400 (a) ) , one year after a community has been formally notified of its identification a a community con.ainin•g an area GE special . flood hazard , for use in any area that has been identified bu the Director of the Federal Emercen::_' management Agency as an a=e:a having special flood hazards unless the community in which such area is situated is then participating 'n the National Flood Insurance Program. Notwithstanding the daze of RUC approval of the recipient ' s application (or , in the case eE grants made )_nder Subpart D, the date of submission of the grantee ' s final statement pursuant to § 570 . 302) , funds pro•iided under this part shall not be expended for acquisition or construction purposes in an area that has been identified by the Federal Emergency Management Agency • (FEMA) as having special flood hazards unless the community in which the area is situated is participating in the National Flood Insurance Program in accordance with 44 CFR Parts 59-79 , or less than a year has passed since FEMA notification to the community regarding such hazards ; and flood insurance is obtained in accordance with section 102 (a) of the Flood Disaster Protection Act of 1973 (42 U .S .C. 4001) . 5 570. 606 Relocation, displacement and acquisition. • I (a) Uniform Relocation Act . (1) The Uniform Relocation Assistance . and Real Property Acquisition Policies Act of 1970 (URA) (42 U.S .0 4601) and HUD implementing regulatins at 24 CFR Part 42 apply to the acquisition of real property by a State agency for an activity assisted under this part and to the displacement of any family , individual, business, nonprofit organization or farm that results from such acquisition. The grantee ' s certification of compliance with the URA is required in the grant agreement. (2) An acquisition and resulting displacement by a State agency is " for an assisted activity" if it occurs on or after the date of the initial submission of a final statement under 24 CFR 570. 3:1)2 (a) (22) (rntitl;2ment Grants) ; 9/88 • • the initial submission of an application to EIUD by a unit of general Local government under §5 570 . 426 , 570 . 430 , or 570 . 435 (d) that is granted for the requested activity UD administered Small Cities Program) ; or the submission of .an application to HUD by a city or urban county under 5 570 . 458 that is granted for the requested activity (UDAG) . However , an acquisition or displacement that occurs on or after the described date is not subject to the URA if the grantee determines that the acquisition or displacement was not carried out for an assisted activity, and the HUD Field Office concurs in that determination . An acquisition or displacement that occurs before the described date is subject to the URA, if the grantee or the HUD Field Office determines that the acquisition or displacement was carried out for the assisted activity. The grantee may , at any time , request a HUD determination whether an acquisition or displacement will be considered to be for an assisted activity and thus subject to these regulations . To be eligible for relocation assistance , however , a person must also meet the eligibility criteria in 24 CFR Part 42 . (b) Residential antidisolacement and relocation assistance plan. Under section 104 (d) of the Act, each grahtee must adopt, make public and certify that it is following a residential antidisolacement and relocation assistance plan providing one- for-one replacement units (paragraph (b) (1) of this section) , and relocation assistance (paragraph (b) (2) of this section) . The plan must also indicate the steps that will be taken consistent with other goals and objectives of this part to minimize the displacement of persons from their homes as a result of any activities assisted under.. this part. (1) One-for-one replacement units. ( i) All occupied and vacant occupiable low/moderate-income dwelling units that are demolished or converted to a use other than as low/moderate-income dwelling units as a direct result of an activity assisted under this part must be replaced by governmental agencies or private developers with low/moderate-income dwelling units. Replacement low/moderate-income dwelling units may include public housing , or existing housing receiving Section 8 project-based assistance under the United States Housing Act of 1937 . The replacement low/moderate-income dwelling units must be provided within three years of the commencement of the demolition or rehabilitation related to the conversion , and must meet the following requirements : (A) The units must be located within the grantee ' s .jurisdiction . K-8 9/88 • , (B) The units must be sufficient in number and size to house at least the number of occupants that could have been housed in the units that are demolished or converted . The number of occupants that may be housed in units shall be determined in accordance with Local housing occupancy codes . (C) The units must be provided in standard condition . Replacement Low/moderate-income dwelling units may include units that have been raised to standard from substandard condition . (n) The units must be designed to remain low/moderate- income dwelling units for at least 10 years from the date of initial occupancy . (ii) Before obligating or expending funds provided under this part for any activity that will directly result in the demolition of low/moderate-income dwelling units or the conversion of low/moderate-income dwelling units to another use , the grantee must make . public , and submit the following information in writing co HUD : (A) A description of the proposed assisted activity; I ( ( (B) The general location on a map and approximate number of dwelling units by size (number of bedrooms) that will be demolished or converted to a use other than 1I for low/moderate-income dwelling units as a direct result of the assisted activity; 1 . (C) A time schedule for the commencement and completion of the demolition or conversion; (D) The general location on a map and approximate number of dwelling units by size (number of bedrooms) that will be provided as replacement dwelling units ; (E) The source of funding and a time schedule for the 1 provision of replacement dwelling units ; 1 (F) The basis for concluding that each replacement dwelling unit will remain a low/moderate-income f dwelling unit for at least 10 years from the date of • initial occupancy . ( (iii) (A) The requirements of paragraph (b) (l) of this section do not apply if the HUD Field Office determines , based upon objective data , that there Is an adequate supply of vacant low/moderate-income dwelling units K-9 9/88 1 in stan dard condition available on a nondiscriminatory basis within the \: \ grantee ' s jurisdiction . In making this determination , the HUD Field Office will consider the housing vacancy rate for the jurisdiction , the number of vacant low/moderate-income dwelling units in the jurisdiction (excluding units that will be demolished or convected) and the number of eligible families an waiting lists for housing assisted under the United States Housing Act of 1937 in the jurisdiction . (B) The HUD Field Office may consider the supply of vacant low/moderate-income dwelling units in standard condition available on a nondiscriminatory basis in an area that is larger than the grantee ' s jurisdiction . Such additional dwelling units shall be considered iE the HUD Field Office determines that the units would be suitable to serve the needs of the low- and moderate income households that could be served by the low/moderate-income dwelling units that are to be demolished or converted to another use . The HUD Field Office must base this determination on geographic and demographic factors , such as location and access to places of employment and to other facilities . (C) The grantee must submit a request for a determination under paragraph (b) (1) ( iii) of this section, directly )1 to the HUD Field Office . (2) Relocation assistance . (i) Each low- or moderate-income household that is displaced by demolition or by the conversion of a low/moderate income dwelling unit to another use as a direct result of an activity assisted under this part • shall be provided with relocation assistance. The _ low- or moderate-income household may elect to receive _ relocation assistance described at 24 CFR Part 42 (HU D' s regulations implementing the URA) , or may elect to receive the following relocation assistance: _ i (A) The relocation assistance described at 24 CFR Part 42, Subpart C (General Relocation Requirements) and Subpart D (Payment for Moving and Related Expenses) . Relocation notices must be issued consistent with , and in the manner prescribed under , 24 CFR 42 . 203 . The definition of "comparable replacement dwelling" used in 24 CFR Part 42 is modified as described in paragraph (b) (3) ( i) of this section . Displaced households provided with I replacement housing assistance under paragraph K-10 9/88 (b) (2) ( i) (C) of this :oc� ion, in the form of a certificate or housing voucher under section 8 of the United States Housing Act of 1S37 , must be provided referrals to comparable replacement dwelling units whose owners are willing to participate in the housing voucher or certificate orogr3c;._ Tie grantee shall advise tenants of their rights under the F ede r a 1 Fair Housing Law (Title VIIL) and of replacement housing opportunities in such a manner that , whenever feasible , they will have a choice .:,etween relocating within their neighborhoods and other neighborhoods consistent with the grantee ' s . responsibility to affirmatively further fair housing ; (3) The reasonable and necessary cost of any security . deposit required to rent the replacement dwelling unit , and credit checks required to rent or ourchase the replacement dwelling unit ; and • (C) Replacement housing assistance . Households are eligible to receive one of the following forms of • replacement housing assistance : (1) Each household must be offered compensation designed to ensure that, for a five-year period , the displaced household will not bear , after relocation , a ratio of shelter costs to income ( that . exceeds 30 percent. Such compensation shall be either : ( i) A certificate or housing voucher for rental assistance provided through the local Public Housing Agency under Section 8 of the United State Housing Act of 1937 ; or ( ii) Cash rental assistance equal to 60 times the amount that is obtained by subtracting 30 percent of the displaced household 's monthly • gross income (with such adjustments as the grantee may deem eppropriate) from the lesser of : the monthly cost of rent and utilities at a • comparable replacement dwelling unit or the monthly cost oZ rent and utilities at the decent , safe and sanitary replacement dwelling to which the household relocates. The grantee may provide the cash payment in either a lump sum or in installments. The grantee may at its (• discretion offer the household a choice between the certificate/housing voucher or cash rental assistance . • s-I1 9/83 ( 2) IE the household purchases an interest in a housing cooperative or mutual housing association and occupies a decent , safe and sanitary unit in the cooperative or association , the household may elect to receive a lump sum payment. This lump sum payment shall be equal to the capitalized value of 60 monthly installments of the amount that is obtained by subtracting 30 percent of the displaced household ' s monthly gross income (with such adjustments as the grantee may deem appropriate) from the monthly cost of cent and utilities at a comparable replacement dwelling unit. To compute the capitalized value , the installments shall be discounted at the rate of interest paid on passbook savings deposits by a _ federally- insured bank oc savings and loan institution conducting business within the grantee 's jurisdiction . To the extent necessary to minimize hardship to the household , the grantee shall , subject to appropriate safeguards , issue a payment in advance of the purchase of the interest in the housing cooperative or mutual housing association. ( ii) Eligibility for relocation assistance . (A) A low- or moderate-income household that is required to move as a direct result of demolition or conversion of a low/moderate income dwelling unit to another use , is eligible for relocation assistance under paragraph (b) (2) of this section if : (1) The household is required to move from the dwelling unit on or after the date that the owner submits a request to the grantee for financial assistance that is later approved for the requested activity. (This applies to dwelling units owned by a person other than a Federal or State agency, as defined under the URA) . • { (2) The household is required to move from the dwelling unit on or after the date of the initial submission of a final statement under 24 CFR 570 .302 (a) (2) (Entitlement Grants) ; the initial submission of an application to HUD by a unit of general local government under 55 570 .426 , 570 . 430 , or 570 . 435 (d) that is granted for the requested activity (HUD administered Small Cities Program) ; or the submission of an application to HUD by a city or 411 urban county under 5 570 . 458 that is granted for i K-12 9/88 the requested activity (UDAG) . (This applies to dwelling units owned by a Federal or State agency as defined under the URA. ) (B) If the displacement occurs on or after the appropriate date described in paragraph (b) (2) ( ii) (A) of this section , the low- or moderate-income household is not eligible for relocation assistance if : ( 1) The household is evicted for cause ; (2) The household moved into the property on or after the date described in paragraph (b) (2) ( ii) (A) of this section , after receiving written notice of the expected displacement ; or (3) The grantee determines that the displacement was not a direct result of the assisted activity , and the HUD office concurs in that determination . (C) If the displacement occurs before the appropriate date described in paragraph (b) (2) ( ii) (A) of this section , the low- or moderate-income household is eligible for relocation assistance if the grantee or HUD determines that the displacement was a direct result of an activity assisted under this part. (3) Definitions . For the purposes of paragraph (b) of this section : (i) 'Comparable replacement dwelling unit' means a • dwelling unit that: (A) Meets the criteria of 24 CFR 42.2 (c) (1) through (4) ; and (B) Is available at a monthly cost for rent . plus estimated average monthly utility costs that does not exceed 30 percent of the household 's average gross monthly income (with such adjustments to income as the grantee may deem appropriate) after taking into account any rental assistance the household would receive. Where a certificate or housing voucher is provided to a household under paragraph (b) (2) (i) (C) (1) (i) of this section , the dwelling unit must . be available to the household at a monthly cost for rent and estimated average monthly utility cost that does not exceed the Fair Market Rent or the payment standard , respectively . K-13 9/38 1 ( ii) "Decent , safe and sanitary dwelling " means a decent , safe and sanitary dwelling as defined in 24 CFR 42 . 2 (e) . ( iii) 'Low/moderate income dwelling unit" means a dwelling unit with a market rental ( including utility casts) that does not exceed the applicable Fair Market Rent (FMR) for existing housing and moderate rehabilitation established under 24 CFR Part 888. ( iv) 'Occupiable dwelling unit" means a dwelling unit that is in a standard condition , or is in a substandard • condition , but is suitable for rehabilitation . (v) "Standard condition' and "substandard . condition suitable for rehabilitation . " if the grantee has a RUD-approved Housing Assistance Plan , the definitions of "standard condition" and "substandard condition suitable for rehabilitation' established in the plan will apply . If the grantee does not have a HUD- approved Housing Assistance Plan , the. grantee must establish and make public its definition of these terms consistent with the, requirements of S 570 . 306 (e) (1) . (4) Effective date. For all grants except those made under Subpart D of this part (Entitlement Grants) , the �. provisions of this paragraph (b) are applicable to grants made on or after October 1, 1988 . For grants made under Subpart D, these provisions will govern all activities for which funds are first obligated by the grantee, on or after the date the first grant is made after September 30, 1988 , without regard to the source year of the funds used for the activity. (c) Section 104 (k) relocation recuicements . Section 104 (k) of the Act requires that reasonable relocation assistance be provided to persons (families , individuals , businesses`, nonprofit organizations , or farms) displaced ( i .e . , moved , permanently - and involuntarily) as a result of the use of assistance received under this part to acquire or substantially rehabilitate property . If such displacement is; subject to • paragraph (a) or (b) of this section , above , this paragraph does not apply . The grantee must develop , adopt! and, provide to persons to be displaced a written notice of the relocation assistance for which they are eligible . The minimum requirements for such assistance under the UDAG Program are described at § 570 . 457 (b) . Under CDBG programs , persons entitled to assistance under this paragraph must be provided relocation assistance , including at a minimum : ( 1) Reasonable moving expenses ; K-14 9/88 • (2) Advisory services needed to help in relocating . The grantee shall advise tenants of their rights under the Federal Fair Housing Law (Title VIII) and of replacement housing opportunities in such a manner that , whenever feasible , they will have a choice between relocating within their neighborhoods and other neighborhoods consistent with the grantee ' s responsibility to affirmatively further fair housing ; and (3) Financial assistance sufficient to enable any person displaced from his or her dwelling to lease and occuoy a suitable , decent , safe and sanitary replacement dwelling where the cost of cent and utilities does not exceed 30 percent of the household 's gross income . (d) Optional relocation assistance . Under section 1G5 (a) ( 11) of the Act, the grantee may provide relocation payments and other relocation assistance for individuals , families , businesses , nonprofit organizations and farms displaced by an activity not subject to paragraphs (a) , (b) or (c) of this section , The grantee may also provide relocation assistance to persons covered under paragraphs (a) , (b) or (c) of this section beyond that required . Unless such assistance is provided pursuant to State or local law, the grantee must provide the assistance only upon the basis of a written determination that the assistance is appropriate and must.. adopt a written policy available to the public that describes the relocation assistance that the grantee has elected to provide and that provides for equal relocation assistance within each class of • displacees . • (e) Appeals . If a person disagrees with the grantee 's j determination concerning the person 's eligibility for , or the amount of a relocation payment under this section, the person may file a written appeal of that determination with the grantee. The appeal procedures to be followed are described in 24 CFR 42. 10 . A low- or moderate income household that has been displaced from a dwelling may file a written request for review of the grantee decision , to the HUD Field Office . ( f) Responsibility of grantee. i (1) The grantee is responsible for ensuring compliance with the requirements of this section , notwithstanding any third party ' s contractual obligation to the grantee to comply with the provisions of this part. (2) The cost of assistance required under this section may be paid from local public funds , funds provided under this part , or funds available from other sources. • K-15 9/89 • • • (3 ) The grantee must maintain records in sufficient detail to demonstrate compliance with the provisions of this section . (g) Displacement . For the purposes of this section , a "displaced oerson" is a person that is required to move permanently and involuntarily and includes a residential tenant who moves from the real property if : (1) The tenant has not been provided with a reasonable opportunity to lease and occupy a suitable , decent , safe and sanitary dwelling in the same building or in a nearby building on the real property following the completion of the assisted activity at a monthly rent and estimated average cost Eor utilities that does not exceed the greater of (i) 30 percent of the tenant household ' s average monthly gross income ; or ( ii) The tenant ' s monthly rent and average cost for utilities before (A) The date that the owner submits a request to the grantee for financial assistance that is later approved for the requested activity. (This applies to dwelling units owned by a person other than a Federal or State agency, as defined under the URA) ; or (B) The date of the initial submission of a final statement under S 570.302(a) (2) (Entitlement Grants) ; the initial submission of an application to HUD by a unit of general local government under S 570 .426 , 57C.430 , or . 570.435 (d) that is granted for the requested activity (HUD administered Small Cities Program) ; or the submission of an application to BUD by a city or urban county under 5 570 . 458 that is granted for the requested activity (UDAG) . (This applies to dwelling units owned by a Federal or State agency as defined under the URA) ; or (2) The tenant is required to move to another dwelling in the real property but is not reimbursed for all actual reasonable out-of-pocket costs incurred in connection with the move ; or (3) The tenant is required to relocate temporarily and : ( i) Is not reimbursed for all reasonable out-of-packet expenses incurred in connection with the temporary relocation , including moving costs and any increased rent and utility costs ; oc K-16 9/98 ( ii) Other conditions of the temporary relocation ace not reasonable . S 570 .607 Employment and contracting opportunities . (a) Grantees shall comply with Executive Order 11246 , as amended by Executive Order 12086 , and the regulations issued pursuant thereto (41 CFR Chapter 60) which provide that no person shall be discriminated against on the basis of race , color , religion , sex , or national origin in all phases of employment during the performance of Federal or . federally assisted construction contracts . As specified in Executive Order 11246 and the implementing regulations , contractors and subcontractors on Federal or federally assisted construction . contracts shall take affirmative action to ensure fair treatment in employment , upgrading , demotion or transfer , recruitment or recruitment advertising , layoff or termination , rates of pay , or other forms of compensation and selection for • training and apprenticeship . (b) Section 3 of the Housing and Urban Development Act of 1968 ( 12 U. S .C. 1701u) requires , in connection with the planning and carrying out of any project assisted under the Act , that to the greatest extent feasible opportunities for training and • employment be given to low and moderate income persons residing within the unit of local government or the ( metropolitan area (or nonmetropolitan county) as determined by the Secretary , in which the project is located , and that contracts for work in connection with the project be awarded r to eligible business concerns which ace located in , or owned in substantial part by persons • residing in the same i metropolitan area (or nonmetropolitan county) as the project. Grantees shall adopt appropriate procedures and ti requirements to assure good faith efforts toward compliance 1 with the statutory directive. HUD regulations at 24 CFR Part 135 are not applicable to activities assisted under this part but may be referred to as guidance . indicative of the Secretary ' s view of the statutory objectives in other } contexts . • t !j t 5 570.60S Lead-based paint. Prohibition against the use of lead-based paint. Section (a) Prevention Act (42 401(b) of the Lead-Based Paint Poisoning ' U.S.C. 4831(b) ) directs the Secretary to prohibit the use of lead-based paint in residential structures constructed or rehabilitated with Federal assistance. Such prohibitions are to contained in structures CFR t constructed aor and ehabilitatedblwith residential 1 assistance provided under this part. h_, 7 . 9/88 • • (b) Notification of hazards of lead-based paint poisoning . ( 1) The Secretary has promulgated requirements regardinc notification to purchasers and tenants of HUD-associated housing constructed prior to 1978 of the hazards of lead- based paint poisoning at 24 CFR Part 35 , Subpart A. This paragraph is promulgated pursuant to the authorization granted in 24 CFR 35 .5 (c) and supersedes , with respect to all housing to which it applies , the notification requirements prescribed by Subpart A of 24 CFR Part 35 . (2) For properties constructed prior to 1978 , applicants for rehabilitaion - assistance provided under this part and tenants or purchasers of properties owned by the grantee or its subrecipient and acquired or rehabilitated with assistance provided under this part shall be notified : ( i) That the property may contain lead-based paint ; (ii) of the hazards of lead-based paint ; (iii) of the symptoms and treatment of lead-based poisoning ; ( iv) of the precautions to be taken to avoid lead-based paint poisoning (including maintenance amd removal techniques for eliminating such hazards) ; (v) of the advisability and availability of blood lead level screening for children under seven years of age; and • (vi) that in the event lead-based paint is found on the property , appropriate abatement procedures may be undertaken . (c) Elimination of lead-based paint hazards. The purpose of this paragraph is to implement the provisions of section 302 of the Lead-Based Paint Poisoning Prevention Act, 42 U.S.C. 4822, by establishing procedures to eliminate as far as practicable the hazards due to the presence of paint which may contain lead and to which children under seven years of age may be exposed in existing housing which is rehabilitated with assistance provided under this part: The Secretary has promulgated requirements regarding the elimination of lead-based paint hazards in HUD-associated housing at 24 CFR Part 35, Subpart C. This paragraph is promulgated pursuant to the authorization granted in 24 CFR 35 .24 (b) (4) and supersedes , with respect to all housing to which it applies , the requirements prescribed by Subpart C of 24 CFR Part 35. K-19 9/88. . ( 1) Applicability . This paragraph applies to the rehabilitation of applicable surfaces in existing housing which is assisted under this pact. The following activities assisted under the Community Development 3lock Grant program are not covere:I by this paragraph : ( i) Emergency repairs (not including lead-based naint- related emergency reoairs) ; ( ii) weatherization ; . ( iii) water or sewer hook-ups ; ( iv) installation of security devices ; (v) facilitation of tax exempt bond issuances which provide funds for rehabilitation ; (vi) other similar types of single-purpose programs that do not include physical repairs or remodeling of applicable surfaces (as defined in 24 CFR 35.22) of residential structures ; and . (vii) any non-single purpose rehabilitation that does not involve applicable surfaces (as defined in 24 CFR 35 .22) that does not exceed $3 ,000 per unit. ki( _ (2) Definitions. - Applicable surface': All intact and 1` nonintact interior and exterior painted surfaces of a residential structure . Chewable surface . All chewable protruding painted surfaces up to five feet from the floor or ground, which are readily accessible to children under seven years of . age , e.g . , protruding corners, windowsills and frames , doors and frames , and other protruding woodwork. N Defective paint surface. Paint on applicable surfaces that is cracking , scaling , chipping , peeling or loose . • \ Elevated blood lead level or EEL. Excessive absorption of ( . lead , that is , a confirmed concentration of lead in whole . t blood of 25 ug/dl (micrograms of lead per deciliter of ( whole blood) or greater . Lead-based paint surface . A paint surface , whether or not defective , identified a5 having a lead content greater than or equal to 1 mg/cm" j (3) Inspection and Testing 1 K-19 9/88 . t • • ( i) Defective paint surfaces . The grantee shall inspect for defective paint surfaces in all units constructed prior to 1978 which ace occupied by families with children under seven years of age and which are proposed for rehabilitation assistance . inzoection shall occur at the same time the The is being inspected for rehabilitation, efecerte paint conditions will be included in the defective for the remainder of the rehabilitation work . write-uo ( ii) Chewable surfaces. The grantee shall be • test the lead content of chewablesurfacesf required he e family residing in a unit, constructed to 1978 and receiving rehabilitation assistance , includes a child under seven years of age with an identified EEL condition . Lead content shall be tested by using an X-ray fluorescence analyzer (XRF) or other method approved by HUD. Test readings of 1 mg/cm2 or higher using an XRF shall be considered positive for presence of lead-based paint. ( iii) Abatement without testing . In lieu of the procedures set forth in paragraph (c) (3) ( iE) of this section , in the case of a residential structure constructed prior to 1978 , the grantee may forgo testing and abate all applicable surfaces in accordance with the methods set out in 24 CFR 35. 24 (b) (2) ( ii) . (4) Abatement Actions . (i) For inspections performed under § 570 . 608 (c) (3) (i) and where defective paint surfaces are found , treatment • shall be provided to defective areas . Treatment shall be performed before final inspection and approval of { the work. • ( ii) For testing performed under 5 570 . 608 (c) (3) (ii) and where interior chewable surfaces are found to contain lead-based paint, all interior chewable surfaces in any affected room . shall be treated . Where exterior chewable surfaces are found to contain lead-based paint, the entire exterior chewable surface shall be treated . Treatment 'shall be performed before final inspection and approval of the work . ( iii) When weather prohibits repainting exterior surfaces before final inspection , the grantee may permit the owner to abate the defective paint or chewable lead- based paint as required by this section and agree to repaint by a specified date . A separate inspection is required . i -20 9/88 (5) Abatement methods . At a minimum , treatment of the defective areas and chewable lead-based paint surfaces shall consist of covering or removal of the painted surface as described in 24 CFR 35 . 24 (b) (2) ( ii) . (6) Funding for inspection , testing and abatement. Program requirements and local program design will determine whether the cost of inspection , testing or abatement is to be borne by the owner/developer , the grantee or a combination of the owner/developer and the grantee . (7) Tenant protection . The owner/developer shall take appropriate action to protect tenants from hazards associated with abatement procedures . Where necessary , these actions may include the temporary relocation of tenants during the abatement process . The owner/developer • shall notify the grantee of all such actions taken . (8) Records . The grantee shall keep a copy of each inspection and/or test report for at least three years . (9) Monitoring and enforcement. RUC field office monitoring of rehabilitation programs includes reviews for compliance with applicable program requirements for lead-based paint. The CPO Field Monitoring Handbook which currently includes instructions for monitoring lead-based paint requirements will be amended as appropriate . In cases of noncompliance , HUD may impose conditions or sanctions on grantees to encourage prompt compliance. (10) Compliance with other program requirements , Federal, State and local laws . (i) Other program requirements . To the extent that assistance from any of the programs covered by this section is used in conjunction with other HUD program assistance which have lead-based paint requirements which may have more or less stringent requirements , the more stringent requirements will prevail. • (ii) HUD responsibility . If HUD determines that a State or local law, ordinance , code or regulation provides for lead-based paint testing or hazard abatement in a manner which provides a level of protection from the hazards of lead-based paint poisoning at least comparable to that provided by the requirements of this section and that adherence to the requirements of . this subpart would be duplicative or otherwise cause. inefficiencies , HUD may modify or , waive the requirements of this section in such manner as may be appropriate to promote efficiency while ensuring such comparable level of protection. K-21 9/88 • • ( iii ) Grantee responsibility . Nothing in this section is intended to relieve any grantee in the programs covered by this section of any responsibility Ear • compliance with State or local laws , ordinances , codes • or regulations governing lead-based paint testing or hazard abatement. ( iv) Disposal of lead-based paint debris . Lead-basd paint and defective paint debris shall be disposed of in accordance with applicable Federal , State oc local requirements . (See , e .g . , 40 CFR Parts 260 through 271. ) 5 570 . 609 Use of debarred , suspended, or ineligible contractors or subrecipients. Assistance under this part shall not be used directly or indirectly to employ , award contracts to , or otherwise engage the services of , or fund any contractor or subrecipient during any period of debarment, suspension , or placement in ineligibility status under the provisions of 24 CPR Part 24 . S 570 .610 Uniform administrative requirements and cost principles. The recipient, its agencies or instrumentalities , and subrecipients shall comply with the policies , guidelines , and requirements of 24 CFR Part 85 and OMB Circulars A-87 , A-110 , A- • 122 , and A-128 ( implemented at 24 CFR Part 44) , as applicable , as they relate to the acceptance and use of Federal funds under this part. The applicable sections of 24 CFR Part 85 and OMB Circular A-110 are set forth at S 570 . 502. • S 570.611 Conflict of interest. (a) Applicability. Ii ( 1) In the procurement of supplies , equipment, construction , and services by recipients , and by subrecipients (including those specified at S 570. 204 (c) ). , the conflict • of interest provisions in 24 CFR 85.36 and OMB Circular A- 110 , respectively , shall apply. (2) In all cases not governed by 24 CFR 85.. 36 and OMB Circular A-110 , the provisions of this section shall apply . Such cases include the acquisition and disposition of real property and the provision of assistance by the recipient, by its subrecipients , or to individuals , businesses and other private entities under eligible activities which authorize such assistance (e .g . , rehabilitation, -7: 9/88 • preservation , and other improvements of private properties or facilities pursuant to 5 570 . 202 , or grants , loans and other assistance to businesses , individuals and other private entities pursuant to 5 570 .203 , 5 570 .204 or 5 570. 455) . (b) Conflicts ❑rohibited . Except for the use of CDBG funds to pay salaries and other related administrative or personnel costs , the general rule is that no persons described in paragraph (c) • of this section who exercise or have exercised any functions or responsibilities with respect to CDBG activities assisted under this part or who are in a position to participate in a decisionmaking process .or gain inside information with regard to such activities , may obtain a personal or financial interest or benefit from a CDBG assisted activity , or have an interest in any contract, subcontract or agreement with respect thereto , or the proceeds thereunder , either for themselves or those with whom they have family or business ties , during their tenure or for one year thereafter . For the UDAG program, the above restrictions shall apply to all • activities that are a part of the UDAG project, and shall I cover any such interest or benefit during , or at any time after , such person ' s tenure . (c) Persons covered . The conflict of interest provisions of paragraph (b) of this section apply to any person who is an employee, agent, consultant, officer , or elected official or ]) appointed official of the recipient , or of any designated public agencies , or subrecipients which are receiving funds under this pact. (d) Exceptions : threshold requirements . Upon the written request of the recipient, HUD may grant an exception to the provisions of paragraph (b) of this section on a case-by-case basis when it determines that such an exception will serve to further the purposes of the Act and the effective and efficient administration of the recipient ' s program or project. An • exception may be considered only after the. recipient has . provided the following : (1) A disclosure of the nature of the conflict, accompanied by ' an assurance that there has been public disclosure of the . conflict and a description of haw the public disclosure • was made ; and (') An opinion of the recipient' s attorney that the interest • for which the exception is sought would not violate State or local law.. . (e) Factors to be considere for exceptions . xc coon . thanrecipeentnhas whether to grant a requestedof this satisEsctJcily met the requirements of paragraph (d) 9;33 -_3 • section , HUD shall consider the cumulative effect of the following factors , where applicable : ( 1) Whether the exception would provide a significant cost benefit or an essential degree of expertise to the program or project which would otherwise not be available ; (2) Whether an opportunity was provided for open competitive bidding or negotiation ; (3) Whether the person affected is a member of a group or class of low o. moderate income persons intended to be the beneficiaries of the assisted activity , and the exception will permit such person to receive generally the same interests or benefits as are being made available oc provided to the group or class ; (4) Whether the affected person has withdrawn from his or her functions or responsibilities , or the decisionmaking process with respect to the specific assisted activity in question ; (5) Whether the interest or benefit was present before the affected person was in a position as described in paragraph (b) of this section ; (6) Whether undue hardship will result either to the recipient or the person affected when weighed against the public interest served by avoiding the prohibited conflict ; and (7) Any other relevant considerations. S 570. 612 Executive Order 12372. (a) General. Executive Order 12372, Intergovernmental Review of Federal Programs , and the Department ' s implementing regulations at 24 CFR Part 52 , allow each State to establish its own process for review and comment on proposed Federal financial assistance programs . (b) Applicability . Executive Order 12372 applies to the . CDEG Entitlement program and the UDAG program. The Executive Order applies to all activities proposed to be assisted. under UDAG, but it applies to the Entitlement program only where a grantee proposes to use funds for the planning or construction (reconstruction or installation) of water or sewer facilities . Such facilities include storm sewers as well as all sanitary sewers , but do not include water and sewer lines connecting a .structure to the lines in the public right-of-way or easement . it is the responsibility of the grantee to initiate th= Executive Order review process if it proposes to use its CD5G or UDAG funds for activities subject to review. K 9!93 conomic OpportuniTles Tar Low- -.3. :.., ...tll lot 1, ,... I IVUJ.I Iy — _oleo _._ • . and Urban Oeveiooment nd V-ry Low-Income Persons CtiCe of Fait Hcus)ng 1 Connection with Assisted Projects and Equal Cccorturmf UO Act of 1968, Section 3 . :clic Reporting Burden tot this=Ileaton at iniormaaon is es amatad to average 2 hours per resporse,including:..e ame icr reviewing insottccons,searching gxisanc 3ca sources,gathering and maintaining the dare needed.and completing and reviewing toe=tieccon of iniormaacn. Send commenr;regarding tfits burden 3mate •any ocher aspect at anis eoilecdon at intarmaaon,including suggestions tar reducing is burden. to die Recce Management Otter.Ctfca at Information?otice< ;d Systems,U.S.Oepara:rent at Housing and Urtrarm Development. 'Nasringccn.O.C.204t 0-35C0 anti:c laid C its or Management and Budget.Pacerwcrtc Reduc car rojec:(2529-0043),Washington.O.C. 205e3. 0o not sand ails completed form to attrer at chase addressees. .ziec:ptenc wame d accress:(Street.City,State.LC) i 2. =west icenue auon:(CcntraCJAwaro wool i 3. Cedar amount of Awarc 1 '+. Ccntac Person: : S. ?hone:(inc ude area coca) i a. Pecoraro Pena::: ,. Date:aeocrt Suc rnmea:_ ;. Program Cade: I (Use a seoarata shear for each Program Ada) %�j�� // �jj%/��j /j�� jji � :'-art I: Employment and Training (' Include New Hires in columns C ano 0.) A a I C ' o I ,- Total New Hires at Aggregraaa i 'a at total salt hours Number ct Sacaon 3 1 RacaUEchnic Cade(s) • by Job Category New Hires mac are I to Section 3 Emolayees Employees and I car Columns 0 and E,show Numbers Secion 3 Residents I and Trainees • Trainees ' 1 112 13 14 15 :„--, /�0�////xi�%/%/ ///r /%%%////%% ,�/�/////i�r/ice/%/ 4F,Zdi. . ,/: Technicians / , /Z/. / , %////%//// , / / Z A Construction by Trade (Ust) 1 Trade: , % 1,,* / // 7 / / d//////&/.1-// . Trade: 1 • 7/7 .y/�/jG' cG1 .." // , , Trade: / / •/ A/ / 'W% / / / / , / // / /19 t 1 1 II 1 � - ... I I r 7 / ,.,/ :. / , , / .,,i / 11 / ,//1 1 / I I I I '//, /,/,,/// Racial/Ethnic Codas: Program Caries: 1 -White American I .nenbte Subsidy 5.HaME•State Adminisaired 2.Stack American 2-Secdon 202/81 1 7•CO8G-Entidecttent '• 3 -Native American 3-PuolicIndian Housing Oevelacment 8 -CO8G-State Administered i-Hispanic American Operation and ucdemt=con 9•Other CO Programs 5_AsianPacfic American s»Homeless Assistance IC -Omer Housing Programs 5 -Hasidic Jaws(Far?art II cnty) 5-HOME form H11O-90002(8194) sce ; ci 2 -ar 74 t35 Part II: Contract's Awarded • 1. Construction Contracts: A. Total dollar amourrt at all contracts awarded an the pralect S 8. Total dollar amount at contracts awarded to Section 3 businesses S C. Percentage of the total dollar amount that was awarded to Section 3 businesses 0. Total number at Sedan 3 businesses.receiving contracts E. Enter the number at S c on 3 businesses receiving contracts by PacallEdtinic code(s)(see page 1 for codes) t 1 21 3 4 5 I S 2. Nan-Canstruction Contracts: l A. Tatal dollar amount at all nan-nnstrucion contracts awarded an the crojec:Jac'itty 8. Total dollar amount at non- nstruction contracts awarded to Sec ion 3 businesses s C. Percentage at the total dollar amount that was awarded to Section 3 businesses 0. Total number at Section 3 businesses receiving non-construction contracts E. Enter the number of Section 3 businesses receiving non-cons ruction contracts by Racial/Ethnic code(s)(see page t for cedes.) t 12 3 14 S • Part 111: Summary indicate the efforts made to direct the employment and ocher economic opportunities generated by HUD financial assistance for housing and community development programs.to the greatest extent feasible,toward low-and very tow-income persons,particularly those who are recipients of government assistance for housing. (Check all that apply.) Attempted to recruit low-income residents through: local advertising media Signs prominendy displayed at the project site. contacts with community organizations and public orprivareagencies operating within the metropolitan area(ornonmeuvpolitan county) in which die Suction 3 covered program or project is located.or similar methods. Participated in aHUD program or other grogram which promotes the training or employment of Section 3 residents. Participated in a HUD iner41.j,t or other program which promotes the award of contracts to business cortceris which meet the definition of Section 3 business concerns_ Coordinated with Yout:hbuildPrograrns administered in the metropolitan amain which the Section 3 covered project is located • Other,describe below. ice;.�= twin Hti0-6CM2:8iS"1 -rn HU0-60002, :onomic opportunities for Low-and Vary Low-income Persons :us;ng and Urban Development ;act of 1963. Sec:icn 3 • • structioas: This form is to be used to report annual accomplishments B lock C: Enter the percentage of the co cal staffhotas Worked forSec:ion gardingemploy-menc.aauung andconcraccingopporcunithes provided 3 employees and a-auiees (including new hires) connected with this low-and very low-income persons underSec on 3 of the Housing and award- Include staff hour for part-time and bill-time poszt;ons- rban Development Act of 1968. The Section 3 regulations apply to Block D: Ater the number of Section 3 residents that were hired and ,y public and Indian Housing programs that receive: (1) develop- trained in connection with this award_ ent assistance pursuant to Section 5 of the U.S.Housing Act of 1937; Block E.: Enter untie: each tucialiethnic code (1 3) the number of .)operating assistance pursuant to Section 9 of the U.S. Housing Act ern 0loyers and�inees recorded in columns D and 1937:or(3)modernization grants pursuant to Section 14 of the U.S. ousing Act of 1937 and to recipients of isousing and community Part II: Carrtract Opportunities eve lopment assistance in excess of 3200,000 expended for: (1) Block 1: Construction Contracts ousing rehabilitation (including reduction and abatement of lead- ',Jed paint hazards); (2) housing construction: or (3) other public [ter A: Enter the total dollar amount of all contacts awarded on the Jnsaucaon projects: and to contract and subcontract in excess of projerdprogram. 100,000 awarded in connection with the Section-3-covered activity [tern B: Enter the total dollar amount of contracts connected with this .cc_ds S100.000. projecr/prograrn that were awarded to Section 3 businesses. Form HIM-6C002 has three pacts which are to be completed For all [tern C: Enter the percentage of the total dollar amount of contracts rograms covered by S tion 3. Part I relates co employment and connec ed with this projectlprogram awarded to Section 3 businesses. raining. Part [I of the form relates to contracting, and Part Item D: Enter the number of Section 3 businesses receiving awards. ummarizes re`ipiens' efforts to comply with Szrtion 3. appropriate racial/ethnic code(s). Recipients or contractors subject to Section 3 requirements must Indicate the e{ maintain appropriate documentation to establish that HUD FitLartcial [tern a Enter under each racialiet tic code (1-6) the number of issistance For housing and community development programs were employees and trainees recorded in Item D. !irecced coward low- and very low-income persons." A recipient of Block 2: Non-Construction Contracts Section 3 covered assistance shall submit two copies of this report to the [tern A: Enter the total dollar amount of all contacts awarded on the ocal HUD Field Office. Where the program providing assistance projerr/pragram. -equires an annual performance report. this Section 3 report is to be subrmiaed with the program performance report Where an annual Item 3: Enter the coral dollar amount of contracts connected with this performance report is not required. this Section 3 report is to be project awarded to Section 3 businesses.. submitted by January 10 and-if the project ends before December 31, Item C. Enter the percentage of the total dollar amount of contracts within 10 days of project completion. Only Prime Recipients are connected with this proje`r/program awarded to Section 3 businesses. required to report to HUD. The report must it:d de accomplishments [tern D: Enter the number of Section 3 businesses receiving awards. of all recipients and their Section 3 covered contractors and subcon- Indicate the=pro .ate raciaUethnic code(s). tractors. [tern a Enter under�' each raciai/ethmic code (1-6) the number of 1. Recipient Enter the name and address of the recipient submitting employees and trainees recorded in Item D. this report. Z. Federal Identification: Enter the number that appears on the award Part Ill: Summary of Efforts -Salf-axPlanatory form (with dashes). The award may be a grant, cooperative agreement or contract Submit two(2)copies of this report to your local HUD Field Office 3. Dollar Amount of Award: Enter the dollar amount,rounded to the within ten (10) days after the end of the reporting period you nearest dollar, received by the recipient specified in item S. Include only contracts executed during this &S. Contact Person/Phone: Enter the name and telephone number reporting period. PHAsl1HAs are to report ail contradslsubcon- of the person with lsriowtedge of the award and the recipient's tracts. implementation of Section 3. 6. Reporting Period: Indicate the use period(months and year) this * The terms"low-income persons and'very low-income persons"have the same meanings given the terms in section 3(b)(2) of the United Stares report covers. 7. Dace Report Submitted: Enter the approoriare date. Housing Act of 1931. Lop-income persons mean families (including single persons)whose incomes do not exceed 80 per eemmrn of the median S. Program Code: Enter the appropriate grogram code as listed at the income far the area.as determined by the Secretary.with adjustments far . bottom of the page. _ smaller and larger families.except that the Secretary may establish income ceilings higher or lower than SO per ccnturn of the median for the area on Part I: Employment and Training Opportunities the basis of the Secretary's Findings such that variations are -«ary B lock A: Contains various job categories. Professionals are defined as because of prevailing levels of construction costs or unusually high-or low- people who have special knowledge of an cct upaaon(i.e..supervisors. income families. very low-income persons mean low-income families architects. surveyor. planners, and computer programmers). For (including single persons) whose incomes do not exceed 50 per construction positions. list each trade and provide ii1r t in columns B centum of the median family income For the area,as determined by thtrough F for each trade where persons were employed. The category the Secre y with adjustments for smaller and larger families.except of"Other"includes occupations such as service workers. that the Sectary may establish income ceilings higher or lower than Block B: Enter the percentage of all the new hires(Section 3 residents) 5O per catumof theme Tian for the area on the basis of the Sececary s [n connection with this award. New Hires include full-time positions findings that such variations are necrtsnry because-of unusually high (permanent temporary and seasonal). or low family incomes_ Norm hJO-6000.2(SiS.4) mit 24 C57-1 ;35 C-25A CITY OF OMAHA LEGISLATIVE CHAMBER 1 Omaha,Nebraska RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: WHEREAS, in 1994 the City of Omaha received Enterprise Zone designation from the State of Nebraska and Enterprise Community designation from the United Sates Department of Housing and Urban Development and qualified for approximately $2,900,000.00 in Enterprise Zone funds; and, WHEREAS, the City of Omaha has appointed an Enterprise Zone Board; and, WHEREAS, such Enterprise Zone Board, with the approval of the Stakeholders, has recommended that $600,000.00 of such funds be used to fund innovative programs and projects meeting the goals and objectives of the Enterprise Zone/Community legislation; and, WHEREAS, such Enterprise Zone Board advertised for proposals for such innovative programs and projects; reviewed the responses thereto; and recommended to the City that the proposal of Bethel Missionary Baptist Church for its Your Mart Convenience Store be funded in the amount of$52,760.00; and, WHEREAS, attached hereto is the proposed Agreement with Bethel Missionary Baptist Church to provide SSBG/Enterprise Zone funding in the amount of$52,760.00 for such program. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: THAT, the attached Agreement between the City of Omaha and Bethel Missionary Baptist Church to provide SSBG/Enterprise Zone funding in the amount of $52,760.00 for its Your Mart convenience Store operation is hereby approved. FURTHER THAT, the Finance Director is authorized to make payments in accordance with such Agreement from the Enterprise Zone Social Services Block Grant. APPROVED AS TO FORM: &V`i,e__ i —to_bf/ ANT CITY ATTORNEY DATE OA, P alalett• , By Councilmember Adopted e N...1..3..2004.. 9 0 la City Clerk Approved_ ~ ///S/e - , - Mayor N \• #' ? n q & CD [ o_ § 7 / o § o k & 7 _ ° » E. / 2 \ E ? 7 a § C / \ §. , / CD] 7 / = 9 E k % ! ' 9 ® n S / ° \ , ^ ? ~ 2 n b 7 ' 73, § ?� g ^ ° � �? . Rd § j ® ° 7 n S ƒ o \ $ ƒ / LA c' § eZ A \4111. / g _. § \ }• \ iii . ;ii • t x \ \ y & \\\ _ \ . � • � m