RES 2023-0565 - CDBG Agreement with African American Empowerment Network for partial funding of Step-Up Omaha Program (January 1, 2023 to August 31, 2023) RESOLUTION NO. 2C23 f)51 1 City Clerk Office Use Only:
Publication Date (if pplica le):
Agenda Date: 5' ZO7 2>
Department: 1
Submitter: l
CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha, Nebraska
RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:
WHEREAS, the City annually receives Community Development Block Grant funds under Title
I of the Housing and Community Development Act of 1974, as amended, for the purpose of benefiting low- and
moderate-income residents, eliminating slums and blight, and for other urgent community development needs;
and,
WHEREAS, the Mayor recommended various projects in the 2022 Consolidated Submission for
Community Planning and Development Programs (Consolidated Plan), including the funding of the African
American Empowerment Network, Inc., a Nebraska non-profit corporation, Step-Up Omaha Job Training and
Work Experience Program (Project); and,
WHEREAS, the City Council approved the 2022 Consolidated Plan on June 28, 2022 by
Resolution No. 2022-0623 and amended the Plan on September 27, 2022 by Resolution No. 2022-0935; the
Consolidated Plan allocated $400,000.00 to the 2023 Program; and,
WHEREAS, the African American Empowerment Network operates an excellent program
providing life skills training, academic guidance, job placement, and other general support to economically
disadvantaged persons between the ages of 16 and 21 to assist them in becoming self-sufficient; and,
WHEREAS, it is necessary for the City to enter into an agreement with the African American
Empowerment Network to provide partial funding support for the Step-Up Omaha Job Training and Work
Experience Program to enable it to serve more participants; and,
WHEREAS, it is in the best interest of the City of Omaha to enter into an agreement with the
African American Empowerment Network, Inc., to provide partial funding support for its life skills training and
job placement program as part of the City's economic development program.
RESOLUTION NO. 2015—n75
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:
THAT, the attached Agreement, as recommended by the Mayor, between the City of Omaha
and the African American Empowerment Network, Inc., a Nebraska non-profit corporation, 2401 Lake Street
Suite 1 10, Omaha, Nebraska 68111, in the amount of $400,000.00, for partial funding of its Step-Up Omaha
Job Training and Work Experience Program for the period from January 1, 2023 through August 31, 2023, is
hereby approved. Funds shall be paid from the FY 2022 Step-Up Omaha Youth Employment Program, Fund
No. 12186, Organization No. 128072, Award No. 100943.
3398 dlh APPROVED AS TO FORM:
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ASSISTANT CITY ATTORNEY ` DATE
Adopted: M Y 2 3 2023 (rD
Attest:
City Clerk
DEPUTY
Approved:
Mayor
CDBG FUND
GRANT AGREEMENT
BETWEEN CITY OF OMAHA AND
THE AFRICAN AMERICAN EMPOWERMENT NETWORK,INC.,
A NON-PROFIT CORPORATION
FOR
PARTIAL SUPPORT OF"STEP UP OMAHA" - A JOB TRAINING
AND WORK EXPERIENCE PROGRAM
JANUARY 1, 2023 THROUGH AUGUST 31, 2023
Fiscal Year Funds 2022
Program Year 2023
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ABBREVIATIONS
SECTION 2 RESPONSIBILITIES OF CONTRACTOR
2.01 Overall Project Performance
2.02 Proposed Goals
2.03 Project Budget
2.04 Term of Agreement
SECTION 3 CONDITIONS FOR RECEIPT OF CITY FINANCING
3.01 Documents Required by City
3.01.1 Evidence of Leveraged/Matching Funds
3.01.2 Minority/Women Owned Business Enterprise Plan
3.01.3 Eligible Contractors
3.01.4 Funding Compliance Deadline
SECTION 4 PROJECT RESPONSIBILITIES OF THE CONTRACTOR
4.01 Eligible Use of Funds
4.02 Ineligible Costs
4.03 Terms and Conditions
4.04 Breach of Agreement
4.05 Affirmative Marketing Policy
SECTION 5 GENERAL ADMINISTRATION REQUIREMENTS OF CONTRACTOR
5.01 Financial Management
5.02 Documentation and Record-Keeping
5.03 Reports
5.04 Record Retention
5.05 Personnel and Participant Conditions
5.06 Match Funds
5.07 Limited English Proficiency(LEP)
SECTION 6 CONTRACTOR'S COMPLIANCE WITH OTHER FEDERAL REGULATIONS
6.01 Environmental Review
6.02 Uniform Relocation Act
6.03 Federal Funding Accountability and Transparency Act
6.04 Drug Free Workplace
SECTION 7 RESPONSIBILITIES OF THE CITY
7.01 Performance Monitoring
7.02 Payments
7.03 Progress Payments
7.04 Technical Assistance
SECTION 8 MUTUAL AGREEMENTS BETWEEN CITY AND CONTRACTOR
8.01 Release of Information Laws
8.02 Applicable Laws
8.03 Interest of the City
8.04 Independent Contractor
8.05 Captions
8.06 Merger
8.07 Modification
8.08 Assignment
8.09 Strict Compliance
8.10 Termination and Enforcement
8.11 Reversion of Assets
8.12 Indemnification
8.13 Unenforceable Provisions
8.14 Disclosure of Lobbying
8.15 Notices
8.16 Applicability
SECTION 9. DEFAULT PROVISIONS
9.01 Remedies
SCHEDULE OF EXHIBITS AND ATTACHMENTS
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CDBG AGREEMENT
(STEP UP OMAHA JOB TRAINING AND WORK EXPERIENCE PROGRAM)
THIS AGREEMENT is entered into by and between the City of Omaha and The African
American Empowerment Network, Inc., a Non-profit Corporation, 2401 Lake Street Suite 110, Omaha,
Nebraska 68111 (sometimes hereinafter referred to as "The Network") based on terms, conditions and
provisions as set forth below.
RECITALS:
WHEREAS,the City of Omaha(hereinafter referred to as "the City") is a municipal corporation
located in Douglas County, Nebraska, and is organized and existing under the laws of the State of
Nebraska, and is authorized and empowered to exercise all powers conferred by the State constitution,
laws, Home Rule Charter of the City of Omaha, 1956, as amended, and local ordinances, including but
not limited to, the power to contract; and,
WHEREAS, the City of Omaha has applied for and received Community Development Block
Grant (hereinafter referred to as "CDBG") Funds under Title I of the Housing and Community
Development Act of 1974, as amended, authorizes the use of CDBG funds for the development of viable
urban communities by providing decent housing, a suitable environment, and creating and expanding
economic development opportunities, principally for the purpose of benefiting low- and moderate-
income persons; and,
WHEREAS, The Network Step Up Omaha Job Training and Work Experience Program
(hereinafter sometimes referred to as "Job Training Program") was included in the City's FY 2021
Consolidated Submission for Community Planning and Development Programs, as amended,
(hereinafter referred to as "Consolidated Plan"), outlining priorities, programs and funding allocations
for the 2022-2023 program year, approved on by City Council on June 28,2022 by Resolution No.2022-
0623 and as amended by the City Council on September 27, 2022 by Resolution No. 2022-0935; and,
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WHEREAS, The Network has submitted an application that provides for partial financing of the
Step Up Omaha Program for the period from January 1, 2023 through August 31, 2023 (hereafter
referred to as the"Project"); and,
WHEREAS, the Consolidated Plan identified that this Project meets Community Development
Block Grant national objective benefiting low- and moderate-income limited clientele; and,
WHEREAS, the Project is a CDBG Fund-eligible activity in that the Project qualifies as a Public
Service [24 CFR 570.201(e)], serves a low- and moderate-income limited clientele and facilitates
economic development by providing partial support for employment services related to jobs training for
at-risk youth and young adults; and,
WHEREAS, the City wishes to enter into an agreement with The Network to assist the City in
utilizing such CDBG funds; and,
WHEREAS, the Step Up Omaha Program Grant Fund was included in the FY 2022 CDBG
Program and Community Services General Fund, and $400,000.00 was allocated to the Project; and,
WHEREAS, The Network has indicated the total estimated cost to administer the Project to be
$4,352,000.00, consisting of a $400,000.00 CDBG Grant Fund and $3,952,000.00 in private financing
and corporate donations; and,
WHEREAS,The Network is organized to engage in such activities as the board of directors may
from time to time determine to be appropriate in undertaking a comprehensive and coordinated approach
to redeveloping targeted geographic areas in a holistic way; and,
WHEREAS, it is in the best interest of the City and the residents thereof that the City enter into
an Agreement with The Network to provide CDBG funding in the amount not to exceed $400,000.00
for the Project.
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NOW,THEREFORE,IN CONSIDERATION OF THESE MUTUAL COVENANTS,the parties
do hereby agree as follows:
SECTION 1. DEFINITIONS AND ABBREVIATIONS.
The following terms shall have the following meanings for all purposes in this Agreement:
1.01 "City" shall mean—the City of Omaha, a Nebraska Municipal Corporation.
1.02 "Contractor" shall mean—The African American Empowerment Network, Inc., a non-
profit corporation, 2401 Lake Street Suite 110, Omaha, Nebraska 68111 (see Exhibit
«A„
1.02.1 "The Network"shall mean The African American Empowerment Network,Inc.
1.03 "Director" shall mean—the Planning Director of the City of Omaha.
1.04 "Recipient" shall mean—the City of Omaha.
1.05 "Subrecipient" shall mean — a public or private non-profit agency, authority or
organization receiving CDBG funds to undertake eligible activities. In this Agreement,
the Subrecipient is The Network.
1.06 "HUD" shall mean—the U.S. Department of Housing and Urban Development.
1.07 "CDBG Grant Funds" shall mean— that portion of the Community Development Block
Grant Program funds awarded to the City, subject to and conditioned upon actual receipt
of same by the City of Omaha, as may be available to grant during the PY 2023 program
year for the use specified herein in an amount not to exceed $400,000.00 payable from
the 2022 Step Up Omaha Youth Employment Program, Award No. 100943, Fund No.
12186 Organization No. 128072,subject to the terms,conditions and requirements of said
Grant Fund Agreement.
1.07.1 "Grant"shall mean—Community Development Block Grant funds made subject
to terms,conditions and provisions of this Grant Agreement. The grant amount
of $400,000.00 shall be unsecured. The Network shall perform project
responsibilities as outlined in Section 2.01 herein during the term of this
agreement. In the event these are unencumbered funds at the expiration of term
of the agreement,these funds shall be de-obligated by the City. In the event of
default, gross negligence or other substantial non-compliance, the amount of
the Grant shall be due and payable immediately from The Network to the City.
1.08 "Step Up Omaha Job Training and Work Experience Program"or"Project" shall mean
—a program administered by The Network that provides training through placement in
jobs at for-profit and non-profit organizations, provides life skills and academic
guidance, and other general support to economically disadvantaged persons to assist
them in becoming self-sufficient.
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•
1.09 "Project Completion" shall mean(1) the date all funds have been received by the
Subrecipient, and allocated to the Project, (2) the date all funds have been disbursed
and(3)the date all specified goals have been satisfied.
1.10 "Project Close Out" shall mean—the dates all project CDBG funds have been
disbursed and City has completed HUD close out procedures (24 CFR 570.509 and 2
CFR,Part 215) (Exhibit"B").
1.11 "Neighborhood Revitalization Strategy Areas" (NRSA) shall mean—those areas
designated according to CPD Notice 96-01 of the CDBG Program that require
partnerships to stimulate reinvestment in human and economic capital and coordinated
strategies to address their needs. These areas are primarily residential, economically
distressed areas. See Exhibit"C" for area boundaries.
1.12 "Low- and Moderate-Income(LMI) Person" shall mean—a person whose annual
household income does not exceed 80 percent of the median household income for the
Omaha NE-IA Metropolitan Statistical Area as determined and updated by HUD.
Attached as Exhibit"D" is the current Median Family Income Chart.
1.13 "Client" or"Participant" shall mean—a qualified participant making application to The
Network to participate in the Jobs Training Program.
1.14 "Reasonable program fees" shall be permitted to be retained by the Sub-recipient and
shall be exempt from this provision.
SECTION 2. RESPONSIBILITIES OF CONTRACTOR.
2.01 Overall Project Performance. The Contractor shall use Grant funds for the administration
of the Jobs Training Program and the marketing of the program to qualified low- and
moderate-income participants in accordance with the proposed goals. While the primary
measurement of accomplishments will be the number of eligible persons participating in
the Project,performance related to the goals listed in Section 2.02 will also be considered
in determining compliance with the terms of this Agreement.
2.02 Proposed Goals. During the Grant period, The Network will provide its best efforts to
accomplish the following goals:
2.02.1 Partner with other individuals and organizations to administer a 9-week program
that:
2.02.1.1 provides educational support, employment and life skills training,
and work experience to approximately 350 individuals between the
ages of 16 and 21;
2.02.2 Recruit participants from partner agencies/programs and the general public
through City-wide marketing with special emphasis on attracting participants
who live in the North and South Neighborhood Revitalization Strategy Areas;
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2.02.3 Assess the educational and skill levels of participants;
2.02.4 Provide a nine-week training and job placement program for a minimum of 325
eligible low and moderate-income participants;
2.02.4.1 Participants will participate in certificate programs, social media
marketing and coding, construction and entrepreneurship
opportunities.
2.02.4.2 Some youth will be "placed" with a partner site via online learning
environment for training and assessment.
2.02.5 Quantify and evaluate the Program outcomes;
2.02.6 Minimum Number of Maximum Percent of Area
Low/Moderate Income Median Income Permitted for
Participants Low/Moderate Income Client
325 (eligible for CDBG) 80%
2.03 Project Budget. The Contractor asserts that the funding sources and amounts listed below
are committed prior to disbursement of City Grant funds.
FY 2022 CDBG $ 400,000.00
Private Funds $ 3,952,000.00
Estimated Project Cost $ 4,352,000.00
2.04 Term of the Agreement. This Agreement shall be in full force and effect beginning
January 1,2023 and shall end on August 31,2023. Eligible expenditures incurred after
January 1, 2023, but prior to execution of this Agreement may be submitted for
reimbursement in accordance with the terms of this Agreement.
SECTION 3. CONDITIONS FOR RECEIPT OF CITY FINANCING.
3.01 Document Required by City. In no event shall the City assume any obligation to make
any or all of the above-referenced funding available, nor shall the City incur any
liability hereunder, unless and until the Contractor has submitted for and received the
prior approval of the Director of all of the documents listed below.
3.01.1 Evidence of Leveraged/Matching Funds. Contractor shall provide written
evidence that funds detailed in the Project Budget described in Section 2.03
herein have been committed or secured for this Project.
3.01.2 Minority/Women Owned Business Enterprise Plan. Contractor shall submit to
the Director for his review and approval a minority and women business
participation plan that discusses economic development and employment
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opportunities. (See Exhibit "N") These plans shall ensure that the Contractor
and its subcontractors will make their best efforts to ensure that construction
services,contracts and employment opportunities are affirmatively marketed to
women and members of minority groups. As used in this Agreement,the term
"women and members of minority groups" means a business at least fifty-one
percent (51%) owned and controlled and actively managed by minority ethnic
race or women members. (Municipal Code, City of Omaha, Nebraska, Sec. 10-
191(h).
3.01.3 Eligible Contractors. Contractor hereby certifies that it is not currently, and
never has been, debarred or disqualified from participation in federally-funded
projects. In addition, Contractor shall obtain a certificate from each contractor
or subcontractor to be used on this Project to the effect that each contractor or
subcontractor has not been debarred or disqualified by HUD (2 CFR, Part 215
Exhibit B and 24 CFR 570.609). The Director shall approve all contractors and
subcontractors prior to being hired by the Contractor (Certification of
Debarment, Exhibit G).
3.01.4 Funding Compliance Deadline. In the event that all conditions of funding are
not met on or before August 31, 2023, then this Agreement shall automatically
become null and void and the City shall not be deemed to have assumed any
obligation or liability hereunder.
SECTION 4. PROJECT RESPONSIBILITIES OF THE CONTRACTOR.
4.01 Eligible Use of Funds. 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 purposes described herein. The Contractor shall not request disbursement of funds
under this Agreement until the funds are needed for payment of eligible costs.
4.01.1 Eligible uses of grant funds for the Project include, but are not limited to:
4.01.1.1 Reimbursement for stipends, paid to participants for attendance at
trainings, internships and actual work done on the job site; and,
4.01.1.2 Reimbursement for other job training related expenses for
participants
4.01.1.3 Reimbursement, for the wages and wage-related expenses of
persons providing project management services and providing case
management services to participants; and,
4.01.1.4 Reimbursement for materials, curriculum related expenditures
necessary for the general administration of the project, except those
costs not directly related to the Step-Up Program, for participants
16-21 years of age; and,
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4.01.1.5 Reimbursement of the reasonable cost of a single audit of the Project
that may be required because the total CDBG expenditures exceed
$750,000.00 (Exhibit"Q"); and,
4.01.1.6 Reimbursement payment for management of payroll and program
teaching database systems on prorate basis.
4.02 Ineligible Costs.
4.02.1 The Contractor shall be responsible for payment of any Project costs that
exceed those specified in this Agreement.
4.02.2 Ineligible costs for the Project include any direct payment to participants
including stipends paid to Program participants for time spent in training that
takes place outside of the actual hours worked at a for-profit or non-profit
organization employing the participant(Exhibit"P"), and/or those participants
whose household incomes exceed 80% of the Median Family Income as
determined by HUD (Exhibit"D").
4.03 Terms and Conditions. The Contractor shall abide by all terms and conditions of this
Agreement.
4.04 Breach of Agreement. If through breach of this Agreement the Contractor fails to abide
by all terms and conditions as described herein, all CDBG funds previously provided to
the Contractor through fulfillment of this Agreement shall promptly be returned to the
City.
4.05 Affirmative Marketing Policy. The Contractor agrees to comply with the City's
Affirmative Marketing Policy, attached hereto as Exhibit"S" and incorporated herein by
this reference as though fully set forth. These affirmative marketing procedures must be
employed in the advertising and marketing of this Project. In marketing, the Contractor
shall also conform to the nondiscrimination provisions hereinafter set forth in Section
5.05.1.2.
SECTION 5. GENERAL ADMINISTRATIVE REQUIREMENTS OF CONTRACTOR.
Contractor agrees to comply with the following requirements:
5.01 Financial Management.
5.01.1 Accounting Standards. The Contractor agrees to comply with 2 CFR, Part 200
and agrees to adhere to the accounting principles and procedures required
therein, utilize adequate internal controls, and maintain necessary source
documentation for all costs incurred. (Exhibit "B", attached hereto and
incorporated herein as though fully set forth.)
5.01.2 Cost Principles. The Contractor shall comply with the requirements and the
standards of 2 CFR,Part 200,"Cost Principles for the Nonprofit Organizations"
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(Exhibit `B"). Both Exhibits are attached hereto and incorporated herein as.
though fully set forth.
•
5.01.2.1 Any deficiencies noted in audit reports must be fully cleared by the
Contractor within 30 days after receipt of audit by the Contractor.
Failure of the Contractor to comply with the above audit
requirements will constitute a violation of this Agreement and may
result in the withholding of future payments and may constitute a
default subject to default remedies referenced herein in Section 9.
5.01.3 Audits. The Contractor shall comply with all provisions and regulations of the
Program and have an annual audit completed in compliance with 2 CFR, Part
200.500, attached hereto as Exhibit `B", and incorporated herein as though
fully set forth. A copy of the audit shall be provided to the Director. The
auditor shall determine the appropriate type of audit to be conducted; i.e.,
limited scope of full compliance. A single audit is not an allowable expense
unless the Subrecipient expends total federal funds over $750,000.00 in each
fiscal year. A limited-scope audit may be allowable provided the auditor
conducts the audit in accordance with generally accepted auditing standards
and the recipient expends less than$750,000.00 in each fiscal year.
5.02 Documentation and Record-Keeping. All Contractor records with respect to any
matters covered in this Agreement shall be made available to the City, its designees or
the federal government, at any time during normal business hours, as often as the City
deems necessary, to audit, examine, and make excerpts or transcripts of all relevant
data. Any contract entered into by the contractor with any subcontractors shall include
this Section to ensure said access.
5.03 Reports. The Contractor shall submit to the City the following reports in accordance with
24 CFR 570.506 with the submission timelines as specified.
5.03.1 Program Reports. The Contractor shall provide reports to the Director to
include activities and accomplishments, participant information and notice of
any significant problems and/or delays on this Project. Reports will be
submitted at the time of each pay request, or, at a minimum, within 15
days following the end of the calendar year quarter. The program reports
are required until such time as all funds have been expended and the City issues
the final payment to the Contractor.
5.03.2 Participant Report. For each participant in the Jobs Training Program
and prior to any reimbursement related to that participant,the Contractor
shall provide the City with the information listing in 5.03.2.1 and retain
the following records for five (5) years after the expiration of this
Agreement as specified in Section 2.04 of this Agreement. For this
Agreement, records shall be retained until December 31,2028.
5.03.2.1 Documentation. Contractor shall be permitted to document
participation by having each participant complete participation
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documents, such as a program application and participation
agreement, in a mutually agreeable, provided that document
includes, at a minimum,the following information:
5.03.2.1.1 participant name(s),home address,zip code, gender,
ethnicity, race,household number, age
5.03.2.1.2 Self-certification of income eligibility by indicating
the actual annual household income and household
size or annual household income relative to 30%,
50% or 80% of the Median Family Income (MFI) as
determined and revised annually by HUD (Exhibit
"D"). Prior to participant income self-
certification, the Contractor must provide the
participant with a copy of the City of Omaha
Definition of Income (Exhibit "0") and have the
participant sign the Declaration of Income/No
Income indicating that the income being reported
is accurate based upon that Definition. In
addition to obtaining the self-certification, the
Contractor must monitor the accuracy of self-
certification. The following documentation must
be included in each file: Free and reduced lunch
certification or Section 8 Award letter or source
documentation (minimum 2 recent consecutive
months of payroll stubs showing hourly, ytd,
overtime, name, place of employment, recent
bank statement, retirement income statement or
other assets) for all income and asset sources for
each household member over 18 years of age. A
random sampling of eligibility will be conducted
for at least ten percent (10%) of all CDBG
Program participants. This information must be
submitted within 30 days of request.
5.03.2.2.3 Reports generated will include:
1. All applicants in alphabetical order listing, name,
zip code, race, ethnicity, age, gender.
2. All CDBG Participants in alphabetical order
listing, name, zip code, race, ethnicity, age, gender,
household number.
3. All CDBG Participants in alphabetical order
listing name,zip code,race,ethnicity,ranking score.
4. Listing of race and ethnicity of program coaches,
program staff and applicants in coach positions.
5.03.2.4 File documentation to include application, ranking
(if applicable), US citizenship, income, race and
ethnicity, progress through program (letters, etc.),
job placement,and notes or correspondence for none
participation,job assignment and location,release of
information authorization
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5.03.2.5 Maintenance of a master data system to include all
above referenced information to include time sheets
and reconciliation of payment wages, source
documentation for all income and assets of
household
5.03.2.6 Completion of City provided demographic
composite form to be submitted no later than
October 31st of each year
5.03.2.7 Documentation of non-participation of applicant in
registration or job orientation
5.03.2.8 Meeting notes or copies or all marketing, media,
outreach,contracts,forms,produced for the program
5.03.2.9 Listing of all job sites and participant assignments
5.03.2.10 Complete program budget to include sources and
uses
5.03.2.11 Listing of all funding sources and amounts
5.03.3 Performance Measurement Report. No later than 30 days after the end of
the contract term or end of the activity, whichever comes first, the
contractor shall provide a report to the City identifying the accomplishments of
the Program, including number of participants, training activities, placements,
and other outcomes, and final demographics as provided in Exhibit E,
Demographic Report, and a Financial Match Report.
5.03.4 Financial Status Reports. Contractor shall submit financial status reports (2
CFR, Part 215) (Exhibit "B") with pay requests. Documentation of the
expenses for which reimbursement is being requested shall accompany all pay
requests. Such documentation shall include information such as time sheets
and evidence of payment. These reports shall be due, at a minimum, 15
calendar days from the end of the calendar year quarter. Attached as Exhibit
"H", and incorporated herein by this reference as though fully set forth, is a
sample financial status report.
5.04 Record Retention. The Contractor and its subcontractors shall maintain such records and
accounts, including property, personnel and financial records, as are deemed necessary
by the City to assure a proper accounting for all expenses. The Comptroller General of
the United States, or any of their duly authorized representatives, or any duly authorized
representatives of the City, as approved by the Director, shall have access to any books,
documents, papers, records and accounts of the Contractor or its subcontractors which
are directly pertinent to this Project for the purpose of making audit, examination,
excerpts and transcriptions. Such records and accounts shall be retained for five(5) years
after expiration of the Agreement as specified in Section 2.04 of this Agreement, or
December 31, 2027. In the event the term of the Agreement would be extended, the
record retention period would be extended correspondingly.
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5.05 Personnel and Participant Conditions.
5.05.1 Contract Compliance Clause.
5.05.1.1 Section 10-192 of the Omaha Municipal Code, Equal Employment
Opportunity Clause (Exhibit "J"). The Contractor and its
subcontractors shall not discriminate against any employee or
applicant for employment because of race, religion, color, sex, age,
national origin, sexual orientation, gender identity, familial or
handicap status. As used herein, the word "treated" shall mean and
include, without limitation, the following: recruited, whether by
advertising or by other means; compensated; selected for training,
including apprenticeship; promoted; upgraded; demoted;
downgraded; transferred; laid off; and terminated. The Contractor
and its subcontractors agree to and shall post in conspicuous places,
available to employees and applicants for employment, notices to
be provided by the contracting officers setting forth the provisions
of this nondiscrimination clause.
5.05.1.2 The Contractor and its subcontractors shall, in all solicitations or
advertisements for employees placed by or on behalf of the
contractor, state that all qualified applicants will receive
consideration for employment without regard to race, religion,
color, sex, age, sexual orientation, gender identity, national origin,
familial or handicap status.
5.05.1.3 The Contractor and its subcontractors shall send to each
representative of workers with which he has a collective bargaining
agreement or other contract or understanding a notice advising the
labor union or workers' representative of the contractor's
commitments under the equal employment opportunity clause of the
city and shall post copies of the notice in conspicuous places
available to employees and applicants for employment.
5.05.1.4 The Contractor and its subcontractors shall furnish to the Human
Rights and Relations Director all federal forms containing the
information and reports required by the federal government for
federal contracts under federal rules and regulations, including the
information required by sections 10-192 to 10-194, inclusive, of the
Omaha Municipal Code and shall permit reasonable access to his
records. Records accessible to the Human Rights and Relations
Director shall be those which relate to Paragraphs 5.05.1 through
5.05.1.7 of this subsection and only after reasonable notice is given
the contractor. The purpose of this provision is to provide for
investigation to ascertain compliance with the Program provided
herein.
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5.05.1.5 The Contractor and its subcontractors shall take such actions with
respect to any subcontractor as the City may direct as a means of
enforcing the provisions of paragraphs 5.05.1 through 5.05.1.7
herein, including penalties and sanctions for noncompliance;
however, in the event the contractor becomes involved in or is
threatened with litigation as the result of such directions by the City,
the City will enter into such litigation as is necessary to protect the
interests of the City and to effectuate the provisions of this division,
and, in the case of contracts receiving federal assistance, the
contractor or the City may request the United States to enter into
such litigation to protect the interests of the United States.
5.05.1.6 The Contractor shall file and shall cause his subcontractors, if any,
to file compliance reports with the Contractor in the same form and
to the extent as required by the federal government for federal
contracts under federal rules and regulations. Such compliance
reports shall be filed with the City's Human Rights and Relations
Director. Compliance reports filed at such times as directed shall
contain information as to the employment practices, policies,
programs and statistics of the Contractor and his subcontractors.
5.05.1.7 The Contractor shall include the provisions of Paragraphs 5.05.1
through 5.05.1.7 of this section, "Equal Employment Opportunity
Clause," and Section 10-193 in every contract, subcontract or
purchase order so that such provisions will be binding upon each
subcontractor or vendor. (Code 1980, Section 10-192; Ord. No.
35344, Section 1, 9-26-00.)
5.05.2 Employment Insurance and Bonding. The Contractor shall purchase a blanket
fidelity bond covering all employees, at a minimum,in an amount equal to cash
advances from the City. The Contractor shall comply with bonding and
insurance requirements of 2 CFR, Part 215, Bonding and Insurance (Exhibit
5.05.3 Workers' Compensation. The Contractor shall provide Workers'
Compensation Insurance coverage for all employees involved in the
performance in this Agreement.
5.05.4 Section 3 -Employment of Low-Income Persons(Section 3 of HUD Act of 68,
as amended, 1 U.S.C. 1701u). The Contractor shall make its best efforts to
comply with Section 3 (Exhibit "K"). The purpose of Section 3 is to ensure
that employment and other economic opportunities generated by HUD
assistance or HUD-assisted projects covered by Section 3 shall, to the greatest
extent feasible, be directed to low- and very low-income persons, particularly
persons who are recipients of HUD assistance for housing.
5.05.5 Conflict of Interest.The Contractor agrees to abide by the provisions of 24 CFR
570.611 with respect to conflicts of interest, and covenants that it presently has
- 15 -
financial interest and shall not acquire any financial interest, direct or indirect,
which would conflict in any manner or degree with the performance of services
required under this Agreement. The Contractor further covenants that in the
performance of this Agreement no person having such a financial interest shall
be employed or retained by the Contractor hereunder. These conflict of interest
provisions apply to any person who is an employee, agent, consultant, officer
or elected official or appointed official of the City or any designated public
agencies or subrecipients which are receiving funds under the CDBG
entitlement program.
5.05.6 Attestation of Citizenship. To comply with Neb. Rev. Stat. 4-108 through 4-
114,the Contractor agrees to comply with the requirements of 5.05.6 and 5.05.7
5.05.6.1 The Contractor shall include the following language in all contracts
and subcontracts for the physical performance of services: "The
Contractor is required and hereby agrees to use a federal
immigration verification system to determine the work eligibility
status of new employees physically performing services within the
State of Nebraska. A federal immigration verification system
means the electronic verification of the work authorization program
authorized by the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996, 8 U.S.C. 1324a,known as the E-Verify
Program,or an equivalent federal program designated by the United
States Department of Homeland Security or other federal agency
authorized to verify the work eligibility status of a newly hired
employee. If the Contractor is an individual or sole proprietorship,
the following applies:
a) The Contractor must complete the United States
Citizenship Attestation Form available on the Department
of Administrative Services website at www.das.state.ne.us.
b) If the Contractor indicates on such attestation form that he
or she is a qualified alien, the Contractor agrees to provide
the U.S. Citizenship and Immigration Services
documentation required to verify the Contractor's lawful
presence in the United States using the Systematic Alien
Verification for Entitlements (SAVE)Program.
c) The Contractor understands and agrees that lawful
presence in the United States is required and the Contractor
may be disqualified or the contract terminated if such
lawful presence cannot be verified as required by Neb.Rev.
Stat. 4-108."
5.05.6.2 The Contractor shall have each person applying for a benefit under
this agreement execute a United States Citizenship Attestation Form
For Public Benefit (Exhibit "L") verifying eligibility status for the
- 16-
purposes of receiving a public benefit. The Contractor shall
maintain aggregate records for the duration of the contract showing:
(a) the number of applicants for public benefits under this
agreement,and(b)the number of applicants rejected pursuant to the
lawful presence requirement set forth in the above-referenced
Nebraska statutes. Further,the Contractor shall provide a summary
report to the City no later than December 15th each calendar year
reflecting this applicant data for such calendar year.
5.05.7 Employee Classification Act. To comply with the Nebraska Employee
Classification Act, all general and subcontractors who perform construction or
delivery service pursuant to this contract shall submit to the City an Affidavit
For Employee Classification Act (Exhibit "M") attesting that (1) each
individual performing services for such contractor is properly classified under
the Nebraska Employee Classification Act, 2010 LB 563 ("the Act"), (2) such
contractor has completed a federal I-9 immigration form and has such form on
file for each employee performing services, (3) such contractor has complied
with Neb. Rev. Stat. section 4-114 (federal immigration verification system),
(4) such contractor has no reasonable basis to believe that any individual
performing services for such contractor is an undocumented worker, and(5) as
of the time of the contract, such contractor is not barred from contracting with
the state or any political subdivision pursuant to the Act. The contractor shall
follow the provisions of the Act. A violation of the Act by a contractor is
grounds for rescission of the contract by the City.
5.06 Match Funds. The Developer will provide documentation to the City showing all non-
federal funds in the project. This documentation should include the following:
a. source of funds (additional documentation as needed)
b. amount of funds
c. date funds provided
d. designation(name) of funds
e. purpose of funds
The documentation shall be submitted to the City annually no later than December 31,
2023.
5.07 Limited English Proficiency (LEP). It is the policy of the City to take reasonable steps
to provide meaningful access to its programs and activities for persons with Limited
English Proficiency (LEP) in accord with Executive Order 13166 titled "Improving
Access to Services by Persons with Limited English Proficiency". The City's policy is
to ensure that staff and subrecipients will communicate effectively with LEP individuals,
and LEP individuals will have access to programs and information. The City is
committed to complying with federal and state requirements in providing access to this
program and its activities for LEP persons.
- 17 -
SECTION 6. CONTRACTOR'S COMPLIANCE WITH OTHER FEDERAL REGULATIONS.
6.01 Environmental Review. The Contractor, if applicable, agrees to comply with the
following regulations insofar as they apply to the performance of this Agreement:
6.01.1 Clean Air Act, 42, U.S.C., 1857, et seq.
6.01.2 Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251, et seq., as
amended 1318 relating to inspection,monitoring entry,reports and information
as well as other requirements specified in Section 114 and Section 308, and all
regulations and guidelines issued thereunder.
6.01.3 Environmental Protection Agency(EPA)regulations pursuant to 40 CFR, Part
50, as amended.
6.01.4 National Environmental Policy Act of 1969.
6.01.5 HUD Environmental Review Procedures (24 CFR, Part 58).
6.01.6 Flood Disaster Protection Act of 1973 (24 U.S.C.4106 and P.L.2234)in regard
to the sale, lease or other transfer of land acquired, cleared or improved under
the terms of the Agreement as it may apply to provisions of the Agreement.
6.01.7 Historic Preservation requirements set forth in the National Historic
Preservation Act of 1966, as amended(16 U.S.C. 470) and the procedures set
forth in 36 CFR, Part 800, Advisory Council on Historic Preservation
Procedures for Protection of Historic Properties, insofar as they apply to the
performance of this Agreement. In general, this requires concurrence from
the State Historic Preservation Office for all rehabilitation and demolition of
historic properties that are forty-five years old or older or that are included on
a Federal, State or local historic property list.
6.02 Uniform Relocation Act. The Contractor shall comply with the applicable regulations of
the Uniform Relocation Act of 1970, as amended (URA) (42 U.S.C. 4601-4655), or
Section 104 (d) of the Housing and Community Development Act of 1974, as amended
(Section 104 (d)), which require relocation assistance be provided to resident owners,
tenants, businesses and other occupants that are displaced as a result of a federally-
assisted project. In the event that the Contractor or its agent displaces any tenant-
occupant of the property, it shall immediately notify the City in writing of the
circumstances surrounding said displacement.
6.03 Federal Funding Accountability and Transparency Act. The Developer shall comply with
the applicable regulations of the Federal Funding Accountability and Transparency Act
(FAFTA) (75 Fed Reg 55663 (Sept. 14, 2010) (to be codified at 2 CFR, Part 170).
Developer shall complete and provide to the City(Exhibit"R").
6.04 Drug Free Workplace. Subrecipient shall continue to provide a drug-free workplace in
accordance with 41 U.S.C. 702 and shall submit a Certification of the Drug Free
- 18 -
Workplace to the City prior to disbursement of funds. See Exhibit "T", attached hereto
and incorporated herein as though fully set forth.
SECTION 7. RESPONSIBILITIES OF THE CITY.
7.01 Performance Monitoring. The City will monitor the performance standards of the
Contractor as stated herein. Substandard performance as determined by the City will
constitute non-compliance with this Agreement. If action to correct such substandard
performance is not taken by the Contractor within a reasonable period of time after being
notified by the City, contract suspension or termination procedures may be initiated.
7.02 Payments. It is expressly agreed and understood that the total amount to be paid by the
City under this Agreement shall not exceed $400,000.00 in CDBG funds. The payment
of these funds is subject to and conditioned upon actual receipt by the City of the same.
Should adequate funding not be available to the City, the City shall notify the Contractor
as soon as reasonably possible and the Agreement will be terminated.
7.02.1 Obligation for Payment. In no event shall the City become obligated to make
any payments for any work performed, materials furnished, expense incurred,
or any other expenditure of any kind whatsoever, unless same is expressly
included in this Agreement, nor shall the City incur any liability hereunder,
unless and until the Contractor has timely and fully complied with its duties
and obligations hereunder. No payments shall be made for any administrative
service incurred the Director deems to be:
7.02.1.1 unacceptable or substandard, or
7.02.1.2 not in accordance with this Agreement or related contracts as
approved for this Project.
7.03 Progress Payments. Progress payments and final payment, as may be authorized by the
Director or his designated representative, are subject to:
7.03.1 receipt of requisite financial status reports, and participant and program reports.
7.03.2 all requests for payment shall be completed no later than August 31,2023.
Any funds not requested will be deobligated.
7.04 Technical Assistance. The Director shall assist the Contractor in the same manner the
Director provides technical assistance to other contractors to ensure compliance with this
Agreement.
SECTION 8. MUTUAL AGREEMENTS BETWEEN CITY AND CONTRACTOR.
8.01 Release of Information Laws. 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
- 19 -
limited purposes and not to harass, degrade or humiliate any person. The information
released shall be used for the limited purposes 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.
8.02 Applicable Laws. Parties to this Agreement shall conform to all existing and applicable
City ordinances,resolutions, state laws,federal laws, and all existing and applicable rules
and regulations. Nebraska law will govern the term and the performance under this
Agreement.
8.03 Interest of the City. Pursuant to Section 8.05 of the Home Rule Charter, no elected
official or any officer or employee of the City shall have a financial interest, direct or
indirect, in any City agreement. Any violation of this section with the knowledge of the
person or corporation contracting with the City shall render the Agreement voidable by
the Mayor or Council.
8.04 Independent Contractor. Nothing contained in this Agreement is intended to, or shall be
construed in any manner, as creating or establishing the relationship of
employer/employee between the parties. The Contractor shall at all times remain an
independent contractor with respect to the services to be performed under this Agreement.
The City shall be exempt from payment of all Unemployment Compensation, FICA,
retirement, life and/or medical insurance and Worker's Compensation Insurance as the
Contractor is an Independent Contractor.
8.05 Captions. Captions used in this Agreement are for convenience and are not used in the
construction of this Agreement.
8.06 Merger. This Agreement shall not be merged into any other oral or written agreement,
lease or deed of any type.
8.07 Modification. This Agreement and any related documents securing the financing contain
the entire agreement of the parties. No representations were made or relied upon by either
party other than those that are expressly set forth herein. No agent, employee, or other
representative of either party is empowered to alter any of the terms herein unless done
in writing and signed by an authorized officer of the respective parties, pursuant to
Section 10-142 of the Omaha Municipal Code.
8.08 Assignment. The Contractor may not assign its rights or obligations under this
Agreement without the express prior written consent of the City.
8.09 Strict Compliance. All provisions of this Agreement and each and every document that
shall be attached shall be strictly complied with as written, and no substitution or change
shall be made upon written direction from authorized representatives of the parties.
8.10 Termination and Enforcement. This Agreement may be suspended or terminated in
accordance with Appendix 11 to 2 CFR, Part 200 (B), 215.61 and 215.62 (Exhibit "I",
attached hereto and incorporated herein by this reference as though fully set forth). Upon
-20-
termination of this Agreement, all funds and interest in any account hereunder shall
become the property of the City and shall be returned to the City.
8.11 Reversion of Assets.Upon the expiration of this Agreement, the Contractor shall transfer
to the City of Omaha any CDBG funds on hand at the time of expiration and any accounts
receivable attributable to the use of CDBG funds (24 CFR 570.503(b)(8)).
8.12 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.
8.13 Unenforceable Provisions. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be in effect to the extent
of such prohibition or enforceability without invalidating the remaining provisions hereof
or affecting the validity or enforceability of such provision in any other jurisdiction.
8.14 Disclosure of Lobbying. The Contractor shall certify and disclose, to the best of its
knowledge and belief, that:
8.14.1 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 an employee of a Member of Congress in
connection with the awarding of any federal contract,the making of any federal
grant, the making of any federal loan, the entering into of any cooperative
agreement, and the extension, continuation, renewal, amendment or
modification of any federal contract, grant, loan, or cooperative agreement.
8.14.2 If any funds other than federal appropriated funds have been paid or will be
paid to any person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection with this
federal contract, grant, loan, or cooperative agreement, the Contractor shall
complete and submit standard Form-LLL, "Disclosure Form to Report
Lobbying", in accordance with its instructions.
8.14.3 The language of this certification be included in the award documents for all
subawards at all tiers, (including subcontracts, subgrants, and contracts under
grants, loans, and cooperative agreements) and that all subrecipients shall
certify and disclose accordingly.
8.15 Notices. The City and the Contractor hereby expressly agree that for purposes of notice,
including legal service or process, during the term of this Agreement, and for the period
of any applicable statute of limitations thereafter, the following named individuals shall
be authorized representatives of the parties:
1) City:
-21 -
David K. Fanslau, Planning Director
City of Omaha
1819 Farnam Street, Suite 1111
Omaha, Nebraska 68183
2) Contractor:
Willie Barney, Executive Director
The African American Empowerment Network, Inc.
2401 Lake Street Suite 110
Omaha, Nebraska 68111
In the event the authorized representative changes during the term of this Agreement,
prior written notice will be given to the respective party at the address noted above.
8.16 Applicability. This Agreement shall be binding upon the parties hereto.
SECTION 9. DEFAULT PROVISIONS.
9.01 Remedies. 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 require repayment of
Grant, in part or in full, for any damages caused to the City by reasons of such default
and termination.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated
below:
ATTEST: CITY OF OMAHA:
CITY CLERK Date MAYOR OF THE CITY OF OMAHA Date
OF THE CITY OF OMAHA
THE AFRICAN AMERICAN EMPOWERMENT
NETWORK,INC.
NESS: a Non-profit Corporation
c
S' By: /43 ,1
Signat e Signature
s.
M 1, Gdi( 5'— g�C5 . .41:23 all i e ,J ,,1 04 C&O`y"&e c. 3vec 1`�]—
Name Date Name and Title
-22-
AT EST: CTI Y QF OMAHA:
* ht, - -' 23 ) A 44,....._ & c23 2 3
City Clerk of t ity of 0 a Da Mayor of the City of Omaha Date
DEPUTY
APPROVED AS TO FORM:
Assistant City'Attorney Date
-23 -
SCHEDULE OF EXHIBITS
Agreement
Exhibit Location Description
A 1.02 Article of Incorporation,Bylaws,Corporate
Resolution,Board Members
B 1.11, 5.01.1, 2 CFR,Part 200,Uniform Administrative Requirements
5.01.2,5.01.3
5.03.4 and 5.05.2
C 1.12 and 5.03.2.1.3 Neighborhood Revitalization Strategy Areas
D 1.13,4.02.2 and Median Family Income Chart
5.03.2.1.4
E 5.03.3 Demographic Report
G 3.01.3 Certification of Debarment&Suspension
H 5.03.4 Financial Status Report
I 8.10 Termination and Enforcement—Appendix 11 to 2 CFR,Part
200(B)215.61 and 215.62
J 5.05.1.1 Equal Opportunity Clause
K 5.05.4 Section 3 Clause
L 5.05.6.2 Attestation Form for Public Benefit
M 5.05.7 Affidavit for Employee Classification Act
N 3.01.2 Minority and Women Business Plan
O 5.03.2.1.4 City of Omaha Definition of Income
P 4.02.2 Project Budget
R 6.03 Federal Funding Accountability and Transparency Act
S 4.05 Affirmative Marketing Policy
T 6.04 Drug Free Workplace
-24-
NE S. ofI S(:o4 ffJohn R ISelo - CORP ttJJ RP
A(ZTICLE OF INCORPORATION llll 111 hIilL 111111111111111 1{61 IHI1
1000853488 P95: 4
OF
AFRICAN AMERICAN EMPOWERMENT N
Filed: 01li2l2009 02:54 PM
AFRICAN AMERICAN EMPOWERMENT NETWORK,INC
The undersigned citizens of the State of Nebraska, acting as Incorporators of a corporation
organized under the Nebraska Nonprofit Corporation Act, adopt the following Articles of
Incorporation:
ARTICLE I
NAME
The name of the corporation is African American Empowerment Network, Inc. ("The
Network").
ARTICLE II
DURATION
The period of the Network's duration is perpetual.
ARTICLE In
MEMBERSHIP
The corporation shall have one or more classes of members, as more specifically provided in its
by-laws.
ARTICLE IV
PURPOSES
This is a public benefit corporation organized for the following purposes:
A. To accelerate the progress of African Americans by developing and implementing a
covenant and strategic plan that empowers African Americans, North Omaha and the
City of Omaha to dramatically and tangibly enhance the quality of life and to create a
greater future for African American youth.
E. To empower individuals and organizations through collective efforts to Connect,
Communicate, Coordinate, Collaborate, Create and Celebrate. The Network strives to
facilitate positive, collaborative change within the community through the participating
individuals and organizations.
C. To do everything necessary, proper, advisable or convenient for the accomplishment of
the purposes set forth herein, and to do all other things incidental thereto or connected
therewith which are not forbidden by the laws of the State of Nebraska, or by these
Articles of Incorporation.
D. To foster and promote the involvement of its members in civic and charitable endeavors
through mutual corporation,collaboration,joint planning and organized execution;and to
provide charitable service to the various communities of its membership so as to foster
and promote the advancement of each such community.
ARTICLE V
POWERS
The Network shall have and exercise all powers and rights conferred upon nonprofit corporations
by the Nebraska Nonprofit Corporations Act and any enlargement of such powers conferred by
subsequent legislative acts; and, in addition thereto, the Network shall have and exercise all
powers and rights which are not otherwise denied nonprofit corporations by the laws of the State
of Nebraska and which are necessary, proper, advisable, or convenient to the attainment of the
purposes set forth in Article III above. Notwithstanding any other provisions of these Articles of
Incorporation,the Network shall not carry on any other activities not permitted to be carried on
(a) by a corporation exempt from income taxation under Section 501 (c) (3) of the Code or (b)
by a corporation,contributions to which are deductible under Section 170(c)(2)of the Code.
ARTICLE VI
BYLAWS TO REGULATE INTERNAL AFFAIRS
The Bylaws of the Network shall regulate the internal affairs of the Network,except to the extent
otherwise provided in these Articles of Incorporation.
ARTICLE VLI
DISTRIBUTION OF ASSESTS ON DISSOLUTION OR FINAL LIQUIDATION
The Network is irrevocably dedicated to and operated exclusively for the purposes stated above,
and no part of the income or assets of the Network shall be distributed to or inure the benefit of
any individual, including members of the Network. Upon dissolution of the Network,the Board
of Directors of the Network shall after paying or making provisions for the payment of all
liabilities of the Network,dispose of all assets of the Network exclusively for the purposes of the
Network in such a manner as shall at the time qualify under Section 501 (c)(3)of the Code,or to
such organization of organizations as shall at the time qualify as an exempt organization or
organisations under Section 501 (c)(3)of the Code,as the Board of Directors shall determine.
ARTICLE VIII
NO POWER TO INFLUENCE LEGISLATION
The Network shall not participate in any political campaign for or against any candidate for
public office or devote a substantial part of its activities to influencing legislation.
ARTICLE IX
REGISTERED OFFICE AND REGISTERED AGENT
The street address of the initial registered office of the Network is 1015 N. 98th Street,Suite 200.
Omaha,NE 68114, and the name of its initial registered agent at such address is: Mr. Gregory
A.Johnson.
The Board of Directors by appropriate resolution shall have the power and authority to change
the location of the registered office of the corporation and to change the designation of the
registered agent of the corporation. F
i
ARTICLE X
BOARD OF DIRECTORS
The affairs of the Network shall be managed by a board of directors. The number of directors
constituting the initial Board of Directors shall be (5) and names and street addresses of the
persons who are to serve as the initial Directors are:
John Ewing Gregory A. Johnson
13516 Burt Street 1015 N. 98th St Suite 200
Omaha,NE 68154 Omaha,NE 68114
Twanna Black Rev. Jeremiah McGhee
8212 Vernon Ave. 2401 Lake Street Suite 250
Omaha,NE 68134 Omaha,NE 68110
Teresa Hunter
7709 Girard Circle
Omaha,NE 68122
ARTICLE XI
ELECTION AND REMOVAL OF DIRECTORS
All Directors shall be elected every 3 years, by a majority of the members of the Board,
present and voting, in a regular or special meeting of the Board. At the annual meeting of
the Board, or at any special meeting call fur such purpose and at which a quorum (as defined in
the Bylaws)is present,any one or more of the directors may be removed with cause by a vote of
the majority of the members of the Board present and voting, and a successor may be elected in
the manner specified in the Bylaws to fill the vacancy then created. Any Director whose
removal has been proposed shall be given an opportunity to be heard at the meeting.
ARTICLE XII
AMENDMENT
These Articles of Incorporation may be amended upon adoption by the Board of Directors of a
resolution setting forth the amendment in the manner provided by law; provided, however, no
amendment of the Articles may be adopted which change or affects in any way the exempt status
of the corporation as an organization existing exclusively for charitable purposes.
ARTICLE XTII
INCORPORATORS
The names and addresses of the Incorporators are:
Mr. Willie Barney
12333 Cuming Street
Omaha,NE 68154
Mr.Gregory A. Johnson
1015 N.98th St.#200
Omaha,NE 68114
Ms.Twaima Black
8212 Vernon Ave.
Omaha,NE 68134
Ms.Teresa Hunter
7709 Girard Circle
Omaha,NE 68122
Rev.Jeremiah McGhee
2401 Lake St.#250
Omaha,NE 68110
Mr.John Ewing
13516 Burt Street
Omaha,NE 68154
IN WITNESS WHEREOF, the above and foregoing Articles of Incorporation are executed this
15th D y of November 2008.
a
` 0 !
Mr. Willie ey, ator v. remiah McGhee,y, rp �, J� Incorporator
, (21.Z
Cd/
1 f • L /' ,.
�y J'o son, Incorporator r. John Ewing, orator
_ /i'. �lX ✓ fic.-.-- - v.-----,.4.44/,_____
r.r '(, )`� 0(..
___.)
Ms. Tawanna Black,Incorporator Ms. Teresa Hater,Incorporator
BYLAWS
OF
AFRICAN AMERICAN EMPOWERMENT NETWORK,INC
ARTICLE I
OFFICES
Section 1. Offices.
The registered office shall be in the City of Omaha,County of Douglas, State of Nebraska
(hereinafter,the"State"). The corporation may also have offices at such other places both
within and without the State,as the Board of Directors may from time to time determine
or the business of the corporation may require.
ARTICLE II
MEETINGS OF DIRECTORS
Section 1. General.
All meetings of the directors shall be held at such place within or without the State as
may be designated from time to time by the Board of Directors.
Section 2. Annual Meetings.
The annual meeting of the directors,commencing with the year 2010 shall be held on"the
first Friday of May", if not a legal holiday,and if a legal holiday,then on the next
business day following,at 11:00 am,or at such other date and time as shall be designated
from time to time by the Board of Directors and stated in the notice of the meeting,at
which they shall elect by a plurality vote the Board of Directors,and transact such other
business as may properly be brought before the meeting. Written notice of the annual
meeting stating the place,date and hour of the meeting shall be given to each director
entitled to vote at such meeting not less than ten(10)nor more than sixty(60)days before
the date of the meeting.
Section 3. Special Meetings. •
Special meetings of the directors,for any purpose or purposes,unless otherwise
prescribed by statute or by the Articles of Incorporation(hereinafter,the"Certificate"),
may be called by the President and shall be called by the President or Secretary at the
request in writing of a majority of the Board of Directors. Such request shall state the
purpose or purposes of the proposed meeting. Written notice of a special meeting stating
the place,date and hour of the meeting and the purpose or purposes for which the meeting
is called,shall be given not less than ten(10)or more than sixty(60)days before the date
of the meeting,to each director entitled to vote at such meeting. Business
transacted at any special meeting of directors shall be limited to the purposes stated in the
notice.
Page f of 8
Section 4. Quorum.
The majority of elected directors present in person,shall constitute a quorum at all
meetings of the directors for the transaction of business,except as otherwise provided by
statute or by the Certificate. If,however,such quorum s all not be present at any meeting
of the directors,the directors entitled to vote,present in person,shall have power to
adjourn the meeting to a future date at which a quorum shall be present. At such
adjourned meeting at which a quorum shall be present any business may be transacted
which might have been transacted at the meeting as originally notified. Notice need not
be given of the adjourned meeting if the time and place are announced at the meeting in
which the adjournment occurs. If the adjournment is for more than thirty(30)days,or if
after the adjournment a new record date is fixed for the adjourned meeting,a notice of the
adjourned meeting shall be given to each director entitled to vote at the meeting.
Section 5. Voting.
When a quorum is present at any meeting,the vote of the majority of the directors having
voting power present in person shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of the
Certificate,a different vote is required in which case such express provision shall govern
and control the decision of such question. Unless otherwise provided in the Certificate or
by statute,each director shall at every meeting of the directors be entitled to one vote in
person.
Section 6. Written Consent, 1
Unless otherwise provided in the Certificate,any action required to be taken at any annual
or special meeting of directors of the corporation,or any action which may be taken at
any annual or special meeting of such directors,may be taken without a meeting,without
prior notice and without a vote,if a consent in writing,setting forth the action so taken,
shall be signed by all the directors. Any such consent shall be filed with the minutes of
the corporation.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Mansgement and Number.
The property,business and affairs of the corporation shall be controlled and managed by a
Board of Directors. The number of directors to constitute the first Board of Directors is
five(5)and such number may be increased or decreased by future action of the Board of
Directors. The business of the corporation shall be managed by its Board of Directors,
which may exercise all such powers of the corporation and do all such lawful acts and
things as are not by statute or by the Certificate or by these bylaws directed or required to
be exercised or done by the directors
Page 2 of 8
II
Section 2. Vacancies.
Vacancies and newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority vote of the directors then in office,though
less than a quorum,or by a sole remaining director,and the directors so chosen shall hold
office until the next annual election and until their successors are duly elected and shall
qualify,unless sooner displaced. If there are no directors in office,then an election of
directors may be held in the manner provided by statute. If,at the time of filling any
vacancy or any newly created directorship,the directors then in office shall constitute less
than a majority of the whole Board of Directors(as constituted immediately prior to any
such increase),then the appropriate court of the State may summarily order an election to
be held to fill any such vacancies or newly created directorships or to replace directors
chosen by the directors then in office.
Section 3. Locations.
The Board of Directors of the corporation may hold meetings,both regular and special,
either within or without the State.
Section 4. First Meeting.
The first meeting of each newly elected Board of Directors shall be held at such time and
place as shall be fixed by the vote of the directors at the annual meeting and no notice of
such meeting shall be necessary to the newly elected directors in order legally to
constitute the meeting,provided a quorum shall be present. In the event of the failure of
the directors to fix the time or place of such first meeting of the newly elected Board of
Directors, or in the event such meeting is not held at the time and place so fixed by the
directors,the meeting may be held at such time and place as shall be specified in a notice
given as hereinafter provided for special meetings of the Board of Directors,or as shall be
specified in a written waiver signed by all of the directors.
Section 5. Regular Meetings.
Regular meetings of the Board of Directors may be held without notice at such time and
at such place as shall from time to time be determined by the Board of Directors.
Section 6. Special Meetings.
Special meetings of the Board of Directors may be called by the President on two days'
notice to each director,either personally or by mail or by email,setting forth the time,
place and purpose of the meeting. Special meetings shall be called by the President or
Secretary in like manner and on like notice on the written request of two directors.
Page 3 of 8
is
Secti.on.7. Quorum.
At all meetings of the Board of Directors,a majority of directors shall constitute a
quorum for the transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of Directors,except
as may otherwise be specifically provided by statute or by the Certificate. If a quorum
shall not be present at any meeting of the Board of Directors,the directors present may
adjourn the meeting from time to time, without notice other than announcement at the
meeting,until a quorum shall be present.
Section 8. Action by Consent.
Unless otherwise restricted by the Certificate,any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting,if all members of the Board of Directors or committee,as the case may
be,consent thereto in writing,and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 9. Meetings by Telephone.
Unless otherwise restricted by the Certificate,members of the Board of Directors or of
any committee thereof,may participate in a meeting of the Board of Directors or
committee by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting by use of such equipment shall
constitute presence in person at such meeting.
Section 10. Committees,Membership,Powers.
The Board of Directors may,by resolution passed by a majority of the whole Board of
Directors,designate one or more committees,each committee to consist of one or more of
the directors of the corporation. The Board of Directors may designate one or more
directors as alternate members of any committee,who may replace any absent or
disgtralif ed member at any meeting of the committee. In the absence or disqualification
of a member of a committee,the member or members thereof present at any meeting and
not disqualified from voting,whether or not he,she or they constitute a quorum,may
unanimously appoint another member of the Board of Directors to act at the meeting in
the place of any such absent or disqualified member. Any such committee,to the extent
provided in the resolution of the Board of Directors,shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be affixed to
all papers which may require it;but no such committee shall have the power or authority
in reference to amending the Certificate;adopting an agreement of merger or
consolidation;recommending to the directors the sale,lease or exchange of all or
substantially all of the corporation's property and assets;recommending to the directors a
dissolution of the corporation or a revocation of a dissolution;amending the bylaws of the
corporation;or increasing or decreasing the membership of the Board of Directors;and,
unless the resolution or the Certificate expressly so provide,no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be determined from time
to time by resolution adopted by the Board of Directors.
Page 4 of 8
Section 11. Committees,Minutes.
Each committee shall appoint a secretary of each meeting and keep regular minutes of its
meetings and report the same to the Board of Directors.
Section 12. Compensation of Directors.
The Board of Directors shall not recieved compensaton for serving as a director. The
directors may be reimbursed for their expenses,if any,for attendance at each meeting of
the Board of Directors.
ARTICLE ITT
NOTICES
Section 1. Notices.
Whenever,under the provisions of the statutes or of the Certificate or of these bylaws,
notice is required to be given to any director, it shall not be construed to mean personal
notice, but such notice may be given in writing,by mail,addressed to such director at
their address as it appears on the records of the corporation,with postage thereon prepaid,
and such notice shall be deemed to be given at the time when the same shall be deposited
in the United States mail. Notice to directors may also be given by email.
Section 2. Waivers.
Whenever any notice is required to be given under the provisions of the statutes or of the
Certificate or of these bylaws,a waiver thereof in writing,signed by the person or persons
entitled to said notice,whether before or after the time stated therein,shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. Designations.
The officers of the corporation shall be chosen by the Board of Directors and shall be a
President, a Vice President,a Secretary and a Treasurer. The Board of Directors may also
choose additional Vice Presidents. Any number of offices may be held by the same
person,unless applicable law,the Certificate or these bylaws otherwise provide,
Section 2. Tenn Removal.
The Board of Directors at its first meeting and after each annual meeting of the directors
shall choose a President,one or more Vice Presidents,a Secretary and a Treasurer. The
Board of Directors may appoint such other officers and agents as it shall deem necessary
who shall hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the Board of Directors. The
officers of the corporation shall hold office until their successors are chosen and qualify.
Any officer elected or appointed by the Board of Directors may be removed at any time
Page 5 of 8
by the affirmative vote of a majority if the Board of Directors_ Any vacancy occurring in
any office of the corporation shall be filled by the Board of Directors.
Section 3. Salaries.
The salaries of the Executive Director shall be fixed by the Board of Directors.
Section 4. The President.
The President of the Board of Directors,shall preside at all meetings of the directors. The
President may execute all bonds,deeds,mortgages,conveyances,contracts and other
instruments,except in cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors or by these by-laws to some other officer or agent of
the corporation,or shall be required by law otherwise to be signed or executed. In
general,the President shall perform all duties incident to the office of President and such
other duties as may from time to time be assigned to him by the Board of Directors. The
Board of Directors may confer like power on any other person or persons,except those
that by statute are conferred exclusively on the President.
Section 5. The Vice Presidents.
The Vice Presidents shall perform such duties as shall be assigned to them and shall
exercise such powers as may be granted to them by the Board of Directors or by the
President of the corporation. In the absence of the President the Vice Presidents,in order
of their seniority,may perform the duties and exercise the powers of the President with
the same force and effect as if performed by the President and shall generally assist the
President and shall perform the duties and have the powers prescribed by the Board of
Directors from time to time.
Section 6. The Secretary.
The Secretary shall attend all meetings of the Board of Directors and record all the
proceedings of the meetings of the corporation and of the Board of Directors in a book to
be kept for that purpose and shall perform like duties for the standing committees when
required. The Secretary shall give,or cause to be given,notice of all meetings and special
meetings of the Board of Directors,and shall perform such other duties as may be
prescribed by the Board of Directors or President,under whose supervision he or she
shall be. The Secretary shall have custody of the corporate seal of the corporation and he
or she,or an Assistant Secretary,Tall have authority to affix the same to any instrument
requiring it and when so affixed,it may be attested by his or her signature or by the
signature of such Assistant Secretary. The Board of Directors may give general authority
to any other officer to affix the seal of the corporation and to attest the affixing by his
signature.
Section 7. The Treasurer.
The Treasurer shall have the custody of the corporate funds and securities and shall keep
full and accurate accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in the name and to the
credit of the corporation in such depositories as may be designated by the Board of
Page 6of'8
Directors. The Treasurer shall disburse the funds of the corporation as may be ordered by
the Board of Directors,taking proper vouchers for such disbursements, and shall render to
the President and the Board of Directors, at its regular meetings,or when the Board of
Directors so requires,an account of all his or her transactions as Treasurer and of the
financial condition of the corporation.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Annual Statement.
The Board of Directors shall present at each annual meeting,and at any special meeting
of the directors when called for by vote of the directors,a full and clear statement of the
business and condition of the corporation.
Section 2. Checks and Deposits.
All checks or demands for money and notes of the corporation shall be signed by such
officer or officers or such other person or persons as the Board of Directors may from
time to time designate. All funds of the corporation not otherwise employed may be
deposited to the credit of the corporation in such banks,trust companies or other
depositories as the Board of Directors may from time to time select.
Section 3. Fiscal Year.
The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.
Section 4. Seal.
The corporate seal shall have inscribed thereon the name of the corporation,the year of
incorporation and the words"Corporate Seal,Nebraska" The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE VII
AMENDMENTS
Section 1. Amendments.
These bylaws may be altered,amended or repealed or new bylaws may be adopted by the
Board of Directors,when such power is conferred upon the Board of Directors by the
Certificate,at any regular meeting of the of the Board of Directors or at any special
meeting of the Board of Directors if notice of such alteration,amendment,repeal or
adoption of new bylaws be contained in the notice of such special meeting.
Page 7 of 8
ARTICLE VIII
INDEiv1NIFICATION AND INSURANCE
Section 1. Indemnification.
A. The corporation shall indemnify to the full extent authorized or permitted by the
general corporation law of the State,as now in effect or as hereafter amended,any person
made, or threatened to be made,a party to any threatened,pending or completed action,
suit or proceeding(whether civil,criminal,administrative or investigate,including an
action by or in the right of the corporation)by reason of the fact that he is or was a
director,officer, employee or agent of the corporation or serves or served any other •
enterprise as such at the request of the corporation.
B. The foregoing right of indemnification shall not be deemed exclusive of any other
rights to which such persons may be entitled apart from this Article IX. The foregoing •
right of indemnification shall continue as to a person who has ceased to be a director,
officer,employee or agent and shall inure to the benefit of the heirs,executors and
administrators of such a person.
Section 2. Insurance.
The corporation may purchase and maintain insurance on behalf of any person who is or
was a director,officer,employee or agent of the corporation,or is or was serving at the
request of the corporation as a director,officer,employee or agent of another corporation,
partnership,joint venture,trust or other enterprise against any liability asserted against
him or her and incurred by him or her in any such capacity,or arising out of his or her
status as such,whether or not the corporation would have the power to indemnify him or
her against such liability under the provisions of the general corporation law of the State.
1
L,Y}tfc ni : z. k
August 31,2009 Teresa Hunts , Secretary
•
Page 8 of 8
THE OMPOWERMENIT NETWORK EMPOWER 1 ..'i
Working Together to Rebuild the Village NORTH OMAHAg emppwornrpnm
Resolution Passed by Empowerment Network Board on Thursday,April 8,2021
Thursday,April 8,2021
The Empowerment Network Board grants authority for Willie Barney, President of the Empowerment
Network,to sign and apply for the City of Omaha Community Development Block Grant Funds in support of •
the 2022 Step-Up Omaha program and other funding opportunities.
The Board is in full support of the application. As the governing body,we have duly authorized this
application. This applicant will comply with all Federal and state requirements governing the use of CDBG
funds.
Adopted by the Empowerment Network Board
Timothy Christian Chair
John Ewing,Jr. Vice Chair
Cynthia Hume Secretary
Greg Johnson Treasurer
Teresa Hunter
Page 1 of 1
is
Empowerment Network Board Members- 2021
Chair: Timothy Christian-(3 Year Term)—Voting,Years on Board—4 Years
CEO/Chairman—NightFox Entertainment,LP
1299 Farnam Street,Suite 300 �.
Omaha,NE 68102
402-401-2740
timothvlchristian@gmail.com
Vice-Chair: John Ewing,Jr. (3 Year Term)—Voting,Years on Board—12 Years;Former Board Chair
Douglas County Treasurer
13516 Burt Street
Omaha, NE 68154
402-444-3224
johnewing@co.douglas.ne.us
Secretary: Cynthia Hume-(3 Year Term)—Voting,Years on Board—4 Years
Fair Deal Village Marketplace Manager
OEDC
2221 N. 24th Street
Omaha,Nebraska 68110
402-250-7067
chume62@gmail.com
Treasurer: Gregory Johnson(3 Year Term)—Voting—Years on Board—12 Years
Shareholder&Director
Hayes&Associates,LLC
1015 N.98th Street Suite 200
Omaha,NE 68114
402-390-2480
gjoh nson @haves-cpa.com
Teresa Hunter(3 Year Term)—Voting,Years on Board—12 Years
President and CEO
Family Housing Advisory Services
2401 Lake Street
Omaha,NE 68110
402-934-6386
teresa@fhasinc.org
4 New Board Members will be added in 2021. Names have been nominated.
President Willie Barney
Ex-officio Empowerment Network
105 N.31stAvenue Suite 101
Omaha,NE 68131
402-290-5627
wbarnev@empoweromaha.com
Step-Up Omaha! Leadership Team
Willie Barney
Title President-Empowerment Network
Role
Willie Barney is Founder and President of the Empowerment Network and one of the creators of the Step-
Up Omaha! employment program.Willie is responsible for raising funds to meet the$2.5 million dollar
budget for Step-Up Omaha and recruiting business and community partners.
Barney is best known for his role as the Founder,President,and Facilitator of the Empowerment
Network.The Empowerment Network is a collaborative of residents,leaders,and organizations working
to facilitate positive change in Omaha,Nebraska and other cities across the country.For over 27 years,
Barney has worked in strategic planning,communications,community building,and facilitation.He is
known as a strategist,facilitator,and catalyst that creates teams to generate results.
Name
Vicki Quaites-Ferris
Title
Director of Operations
Role
Vicki serves as the Director of Operations for the Empowerment Network. Vicki manages the
relationships with businesses and worksites and facilitates the planning process with partners. Vicki also
leads the communications and outreach efforts of the Network and Step-Up Omaha! She has been
instrumental in the growth and success of the youth employment program.
Vicki Quaites-Ferris,Director of Operations for the Empowerment Network,has extensive experience
with marketing,communications,events management,community outreach and operational leadership.
Vicki manages the communications and outreach for Step-Up Omaha! Yield has worked for two Mayor's
administrations and served as the Director of Operations for the Empowerment Network for over nine •
years. She has an extensive background with leading job training and workforce development programs.
Step-Up Omaha staff includes:
Step-Up Omaha Employment Director
Step-Up Omaha Career and Life Skills Coaches—Full-time
Step-Up Omaha Career and Life Skills Coaches-Summer
DEC-29-2013 15:20 IRS 513 263 3695 P.03
INTERNAL REVENUE SERVICE DEPARTMENT OP THE TREASURY
P. O. &Oc 2509
. CINCINNATI, OH 45201
Date: tJ r v 2 ; 2013 Employer
loy Identification Number:
DLN:
-421
503316030 i
AFRICAN AMERIcINZ EMPOWERMENT
Contact k�eY'BCn:
NETWORK INC HARRY S MARTINEZ TD# 31318
C/O HAVES & ASSOCIATES LLC Contact Telephone Number:
1215 bt 98TR ST STE 200 (877) 829-5500
O1A., NE 68114
ACCOunting Period RnAi+ng:
Decker 31
Public Charity Status:
170(b) (1) (A) (vi)
Form 990 Required.:
Yes
Effective Date of Exemption:
— March 21, 2013
Contribution Deductibility:
Yes
Addendum Applies:
Yes
Dear Applicant:
We are pleased to inform you that upon review of your application for tax
exempt status we have determined that you are exempt from Federal income tax •
under section 501(a) (3) of the Internal Revenue Code. Contributions to you are •
deductible in"P - section 170 of the Code. You are also qualified to receive
tax deductible bequests, devises, transfers or gifts wader section 2055, 2106
or 2522 of the Code. Because this letter could help resolve any questions
regarding your exempt Status, you should keep it in your permanent records.
Organizations exempt under section 501(c) (3) of the Code are further classified
as either public charities or private foundations. We determined that you are
a public charity under the Code section(a) listed in the heading of this
letter.
• i
Please see enclosed Publication 4221-PC, Compliance Guide for 501(c) (3) Public
Charities, for some helpful information about your responsibilities as an
exempt organization.
}
I ;
• i
• i
Letter 947
:-2 -2013 15:20 IRS 513 263 3695 P.04
_2„
AF ICAN AMERICAN Eo
Sincerely,
)46.4.4.01‘..
Director, Exempt Organizations i
Enclosure: Publication 4221-PC
1
• i
Letter 947
•
DhC-'d9-2013 1520 IRS 513 263 3695 P.05
•
-3-
1
ApRICAN AMERIcaN EMPOWERMENT •
•
ADDENDUM
Based on the information submitted with your application, we approved your
request for reinstatement ondel- Notice 2011-44. Your effective date of
exemption, as shown in the heading of this letter, is the postmark date of your
application.
1
1
!
•
1 • 1
i 1
•
•
••
1
1
•
Letter 947
1•
•
1
TOTAL P.05
Exhibit B
CHAPTER II-OFFICE OF MANAGEMENT AND
BUDGET GUIDANCE
Part Page
200 Uniform administrative requirements, cost prin-
ciples, and audit requirements for Federal
awards 81
201-299 [Reserved]
79
PART 200-UNIFORM ADMINISTRA- Subpart D-Post Federal Award Pt.200 2 CFR Ch.II(1-1-22 Edition)
TIVE REQUIREMENTS, COST PRIN- Requirements
CIPLES, AND AUDIT REQUIRE- 200.300 Statutory and national 200.336 Methods for collection, trans- 200.419 Cost accounting standards and dis-
mission,and storage of Information. closure statement.
MENTS FOR FEDERAL AWARDS quirements. 200.337 Access to records.
200.301 Performance measurement. 200.338 Restrictions on public access to GENERAL PROvIsroNS FOR SELECTED ITEMS OF
Subpart A-Acronyms and Definitions 200.302 Financial management. records. COST
200.303 Internal controls. REMEDIES FOR NDNGDMPLIArvgE 200.420 Considerations for selected items of
ACRONYMS 200.304 Bonds. cost.
200.305 Federal payment. 200.339 Remedies for noncompliance. 200.421 Advertising and public relations.
Sec. 200.306 Cost sharing or matching. 200.340 Termination. 200.422 Advisory councils.
200.0 Acronyms. 200.307 Program income. 200.341 Notification of termination require- 200.423 Alcoholic beverages.
200.1 Definitions. 200.308 Revision of budget and program ment. 200.424 A activities.
200.342 Opportunities to object, hearings, 200.425 Auditudit services,
plans. and appeals. 200.426 Bad debts.
Subpart B-General Provisions 200.309 Modifications to period of perform- 200,343 Effects of suspension and terms- 200.427 Bonding costs.
200.100 Purpose. ance. nation. 200.428 Collections of improper payments.
200.429 Commencement and convocation
200.101 Applicability. PROPERTY STANDARDS CLOSEOUT costs.
200.102 Exceptions. 200.310 Insurance coverage. 200.344 Closeout. 200.430 Compensation-personal services.
200.103 Authorities. 200.431 Compensation-fringe benefits.
200.311 Real property.
200.104 Supersession. POST-CLOSEOUT ADJUSTMENTS AND 200.432 Conferences.
200.105 Effect on other issuances. 200.312 Federally-owned and exempt prop- CONTINUING RESPONSIDILITDs 200.933 Contingency provisions.
200.106 Agency implementation. arty. n 200.934 Contributions and donations.
p 200.313 Equipment. 200.345 Post-closeout adjustments and co 200.435 Defense and prosecution of criminal
200.107 OMB responsibilities. 200.314 Supplies. tinning responsibilities. and civil proceedings, claims, appeals
200.108 Inquiries. 200.315 Intangible property. COLLECTION of AMOUNTS DUE and patent Infringements.
200.109 Review date. 200.316 Property trust relationship. 200.436 Depreciation.
200.110 Effective/applicability date. 200.346 Collection of amounts due. 200.437 Employee health and welfare costs.
200.111 English language. PROCUREMENT STANDARDS 200.438 Entertainment costs.
200.112 Conflict of interest. Subpart E-Cost Principles 200.439 Equipment and other capital ezpend-
200.113 Mandatory disclosures. 200.317 Procurements by states. GENERAL PROVISIONS General procurement standards. 200.440 Exchange rates.
Subpart C-Pre-Federal Award Require- 200.319 Competition. 200.400 Policy guide. 200.441 Fines,penalties,damages and other
ments and Contents of Award Federal Awards 200.320 Methods of procurement to be Col- 200.401 Application. settlements.lowed. - BASIC CONSIDERATIONS 200.492 Fund raising and investment man-
200.321 Contracting with small and minority agement costs.
200.200 Purpose. de-
businesses,women's business enterprises, 200.402 Composition of costs. 200.443 Gams and losses on disposition of de-
200.201 Use of grant agreements(Including 200.403 Factors affecting allowability of preclable assets.
and labor surplus area firms.
fixed amount awards),cooperative agree- costs. 200.444 General costs government.
200.322 Domestic preferences for procure- 200.445 Goods or services
s for personal use.
menfs,and contracts. 200.404 Reasonable costs.ment9. 200.905 Allocable costs. 200.446 Idle facilities and idle Capacity.
200.202 Program planning and design. 200,447 Insurance and indemnification.
200.203 Requirement to provide public no- 200324 Contract cost and price. 200407 Pi writtenl 200.323 Procurement of recovered materials. 200.906 Applicable credits. 200.448Intellectual property.
tics of Federal financial assistance pro- . . ror approval (prior ap- 200.44 Interest.
grams. 200.325 Federal awarding agency or pass- prove]).
200.204 Notices of funding opportunities. through entity review. 200.408 Limitation on allowance of costs. 200.450 Lobbying.
200.326 Bonding requirements. 200.909 Special considerations. 200.451 Losses on other awards or contracts,
200.205 Federal awarding agency review of 200.327 Contract provisions. 200.410 Collection of unallowable costs. 200.452 Maintenance and repair costs.
merit of proposals. 200.411 Adjustment of previously negotiated 200.453 Materials and supplies costs,Inelud-
200.206 Federal awarding agency review of PERFORMANCE AND FINANCIAL MONITORING Indirect(F&A)cost rates containing un- log costs of computing devices.
allowable costs 200.454 Memberships,subscriptions,and pro-
risk posed by applicants. AND REPORTING . fessional activity costs.
200.207 Standard application requirements. 200.328 Financial reporting. DIREcr AND INDIRECT(F&A)COSTS 200.455 Organization costs.
200.208 Specific Conditions. p g• 200.956 Participant support costs.
200
200.209 Certifications and representations. .329 Monitoring and reporting program 200.412 Classification of costs. 200.457 Plant and security costs.
200.210 Pre-award costs, performance. 200.413 Direct coats. 200.958 Pre-award costs.
200.211 Information contained in a Federal 200.330 Reporting on real property. 200.414 Indirect(F&A)costs. 200.459 Professional service costs.
award. 200.415 Required certifications. 200.460 Proposal costs.
MONITORING Public access to Federal award 1RCOr- SUBRECIPIENT MehIIVRG AND MANAGEMENT SPECIAL CONsmeeATI0NS FOR STATES,LOCAL 200.961 Publication and printing costs.
mation. 200.331 Subrecipient and Contractor deter- GovERNMENra AND INDIAN TRIBES 200.962 Rearrangement and reconversion
200.213 Reporting a determination that a minations. 200.416 Cost allocation plans and indirect costs.
non-Federal entity is not qualified for a 200.332 Requirements for pass-through enti- cost proposals. 200.464 Recruitinn costs.
200.465 Relocation costs of employees.
Federal award. ties. 200.417 Interagency service. 200.465 Rental costs of real property and
200.219 Suspension and debarment. 200.333 Fixed amount subawards. equipment.
SPECIAL CONSIDERATIONS FOR INSTITUTIONS OF
200.215 Never contract with the enemy. RECORD RETENTION AND ACCESS HIGHER EDUCATION 200.468 Ceiling and
and student aid costs.
200.216 Prohibition on certain telecommuni- 200.467 Selling ana marketing costa.
cations and video surveillance services or 200.339 Retention requirements for records. 200.go Costs incurred by states and local 200.468 Studs Specialized service facilities.
equipment. 200.335 Requests for transfer of records. governments. 200.469 Student activity costs.
81 82
OMB Guidance §200.0 §200.1 2 CFR Ch.II(1-1-22 Edition)
200.970 Taxes(including Value Added Tax). APPENDIX VII TO PART 220--STATES AND
200.971 Telecommunication costs and video LOCAL GOVERNMENT AND INDIAN TRIBE IN- FTE Full-time equivalent diary apparatus necessary to make it
surveillance Costs. DIRECT COST PROPOSALS GAAP Generally Accepted Account- usable for the purpose for which it is
200.972 Termination costs. APPENDIX VIII 1O PART 200-NONPROFIT OR- lag Principles acquired. Acquisition Costa for soft-
200.473 Training and education costs. OAMZATIONS EXEMPTED FROM SUBPART E GAGAS Generally Accepted Govern- ware includes those development costs
' 200.979 Transportation costs. OF PART 200 ment Auditing Standards capitalized in accordance with gen-
200.975 Travel costs. APPENDIX IX TO PART 200-HOSPITAL COST GAO Government Accountability Of- erally accepted accounting principles
200.976 Trustees. PRINCIPLES fice
APPENDIX X TO PART 200-DATA COLLECTION (GAAP). Ancillary charges, such as
Subpart F-Audit Requirements FORM(FORM SF-SAC) pe o GOCOGovernment owned,contractor taxes,duty,protective in transit insur-
APPENDIX XI TO PART 200-COMPLIANCE SUP- operated ance,freight,and installation may be
GENERAL PLEMENT GSA General Services Administration included in or excluded from the acqui-
200.500 Purpose. APPENDIX XII TO PART 200-AWARD TERM AND IBS Institutional Base Salary sition cost in accordance with the non-
CONDITION FOR RECIPIENT INTEGRITY AND IHE Institutions of Higher Education Federal entity's regular accounting
AUDITS PERFORMANCE MATTERS IRO Internal Revenue Code practices.
200.501 Audit requirements. AUTHORITY:31 U.S.C.503 ISDEAA Indian Self-Determination Advance payment means a payment
200.502 Bests for determining Federal SOURCE:78 FR 78fi08,Dec.26,2013,unlessand Education and Assistance Act that a Federal awarding agency or
expended. otherwise noted. MTC Modified Total Cost pass-through entity makes by any ap-
awards200.503 Relation to other audit require-
NEE Modified Total Direct Cost propriate payment mechanism,Snclud-
menta. Subpart A-Acronyms and NFE Non-Federal Entity ing a predetermined payment schedule,
200.509 Frequency of audits. p y OMB Office of Management and Budg- before the non-Federal entity disburses
200.505 Sanctions. Definitions et the funds for program purposes.
200.506 Audit costs. PII PersonallyIdentifiable Informa-
200.507 Program-specific audits. ACRONYMS Allocation means the upo of a to
Won signing a cost,or a group (s costs, a-
AUDrrEEs §200.0 Acronyms. PMS Payment Management System one or more cost objective(s), in pro-
200.508 Auditee responsibilities. PRHP Poet-retirement Health Plans sortable proportion to the benefit pro-
ACRONYM TERM PTE Pass-through Entity vided or otherequitable relationship.
200.509 Auditor selection. p•
REUI Relative Energy Usage Index
200.510 Financial statements. CAS Cost AccountingStandardsg g The process may entailin costobjectiveec a
• 200.511 Audit findings follow-up. SAMFA System Financialr Award Management cost(s)ughc one to a final mit
CFR Code of Federal Regulations SFA Student Aid
200.512 Report submission. or through or more intermediate
CMIA Cash Management Improve- SNAP Supplemental Nutrition Assist- cost objectives.
FEDERAL AGENCIES mint Act ance Program Assistance listings refers to the pub-
COG Councils Of Governments SPOC Single Point of Contact
200.513 Responsibilities. C050 Committee of Sponsoring Orga- TANF Temporary Assistance for one parograms
listing Federal assist-
p y once h managed and adminis-
AUDI1UILa nizatfons of the Treadway Commis- Needy Families tered by the General Services Adminis-
sion200.519 Scope of audit. TFM Treasury Financial Manual Oration,formerly known as the Catalog
200.515 Audit reporting. U.S.C. United States Code of Federal Domestic Assistance
200.616 Audit findings. VAT Value Added Tax (CFDA).
200.517 Audit documentation. EPA Environmental Protection Agen
8 Major program determination. cy [78 FR 78608,Dec.26,2013,as amended at 79 Assistance listing number means a
200.51 Criteria for Federal program risk. ERISA Employee Retirement Income FR 75880,Dec.19,2014;80 FR 43308,July 22, unique number assigned to identify a
200.5198
200.5 Criteria for a low-risk auditee. 2015;85 FR 99529,Aug.13,2020] Federal Assistance Listings, formerly
Security Act of 1979(29 U.S.C.1301-
1961) §200.1 Definitions. known as the CFDA Number.
MANAGEMENT DECISIONS Assistance listing program title means
EUI Energy Usage Index These are the definitions for terms the title that corresponds to the Fed-
200.521 Management decision. F&A Facilities and Administration used in this part.Different definitions era] Assistance Listings Number, for-
APPENDIX I To PART 200-FULL TEXT OF No- FAC Federal Audit Clearinghouse may be found in Federal statutes or merlyknown as the CFDA
TICE OF FUNDING OPPORTUNITY FAIN Federal Award Identificationprogram
APPENDIX II TO PART 200-CONTRACT PROM- caiy regulations that applyro more epeCifi- title.Audit
Number y particularprograms finding means deficiencies
SZONe FOR NON-FEDERAL ENTITY CON- Call to r0 Tama or supple-
TRACTS UNDER FEDERAL AWARDS
FAPIIS Federal Awardee Perform- ties.These definitions could be supple- which the auditor is required by
APPENDIX III To PART 200- mmEcr(F&A) ance and Integrity Information Sys- minted by additional Instructional in- §200.516(a)to report in the schedule of
COSTS IDENTIFICATION AND ASSIGNMENT, tem formation provided in governmentwide findings and questioned costs.
AND RATE DETERMINATION FOR INSTrrO- FAR Federal Acquisition Regulation standard information collections. For Audltee means any non-Federal enti-
WOOS OF HIGHER EDUCATION(IHEs) FFATA Federal Funding Account- purposes of this part, the following ty that expends Federal awards which
APPENDIX IV TO PART 200-INDntECT(F&A) ability and Transparency Act of 2006 definitions apply: must be audited under subpart F of
COSTS IDENTIFICATION AND ASSIGNMENT, or Transparency Act-Public Law Acquisition cost means the cost of the this part.
AND RATE DETERMINATION FOR NONPROFIT
109-282,as amended by section 6202(a) asset includingthe cost to readythe Auditor means an auditor who is a
ORGANIZATIONS of Public Law 110-252(31 U.S.C.6101)
APPENDIX V TO PART 200-STATE/LOCAL Gov-
FICA Federal Insurance Contribu- asset for its Intended use.example,Acquisition public accountant or a Federal,State,
ERNMENTWIDE CENTRAL SERVICE COST AL- cost for equipment,for means local government,or Indian tribe audit
LOCATION PLANS tions Act the net invoice price of the equipment, organization,which meets the general
APPENDIX VI TO PART 260-PUBLIC ASSIST- FOIA Freedom of Information Act including the cost of any modifica- standards specified for external audi-
MICE COST ALLOCATION PLANS FR Federal Register tions,attachments,accessories,or aux- tors in generally accepted government
83 84
OMB Guidance §200.1 §200.1 2 CFRCh.11(1-1-22 Edition)
auditing standards(GAGAS).The term sets that materially increase their A cluster of programs must be consid- Contract means, for the purpose of
auditor does not include internal audi- value or useful life. ered as one program for determining Federal financial assistance,a legal in-
tors of nonprofit organizations. Central service cost allocation plan major programs, as described in strument by which a recipient or sub-
Budget means the financial plan for means the documentation identifying, §200.518, and, with the exception of recipient purchases property or serv-
the Federal award that the Federal accumulating,and allocating or devel- R&D as described in§200.501(c),wheth- ices needed to carry out the project or
awarding agency or pass-through enti- oping billing rates based on the allow- er a program-specific audit may be program under a Federal award. For
ty approves during the Federal award able costs of services provided by a elected. additional information on subrecipient
process or in subsequent amendments State or local government or Indian Cognizant agency for audit means the and contractor determinations, see
to the Federal award.It may include tribe on a centralized basis to its de- Federal agency designated to carry out §200.331. See also the definition of
the Federal and non-Federal share or partments and agencies. The costs of the responsibilities described in subaward in this section.
only the Federal share,as determined these services may be allocated or §200.513(a). The cognizant agency for Contractor means an entity that re-
by the Federal awarding agency or billed to users. audit is not necessarily the same as the ceives a contract as defined in this sec-
pass-through entity. Claim means,depending on the con- cognizant agency for indirect costs.A tion.
Budget period means the time Inter- text,either: list of cognizant agencies for audit can Cooperative agreement means a legal
val from the start date of a funded por-
tion of an award to the end date of that (1)A written demand or written as- be found on the Federal Audit Clear- instrument eofr financial assistance be-
funded portion during which recipients section by one of the parties to a Fed- inCogniz(FAC)website. tween a Federal awarding agency and a
are authorized to expend the funds eral award seeking as a matter of Cognizant agency indirect costs recipient le a pass-through entity and
awarded, including any funds carried right: means the Federal agency responsible a subrecipient that,consistent with 31
forward or other revisions pursuant to (i)The payment of money in a sum for reviewing,negotiating,and appreov-
ct U.S.C.6302-6305:
§200.308. certain; ing cost allocation plans or indirect (1)Is used to enter into a relation-
assets means: (ii)The adjustment or interpretation cost proposals developed under this ship the principal purpose of which is
(I)Tangible or intangible assets used of the terms and conditions of the Fed- part on behalf of all Federal agencies, to transfer anything of value to carry
in operations having a useful life of era]award;or The cognizant agency for indirect cost out a public purpose authorized by a
more than one year which are capital- (iii)Other relief arising under or re- is not necessarily the same as the cog- law of the United States(see 31 U.S.C.
nizant agency for audit. For assign- 6101(3));and not to acquire property or
ized in accordance with GAAP.Capital lacing to a Federal award.
assets include: (2)A request for payment that is not meets of cognizant agencies see the services for the Federal Government or
(I)Land,buildings(facilities),equip- in dispute when submitted. following; pass-through entity's direct benefit or
ment, and intellectual property (In- Class of Federal awards means a group (1) For Institutions of Higher Edu- use;
eluding software)whether acquired by of Federal awards either awarded under cation (IHEs): Appendix III to this (2) Is distinguished from a grant in
purchase, construction, manufacture, a specific program or group of pro- part,paragraph C.11. that it provides for substantial involve-
exchange,or through a lease accounted grams or to a specific type of non-Fed- (2) For nonprofit organizations: Ap- meet of the Federal awarding agency
for as financed purchase under Govern- eral entity or group of non-Federal en- pendix IV to this part,paragraph C.2.a. in carrying out the activity con-
ment Accounting Standards Board titles to which specific provisions or (3)For State and local governments: templated by the Federal award.
(GASB) standards or a finance lease exceptions may apply. Appendix V to this part,paragraph F.1. (3)The term does not include:
under Financial Accounting Standards Closeout means the process by which (9)For Indian tribes:Appendix VII to (I)A cooperative research and devel-
Board(FASB)standards;and the Federal awarding agency or pass- this part,paragraph D.1. opment agreement as defined in 15
(ii) Additions, improvements, modi- through entity determines that all ap- Compliance supplement means an an- U.S.C.3710a;or
ficatiens, replacements, rearrange- plicable administrative actions and all nually updated authoritative source for (ii)An agreement that provides only:
ments, reinstallations, renovations or required work of the Federal award auditors that serves to identify exist- (A)Direct United States Government
alterations to capital assets that mate- have been completed and takes actions ing important compliance require- cash assistance to an individual;
rially increase their value or useful life as described to§200.394. ments that the Federal Government (B)A subsidy;
(not ordinary repairs and mainte- Cluster of programs means a grouping expects to be considered as part of an (C)A loan;
nonce). of closely related programs that share audit. Auditors use it to understand (D)A loan guarantee;or
(2)For purpose of this part,capital common compliance requirements.The the Federal program's objectives,pro- (E)Insurance.
assets do not include intangible right- types of clusters of programs are re- cedures,and compliance requirements, Cooperative audit resolution means the
to-use assets(per GASB)and right-to- search and development(R&D),student as well as audit objectives and sug- use of audit follow-up techniques which
use operating lease assets(per FASB). financial aid(SFA),and other clusters. gested audit procedures for deter- promote prompt corrective action by
For example, assets capitalized that "Other clusters"are as defined by OMB mining compliance with the relevant improving communication, fostering
recognize a lessee's right to control the in the compliance supplement or as Federal program. collaboration,promoting trust,and de-
use of property and/or equipment for a designated by a State for Federal Computing devices means machines veloping an understanding between the
period of time under a lease contract. awards the State provides to its sub- used to acquire,store,analyze,process, Federal agency and the non-Federal en-
See also§200.965. recipients that meet the definition of a and publish data and other information tity.This approach is based upon:
Capital expenditures means expendi- cluster of programs.When designating electronically, including accessories (I)A strong commitment by Federal
tures to acquire capital assets or ex- an"other cluster,"a State must iden- (or"peripherals")for printing, trans- agency and non-Federal entity leader-
penditures to make additions,improve- try the Federal awards included in the mitting and receiving,or storing else- ship to program integrity;
ments, modifications, replacements, cluster and advise the subrecipients of tronic information.See also the defini- (2) Federal agencies strengthening
rearrangements, reinstallations, ran- compliance requirements applicable to tions of supplies and information tech- partnerships and working coopera-
ovations,or alterations to capital as- the cluster,consistent with§200.332(a). nology systems in this section. tively with non-Federal entities and
85 86
OMB Guidance §200.1 §200.1 2 CFR Ch.11(1-1-22 Edition)
their auditors; and non-Federal enti- Discretionary award means an award (B)Services performed by employees, (i)Grants;
ties and their auditors working coop- in which the Federal awarding agency, contractors, subrecipients, and other (ii)Cooperative agreements;
eratively with Federal agencies; in keeping with specific statutory au- payees;and (iii)Non-cash contributions or dona-
(3)A focus on current conditions and thority that enables the agency to ex- (C) Programs for which no current tions of property (including donated
corrective action going forward; ercise judgment("discretion"),selects services or performance are required surplus property);
(9) Federal agencies offering appro- the recipient and/or the amount of Fed- such as annuities,insurance claims,or
(iv)
v)Food
appropcommodities;
ns;
an
priate relief for past noncompliance eral funding awarded through a com- other benefit payments. (v)Food commodities;and
when audits show prompt corrective petitive process or based on merit of Federal agency means an"agency"as (vi) Other financial assistance (ex-
action has occurred;and proposals. A discretionary award may defined at 5 U.S.C. 551(1)and further cept assistance listed in paragraph(2)
(5)Federal agency leadership sending be selected on a non-competitive basis, clarified by 5 U.S.C.552(f). of this definition).
a clear message that continued failure as appropriate. Federal Audit Clearinghouse (FAC) (2)For§200.203 and subpart F of this
to correct conditions identified by au- Equipment means tangible personal means the clearinghouse designated by part,Federal financial assistance also In-
dits which are likely to cause improper property(including information tech- OMB as the repository of record where eludes assistance that non-Federal en-
payments,fraud,waste,or abuse is un- nology systems)having a useful life of non-Federal entities are required to Cities receive or administer in the form
acceptable and will result in sanctions. more than one year and a per-unit ac- transmit the information required by of:
Corrective action means action taken quiaftion cost which equals or exceeds subpart F of this part. (i)Loans;
by the auditee that: the lesser of the capitalization level es- Federal award has the meaning, de- (ii)Loan Guarantees;
(1)Corrects identified deficiencies; tablished by the non-Federal entity for pending on the context,in either para- (iii)Interest subsidies;and
(2)Produces recommended improve- financial statement purposes,or$5,000. graph(1)or(2)of this definition:
meats;or P P (iv)Insurance.
(3)Demonstrates that audit findings See also the definitions of capital as- (1)(i)The Federal financial assistance (3)For§200.216,Federal financial as-
are either invalid or do not warrant sets, computing devices,general purpose that a recipient receives directly from aistance includes assistance that non-
equipment, information technology sys- a Federal awarding agency or indi- Federal entities receive or administer
auditee action. terns,special purpose equipment, rectly from a pass-through entity,as in the form of:
Cost allocation plan means central p P p 9 pment,and sup- described in 2 g y (i)Grants;
service cost allocation plan or public plies in this section. §00.101;or
assistance cost allocation plan. Expenditures means charges made by (de The coat-reimbursement contract (ii)i Cooperative agreements;
a non-Federal emit under the Federal Acquisition Regina- (ii)Loans;and
Cost objective means a program,func- y to a project or
tion, activity, award, organizational program for which a Federal award was bona that a non-Federal entity re- (iv)Loan Guarantees.
received. ceives directly from a Federal award- (4)Federal financial assistance does
subdivision,contract,or work unit for ing agency or indirectly from a pass- not include amounts received as relm-
which cost data are desired and for (1)The charges may be reported on a through entity,as described in§200.101. bursement for services rendered to in-
which provision is made to accumulate cash or accrual basis, as long as the (2)The instrument setting forth the dividuals as described in 200.502(h)and
C).
and measure the cost of processes, methodology is disclosed and is con- terms and conditions.The instrument i §
products,jobs,capital projects,etc.A sistently applied. is the grant agreement, cooperative Federal interest means,for purposes of
cost objective may be a major function (2) For reports prepared on a cash agreement,other agreement for assist- §200.330 or when used in connection
of the non-Federal entity,a particular basis,expenditures are the sum of: ante covered in paragraph (2) of the with the acquisition or improvement of
service or project,a Federal award,or (i) Cash disbursements for direct definition of Federal financial assistance real property, equipment, or supplies
an indirect (Facilities& Adminiatra- charges for property and services; in this section,or the cost-reimburse- under a Federal award, the dollar
tive(F&A))cost activity,as described (ii)The amount of indirect expense ment contract awarded under the Fed- amount that is the product of the:
in subpart E of this part.See also the charged;
definitions of final cost objective and in-- eral Acquisition award does Regulations. (I)The percentage of cost
her real
(iii)The value applied;an party in-kind he Federal F nota include proton in thetotal cost of the real
termediate cost objective in this section. contributions and other contracts that a Federal agency
Cost sharing or matching means the g a property,equipment,or supplies;and
portion of project costs not paid by eat The amount ofen cash advance pay- uses to or goods n act oe from er a (2)Current rev mints, or
h the
Federal funds or contributions(unless merits and payments made to sub- Fed contractor Gr or a contract to tractor property,exten the o of both, to
otherwise authorized by Federal stet- recipients. Federal Government( owned,contractor the extent the costst of acquiring a as
ac-
ute).See also§200.306. (3) For reports prepared on an ac- operated facilities ). proving the property were included as
Cross-cutting audit finding means an cruel basis,expenditures are the sum (4)See also definitions of Federal II- project costs.
of: nancial assistance, grant agreement, Federal program means:audit finding where the same under-
(i) Cash disbursements for direct and cooperative agreement. (1)All Federal awards which are as-
lying condition or issue affects all Fed- charges for property and services; Federal award date means the date signed a single Assistance Listings
oral awards(including Federal awards
of more than one Federal awarding (ii)The amount of indirect expense when the Federal award is signed by Number.
agency or pass-through entity), incurred; the authorized official of the Federal (2) When no Assistance Listings
Disallowed costs means those charges (iii)The value of third-party in-kind awarding agency. Number is assigned,all Federal awards
to a Federal award that the Federal contributions applied;and Federal awarding agency means the from the same agency made for the
awarding agency or pass-through enti- (iv)The net increase or decrease in Federal agency that provides a Federal same purpose must be combined and
ty determines to be unallowable,in ac- the amounts owed by the non-Federal award directly to a non-Federal means entity. considered one Notwithstanding
cordance with the applicable Federal entity for: Federal financial assistance (3) Notwithstanding paragraphs (1)
statutes,regulations,or the terms and (A) Goods and other property re- (1)Assistance that non-Federal enti- and(2)of this definition,a cluster of
conditions of the Federal award. ceived; ties receive or administer in the form programs.The types of clusters of pro-
- of: grams am:
87
88
OMB Guidance §200.1 §200.1 2 CFR Ch.II(1-1-22 Edition)
(i)Research and development(R&D); granting institution of education,pri- out a public purpose authorized by a (ii)When an agency's review is un-
(Ii)Student financial aid(SFA);and vate foundation,hospital,organization law of the United States(see 31 U.S.C. able to discern whether a payment was
(iii)"Other clusters,"as described in engaged exclusively in research or set- 6101(3));and not to acquire property or proper as a result of Insufficient or
the definition of cluster of programs in entific activities, church, synagogue, services for the Federal awarding agen- lack of documentation, this payment
this section. mosque or other similar entities orga- cy or pass-through entity's direct ben- should also be considered an improper
Federal share means the portion of sized primarily for religious purposes; efit or use; payment. When establishing docu-
the Federal award costs that are paid or (2)Is distinguished from a coopera- mentation requirements for payments,
using Federal funds. (9)An organization located in a coon- tive agreement in that it does not pro- agencies should ensure that all docu-
Final cost objective means a cost ob- try other than the United States not vide for substantial involvement of the mentation requirements are necessary
jective which has allocated to it both recognized as a foreign public entity. Federal awarding agency in carrying and should refrain from imposing addi-
direct and indirect costs and, in the Foreign public entity means: out the activity contemplated by the tional burdensome documentation re-
non-Federal entity's accumulation sys- (1)A foreign government or foreign Federal award. quirements.
tern, is one of the final accumulation governmental entity; (3) Does not include an agreement (111)Interest or other fees that may
points,such as a particular award,In- (2)A public international organiza- that provides only: result from an underpayment by an
ternal project,or other direct activity tion,which is an organization entitled (i)Direct United States Government agency are not considered an improper
of a non-Federal entity. See also the to enjoy privileges, exemptions, and cash assistance to an individual; payment If the interest was paid cor-
definitions of cost objective and inter- immunities as an international organs- (ii)A subsidy; rectly. These payments are generally
mediate cost objective in this section. zation under the International Organi- (fif)A loan; separate transactions and may be nee-
Financial obligations, when ref- nations Immunities Act(22 U.S.C.288- (vi)A loan guarantee;or essary under certain statutory, con-
erencing a recipient's or subrecipient's 288f); (v)Insurance. tractual, administrative, or other le-
use of funds under a Federal award, (3)An entity owned(in whole or in Highest level owner means the entity gaily applicable requirements.
means orders placed for property and part)or controlled by a foreign govern- that owns or controls an immediate (iv)A"questioned cost"(as defined
services, contracts and subawards ment;or owner of the offeror,or that owns or in this section)should not be consid-
made,and similar transactions that re- (9)Any other entity consisting whol- - controls one or more entities that con- ered an improper payment until the
quire payment. ly or partially of one or more foreign - trol an immediate owner of the offeror. transaction has been completely re-
Fixed amount awards means a type of governments or foreign governmental No entity owns or exercises control of viewed and is confirmed to be im-
grant or cooperative agreement under entities. the highest-level owner as defined in proper.
which the Federal awarding agency or General purpose equipment means the Federal Acquisition Regulations (v)The term"payment"in this defi-
pass-through entity provides a specific equipment which is not limited to re- (FAR)(48 CFR 52.204-17). nition means any disbursement or
level of support without regard to ac- search, medical, scientific or other Hospital means a facility licensed as transfer of Federal funds(including a
tual costs incurred under the Federal technical activities. Examples include a hospital under the law of any state or commitment for future payment,such
award.This type of Federal award re- office equipment and furnishings,mod- a facility operated as a hospital by the as cash,securities,loans,loan guaran-
duces some of the administrative bur- ular offices,telephone networks,infor- United States,a state,or a subdivision tees, and insurance subsidies) to any
den and record-keeping requirements matfon technology equipment and sys- of a state. non-Federal person, non-Federal enti-
for both the non-Federal entity and tems, air conditioning equipment, re- Improper payment means: ty,or Federal employee,that is made
Federal awarding agency or pass- production and printing equipment, (I) Any payment that should not by a Federal agency, a Federal con-
through entity.Accountability is based and motor vehicles.See also the defini- have been made or that was made in an tractor,a Federal grantee,or a govern-
primarily on performance and results. tions of equipment and special purpose incorrect amount under statutory,con- mental or other organization admin-
See§§200.102(c),200.201(b),and 200.333. equipment in this section. tractual, administrative, or other le- istering a Federal program or activity.
Foreign organization means an entity Generally accepted accounting prin- gaily applicable requirements. (vi) The term "payment" includes
that is: ciples(GAAP)has the meaning specified (i) Incorrect amounts are overpay- disbursements made pursuant to prime
(1) A public or private organization in accounting standards issued by the ments or underpayments that are made contracts awarded under the Federal
located in a country other than the GASB and the FASB. - to eligible recipients (including snap- Acquisition Regulation and Federal
United States and its territories that is Generally accepted government auditing propriate denials of payment or sere- awards subject to this part that are ex-
subject to the laws of the country in standards(GAGAS),also known as the ice,any payment that does not account pended by recipients.
which it is located,irrespective of the Yellow Book,means generally accepted for credit for applicable discounts,pay- (2) See definition of improper pay-
citizenship of project staff or place of government auditing standards issued manta that are for an incorrect ment in OMB Circular A-123 appendix
performance; by the Comptroller General of the amount,and duplicate payments).An C,part I A(1) "What is an improper
(2)A private nongovernmental orga- United States,which are applicable to improper payment also includes any payment?"Questioned costs,including
nization located in a country other financial audits. payment that was made to an ineli- those identified in audits,are not an
than the United States that solicits Grant agreement means a legal instru- gable recipient or for an ineligible good improper payment until reviewed and
and receives cash contributions from ment of financial assistance between a or service, or payments for goods or confirmed to be improper as defined in
the general public; Federal awarding agency or pass- services not received(except for such OMB Circular A-123 appendix C.
(3)A charitable organization located through entity and a non-Federal enti- payments authorized by law). Indian tribe means any Indian tribe,
in a country other than the United ty that,consistent with 31 U.S.C.6302, Note 1 to paragraph(1)(i)of this defini- band,nation,or other organized group
States that is nonprofit and tax ex- 6304: Lion. Applicable discounts are only or community, including any Alaska
empt under the laws of its country of (1)Is used to enter into a relation- those discounts where it is both advan- Native village or regional or village
domicile and operation, and is not a ship the principal purpose of which is tageous and within the agency's con- corporation as defined in or established
university, college, accredited degree- to transfer anything of value to carry trol to claim them. pursuant to the Alaska Native Claims
89 90
§200.1 2 CFR Ch.II(1-1-22 Edition)
OMB Guidance 9200.1 a loan guarantee when specified condi- and approved by the cognizant agency
Settlement Act(43 U.S.C.Chapter 33), Internal controls for non-Federal enti- bons are fulfilled by the borrower,the for indirect costs.
which is recognized as eligible for the ties means: lender,or any other party to the guar- Modified Total Direct Cost (MTDC)
special programs and services provided (1) Processes designed and ample- antee agreement. means all direct salaries and wages,ap-
by the United States to Indians be- masted by non-Federal entities to pro- Local government means any unit of plicable fringe benefits,materials and
cause of their status as Indians (25 vide reasonable assurance regarding government within a state,including a: supplies,services,travel,and up to the
U.S.C.450b(e)).See annually published the achievement of objectives In the (1)County; first$25,000 of each subaward(regard-
Bureau of Indian Affairs list of Indian following categories: (2)Borough; less of the period of performance of the
Entities Recognized and Eligible to Re- (I)Effectiveness and efficiency of op- (3)Municipality; subawards under the award).MTDC ex-
cefve Services. erations; (4)City; eludes equipment, capital expendi-
Institutions of Higher Education(IHEs) (ii)Reliability of reporting for inter- (5)Town; turea,charges for patient care,rental
is defined at 20 U.S.C.1001. nal and external use;and (6)Township; costs, tuition remission, scholarships
Indirect (facilities & administrative (itf)Compliance with applicable laws (7)Parish; and fellowships, participant support
(F&A))costs means those costs incurred and regulations. (8)Local public authority,including costs and the portion of each ems a may
Y public housing agency under the
for a common or joint purpose benefit- (2)Federal awarding agencies are re- an1n excess of$25,000. Other items
ting more than one cost objective,andonly be excluded when necessary to
not readily assignable to the cost ob- quired to follow internal control corn- United States Housing Act of 1937; avoid a serious inequity In the dis-
pliance requirements 1n OMB Circular (9)Special district;
jectives specifically benefitted, with- No. A-123, Management's Responsi- (10)School district; thet approval
of indirect costa, and with
out effort disproportionate to the re- bility for Enterprise Risk Management (11)Intrastate district; or ndirctc of the cognizant agency
sults achieved.To facilitate equitable and Internal Control. for indirectcoats.
distribution of indirect expenses to the Loan means a Federal loan or loan (12)ne r of incorporatedgovernments,anonprofit whether Non-discretionarythe aware l awardingws an
cost objectives served,It may be sec- ps not at law;a cot- award made by Federal accord-
essary to establish a number of pools of guarantee receivedali or administered by pot3)ion under oth State and agency withto specific recipients i it tya P a non-Federal entity,except as used in
indirect (F&A) costs. Indirect (F&A) the definition of program income in this talit)Any other agency or,norrumen- com requirements,
eligibility that in
cost pools must be distributed to bone- section. Statey of a multi-,ov regional, or antra- compliance requirements, ory author-
fitted cost objectives on bases that will (1)The term"direct loan"means a State or local government. keeping with specific statutory produce an equitable result in consider- disbursement of funds by the Federal Major program means a Federal pro- ell the agency ("s noc ability to non-
atlon of relative benefits derived. Government to a non-Federal borrower gram determined by the auditor to be a disc judgement("discretion"). A non-
Indirect cost rate proposal means the under a contract that requires the re- major program In accordance with discretionary award amount could be
documentation prepared by a non-Fed- payment of such funds with or without §200.518 or a program identified as a determined specifically or by formula.
eral entity to substantiate its request interest. The term includes the pur_ major program by a Federal awarding Non-Federal entity (NFE) means a
for the establishment of an indirect chase of, or participation in, a loan agency or pass-through entity In ac- State,local government,Indian tribe,
cost rate as described in appendices III made by another lender and financing cordance with§200.503(e). Institution of Higher Education(ME),
through VII and appendix IX to this arrangements that defer payment for Management decision means the Fed- or nonprofit organization that carries
part. more than 90 days,including the sale of eral awarding agency's or pass-through out a Federal award as a recipient or
Information technology systems means a Federal Government asset on credit entity's written determination, pro- subrecipient.
computing devices, ancillary equip- terms.The term does not include the vlded to the auditee,of the adequacy of Nonprofit organization means any cor-
ment,software,firmware,and similar acquisition of a federally guaranteed the audltee's proposed corrective ac- poration, trust, association, coopera-
procedures,services(including support loan in satisfaction of default claims or tions to address the findings,based on tive,or other organization,not includ-
services), and related resources. See the price support loans of the Com- its evaluation of the audit findings and ing IHEs,that:
also the definitions of computing devices modity Credit Corporation. proposed corrective actions. (1) Is operated primarily for eel-
and equipment In this section. (2)The term"direct loan obligation" Micro-purchase means a purchase of entific, educational, service, chari-
Intangible property means property means a binding agreement by a Fed- supplies or services, the aggregate table,or similar purposes in the public
having no physical existence,such as eral awarding agency to make a direct amount of which does not exceed the interest;
trademarks, copyrights, patents and loan when specified conditions are ful- micro-purchase threshold. Micro-pur- (2) Is not organized primarily for
patent applications and property,such filled by the borrower. chases comprise a subset of a non-Fed- profit;and
as loans,notes and other debt instru- (3)The term"loan guarantee"means oral entity's small purchases as defined (3) Uses net proceeds to maintain,
ments, lease agreements, stock and any Federal Government guarantee,in- in§200.320. improve, or expand the operations of
other Instruments of property owner-' surance,or other pledge with respect Micro-purchase threshold means the the organization.
ship(whether the property is tangible to the payment of all or a part of the dollar amount at or below which a non- Notice of funding opportunity means a
or Intangible). principal or interest on any debt obit- Federal entity may purchase property formal announcement of the avail-
Intermediate cost objective means a gation of a non-Federal borrower to a or services using micro-purchase proce- ability of Federal funding through a fi-
cost objective that is used to accumu- non-Federal lender, but does not In- dures (see §200.320). Generally, the nancial assistance program from a Fed-
late indirect costs or service center elude the Insurance of deposits,shares, micro-purchase threshold for procure- eral awarding agency. The notice of
costs that are subsequently allocated or other withdrawable accounts In ff- ment activities administered under funding opportunity provides informs
to one or more indirect cost pools or nancfal institutions. Federal awards is not to exceed the tion on the award, who Is eligible to
final cost objectives.See also the deft- (4)The term "loan guarantee com- amount set by the FAR at 48 CFR part apply,the evaluation criteria for selec-
nitlons of cost objective and final cost ob- mitment"means a binding agreement 2,subpart 2.1,unless a higher threshold tion of an awardee, required comps-
jective in this section. by a Federal awarding agency to make is requested by the non-Federal entity nests of an application, and how to
91 92
OMB Guidance §200.1 §200.1 2 CFR Ch.II(1-1-22 Edition)
submit the application.The notice of Period of performance means the total
and interestdon loans. In made with Fed- Rland
i property means tu, including
dap-
funding opportunity is any paper or estimated time interval between the eral award funds. Interest earned on land improvements,structures and ap-
electronic issuance that an agency uses start of an initial Federal award and advances of Federal funds is not pro- purtenances thereto, but excludes
to announce a funding opportunity, the planned end date, which may in- gram income.Except as otherwise pro- moveable machinery and equipment.
whether it is called a "program an- elude one or more funded portions,or vided in Federal statutes,regulations, Recipient means an entity, usually
nouncement,""notice of funding avail- budget periods. Identification of the or the terms and conditions of the Fed- but not limited to non-Federal entities
ability," "broad agency announce- period of performance in the Federal eral award, program income does not
ment," "research announcement," award per§200.211(b)(5)does not com- that receives a Federal award directly
"solicitation,"or some other term. mit the awarding agency to fund the includet rebates,d credits,noffct them. Seane from a Federal does o include
The
Office of Management and Budget award beyond the currently approved alsosor earned on any U.S.C. See term refs or individuals not taresub-
(OMB) means the Executive Office of budget period. "Disposition§200.407.See also 35 U.Educational 200-212 ficia recipients o or that are bene-
the President, Office of Management Personal property means ard of Rightsin lionsde fi Re Renewal
l thed means
g pop y property Awards" applies to inventions made
and Budget. other than real property. It may besubsequentRseq award an expiring awardFederal made
Oversight agency for audit means the tangible,having physical existence,or - under Federals awards. wardf to an ta con-
Federal Project cost means totald allowable award for which the start date is con-
Federal awarding agency that provides g coats incurred under a Federal award
the predominant amount of funding di- Personally Identifiable Information and all required cost sharing and vol- e with, i or closely al awe, the
rectiy(direct funding)(as listed on the (PII) means information that can be untary committed cost sharing, endn of the expiring Federal award. A
a
includ- renewal award's start date will begin
schedule of expenditures of Federal used to distinguish or trace an individ- ing third-party contributions. a
awards, see §200.510(b)) to a non-Fed- ual's identity, either alone or when Property means real property or per- distinct period of performance.
eral entity unless OMB designates a combined with other personal or idea- tonal property.See also the definitions Research and Development (R&D)
th
specific cognizant agency for audit. tifying Information that is linked or of real property and personal property in means all research activities, both
When the direct funding represents less linkable to a specific individual.Some this section. basic and applied,and all development
information that is considered to be activities that are performed by non-
than 25 percent of the total Federal ex- Protected Personally Identifiable Infor-
penditures (as direct and sub-awards) PII is available in public sources such mation(Protected PII)means an indivfd- Federal entities. The term research
by the non-Federal entity, then the as telephone books, public websites, ual's first name or first Initial and last also includes activities involving the
Federal agency with the and university listings.This type of in- training of individuals in research
g y predominant formation is considered to be Public name in combination with any one or techniques where such activities utilize
amount of total funding is the des- PII and includes,for example,first and more of types of information,includ- the same facilities as other research
ignated oversight agency for audit. ing,but not limited to,social security
last name, address, work telephone and development activities and where
When there is no direct funding, the number, passport number, credit card
number,email address,home telephone such activities are not included in the
Federal awarding agency which is the number,and P numbers, clearances, bank numbers,
predominant source of pass-through general educational ere- biometrics, date and place of birth, instruction function."Research"is to-
funding must assume the oversight re- anchodentiredis to any single category of re- teal and financial records,educational ward fuller scientific knowledge or un-
ed.
formation or technology.Rather,it re- deratandtn of the
sight agency for audit and the process transcripts.This does not include PII g subject studied.
for any reassignments are described in quires a case-by-case assessment of the that is required by law to be disclosed. "Development" is the systematic use
§200.513(b). specific risk that an individual can be See also the definition of Personally of knowledge and understanding gained
Participant support costs means direct identified. Non-PII can become PII Identifiable Information(P11)In this sec- from research directed toward the pro-
whenever additional information is tion. ductton of useful materials, devices,
costs for items such as stipends or sub- made publicly available, in any me- systems,or methods,including
sistence allowances,travel allowances, ilium and from any source,that,when Questionednt means a ecau that in and develo m design
b
and registration fees paid to or on be- auditioned by thh e auditor because of an P eat of prototypes and
combined with other available infer- audit finding: processes.
half of participants or trainees(but not
employees) in connection with con- motion,could be used to identify an in- (1)Which resulted from a violation or Simplified acquisition threshold means
or trainingdividual.
projects. Program income meansPossible violation a statute,regula- the dollar amount below which a non-
ferences, gr grosse incomethat tien,or the te c and conditionsnu a Fedor ervl entity gmay s
hase property
Pass-through entity (PTE) means a earned by the non-Federal entity that Federal award,includingfor funds used or services daft small prcurchase meth-
non-Federal entity that provides a is directly generated by a supported ac- to match Federal funds; ode(see§200.320).Non-Federal entities
subaward to a subrecipient to carry out tivity or earned as a result of the Fed- (2)Where the costs, at the time of adopt small purchase procedures is
part of a Federal program. era] award during the period of per-
. Performance goal means a target level formance except asthe audit, are not supported by ads- order t expedite the purchase u items
p ti provided p in quate documentation;stor at or below thesimplified
simplified acquisition
of performance expressed as a tangible, §200.307(f).(See the definition of period (3)Where the costs incurred a
measurable objective, against which ofappear threshold. The ricureme acquisition
gperformance in this section.)Program unreasonable and do not reflect the ac- threshold for procurement activities
actual achievement can be compared, income includes but is not limited to tions a prudent person would take in administered under Federal awards is
including a goal expressed as a quan- income from fees for services per- the circumstances. set by the FAR at 48 CFR part 2,sub-
titative standard, value, or rate. In formed,the use or rental or real or per- (4)Questioned costs are not an im- part 2.1.The non-Federal entity is re-
some instances(e.g.,discretionary re- sonal property acquired under Federal proper payment until reviewed and sponsible for determining an appro-
search awards),this may be limited to awards, the sale of commodities or confirmed to be improper as defined in priate simplified acquisition threshold
the requirement to submit technical items fabricated under a Federal OMB Circular A-123 appendix C. (See based on internal controls,an evalua-
performance reports(to be evaluated in award, license fees and royalties on also the definition of Improper payment tion of risk,and its documented pro-
accordance with agency policy). patents and copyrights, and principal
in this section), curement procedures. However, in no
93 94
OMB Guidance §200.1 §200.100 2 CFR Ch.II(1-1-22 Edition)
circumstances can this threshold ex- Subsidiary means an entity in which budget on the part of the non-Federal principles are designed to provide that
need the dollar value established in the more than 50 percent of the entity is entity and that becomes a binding re- Federal awards bear their fair share of
FAR(48 CFR part 2,subpart 2.1)for the owned or controlled directly by a par- quirement of Federal award. See also cost recognized under these principles
simplified acquisition threshold. Re- ent corporation or through another §200.306. except where restricted or prohibited
cipients should determine if local goy- subsidiary of a parent corporation. by statute.
ernment laws on purchasing apply. Supplies means all tangible personal [85 FR 99529,Aug.13,2020,as amended at 86
Special purpose equipment means Property other than those described in FR 10939,Feb.22,20211 (d SFingle Audit Requirements and
equipment which is used only for re- the definition of equipment in this sec- Audit issuedllpursu Subpart F Singleof this part
Subpart B—General Provisions is pursuant to the Audit
search, medical, scientific, or other tion.A computing device is a supply if p Act Amendments of 1996, (31 U.S.C.
technical activities. Examples of spy- the acquisition cost is less than the $200.100 Purpose. 7501-7507). It sets forth standards for
dial purpose equipment include micro- lesser of the capitalization level estab- obtaining consistency and uniformity
scopes,x-ray machines,surgical bistro- lished by the non-Federal entity for fi- (a)Purpose.(1)This part establishes among Federal agencies for the audit
ments,and spectrometers.See also the nancial statement purposes or $5,000, uniform administrative requirements, of non-Federal entities expending Fed-
definitions of equipment and general regardless of the length of its useful cost principles,and audit requirements eral awards.These provisions also pro-
purpose equipment in this section. life. See also the definitions of com- for Federal awards to non-Federal enti- vide the
ties, as described in 200.101. Federal awardingring and procedures for
means any state of the United puling devices and equipment in this sec- § Federal agencies and pass-
States, the District of Columbia, the lion, awarding agencies must not impose ad- through entities when using the results
Commonwealth of Puerto Rico, U.S. Telecommunications cost means the except
ditional orroved inconsistent requirements, of these audits.
cost of using communication and to- except as provided in §§200.102 and
Virgin Islands, Guam, American 200.211, or unless specifically required (e)Guidance on challenges and prizes.
Samoa, the Commonwealth of the lephony technologies such as mobile by Federal statute,regulation,or Ex- For OMB guidance to Federal awarding
Northern Mariana Islands, and any phones,land lines,and internet. agencies on challenges and prizes,
Termination means the endingof a ecutive order.
agency or instrumentality thereof ex- (2)This part provides the basis for please see memo M-10-11 Guidance on
elusive of local governments. Federal award,in whole or in part at systematic and periodic collection and the Use of Challenges and Prizesto
Student Financial Aid (SFA) means any time prior to the planned end of uniform submission by Federal agen- Promote Open Government, issued
Federal awards under those programs period of performance.A lack of avail- ties of information on all Federal fi- March 8,2010,or its successor.
of general student assistance,such as able funds is not a termination. nancial assistance programs to the Of- [78 FR 78608,Dec.26,2013,as amended at 85
those authorized by Title IV of the Third-party in-kind contributions five of Management and Budget(OMB). FR 99536,Aug.13,2020]
means the value of non-cash contribu- policies re-
Higher Education Act of 1965, as It also establishes Federal
lions(i.e.,property or services)that— $200.101 Applicability.
informa-
amended, (20 U.S.C. 1070-1099d),which fated to the delivery of this are administered bythe U.S. Depart- (1) Benefit a federally-assisted tion to the
project or program;and public, including through agencies. (1)General
Thepr requirements Festabl
ment of Education, and similar pro- the use electronicnermedia. It pre- g
grams provided by other Federal agen- (2) Are e without
by non-Federal scribes the manner in which ,General lished inthis part apply to Federal
third parties,en nert er,to a non- Services Federal agencies n non-Fed ral make Federal awards Gies.It does not include Federal awards (GSA), OMB,
programs that Federal entity undera Federal award. Federal i agencies assistancess that administer ms non-Federal applicablea to all require-
underprovide fellow- g
Unls, fort d financial obligations arec financial ut t programs
re-
ships
or similar Federal awards to stu- p grams meats are all costs dents on a competitive basis, or for means, forh financialfin reportsialo ligation are to carry out their statutoryderalrespon- la(2)to Federal awards.
dentsspecified studies or research. incurred n a esh basis,t finan Fel raligentity sibilities under the Federal Program Fubpar a throng E of the may
Subaward means an award tathaby the no paid igl entity Information Active U.S.C. menbleb). to apply te A through of t part
provided that have not been paid (liquidated). (b) Administrative requirements. Sub- to Federal agencies,for-profit entities,
by a pass-through entity to a sub- For reports prepared on an accrual ex- parts B through D of this part set forth foreign public entities,or foreign orga-
recipient for the subrecipient to carry penditure basis,these are financial ob- the uniform administrative require- nizations, except where the Federal
out part of a Federal award received by ligations incurred by the non-Federal menu for grant and cooperative agree- awarding agency determines that the
the pass-through entity.It does not in- entity for which an expenditure has menu,including the requirements for application of these subparts would be
elude payments to a contractor or pay- not been recorded. Federal awarding agency management inconsistent with the international re-
ments to an individual that is a bene- Unobligated balance means the of Federal
ficiary of a Federal program. A grant programseen before,a the the statutes
of the United States or
amount of funds under a Federal award Federal award has been made,and the the statutes or regulations of a foreign
subaward may be provided through any that the non-Federal entity has not ob- requirements Federal awarding agen- government.
form of legal agreement,including an ligated. The amount is computed by cies may impose on non-Federal enti- (b) Applicability to different types of
agreement that the pass-through enti- subtracting the cumulative amount of ties in the Federal award. Federal awards. (1) Throughout this
ty considers a contract. the non-Federal entity's unliquldated (c)Cost principles. Subpart E of this part when the word"must"is used it
Subrecipient means an entity,usually financial obligations and expenditures part establishes principles for deter- indicates a requirement.Whereas,use
but not limited to non-Federal entities, of funds under the Federal award from mining the allowable costs incurred by of the word"should" or"may" indi-
that receives a subaward from a pass- the cumulative amount of the funds non-Federal entities under Federal sates a best practice or recommended
through entity to carry out part of a that the Federal awarding agency or awards.The principles are for the pur- -approach rather than a requirement
Federal award;but does not include an pass-through entity authorized the pose of cost determination and are not and permits discretion.
individual that is a beneficiary of such non-Federal entity to obligate. intended to identify the circumstances (2)The following table describes what
award.A subrecipient may also be a re- Voluntary committed cast sharing or dictate the extent of Federal Gov- portions of this part apply to which
cipient of other Federal awards di- means cost sharing specifically pledged ernment participation in the financing types of Federal awards.The terms and
rectly from a Federal awarding agency. on a voluntary basis In the proposal's of a particular program or project.The conditions of Federal awards(including
95 96
OMB Guidance §200.101 §200.101 2 CFR Ch.11(1-1-22 Edition)
this part) flow down to aubawards to eral award.Pass-through entities must part, which are supplementary to the guidance in subpart C of this part does
subrecipients unless a particular sec- comply with the requirements de- CAS requirements. In addition, costs not apply to the following programs:
tion of this part or the terms and con- scribed in subpart D of this part, that are made unallowable under 10 (1) Entitlement Federal awards to
ditions of the Federal award specifi- §§200.331 through 200.333, but not any U.S.C. 2329(e)and 41 U.S.C. 4304(a)as carry out the following programs of the
cally indicate otherwise. This means requirements in this part directed to- described in the FAR 48 CFR part 31, Social Security Act:
that non-Federal entities must comply wards Federal awarding agencies un- subpart 31.2,and 98 CFR 31.603 are al- (I) Temporary Assistance for Needy
with requirements in this part regard- less the requirements of this part or ways unallowable. For requirements Families(title IV-A of the Social Secu-
leas of whether the non-Federal entity the terms and conditions of the Federal other than those covered in subpart D, rity Act,42 U.S.C.601-619);
is a recipient or subrecipient of a Fed- award indicate otherwise. §§200.331 through 200.333,and subparts (i1) Child Support Enforcement and
TABLE 1 TO PARAGRAPH(b) E and F of this part,the terms of the Establishment of Paternity(title IV-D
contract and the FAR apply.Note that of the Social Security Act, 42 U.S.C.
Are applicable to the following
types of when a non-Federal entity is awarded a 651-669b);
Federal Awards and FIxed.Pnca Con. Are NOT applicable to the Wowing
The blowing pollens of this Part tracts and Subcontracts(except as typeset Federal Awards end Fixed-Price FAR contract, the FAR applies, and (iii)Foster Care and Adoption Assist-
The In paragraphs(d)and(e)of this Contracts end Subcontracts: the terms and conditions of the con- ance(title IV-E of the Act,42 U.S.C.
tract shall prevail over the require- 670-679c);
Subpart A-Acronyms and oermaons...... -An. ments of this part. (iv)Aid to the Aged,Blind,and Dis-
Subpart B-General Provisions,except -All.
for §§zoo.m English Language, (d)Governing provisions.With the ex- abled(titles I,X,XIV,and XVI-AABD
200.112 Conflict of interest,200.113 caption of subpart F of this part,which of the Act,as amended);
Mandatory Disclosures. is required by the Single Audit Act,in (v). Medical Assistance (Medicaid)
§§200.111 English Language,200.112 -Grant Agreements and cooperative -Agreements for loans,loan guaran- any circumstances where the provi- (title XIX of the Act,42 U.S.C. 1396-
Conflict of Interest,200.113 Mandatory agreements. tees,Interest subsidies and insurance. aloes of Federal statutes or re ulations 1396w-5)not including the State Med-
Disclosures. -Procurement contracts awarded by g
Federal Agencies under the Federal differ from the provisions of this part, icaid Fraud Control program author-
Acquisition Regulation and sub- the provision of the Federal statutes or ized by section 1903(a)(6)(B)of the So-
contracts under those contracts. regulations cial SecurityAct Subparts C-D,except for§§200.203 Re- -Grant Agreements and cooperative -Agreements for loans,loan guaran- g govern.This includes, for (42 U.S.C.
guirement to provide public notice of agreements. tees,Interest subsidies and insurance. agreements with Indian tribes,the pro- 1396b(a)(8)(B));and
Federal financial assistance programs, -Procurement contracts awarded by visions of the Indian Self-Determina- (vi)Children's Health Insurance Pro-
200.303 Internal controls,200.331-333 Federal Agencies under the Federal ton and Education and Assistance Act gram(title XXI of the Act,42 U.S.C.
Subreclgent Monitoring and Manage- Acquisition Regulation and sub- 1397aa-1397mm.
mein. contracts under those c0etraas. (ISDEAA), as amended, 25 U.S.0 950- )
§200.203 Requirement to provide pubs -Gram Agreements and cooperative --Procurement contracts awarded by 958ddd-2. (2) A Federal award for an experi-
notice of Federal financial assistance agreements. Federal Agencies under the Federal (e) Program applicability. Except for mental,pilot,or demonstration project
programs. -Agreements fa bans,loan guaran- Acquisition Regulation and sub- §§200.203, 200.216, and 200.331 through that Is also supported by a Federal
tees,Interest subsidies and insurance. contracts under those contracts.
§§200.303 Internal controls,200.331-333 -AIL 200.333,the requirements in subparts C, award listed in paragraph(f)(1)of this
subrecipient Monitoring and Manage- D,and E of this part do not apply to section.
mans. the following programs: (3) Federal awards under subsection
Subpart E-Cost Principles..........._.......... -Grant Agreements and cooperative -Gram agreements and cooperative 412(e)of the Immigration and Nation-
agreements,00 except those providing agreements providing foods commed. (1) The block grant awards author- silty Act and subsection 501(a)of the
ftiBS. Des. ized by the Omnibus Budget Reconcili-
-All procurement contracts under the -Fixed amount awards. ation Act of 1981(includingCommunityRefugee Education Assistance Act of
Federal Acquisition Regulations ex. -Agreements for loans,loans guaran- 1980(Pub. L.96-422,99 Stat. 1809),
pt those that are not negotiated. x lees.Interest subsidies and Insurance. Services), except to the extent that cash assistance, medical assistancer-Federal awards to hospitals(see Ap- subpart E of this part apply to sub-
and F-Audit Requirements........._.... -Grant Agreements pendix 0(Hospital Cost Principles). recipients of Community Services and supplemental security income ban-
g and imperative -Fixed-prMa contracts and subcontracts Block Grant funds pursuantefits to refugees and entrants and the
agreements. awarded under the Federal Acquisition to 92 administrative costs ofproviding-Contracts and subcontracts,except Regulation. U.S.C.9916(a)(1)(B); the
fixed pace contacts and subcontracts, assistance and benefits (8 U.S.C.
awarded under the Federal Acquisition (2)Federal awards to local education 1522(e)).
Regulation. agencies under 20 U.S.C. 7702-7703b, (4)Entitlement awards under the fort-
-Agreements to loans,loans guaran- (portions of the Impact Aid program); g programs of The National
tees,Interest subsidies and insurance (3)Payments under the Department i
Lew n
and other forms al Federal Financial School Lunch Act:
of
Assistance as delin by the Single Veterans Affairs' State Home Per (i) National School Lunch Program
Audit ad amendmemaigss. Diem Program(38 U.S.C.1741);and (section 4 of the Act,92 U.S.C.1753);
(4)Federal awards authorized under (ii)Commodity Assistance(section 6
the Child Care and Development Block of the Act,42 U.S.C.1755);
(c)Federal award of cost-reimbursement the contract,but the requirements of Grant Act of 1990,as amended: (iii)Special Meal Assistance(section
contract under the FAR to a non-Federal subparts D,E,and F are supplementary (i)Child Care and Development Block 11 of the Act,42 U.S.C. ervic;
entity. When a non-Federal entity is to the FAR and the contract.When the Grant(42 U.S.C.9658). (iv) Summer Food Service Program
(ii)Child Care Mandatory and Match- for Children(section 13 of the Act,92
awarded a cost-reimbursement con- Cost Accounting Standards(CAS)are
tract,only subpart D,§§200.331 through applicable to the contract, they take ing Funds of the Child Care and Devel- U.S.C.1761);and
200.333, and subparts E and F of this opment Fund(92 U.S.C.9858). (v)Child and Adult Care Food Pro-
P precedence over the requirements of
part are incorporated by reference into this part, including subpart F of this Except for §§200,203 and 200.216, the 1766).
97 98
OMB Guidance §200.104
§200.105 2 CFR Ch.11(1-1-22 Edition)
(5)Entitlement awards under the fort- quirements imposed by statute or in
lowing programs of The Child Nutri- subpart F of this part. (b)A-87,"Cost Principles for State, parts C through F of this part in codi-
tion Act of 1968: (d) Federal awarding agencies may Local and Indian Tribal Governments" fled regulations unless different provi-
(i)Special Milk Program(section 3 of request exceptions in support of limo- (2 CFR part 225)and also FEDERAL REG- sions are required by Federal statute
the Act,42 U.S.C.1772); votive program designs that apply a 1STER notice 51 FR 552(January 6,1986); or are approved by OMB.
(ii) School Breakfast Program (sec- risk-based, data-driven framework to (c) A-89, "Federal Domestic Assist-
tion 4 of the Act,92 U.S.C.1773);and alleviate select compliance require- ance Program Information"; 985 FR.99538,Aug.13,2020]
(iii) State Administrative Expenses ments and hold recipients accountable (d)A-102,"Grant Awards and Cooper- §200.107 OMB res oeasib]lities.
(section 7 of the Act,92 U.S.C.1776). for good performance.See also§200.206. ative Agreements with State and Local p
(6)Entitlement awards for State Ad- Governments"; OMB will review Federal agency reg-
ministrative Expenses under The Food [85 FR 99538,Aug.13,2020,as amended at 86 (e) A-110, "Uniform Administrative ulations and implementation of this
and Nutrition Act of 2008(section 16 of FR 10439,Feb.22,2021] Requirements for Awards and Other part, and will provide interpretations
the Act,7 U.S.C.2025). $200.103 Authorities. Agreements with Institutions of Higher of policy requirements and assistance
(7)Non-discretionary Federal awards Education, Hospitals,and Other Non- to ensure effective and efficient imple-
under the following non-entitlement This part is issued under the fol- profit Organizations" (codified at 2 mentation,Any exceptions will be sub-
programs: lowing authorities. CFR 215); ject to approval by OMB. Exceptions
(i) Special Supplemental Nutrition (a)Subparts B through D of this part (D A-122, "Cost Principles for Non- will only be made in particular cases
Program for Women,Infants and Chil- are authorized under 31 U.S.C.503(the Profit Organizations"(2 CFR part 230); where adequate justification is pre-
dren(section 17 of the Child Nutrition Chief Financial Officers Act,Functions (g) A-133, "Audits of States, Local sented.
Act of 1966)42 U.S.C.1786; of the Deputy Director for Manage- Governments and Non-Profit Organiza-
(ii)The Emergency Food Assistance ment),41 U.S.C.1101-1131(the Office of tions";and §200.108 Inquiries.
Programs(Emergency Food Assistance Federal Procurement Policy Act),Re- (h)Those sections of A-50 related to
Act of 1983)7 U.S.C.7501 note;and organization Plan No.2 of 1970,and Ex- audits performed under subpart F of Inquiries concerning this part may be
(iii) Commodity Supplemental Food ecutive Order 11591 ("Prescribing the this part. directed to the Office Office Federal Manage-(section 5 of the Agriculture Duties of the Office of Management chart Management of Manage-
and Consumer Protection Act of 1973)7 and Budget and the Domestic Policy FR8 7F5l 2, e,Dee.Dec.201 2 85 as amended Aug.at 79 ment ande Budget,in Washiness should
U.S.C.612c note. 76882, 19,2014;85 FR 49538,A 13, Non-Federal entitles' inquiries should Council in the Executive Office of the 2020]
(85 FR 49536,Aug.13,2020,as amended at 86 President"), the Single Audit Act be addressed to the Federal awarding
FR 10439,Feb.22,2021] Amendments of 1996, (31 U.S.C. 7501- §200.105 Effect on other issuances. agency,cognizant agency for indirect
7507),as well as The Federal Program costs, cognizant or oversight agency
§200.102 Exceptions. Information5 ), we Act (Pub. L. 9-220 and (a) Superseding inconsistent require- for audit,or pass-through entity as ap-
ments. For Federal awards subject to
(a)With the exception of subpart F of Pub.L.98-169,as amended,codified at this part, all administrative require- propriate.
this part, OMB may allow exceptions 31 U.S.C.6101-6106). ments, program manuals, handbooks §200.109 Review date.
for classes of Federal awards or non- (b)Subpart E of this part is author- and other non-regulatory materials
Federal entities subject to the require- ized under the Budget and Accounting that are inconsistent with the require- OMB will review this part at least
melts of this part when exceptions are Act of 1921, as amended; the Budget ments of this part must be superseded every five years after December 26,
not prohibited by statute.In the inter- and Accounting Procedures Act of 1950, upon implementation of this part by 2013.
est of maximum uniformity,exceptions as amended (31 U.S.C. 1101-1125); the the Federal agency,except to the ex-
from the requirements of this part will Chief Financial Officers Act of 1990(31 tent they are required by statute or au- §200.110 Effective/applicability date.
be permitted as described in this sec- U.S.C. 503-504); Reorganization Plan thorized in accordance with the provi- (a) The standards set forth in this
tion. No.2 of 1970;and Executive Order 11541, sions in§200.102. part that affect the administration of
(b)Exceptions on a case-by-case basis "Prescribing the Duties of the Office of (b)Imposition of requirements on recipi- Federal awards issued by Federal
for individual non-Federal entities may Management and Budget and the Do- eats. Agencies may impose legally awarding agencies become effective
be authorized by the Federal awarding mestic Policy Council in the Executive binding requirements on recipients once implemented by Federal awarding
agency or cognizant agency for indirect Office of the President." only through the notice and public agencies or when any future amend-
costs,except where otherwise required (c)Subpart F of this part is author- comment process through an approved ment to this by law or where OMB or other approvalSinglepart becomesnegotiated filar.
Amendmentsed e the 1 Audit Act agencythi part,other statutes
es authorized (b) (as of the pi indirect the
is expressly required by this part. of 1996, (31 U.S.C. 7501- by this part,other statutes or regula- rates(as of publication date of the
(c)The Federal awarding agency may 7507). tions,or as incorporated into the terms
adjust requirements to a class of Fed- of a Federal award. revisions to the guidance)will remain
eral awards or non-Federal entities [85 FR 99536,Aug.13,2020] in place until they expire.The effective
when approved by OMB, or when re- [85 FR 49538,Aug.13,2020] date of changes to indirect cost rates
quince by Federal statutes or regula- §200.104 Supersession. must be based upon the date that a
tines, except for the requirements In As described in§200.110,this part su- §200.108 Agency implementation, newly re-negotiated rate goes into ef-
subpart F of this part. A Federal persedee the following OMB guidance The specific requirements and re- feet for a specific non-Federal entity's
awarding agency may apply less re- documents and regulations under title spessibillties of Federal agencies and fiscal year.Therefore,for indirect cost
etrictive requirements when making 2 of the Code of Federal Regulations: non-Federal entities are set forth in rates and cost allocation plans,the re-
fixed amount awards as defined in sub- (a) A-21, "Cost Principles for Edu- this part. Federal agencies making vised Uniform Guidance(as of the pub-
part A of this part,except for those re- cational Institutions"(2 CFR part 220); Federal awards to non-Federal entities lication date for revisions to the guid-
must implement the language in sub- ance) become effective In generating
99
100
OMB Guidance §200.201 §200.202 2 CFR Ch.II(1-1-22 Edition)
proposals and negotiating a new rate ceedings to SAM (currently FAPIIS). is no governmental review of the ac- agency's performance plan and should
(when the rate is re-negotiated). Failure to make required disclosures teal costs incurred by the non-Federal support the Federal awarding agency's
can result in any of the remedies de- entity in performance of the award. performance measurement, manage-
[85 FR 99538,Aug.13,2020] scribed in§200.339.(See also 2 CFR part Some of the ways in which the Federal ment, and reporting as required by
*200.111 English language. 190,31 U.S.C.3321,and 41 U.S.C.2313.) award may be paid include,but are not Part 6 of OMB Circular A-11(Prepara-
(a) All Federal financial assistance [85 FR 99539,Aug.13,2020] limited to: tion,Submission,and Execution of the
announcements and Federal award in- (1)In several partial payments, the Budget).The program must also be de-
amount of each agreed upon in ad- signed to align with the Program Man-
formation must be in the English Ian- Subpart C—Pre-Federal Award vanes, and the "milestone" or event agement Improvement Accountability
guage.Applications must be submitted Requirements and Contents of triggering the payment also agreed Act(Pub.L.119-264).
in the English language and must be in Federal Awards upon in advance,and set forth in the
the terms of U.S.dollars.If the Federal Federal award; §200.203 Requirement to provide pub-
awarding agency receives applications SOURCE:85 FR 99539,Aug.13,2020,unless (ii) On a unit price basis, for de- lie notice of Federal financial another currency, the Federal otherwise noted. fined unit or units,at a defined price or eistnnce programs.
awarding agency will evaluate the ap- prices,agreed to in advance of perform-
plication by converting the foreign cur- §200.200 Purpose. ance of the Federal award and set forth (a) The Federal awarding agency
rency to United States currency using Sections 200.201 through 200.216 pre- in the Federal award;or, must notify the public of Federal pro-
the date specified for receipt of the ap- scribe instructions and other pre-award (111)In one payment at Federal award grams in the Federal Assistance List-
plication. completion. lags maintained by the General Serv-
(b) Non-Federal entitles may trans- matters to be used by Federal awarding ices Administration(GSA).
agencies in the program planning,an- (2)A fixed amount award cannot be ( )
late the Federal award and other docu- nouncement, application and award used in programs which require manda- (1)The Federal Assistance Listings is
ments into another language. In the processes. tory cost sharing or match. the single,authoritative,government-
event of inconsistency between any (3)The non-Federal entity must car- wide comprehensive source of Federal
terms and conditions of the Federal §200.20I Use of grant agreements(in- tify In writing to the Federal awarding financial assistance program informa-
award and any translation into another eluding fixed amount awards),co- agency or pass-through entity at the tion produced by the executive branch
language,the English language mean- operative agreements, and con- end of the Federal award that the of the Federal Government.
lug will control. Where a significant tracts. project or activity was completed or (2)The information that the Federal
portion of the non-Federal entity's em- (a)Federal award instrument.The Fed- the level of effort was expended.If the
ployees who are working on the Fed- for awarding al agencyy mustB submit int GSA
eral award are not fluent in English, eralti awarding g agencyideontheor pass-through requiredotcarried level out, he amountou efforthe Fed-- graphod approval by OMB is listed GSA must
g entity must decide the appropriate not the of the (b) of this section. must
the non-Federal entity must provide instrument for the Federal award(i.e., eral award must be adjusted.
the Federal award in English and the grant agreement, cooperative agree- (9) Periodic reports may be estab- prescribethe formatfor the submission
language(s)with which employees are ment,or contract)in accordance with lished for each Federal award. in coordination
rdination withh OMB.
more familiar. the Federal Grant and Cooperative (5)Changes in principal investigator, (3)The Federal awarding agency may
Agreement Act(31 U.S.C.6301-08). project leader,project partner,or scope not award Federal financial assistance
§200.112 Conflict of interest. (b)Fixed amount awards. In addition of effort must receive the prior written without assigning it to a program that
en-
a has been included in the Federal As-
The Federal awarding agency must to the options described in paragraph approval of the Federal awardingg
establish conflict of interest policies (a) of this section, Federal awarding cy or pass-through entity. sistance Listings as required in this
for Federal awards. The non-Federal agencies, or pass-through entities as section unless there are exigent cir-
entity must disclose in writing any po- permitted in §200.333, may use fixed §200.202 Program planning and de- cumatances requiring otherwise, such
tential conflict of interest to the Fed- amount awards (see Fixed amount sign. as timing requirements imposed by
eral awarding agency or pass-through awards in§200.1)to which the following The Federal awarding agency must statute.
entity in accordance with applicable conditions apply: design a program and create an Assist- (b) For each program that awards
Federal awarding agency policy. (1)The Federal award amount is ne- ance Listing before announcing the No- discretionary Federal awards,non-dis-
gotiated using the cost principles(or tice of Funding Opportunity.The pro- cretionary Federal awards, loans, in-
§200.113 Mandatory disclosures. other pricing information)as a guide. gram must be designed with clear goals surance,or any other type of Federal
The non-Federal entity or applicant The Federal awarding agency or pass- and objectives that facilitate the deliv- financial assistance, the Federal
for a Federal award must disclose,In a through entity may use fixed amount ery of meaningful results consistent awarding agency must, to the extent
timely manner,in writing to the Fed- awards if the project scope has measur- with the Federal authorizing legiela- practicable, create, update, and man-
eral awarding agency or pass-through able goals and objectives and if ads- tion of the program.Program perform- age Assistance Listings entries based
entity all violations of Federal crimi- quate cost, historical, or unit pricing ance shall be measured based on the on the authorizing statute for the pro-
nal law involving fraud, bribery, or data is available to establish a fixed goals and objectives developed during gram and comply with additional guid-
gratuity violations potentially affect- amount award based on a reasonable program planning and design. See ance provided by GSA in consultation
ing the Federal award.Non-Federal en- estimate of actual cost.Payments are §200.301 for more information on per- with OMB to ensure consistent,accu-
tities that have received a Federal based on meeting specific requirements formance measurement. Performance rate information is available to
pro-
award including the term and condi- of the Federal award.Accountability is measures may differ depending on the tion outlined in appendix XII to this based on performance and results.Ex- type of program. The program must spective applicants. Accordingly, Fed-
part are required to report certain cept in the case of termination before align with the strategic goals and ob- eral awarding agencies must submit
civil, criminal,or administrative pro- completion of the Federal award,there jectives within the Federal awarding the following information to GSA:
101 102
OMB Guidance §200.204 §200.205 2 CFR Ch.II(1-1-22 Edition)
(1) Program Description, Purpose, efal assistance,in a location preceding (9)Application Preparation and Sub- formance and Integrity Information
Goals, and Measurement. A brief sum- the full text of the announcement: mission Information,including the ap- System (FAPIIS)) prior to making a
many of the statutory or regulatory re- (1)Federal Awarding Agency Name; plicable submission dates and time. Federal award where the Federal share
quirements of the program and its in- (2)Funding Opportunity Title; (5) Application Review Information is expected to exceed the simplified ac-
tended outcome. Where appropriate, (3)Announcement Type(whether the including the criteria and process to be quisition threshold,defined in 91 U.S.C.
the Program Description, Purpose, funding opportunity is the initial an- used to evaluate applications.See also 134,over the period of performance.As
Goals, and Measurement should align nouncement of this funding oppor- §§200.205 and 200.206. required by Public Law 112-239, Na-
with the strategic goals and objectives tunity or a modification of a pre- (6)Federal Award Administration In- tional Defense Authorization Act for
within the Federal awarding agency's viously announced opportunity); formation.See also§200.211. Fiscal Year 2013, prior to making a
performance plan and should support (4)Funding Opportunity Number(re- (7)Applicable terms and conditions Federal award, the Federal awarding
the Federal awarding agency's per- (mtred, if applicable). If the Federal for resulting awards,including any ex- agency must consider all of the infer-
formance measurement, management, awarding agency has assigned or will ceptions from these standard terms. mation available through FAPUS with
and reporting as required by Part 6 of assign a number to the funding oppor- §200.205 Federal awardingagency re- regard to the applicant and any imme-
OMB Circular A-11; tunny announcement, this number view of merit ofproposals.g y elate highest level owner, predecessor
(2) Identification. Identification of must be provided; (i.e.;a non-Federal entity that is re-
whether the program makes Federal (5)Assistance Listings Number(s); For discretionary Federal awards, placed by a successor), or subsidiary,
awards on a discretionary basis or the (6)Key Dates.Key dates include due unless prohibited by Federal statute, identified for that applicant in FAPIIS,
Federal awards are prescribed by Fed- dates for applications or Executive the Federal awarding agency must de- if applicable.At a minimum,the infer-
eral statute,such as in the case of for- Order 12372 submissions,as well as for sign and execute a merit review process mation in the system for a prior Fed-
mula grants. any letters of intent or pre-appllca- for applications,with the objective of eral award recipient must demonstrate
(3) Projected total amount of funds tions. For any announcement issued selecting recipients most likely to be a satisfactory record of executing pro-
available for the program. Estimates before a program's application mate- successful in delivering results based grams or activities under Federal
based on previous year funding are ac- rials are available,key dates also in- on the program objectives outlined in grants,cooperative agreements,or pro-
ceptable if current appropriations are elude the date on which those mate- section§200.202.A merit review is an curement awards; and integrity and
not available at the time of the sub- rials will be released;and any other ad- objective process of evaluating Federal business ethics.The Federal awarding
mission; ditfonal information,as deemed appli- award applications in accordance with agency may make a Federal award to a
(9) Anticipated source of available cable by the relevant Federal awarding written standards set forth by the Fed- recipient who does not fully meet these
funds. The statutory authority for agency. eral awarding agency. This process standards,if it is determined that the
funding the program and,to the extent (b) Availability period, The Federal must be described or incorporated by information is not relevant to the cur-
possible, agency, sub-agency, or, if awarding agency must generally make reference in the applicable funding op- rent Federal award under consideration
known,the specific program unit that all funding opportunities available for portunity(see appendix I to this part.). or there are specific conditions that
will issue the Federal awards,and asso- application for at least 60 calendar See also§200.209.The Federal awarding can appropriately mitigate the effects
elated funding Identifier(e.g.,Treasury days. The Federal awarding agency agency must also periodically review of the non-Federal entity's risk in ac-
Account Symbol(s)); may make a determination to have a its merit review process. cordance with§200.208.
(5)General eligibility requirements.The less than 60 calendar day availability
statutory, regulatory or other eligi- period but no funding opportunity (b) Risk agencyevaluation.mustu. (1)hThe Federal
¢200.iew Federaliskposed
b awardingp agency re- framework
or have place a
bility factors or considerations that de- should be available for less than 30 cal- view of risk posed by applicants. framework for evaluating the risks
termine the applicant's qualification endar days unless exigent cir-
for Federal awards under the program cumatances require as determined by rie Review of OMB-designated rPrior posed l applicantss. This before they receive
(e.g.,type of non-Federal entity);and the Federal awarding agency head or tto m kiofgovernmentwidegFederal data. (1)hFed-eo- Federal awards. evaluation may
(6) Applicability of Single Audit Re- delegate. eral
making a agency award, the incorporateic is eligibilityl of theevaluation the qu of
l-
quirements. Applicability of Single (c)Full text of funding opportunities. seal awardingritI is required Actby the the of itsaa p at nf or the de al
Audit Requirements as required by The Federal awarding agency must In- Payment,313301Integrity Information U.S.C.ofawardingity its application. If nes thathatral
subpart F of this part. elude the following Information in the 2019,31 U.S.C. in note,and 91 C. agency determines a
full text of each funding opportunity. 2313 to review information available Federal award will be made, special
§200.204 Notices of funding opportune- For specific instructions on the con- through any OMB-designated reposi- conditions that correspond to the de-
fies, tent required in this section,refer to tories of governmentwide eligibility gree of risk assessed may be applied to
For discretionary grants and cooper- appendix I to thi part. qualification or financial integrity in- the Federal award.Criteria to be evalu-
ative agreements that are competed, (1)Full programmatic description of formation as appropriate.See also sus- ated must be described in the an-
the Federal awarding agency must an- the funding opportunity, pension and debarment requirements nouncement of funding opportunity de-
nounce specific funding opportunities (2) Federal award information, in- at 2 CFR part 190 as well as individual scribed in§200.204.
by providing the following information eluding sufficient information to help Federal agency suspension and debar- (2)In evaluating risks posed by appli-
in a public notice: an applicant make an informed decl- Rent regulations in title 2 of the Code cants, the Federal awarding agency
(a)Summary information in notices of sion about whether to submit an appli- of Federal Regulations. may use a risk-based approach and
funding opportunities. The Federal cation.(See also§200.419(c)(4)). (2)In accordance 91 U.S.C.2313,the may consider any items such as the fol-
awarding agency must display the fol- (3) Specific eligibility information, Federal awarding agency is required to lowing:
lowing information posted on the OMB- including any factors or priorities that review the non-public segment of the (i) Financial stability. Financial sta-
designated governmentwide website for affect an applicant's or its applica- OMB-designated integrity and perform- bility;
funding and applying for Federal finan- tion's eligibility for selection. ance system accessible through SAM (ii) Management systems and stand-
(currently the Federal Awardee Per- ands. Quality of management systems
103
104
OMB Guidance §200.208 §200.209 2 CFR Ch.II(1-1-22 Edition)
and ability to meet the management (b) Information collection. If applica- (3)The nature of the action needed to (2)Recipient's unique entity identi-
standards prescribed in this part; ble,the Federal awarding agency may
(iii)History of performance.The apply- inform applicants and recipients that removep the additional requirement,if fie3;
cant's record in managing Federal they do not need to provide certain in- applicable; (3)Unique Federal Award Identifica-
awards,if it is a prior recipient of Fed- formation otherwise required by the (9)The st if allowedfor completing tion Number(FAIN);
the actions if applicable;and (4)Federal Award Date(see Federal
eral awards, including timeliness of relevant information collection. (5)The method for requesting recon- award date in§200.201);
compliance with applicable reporting
requirements, conformance to the §200.208 Specific conditions. sideration of the additional require- (5)Period of Performance Start and
terms and conditions of previous Fed- (a)Federal awarding agencies are re- ments imposed. End Date;
eral awards,and if applicable,the ex- sponsible for ensuring that specific (e)Any additional requirements must (6) Budget Period Start and End
tent to which any previously awarded Federal award conditions are con- be promptly removed once the condi- Date;
amounts will be expended prior to fu- sistent with the program design re- bons that prompted them have been (7) Amount of Federal Funds Obli-
ture awards; fleeted in §200.202 and include clear satisfied. gated by this action;
(iv) Audit reports and findings. Re- performance expectations of recipients §200.209 Certifications and represen- Obli a fd;e Amount of Federal Funds
ports and findings from audits per- as required in§200.301. tat[ons. g ed;
formed under subpart F of this part or (b)The Federal awarding agency or (9)Total Approved Cost Sharing or
the reports and findings of any other pass-through entity may adjust spe- Unless prohibited by the U.S. Con- Matching,where applicable;
available audits;and cilia Federal award conditions as need- atitution, Federal statutes or regula- (10) Total Amount of the Federal
(v)Ability to effectively implement re- ed, in accordance with this section, tions,each Federal awarding agency or Award including approved Cost Sharing
quirements. The applicant's ability to based on an analysis of the following pass-through entity is authorized to re- or Matching;
effectively implement statutory,regu- factors: quire the non-Federal entity to submit (11)Budget Approved by the Federal
latory,or other requirements imposed (1)Based on the criteria set forth in certifications and representations re- Awarding Agency;
on non-Federal entities. §200.206; quired by Federal statutes,or regula- (11) Federal award description, (to
(a)Risk-based requirements adjustment. (2)The applicant or recipient's his- tions on an annual basis. Submission comply with statutory requirements
The Federal awarding agency may ad- tory of compliance with the general or may be required more frequently if the (e.g., Name );
just requirements when a risk-evalua- specific terms and conditions of a Fed- non-Federal entity fails to meet a re- (12)Name of Federal awarding -
tion indicates that it may be merited eral award; quirement of a Federal award. cy and contact information for awardward-
either pre-award or post-award. (3)The applicant or recipient's abil- ing official,
(d)Suspension and debarment cempli- ity to meet expected performance goals §200.210 Pre-award costa. (13)Assistance Listings Number and
ante.(1)The Federal awarding agency as described in§200.211;or For requirements on costs incurred Title;
must comply with the guidelines on (4)A responsibility determination of by the applicant prior to the start date (19) Identification of whether the
governmentwide suspension and debar- an applicant or recipient. of the period of performance of the award is R&D;and
ment in 2 CFR part 180,and must re- (c) Additional Federal award condi- Federal award,see§200.950. (15)Indirect cost rate for the Federal
quire non-Federal entities to comply tions may include items such as the award(including if the de minimis rate
with these provisions.These provisions following: §200.211 Information contained in a is charged per§200.914).
(1)Requiring payments as reimburse- Federal award.
restrict Federal awards,subawards and (c) General terms and conditions. (1)
contracts with certain parties that are meats rather than advance payments; A Federal award must include the Federal awarding agencies must incor-
debarred, suspended or otherwise ex- (2)Withholding authority to proceed following information: porate the following general terms and
eluded from or ineligible for participa- to the next phase until receipt of evi- (a) Federal award performance goals. conditions either in the Federal award
tion in Federal programs or activities. deuce of acceptable performance within Performance goals,indicators,targets, or by reference,as applicable:
a given performance period; and baseline data must be included in (i)Administrative requirements.Admin-
[65 FR 99539,Aug.13,2020,as amended at 86 (3) Requiring additional, more de- the Federal award, where applicable. istrative requirements implemented by
FR 10939,Feb.22,2021] tailed financial reports; The Federal awarding agency must the Federal awarding agency as speci-
§200.207 Standard application re. (9)Requiring additional project mon- also specify how performance will be lied in this part.
quirements. itoring; assessed in the terms and conditions of (ii)National policy requirements.These
(5)Requiring the non-Federal entity the Federal award,including the ttm- include statutory, executive order,
(a)Paperwork clearances.The Federal to obtain technical or management as- ing and scope of expected performance. other Presidential directive, or regu-
awarding agency may only use applica- sistance;or See§§200.202 and 200.301 for more infor- latory requirements that apply by spe-
tion information collections approved (6)Establishing additional prior ap- mation on Federal awardperformance
by OMB under the Paperwork Reduc- provals. specific.s Seee § and are noto program-
by na-
goals. tionl require ants. and na-
tion Act of 1995 and OMB's imple- (d)If the Federal awarding agency or (b)General Federal award information. tional policy requirements.
meeting regulations in 5 CFR part 1320 pass-through entity is imposing addi- The Federal awarding agency must in- (iii) Recipient integrity and perform-
and In alignment with OMB-approved, tional requirements,they must notify elude the following general Federal ance matters.If the total Federal share
governmentwide data elements avail- the applicant or non-Federal entity as award information in each Federal of the Federal award may include more
able from the OMB-designated stand- to: award: than 3600,000 over the period of
per-
ards lead. Consistent with these re- (1)The nature of the additional re- (]) Recipient name (which must must include
thed Federal awandingnd Lion
quirements, OMB will authorize addi- quirements; match the name associated with its must include the term and condition
tional information collections only on (2)The reason why the additional re- unique entity identifier as defined at 2 available in appendix XII of this part.
a limited basis. quirements are being imposed; CFR 25.315); See also§200.113.
105 106
OMB Guidance §200.213 §200.214 2 CFR Ch.II(1-1-22 Edition)
(iv)Future budget periods.If it is an- in this section,for applicable Federal made to the non-Federal entity is ex- mination that a non-Federal entityis
ticipated that the
p periodl u perform- awards the c Federal awarding agencys pub- pected to exceed the he simplified aof per- not equented for a Federal award and
ante will include multiple budget peri- must announce all Federal awards pub- tion threshold over the period of per- subsequently:
ods,the Federal awarding agency must holy and publish the required informs- formance. (I)Learns that any of that informa-
indicate that subsequent budget peri- tion on a publicly available OMB-des- (b)The Federal awarding agency is tion is erroneous,the Federal awarding
ods are subject to the availability of ignated governmentwide website. not required to report a determination agency must correct the information in
funds,program authority,satisfactory (b)All information posted in the des- that a non-Federal entity is not quali- the system within three business days;
performance,and compliance with the ignated Integrity and performance sys- fled for a Federal award if they make and
terms and conditions of the Federal tern accessible through SAM(currently the Federal award to the non-Federal (2)Obtains an update to that infor-
award. FAPIIS)on or after April 15,2011 will entity and include specific award terms mation that could be helpful to other
(v) Termination provisions. Federal be publicly available after a waiting and conditions,as described in§200.208. Federal awarding agencies,the Federal
awarding agencies must make recipi- period of 19 calendar days,except for: (c)If a Federal awarding agency re- awarding agency is strongly encour-
ents aware,in a clear and unambiguous (1)Past performance reviews required ports a determination that a non-Fed- aged to amend the information in the
manner,of the termination provisions by Federal Government contractors in eral entityis not Fed-in §200.340, including the applicable qualifiede for system to incorporate the update in a
accordance with the Federal Acquisi- eral award,as described in paragraph timely way.
termination provisions in the Federal tion Regulation(FAR)48 CFR part 92, (a)of this section,the Federal award- (e) Federal awarding agencies must
awarding agency's regulations or in subpart 92.15; ing agency also must notify the non- not post any information that will be
each Federal award. (2) Information that was entered Federal entitythat— made publicly available in the non-
(2) The Federal award must infor-
porate,by reference,all general terms prior to April 15,2011;or (1)The determination was made and public segment of designated integrity
and conditions of the award, which (3) Information that is withdrawn reported to the designated integrity and performance system that is cov-
must be maintained on the agency's during the 19-calendar day waiting pe- and performance system accessible ered by a disclosure exemption under
riod by the Federal Government offi- through SAM,and include with the no- the Freedom of Information Act.If the
website. cial tification an explanation of the basis recipient asserts within seven calendar
(3)If a non-Federal entity requests a for the determination; days to the Federal awarding agency
copy of the full text of the general (c) Nothing in this section may be
terms and conditions, the Federal construed as requiring the publication (2) The information will be kept in that posted the information that some
of Information otherwise exempt under the system for a period of five years or all of the information made publicly
awarding agency must provide it. p from the date of the determination,as available is covered bya disclosure ex-
(9)Wherever the general terms and the Freedom of Information Act (5
U.S.0 552), or controlled unclassified required by section 872 of Public Law mationn under the Freedom of Infor-
conditiona are publicly available, the 110-917, as amended 91 U.S.C. 2313), awarding
Federal awarding agency must main- information pursuant to Executive ( Act, the Federal
tain an archive of previous versions of Order 13556. then archived; agency that posted the information
the general terms and conditions,with (3) Each Federal awarding agency must remove the posting within seven
effective dates,for use by the non-Fed- §200.213 Reporting a determination that considers making a Federal award calendar days of receiving the riser-
eral entity,auditors,or others. that a non-Federal entity is not to the non-Federal entity during that tion.Prior to riposting the releasable
(d)Federal awardingagency, qualified for a Federal award. five year period must consider that in- information, the Federal awarding
g cy,program, formation in judging whether the non- agency must resolve the issue in ac-
or Federal award specific terms and con- (a)If a Federal awarding agency does Federal entity is qualified to receive cordance with the agency's Freedom of
ditions. The Federal awarding agency not make a Federal award to a non- the Federal award when the total Fed- Information Act procedures.
must include with each Federal award Federal entity because the official de- eral share of the Federal award is ex-
any terms and conditions necessary to termines that the non-Federal entity pected to include an amount of Federal §200.214 Suspension and debarment.
communicate requirements that are in does not meet either or both of the funding in excess of the simplified ac- Non-Federal entities are subject to
addition to the requirements outlined minimum qualification standards as quisition threshold over the
In the Federal awarding agency's gen- described in§200.206(a)(2),the Federal period of the non-procurement debarment implementingng
eral terms and conditions. See also awarding agency must report that de- performance; suspension regulations
§200.208. Whenever practicable, these termination to the designated integ- (4)The eeintegrity
nsg non-Federal entity mayr ao ce partExec180. Orderseg lati and 128C 2 CFR
specific terms and conditions also rity and performance system accessible the al arc a sible th and performance restrict
The awards,ards,ons a 2 CFR partd
portal accessible through SAM (cur- coo rectsict subawards, one
should be shared on the agency's through SAM(currently FAPIIS),only rently the Contractor Performance As- contracts with certain parties that are
website and in notices of funding op- if all of the following apply: sessment Reporting System(CPARS)) debarred, suspended, or otherwise ex-
portunities(as outlined in§200.209)in (1)The only basis for the determine- and comment on any information the eluded from or ineligible for participa-
addition to being included in a Federal tion described in this paragraph(a)is system contains about the non-Federal tion In Federal assistance programs or
award.See also§200.207. the non-Federal entity's prior record of entity itself;and activities.
(e) Federal awarding agency require- executing programs or activities under (5) Federal awarding agencies will
menu.Any other information required Federal awards or its record of integ- consider that non-Federal entity's §200.215 Never contract with the
by the Federal awarding agency. rity and business ethics,as described in comments in determining whether the enemy.
§200.206(a)(2)(i.e.,the entity was deter- non-Federal entity is qualified for a fu- Federal awarding agencies and re-
§200.212 Public access to Federal mined to be qualified based on all fat- ture Federal award. cipients are subject to the regulations
award information. tors other than those two standards);
(a)In accordance with statutory re- and ro If a informationFedera intoawa hg designatedagsncy en- Enemye innt2nC Never partC 3 ct with the
tits ity o m the ns i 2 CFR 183.a The regula-
quirements for Federal spending trans- (2) The total Federal share of the integrity and performance system ac- bons in 2 CFR part 183 affect covered
parency(e.g.,FFATA),except as noted Federal award that otherwise would be cessible through SAM about a deter- contracts, grants and cooperative
107 108
OMB Guidance §200.300 §200.301 2 CFR Ch.II(1-1-22 Edition)
agreements that are expected to exceed executive agencies administering loan, §200.301 Performance measurement, which emphasizes collaboration and co-
350,000 within the period of perform- grant, or subsidy programs shall
(a) The Federal awardin agencyordination to advance data and evi-
ance,are performed outside the United prioritize available funding and tech- g dence-buildingfunctions in the Federal
States and its territories, and are In nical support to assist affected busi- must measure the recipient's perform-
ante to show achievement of program government). The Federal awarding
support of a contingency operation in messes, institutions and organizations goals and objectives, share lessons agency should also specify any require-
which members of the Armed Forces as is reasonably necessary for those af- learned, improvements of award recipients'
are actively engaged in hostilities. d program outcomes, P partition,
tested entities to transition from coy- and foster adoption of promising prac- lion in a federally funded evaluation,
$200.210 Prohibition on certain tele. ered communications equipment and tices. Program goals and objectives and any evaluation activities required
communications and video surveil- services,to procure replacement equip- should be derived from program plan- to be conducted by the Federal award.
lance services or equipment. ment and services,and to ensure that ning and design.See§200.202 for more *200.302 Financial management.
(a)Recipients and subrecipients are communications service to users and information. Where appropriate, the
prohibited from obligating or expend- customers is sustained. Federal award may include specific (a)Each state must expend and ac-
ing loan or grant funds to: (c)See Public Law 115-232,section 809 Program goals, indicators, targets, count for the Federal award in accord-
(1)Procure or obtain; for additional information. baseline data, data collection, or ex- ance with state laws and procedures for
(2)Extend or renew a contract to pro- (d)See also§200.971. pected outcomes(such as outputs, or expending and accounting for the
services performance or public impacts state's own funds. In addition, the
cure or obtain;or of any of these) with an expected state's and the other non-Federal enti-
(3)Enter into a contract(or extend Subpart D—Post Federal Award timeline for accomplishment. Where ty's financial management systems,in-
or renew a contract)to procure or ob- Requirements
taro equipment, services, Cr systems G applicable,rfma thism should alsoo include any eluding rethe ed documentingstatutes,
compll-
that uses covered telecommunications performance measures or independent ance with Federal statutes, -
equipment or services as a Substantial Souses:85 FR 99593,Aug.13,2020,unless sources of data that may be used to lions,and the terms and conditions of
or component any system, otherwise noted. measure progress.The Federal award- the Federal award, must be sufficient
or as essentialmentofa partyofs any ing agency will determine how per- to permit the preparation of reports re-
orcritical A technologydescribed in Public Law §200.300 Statutory and-national policy formance progress is measured,which quired by general and program-specific
sys1stem section be9, covered tele-w requirements. may differ by program. Performance terms and conditions;and the tracing
communications equipment is tele- (a) The Federal awarding agency measurement progress must be both of funds to a level of expenditures ade-
measured and reported.See§200.329 for quate to establish that such funds have
must manag
e equipment produced and administer the Fed- more information on monitoring
by Huawel Technologies Company or eral award in a manner so as to ensure pro- been used according to the Federal
gram performance.The Federal award- statutes, regulations, and the terms
ZTE Corporation(or any subsidiary or that Federal funding is expended and
ing agency may include program-ape- and conditions of the Federal award.
affiliate of such entities). associated programs are implemented sifts requirements,as applicable.These See also§200.950.
(i)For the purpose of public safety, in full accordance with the U.S. Con- requirements must be aligned, to the (b) The financial management eys-
security of government facilities,phys- stitution,Federal Law,and public poi- extent permitted by law,with the Fed- tern of each non-Federal entity must
ical security surveillance of critical in- icy requirements: Including, but not eral awarding agency strategic goals, provide for the following (see also
frastructure, and other national secu- limited to, those protecting free strategic objectives or performance §§200.339,200.335,200.336,and 200.337):
rity purposes, video surveillance and speech, religious liberty, public wel- goals that are relevant to the program. (1)Identification,in its accounts,of
telecommunications equipment pro- fare,the environment,and prohibiting See also OMB Circular A-11,Prepara- all Federal awards received and ex-
duced by Hytera Communications Cor- discrimination. The Federal awarding tion,Submission,and Execution of the pended and the Federal programs under
poration, Hangzhou Hikvision Digital agency must communicate to the non- Budget Part 6. which they were received.Federal pro-
Technology Company,or Dahua Tech- Federal entity all relevant public poi- (b) The Federal awardingagency
nolo Company g Y mustum and Federal,as award identification
gy p y(or any subsidiary Sror icy requirements, including those in should provide recipients with clear include, applicable,the Assist-
affiliate of such entities). general appropriations provisions,and performance goals,indicators,targets, once Listings title and number, Fed-
(ii)Telecommunications or video Bur- incorporate them either directly or by and baseline data as described in eral award identification number and
veillance services provided by such en- §200.211. Performance reporting tin reference in the terms and conditions p g fre- year,name of the Federal agency,and
ti ties or using such equipment. of the Federal award. quency and content should be estab- name of the pass-through entity, if
(lit) Telecommunications or video (b)The non-Federal entity is respon- lished to not only allow the Federal any.
surveillance equipment or services pro- Bible for complying with all require- awarding agency to understand the re- (2) Accurate, current, and complete
duced or provided by an entity that the cipient progress but also to facilitate disclosure of the financial results of
Secretary of Defense, in consultation meats of the Federal award. For all identification of promising practices each Federal award or program in ac-
with the Director of the National Intel- Federal awards,this Includes the provi- among recipients and build the evi- cordance with the reporting require-
ligence or the Director of the Federal alone of FFATA, which Includes re- dence upon which the Federal awarding ments set forth in§§200.328 and 200.329.
Bureau of Investigation,reasonably be- quirements on executive compensation, agency's program and performance de- If a Federal awarding agency requires
lieves to be an entity owned or con- and also requirements implementing cisions are made.See§200.328 for more reporting on an accrual basis from a re-
trolled by,or otherwise connected to, the Act for the non-Federal entity at 2 information on reporting program per- cipient that maintains its records on
the government of a covered foreign CFR parts 25 and 170. See also statu- formance. other than an accrual basis,the recipi-
country. tory requirements for whistleblower (c)This provision is designed to oper- eat must not be required to establish
(b)In implementing the prohibition protections at 10 U.S.C.2409,41 U.S.C. ate in tandem with evidence-related an accrual accounting system.This re-
under Public Law 115-232, section 889, 9712,and 10 U.S.C. 2324,41 U.S.C. 4309 statutes(e.g.;The Foundations for Evi- cipient may develop accrual data for
subsection(f), paragraph(1),heads of and 4310. deuce-Based Policymaking Act of 2018, its reports on the basis of an analysis
109 110
OMB Guidance §200.305 §200.305 2 CFR Ch.II(1-1-22 Edition)
of the documentation on hand. Simi- uses, regulations and the terms and non-Federal entity whether the pay- Federal awarding agency sets a specific
larly,a pass-through entity must not conditions of Federal awards. ment is made by electronic funds condition per§200.208,or when the non-
require a subrecipient to establish an (d) Take prompt action when in- transfer,or issuance or redemption of Federal entity requests payment by re-
accrual accounting system and must stances of noncompliance are identified checks,warrants,or payment by other imbursement. This method may be
allow the subrecipient to develop ac- including noncompliance identified in means. See also §200.302(b)(6). Except used on any Federal award for con-
crual data for its reports on the basis audit findings. as noted elsewhere in this part,Federal struction,or if the major portion of the
of an analysis of the documentation on (e)Take reasonable measures to safe- agencies must require recipients to use construction project is accomplished
hand. guard protected personally identifiable only OMB-approved, governmentwlde through private market financing or
(3)Records that identify adequately information and other information the information collection requests to re- Federal loans,and the Federal award
the source and application of funds for Federal awarding agency or pass- quest payment. constitutes a minor portion of the
federally-funded activities. These through entity designates as sensitive (1)The non-Federal entity must be project. When the reimbursement
records must contain information per- or the non-Federal entity considers paid in advance,provided it maintains method is used,the Federal awarding
taming to Federal awards, authoriza- sensitive consistent with applicable or demonstrates the willingness to agency or pass-through entity must
tions, financial obligations, unobli- Federal, State, local, and tribal laws maintain both written procedures that make payment within 30 calendar days
gated balances, assets, expenditures, regarding privacy and responsibility minimize the time elapsing between after receipt of the billing,unless the
income and interest and be supported over confidentiality. the transfer of funds and disbursement Federal awarding agency or pass-
by source documentation. by the non-Federal entity,and finan- through entity reasonably believes the
(4) Effective control over, and ac- §200.304 Bonds. cial management systems that meet reasonably believes the
countability for, all funds, property, The Federal awarding agency may in- the standards for fund control and ac- requestto be improper.
and other assets.The non-Federal enti- elude a provision on bonding, insur- countability as established in this part. ee If the non-Federaler.
entity cannot
ty must adequately safeguard all assets ance, or both in the following cir- Advance payments to a non-Federal en- meet the criteria for advance payments
and assure that they are used solely for cumstances: tity must be limited to the minimum and the Federal awarding agency or
authorized purposes.See§200.303. (a) Where the Federal Government amounts needed and be timed to be in pass-through entity has determined
(5)Comparison of expenditures with guarantees or insures the repayment of accordance with the actual,immediate that reimbursement is not feasible be-
budget amounts for each Federal money borrowed by the recipient,the cash requirements of the non-Federal cause the non-Federal entity lacks suf-
award. Federal awarding agency,at its discre- entity in carrying out the purpose of ficient working capital, the Federal
(8)Written procedures to implement tion, may require adequate bonding the approved program or project.The awarding agency or pass-through enti-
the requirements of§200.305. and insurance if the bonding and insur- timing and amount of advance pay- ty may provide cash on a working cap-
(7) Written procedures for deter- ance requirements of the non-Federal meets must be as close as is adminis- ital advance basis. Under this prece-
mining the allowability of costs in ac- entity are not deemed adequate to pro- tratively feasible to the actual die- dure, the Federal awarding agency or
cordance with subpart E of this part test the interest of the Federal Govern- bursements by the non-Federal entity pass-through entity must advance cash
and the terms and conditions of the meet. for direct program or project costs and payments to the non-Federal entity to
Federal award. (b)The Federal awarding agency may the proportionate share of any allow- cover its estimated disbursement needs
require adequate fidelity bond coverage able indirect costs. The non-Federal for an initial period generally geared
§200.303 Internal controls. where the non-Federal entity lacks suf- entity must make timely payment to to the non-Federal entity's disbursing
The non-Federal entity must: ficient coverage to protect the Federal contractors in accordance with the cycle. Thereafter, the Federal award-
(a)Establish and maintain effective Government's interest. contract provisions. ing agency or pass-through entity must
internal control over the Federal (c)Where bonds are required in the (2) Whenever possible, advance pay- reimburse the non-Federal entity for
award that provides reasonable assur- situations described above, the bonds meats must be consolidated to cover its actual cash disbursements. Use of
ance that the non-Federal entity is must be obtained from companies hold- anticipated cash needs for all Federal the working capital advance method of
managing the Federal award in compli- ing certificates of authority as accept- awards made by the Federal awarding Payment requires that the pass-
ance with Federal statutes, regula- able sureties,as prescribed in 31 CFR agency to the recipient. through entity provide timely advance
tions,and the terms and conditions of part 223. (i)Advance payment mechanisms in- Payments to any subrecipients in order
the Federal award.These internal con- elude,but are not limited to,Treasury to meet the subrecipient's actual cash
trols should be in compliance with *200.305 Federal payment. check and electronic funds transfer and disbursements.The working capital ad-
guidance in "Standards for Internal (a) For states, payments are gov- must comply with applicable guidance vance method of payment must not be
Control in the Federal Government" erned by Treasury-State Cash Manage- in 31 CFR part 208. used by the pass-through entity If the
issued by the Comptroller General of merit Improvement Act(CMIA)agree- (ii)Non-Federal entities must be au- reason for using this method is the un-
the United States or the"Internal Con- meats and default procedures codified thorized to submit requests for advance willingness or inability of the pass-
trol Integrated Framework",issued by at 31 CFR part 205 and Treasury Finan- payments and reimbursements at least through entity to provide timely ad-
the Committee of Sponsoring Organiza- cial Manual (TFM) 9A-2000, "Overall monthly when electronic fund transfers vance payments to the subrecipient to
tions of the Treadway Commission Disbursing Rules for All Federal Ages- are not used,and as often as they like meet the subrecipient's actual cash die-
(COSO). cies". when electronic transfers are used,in bursements.
(b) Comply with the U.S. Constitu- (b) For non-Federal entities other accordance with the provisions of the (5)To the extent available,the non-
Mon,Federal statutes,regulations,and than states, payments methods must Electronic Fund Transfer Act (15 Federal entity must disburse funds
the terms and conditions of the Federal minimize the time elapsing between U.S.C.1693-1693r). available from program income (in-
awards. the transfer of funds from the United (3) Reimbursement is the preferred eluding repayments to a revolving
(c) Evaluate and monitor the non- States Treasury or the pass-through method when the requirements in this fund),rebates,refunds,contract settle-
Federal entity's compliance with stat- entity and the disbursement by the paragraph(b)cannot be met,when the merits, audit recoveries, and interest
111 112
OMB Guidance §200.305 5200.306 2 CFR Ch.II(1-1-22 Edition)
earned on such funds before requesting for funds received, obligated, and ex- (D)Make returns payable to:Depart- Department of Health and Human
additional cash payments. pended. meet of Health and Human Services. Services."
(6)Unless otherwise required by Fed- (ii) Advance payments of Federal (10)Funds,principal,and excess cash Mail Check to Treasury approved
eral statutes, payments for allowable funds must be deposited and main- returns must be directed to the origi- lockbox:
costs by non-Federal entities must not tained In insured accounts whenever nal Federal agency payment system. HHS Program Support Center, P.O.
be withheld at any time during the pe- possible. The non-Federal entity should review Box 530231,Atlanta,GA 30353-0231
riod of performance unless the condi- (8) The non-Federal entity must instructions from the original Federal aplease allow 4-6 weeks for proc-
tiens of§200.208,subpart D of this part, maintain advance payments of Federal agency payment system. Returns eseing of a payment by check to be ap-
including§200.339, or one or more of awards in interest-bearing accounts, should include the following informs-
the following applies: unless the following apply: tion: plied to the appropriate PMS account.
(i)The non-Federal entity has failed (i) The non-Federal entity receives (i)Payee Account Number(PAN),1f (v)Questions can be directed to PMS
to comply with the project objectives, less than$250,000 in Federal awards per the payment originated from PMS,or at 877-619-5533 or
Federal statutes, regulations, or the year. Agency information to indicate whom PMSSupPort@Psc.hhs.gov.
terms and conditions of the Federal (ii)The best reasonably available in- to credit the funding if the payment
award. terest-bearing account would not be ex- originated from ASAP, NSF, or an-
al)The non-Federal entity is delis- pected to earn interest in excess of$500 other Federal agency payment system. (a)Under Federal research proposals,
quent in a debt to the United States as per year on Federal cash balances. (ii)PMS document number and sub- voluntary committed cost sharing is
defined in OMB Circular A-129, Poll- (iii)The depository would require an account(s), if the payment originated not expected. It cannot be used as a
cies for Federal Credit Programs and average or minimum balance so high from PMS, or relevant account num- factor during the merit review of appli-
Non-Tax Receivables."Under such con- that it would not be feasible within the hers if the payment originated from an- cations or proposals,but may be con-
ditions, the Federal awarding agency expected Federal and non-Federal cash other Federal agency payment system. sidered if it is both in accordance with
or pass-through entity may,upon rea- resources. (iii)The reason for the return(e.g., Federal awarding agency regulations
sonable notice,inform the non-Federal (iv)A foreign government or banking excess cash,funds not spent,interest, and specified in a notice of funding op-
entity that payments must not be system prohibits or precludes interest- part interest part other,etc.) portunity.Criteria for considering vol-
made for financial obligations incurred bearing accounts. (11)When returning funds or interest untary committed cost sharing and
after a specified date until the condi- (9)Interest earned amounts up to$500 to PMS you must include the following any other program policy factors that
tions are corrected or the indebtedness per year may be retained by the non- as applicable: may be used to determine who may re-
ts the Federal Government is liq- Federal entity for administrative ex- (1)For ACH Returns: ceive a Federal award must be explic-
uidated. itly described in the notice of funding
(iii)A payment withheld for failure passe. Any additional interest earned Routing Number:051036706 opportunity. See also §§200.414 and
on Federal advance payments deposited Account number:303000
to comply with Federal award condi- 200.204 and appendix I to this part.
bons, but without suspension of the in interest-bearing accounts must be Bank Name and Location:Credit Gate- (b) For all Federal awards, any
Federal award,must be released to the remitted annually to the Department way—ACH Receiver St.Paul,MN shared costs or matching funds and all
non-Federal entity upon subsequent of Health and Human Services Pay- (ii)For Fedwire Returns is contributions, including cash and
meet Management System (PMS)
compliance. When a Federal award is Routing Number:021030004 third-party in-kind contributions,
suspended, payment adjustments will through an electronic medium using ei- Account number:75010501 must be accepted as part of the non-
be made in accordance with§200.343. toes Automated Clearing House(ACH) Bank Name and Location:Federal Re- Federal entity's cost sharing or match-
(iv)A payment must not be made to network or a Fedwire Funds Service serve Bank Trees NYC/Funds Trans- ing when such contributions meet all
payment.
a non-Federal entity for amounts that (I)For returning interest on Federal far Division New York,NY of the following criteria:
are withheld by the non-Federal entity awards paid through PMS, the refund release note that the organization (1)Are verifiable from the non-Fed-
from payment to contractors to assure initiating payment is likely to incur a eral entity's records;
should:
satisfactory completion of work. A charge from their Financial Institution (2)Are not included as contributions
payment must be made when the non- (A) Provide an explanation stating for this typefor any other Federal award;
that the refund is for interest; of payment.
Federal entity actually disburses the (iii)For International ACH Returns: (3)Are necessary and reasonable for
withheld funds to the contractors or to (B) List the PMS Payee Account accomplishment of project or program
escrow accounts established to assure Number(s)(PANs); Beneficiary Account: Federal Reserve objectives;
satisfactory completion of work. (C)List the Federal award number(s) Bank of New York/ITS (4)Are allowable under subpart E of
(7) Standards governing the use of for which the interest was earned;and Bank:Citibank N.A.(New York) this part;
(D)Make returns payable to:Depart- Swift Code:CITIUS33
banks and other institutions as deposi-
p y Account Number:36838868 (5)Are not paid by the Federal Gov-
Account of advance payments under Fed- ment of Health and Human Services. ernment under another Federal award,
eral awards are as follows. (ii)For returning interest on Federal Bank Address: 389 Greenwich Street, except where the Federal statute au-
(i)The Federal awarding agency and awards not paid through PMS,the re- New York,NY 10013 USA thorizing a program specifically pro-
entity must not require fund should: Payment Details(Line 70):Agency Lo- vides that Federal funds made avail-
pass-throughseparate depository accounts for funds (A) Provide an explanation stating cateraCode(ALC):when 75010501 able for such program can be applied to
provided to a non-Federal entity or es- that the refund is for interest; Name(abbreviated when possible)and matching or cost sharing requirements
tablish any eligibility requirements for (B)Include the name of the awarding ALC Agency POC of other Federal programs;
depositories for funds provided to the agency; (iv)For recipients that do not have (6)Are provided for in the approved
non-Federal entity.However,the non- (C)List the Federal award number(s) electronic remittance capability, budget when required by the Federal
Federal entity must be able to account for which the interest was earned;and please make checks payable to: "The awarding agency;and
113 114
OMB Guidance §200.306 §200.307 2 CFR Ch.II(1-1-22 Edition)
(7) Conform to other provisions of (f) When a third-party organization (1) The value of donated land and identified in the Federal award or Fed-
this part,as applicable. furnishes the services of an employee, buildings must not exceed its fair mar- eral awarding agency regulations as
(c) Unrecovered indirect costs, in- these services must be valued at the ket value at the time of donation to program income.
eluding indirect costs on cost sharing employee's regular rate of pay plus an the non-Federal entity as established (d)matching may be included as part of amount of fringe benefits that is rea- by an independent appraiser(e.g., Property.Proceedsm nfrom the sale
cost sharing or matching only with the sonable,necessary,allocable,and oth- p car- of real programproperty,inco such o proceedsds
prior approval of the Federal awarding unwise allowable,and indirect costs at eral
real Servicese d Administrationsr or ep- are not income; with
h
eeae ve) ibyarep- will it handled in accordanceProperty agency. Unrecovered indirect cost either the third-party orgaNzatlon's resentative)and certified by a Stand-
meansrespon-
the difference between the approved federally-negotiated indirect aible official of the non-Federal entityrequirements of 313he and
amount charged to the Federal award cost rate or,a rate in accordance with as required by the Uniform Relocation arch§§200.311, and Federal
or as
and the amount which could have been specifically identified in Federal stet-
charged to the Federal award under the ploy the same skill(s) for which the tion Policies Act of 1970,as amended, utes,regulations,or the terms and con-
non-Federal entity's approved sego- employee is normally paid.Where do- (42 U.S.C.4601-4655)(Uniform Act)ex- dl floes of the Federal award.
bated indirect cost rate. sated services are treated as indirect cept as provided in the implementing in)Use of program income.If the Fed-
(d) Values for non-Federal entity costs,indirect cost rates will separate regulations at 49 CFR part 24, "Uni- eral awarding agency does not specify
contributions of services and property the value of the donated services so form Relocation Assistance And Real in its regulations or the terms and con-
must be established in accordance with that reimbursement for the donated Property Acquisition For Federal And ditions of the Federal award, or give
the cost principles in subpart E of this services will not be made. Federally-Assisted Programs". prior approval for how program income
part.If a Federal awarding agency au- (2)The value of donated equipment is to be used,paragraph(e)(1)of this
thorizes the non-Federal entity to do- (a)Donated property from third par- must not exceed the fair market value section must apply.For Federal awards
nate buildings or land for construction/ ties may include such items as equip- of equipment of the same age and con- made to IHEs and nonprofit research
facilities acquisition projects or long- merit, office supplies, laboratory sup- ditien at the time of donation. institutions, if the Federal awarding
term use, the value of the donated plies,or workshop and classroom sup-
property for cost sharing or matching plies.Value assessed to donated prop- (t The value itf donatedreal lsue ofe must agency does not terms and conditionsi its regulof
must be the lesser of paragraph(d)(1) arty included in the cost sharing or not parable
apace
the fair establishedi valuean cod- the or the adh and of
or(2)of this section. matching share must not exceed the Pendent
aappr iaslof y comparablespacee the Federal award how program income
f
(1)The value of the remaining life of fair market value of the property at anddefacilities is in oaitely- ow section o be used,paapply.ragraph In sp(e)(2)ifyiof this
the property recorded in the non-Fed- the time of the donation. privately-owned natives must (e)(1)and(2)eof
P P Y building in the same locality.
f
eral entity's accounting records at the (h)The method used for determining (4) The value of loaned equipment this
to paragraphs de1l and rd g
section, the Federalsh din-
time of donation. cost sharing or matching for third- must not exceed Its fair rental value. agency may distinguish between in-
(2) The current fair market value. party-donated equipment, buildings (j)For third-party in-kind in-
However, contribu-
when there is sufficient jus- and land for which title passes to the tions, the fair market value of goods come earned by the recipient and tification,the Federal awarding agen- non-Federal entity may differ accord- and services must be documented andtween come earned by subrinds, or red nos
cy may approve the use of the current ing to the purpose of the Federal to the extent feasible supported by the of inn the sources, kinds, or amounts
fair market value of the donated prop- award,if paragraph(h)(1)or(2)of this same methods used internally by the of income.When the Federal awarding
arty, even if it exceeds the value de- section applies. non-Federal entity. agency authorizes the approaches in
scribed in paragraph(d)(1)of this sec- (1) If the purpose of the Federal (k) For IHEs, see also OMB memo- paragraphs(e)(2)and(3)of this section,
tion at the time of donation. randum M-01-06,dated January 5,2001, program income in excess of any
(e) Volunteer services furnished by award is to assist the non-Federal anti- Clarification of OMB A-21 Treatment amounts specified must also be de-
third-party professional and technical ty in the acquisition of equipment, of Voluntary Uncommitted Cost Shar- ducted from expenditures,
personnel, consultants, and other buildings or land,the aggregate value ingand Tuition Remission Costs. (1)Deduction.Ordinarily
of the donated property may be from program al-
skilled and unskilled labor may be claimed as cost sharing or matching. come must be deducted total al-
counted as cost sharing or matching if §200.307 Program income. towable costs to determine the net al-
the service is an integral and necessary (2) If the purpose of the Federal (a)General. Non-Federal entities are lowable costs.Program income must be
part of an approved project or program. award is to support activities that re- encouraged to earn income to defray used for current costs unless the Fed-
Rates for third-party volunteer serv- quire the use of equipment,buildings program costs where appropriate. eral awarding agency authorizes other-
ices must be consistent with those paid or land, normally only depreciation (b)Cost of generating program income. wise. Program income that the non-
for similar work by the non-Federal en- charges for equipment and buildings If authorized byFederal regulations or
may be made.However,the fair market g Federal theentity did not and mustuts bea the
tity. In those instances in which the the Federal award,costs incidental to
required skills are not found in the value of equipment or other capital as- - time of reduce
he Federaledl aw awardwand usedn-
sets and fair rental chargesthe deducgenerted
of gross
income income may Federalt reduce n hr
non-Federal entity,rates must be con- for land be deducted from gross to de-
sistent with those paid for similar may be allowed,provided that the Fed- termine program income, to entity the funds ns rather
fit
work in the labor market in which the eral awarding agency has approved theprovided than to increase the funds committed
P these costs have not been charged to to the project.
non-Federal entity competes for the charges.See also§200.420. the Federal award.
kind of services involved. In either (i) The value of donated property (c)Governmental revenues.Taxes,ape- (2) Addition. With prior approval of
case,paid fringe benefits that are rea- must be determined in accordance with cial assessments, levies, fines, and the Federal awarding agency (except
IHEsonable,necessary,allocable,and oth- the usual accounting policies of the other such revenues raised by a non- for
tutiins, and nonprofit research insti-
erwlse allowable may be included in non-Federal entity,with the following Federal entity are not program income as described 1n this paragraph
the valuation. qualifications: . unless the revenues are specifically (e))program income may be added to
115 116
OMB Guidance §200.308 §200.308 - 2 CFR Ch.II(1-1-22 Edition)
the Federal award by the Federal agen- budget and program plan revisions,in more than 90 calendar days pre-award proved by the Federal awarding agen-
cy and the non-Federal entity.The pro- accordance with this section. require prior approval of the Federal cy.The Federal awarding agency can-
gram income must be used for the pur- (c) For non-construction Federal awarding agency.All costs incurred be- not permit a transfer that would cause
poses and under the conditions of the awards, recipients must request prior fore the Federal awarding agency any Federal appropriation to be used
Federal award. approvals from Federal awarding agen- makes the Federal award are at the re- for purposes other than those con-
(3) Cost sharing or matching. With cies for the following program or budg- cipient's risk(i.e.,the Federal award- sistent with the appropriation.
prior approval of the Federal awarding et-related reasons: ing agency is not required to reimburse (g) All other changes to non-con-
agency,program income may be used (1)Change in the scope or the objec- such costs if for any reason the recipi- struction budgets, except for the
to meet the cost sharing or matching tive of the project or program(even if ent does not receive a Federal award or changes described In paragraph(c)of
requirement of the Federal award.The there is no associated budget revision if the Federal award is less than anticl- this section, do not require prior ap-
amount of the Federal award remains requiring prior written approval). pated and inadequate to cover such proval(see also§200.407).
the same. (2)Change in a key person specified costs).See also§200.458. (h)For construction Federal awards,
(f)Income after the period of perform- in the application or the Federal (2)Initiate a one-time extension of the recipient must request prior writ-
ance. There are no Federal require- award. the period of performance by up to 12 ten approval promptly from the Fed-
ments governing the disposition of in- (3) The disengagement from the months unless one or more of the con- eral awarding agency for budget revi-
come earned after the end of the period project for more than three months,or ditions outlined in paragraphs(e)(2)(1) sions whenever paragraph(h)(1),(2),or
of performance for the Federal award, a 25 percent reduction in time devoted through(iii)of this section apply.For (3)of this section applies:
unless the Federal awarding agency to the project,by the approved project one-time extensions, the recipient (1)The revision results from changes
regulations or the terms and condi- director or principal Investigator. must notify the Federal awarding in the scope or the objective of the
tions of the Federal award provide oth- (4) The inclusion, unless waived by agency in writing with the supporting project or program.
erwise. The Federal awarding agency the Federal awarding agency,of costs reasons and revised period of perform- (2) The need arises for additional
may negotiate agreements with recipi- that require prior approval in accord- ance at least 10 calendar days before
ents regarding appropriate uses of in- ante with subpart E of this part as ap- the end of the period of performance Federal funds to complete the project.
come earned after the period of per- plicable. specified In the Federal award. This (3) A revision is desired which in-
formance as part of the grant closeout (5)The transfer of funds budgeted for one-time extension must not be exer- volves specific costs for which prior
process.See also§200.344. participant support costs to other cat- cised merely for the purpose of using written approval requirements may be
(g) License fees and royalties. Unless egories of expense. unobligated balances. Extensions re- imposed consistent with applicable
the Federal statute, regulations, or (6) Unless described in the applica- quire explicit prior Federal awarding OMB cost principles listed in subpart
E.
terms and conditions for the Federal tion and funded in the approved Fed- agency approval when:
award provide otherwise,the non-Fed- eral awards,the subawarding,transfer- (I)The terms and conditions of the (4) No other prior approval require-
eral entity is not accountable to the ring or contracting out of any work Federal award prohibit the extension. ments for budget revisions may be im-
Federal awarding agency with respect under a Federal award,including fixed (ii)The extension requires additional posed unless an exception has been ap-
to program income earned from license amount subawards as described in Federal funds. proved by OMB.
fees and royalties for copyrighted ma- §200.333.This provision does not apply (iii) The extension involves any (5)When a Federal awarding agency
terial, patents, patent applications, to the acquisition of supplies,material, change in the approved objectives or makes a Federal award that provides
trademarks, and inventions made equipment or general support services. scope of the project. support for construction and non-con-
under a Federal award to which 37 CFR (7) Changes in the approved cost-
(3) Carry forward unobligated bal- struction work, the Federal awarding
part 401 is applicable. sharing or matching provided by the ances to subsequent budget periods. agency may require the recipient to ob-
non-Federal entity. (4)For Federal awards that support lain prior approval from the Federal
§200.308 Revision of budget and pro- (8) The need arises for additional research, unless the Federal awarding awarding agency before making any
gram plans. Federal funds to complete the project. agency provides otherwise in the Fed- fund or budget transfers between the
(a)The approved budget for the Fed- (d)No other prior approval require-
agency's award or in the Federal awarding two types of work supported.
eral award summarizes the financial ments for specific items may be im- agency's regulations, the prior thisap- (i) When requesting approval for
aspects of the project or program as ap- posed unless an exception has been ap-
paragraph requirements described in budget revisions, the recipient must
infor-
proved during the Federal award pros- proved by OMB.See also§§200.102 and paragraph(e)are automatically waived use the same format for budget liesess.It may include either the Federal 200.907. (i.e., recipients need not obtain such motion that was used in the applies-
non-Federal share (see definition (e)Except for requirements listed in prior approvals)unless one of the con- lion,unless the Federal awarding ages-
andfor Federal share in§200.1)or only the paragraphs (c)(1) through (8) of this ditions included in paragraph(e)(2)of cy indicates a letter of request suffices.
Federal share,depending upon Federal section,the Federal awarding agency is this section applies. (je Within 30 calendar days from the
awarding agency requirements. The authorized, at its option, to waive (f) The Federal awarding agency date rofev
receipt of the request for budg-
riling
budget and program plans include con- other cost-related and administrative may,at its option,restrict the transfer et revisions, the Federal awarding
siderations for performance and pro- prior written approvals contained in of funds among direct cost categories agency must review the request and
gram evaluation purposes whenever re- subparts D and E of this part. Such or programs, functions and activities notify the recipient whether the budget
in accordance with the terms waivers may include authorizing re- for Federal awards in which the Fed- revisions have been approved.If the re-
quiredand conditions of the award. cipients to do any one or more of the eralimshare of uiths project exceeds the visioneend 1s still under consideration ed at
(b)Recipients are required to report following: simplified acquisition threshold and the of 30 calendar days,the Federal
deviations from budget or project scope' the cumulative amount of such trans- awarding agency must inform the re-
deviations p j p (1) Incur project costs 90 calendar fers exceeds or is expected to exceed 10 cipient in writing of the date when the
or objective,and request prior app - days before the Federal awarding agen- percent of the total budget as last ap- recipient may expect the decision.
als from Federal awarding agenciescies for cy makes the Federal award.Expenses
117 118
OMB Guidance §200.312 §200.313 2 CFR Ch.II(1-1-22 Edition)
§200.309 Modifications to Period of atlens where the non-Federal entity is alternative methods(e.g., the author- dures.Other non-Federal entities must
Performance. disposing of real property acquired or ity provided by the Federal Technology follow paragraphs (c) through (e) of
If a Federal awarding agency or pass- improved with a Federal award and ac- Transfer Act(15 U.S.C.3710(i))to do- this section.
through entity approves an extension, gutting replacement real property nate research equipment to ed
or if a recipient extends under under the same Federal award,the net u-
(c)Use.(1)Equipment must be used
§200.308(e)(2), the Period of Perform- proceeds from the disposition may be rational and nonprofit organizations in by the non-Federal entity in the pro-
ance will be amended to end at the used as an offset to the cost of the re- accordance with Executive Order 12999, gram or project for which it was ac-
completion of the extension.If a termi- placement property. "Educational Technology: Ensuring quired as long as needed, whether or
es
nation occurs, the Period of Perform- (2)Sell the property and compensate Opportunity for All Federal
a the not the project or program continues
once will be amended to end upon the the Federal awarding agency. The Next Century.").i'sue appropriatehe oiat awarding to be supported by the Federal award,
effective date of termination.If a re- amount due to the Federal awarding agency must issue Instruc- and the non-Federal entity must not
newal award is issued,a distinct Period agency will be calculated byapplying lions Et thenono non-Federal entity. encumber the(c)Exempt property means d where property withoutardigeprior
of Performance will begin. the Federal awarding agency's percent- acquired under a Federal award where approval of the Federal awarding agen-
age of participation in the cost of the anythe Federal awardinghas rho- cy.The Federal awarding agency may
a
PROPERTY STANDARDS original purchase and cost ofagency
( Im- see to vest title to the property to the require the submission of the applica-
provements)to the proceeds of the sale non-Federal entityble common form for equipment.
§200.310 Insurance coverage, after deduction of any actual and mea- sp wiFeder further rn- iginWhen
non-Federal entity must, at a sonable selling and fixing-up expenses. m nt, basedbjlity to the the explicitxp terms nor gloram
or project,r needed for theoriginal may pro-
The be
minimum, meat, itiupon Fedearns used In hrthe equipmenties be
provide the equivalent in- If the Federal award has not been and conditions of the Federal award, used in other activities supported by
surance coverage for real property and closed out,the net proceeds from sale The Federal awarding agency may ex- the Federal awarding agency, in the
equipment acquired or improved with may be offset against the original cost ercise this option when statutory au- following order of priority:
Federal funds as provided to property of the property.When the non-Federal thority exists. Absent statutory au- (i)Activities under a Federal award
owned by the non-Federal entity.Fed- entity is directed to sell property,sales thority and specific terms and condi- from the Federal awarding agency
erally-owned property need not be in- procedures must be followed that pro- tions of the Federal award,title to ex- which funded the original
sured unless required by the terms and vide for competition to the extentempprogram or
conditions of the Federal award. practicable and result in the highest oral award property acquiredinwith u ther the oFral project,( )Activities tvn
possible return. Goal rnm remains Federal omth Federal awarding dal awards
§200.311 Real property. (3) Transfer title to the Federal Government. from other agencies.
(a)Title.Subject to the requirements awarding agency or to a third party §200.313 Equipment. This Includes consolidated equipment
and conditions set forth in this section, designated/approved by the Federal for information technology systems.
title to real property acquired or Tim- awarding agency.The non-Federal en- See TTitle.§Subject
(2)During the time that equipment is
(a)ondi.ons e t forthto the requirements g
proved under a Federal award will vest tity is entitled to be paid an amount used on the project or program for
upon acquisition in the non-Federal en- calculated by applying the non-Federal and contoditions equip set ac ini this section, which it was acquired,the non-Federal
title l award will acquired under a
tity. entity's percentage of participation in entity must also make equipment
(b)Use.Except as otherwise provided the purchase of the real property(and Lion in
the non-Federalil will vest upon entity.Unl sis available for use on other
lion in iicalythoriUnless sts or
Federal statutes or by the Federal cost of any improvements)to the cur- a statute specifically authorizes the programs currently or previously sup-
awarding agency,real property will be rent fair market value of the property. Federal agency to vest title in the non- ported by the Federal Government,
used for the originally authorized pur- Federal entity without further respon- provided
inter-
pose as long as needed for that purpose, §200.312 Federally-owned and exempt
during which time the non-Federal en- property. aibility to the Federal Government, fere witt that such h the workk use on thhee will not projectss oor
must not dispose of or encumber (a)Title to federally-owned property and the Federal agency elects to do so, program for which it was originally ac-
titythe title must be a conditional title. quired. First preference for other use
its title or other interests. remains vested in the Federal Govern- Title must vest in the non-Federal en- must be given to other programs or
(c)Disposition.When real property Is ment. The non-Federal entity must tity subject to the following condi- projects supported by Federal awarding
no longer needed for the originally au- submit annually an inventory listing of lions: agency that financed the equipment 1
thorized purpose,the non-Federal entf- federally-owned property in its custody (1)Use the equipment for the author- and second preference must be given to
ty must obtain disposition instructions to the Federal awarding agency.Upon iced purposes of the project during the programs or projects under Federal
from the Federal awarding agency or completion of the Federal award or period of performance, or until the awards from other Federal awarding
pass-through entity. The instructions when the property is no longer needed, property is no longer needed for the agencies.Use for non-federally-funded
must provide for one of the following the non-Federal entity must report the purposes of the project. programs or projects is also permis-
alternatives: property to the Federal awarding agen- (2)Not encumber the property with- Bible.User fees should be considered if
(1) Retain title after compensating cy for further Federal agency utiliza- out approval of the Federal awarding appropriate.
the Federal awarding agency. The tion. agency or pass-through entity.
encourage-
amount paid to the Federal awarding (b) If the Federal awarding agency (3)Use and dispose of the property in (3) Notwithstanding the agency will be computed by applying has no further need for the property,it accordance with paragraphs (b), (c), mart in§200.307 to earn program in-
the Federal awarding agency's percent- must declare the property excess and and(e)of this section. come,the non-Federal entity must not
age of participation 1n the cost of the report it for disposal to the appropriate (b)General.A state must use,manage use equipment acquired with the Fed-
original purchase(and costs of any Tim- Federal disposal authority,unless the and dispose of equipment acquired coal award to provide services for a fee
provements) to the fair market value Federal awarding agency has statutory under a Federal award by the state in that is less than private companies
of the property.However,in those situ- authority to dispose of the property by accordance with state laws and prose- charge for equivalent services unless
119 120
OMB Guidance §200.314 §200.315 2 CFR Ch.II(1-1-22 Edition)
specifically authorized by Federal stet- from the Federal awarding agency if amount of compensation must be corn- search data relating to published ro-
ute for as long as the Federal Govern- required by the terms and conditions of puted in the same manner as for equip- search findings produced under a Fed-
ment retains an interest in the equip- the Federal award. Disposition of the ment.See§200.313(e)(2)for the calcula- eral award that were used by the Fed-
ment. equipment will be made as follows,in tion methodology. oral Government in developing an
(9) When acquiring replacement accordance with Federal awarding (b) As long as the Federal Govern- agency action that has the force and
equipment,the non-Federal entity may agency disposition instructions: ment retains an interest in the sup- effect of law, the Federal awarding
use the equipment to be replaced as a (1)Items of equipment with a current plies,the non-Federal entity must not agency must request,and the non-Fed-
trade-in or sell the property and use per unit fair market value of$5,000 or use supplies acquired under a Federal eral entity must provide,within a rea-
the proceeds to offset the cost of the less may be retained,sold or otherwise award to provide services to other or- sonable time,the research data so that
replacement property. disposed of with no further responsi- ganizations for a fee that is less than they can be made available to the pub-
(d) Management requirements. Proce- bility to the Federal awarding agency. private companies charge for equiva- lie through the procedures established
dures for managing equipment(includ- (2)Except as provided in§200.312(b), lent services, unless specifically au- under the FOIA.If the Federal award-
ing replacement equipment), whether or if the Federal awarding agency fails thorized by Federal statute. ing agency obtains the research data
acquired in whole or in part under a to provide requested disposition in- solely in response to a FOIA request,
Federal award,until disposition takes siructions within 120 days, items of §200.315 Intangible property. the Federal awarding agency may
place will,as a minimum,meet the fol- equipment with a current per-unit fair (a)Title to intangible property(see charge the requester a reasonable fee
lowing requirements: market value in excess of$5,000 may be definition for Intangible
(1) Property records must be main- retained by the non-Federal entity or 9 property award in equaling theh fulle a incremental data.
cost fof
ee
tamed that include a description of the sold.The Federal awarding agency is est acquired under a Fthernl shouldhoulding the research data. This fhe
vestslt eition in thee non-Fed- reflect costs incurred by eh-
property, a serial number or other entitled to an amount calculated by coal entity. The non-Federal entity Federal agency and the non-Federal en-
identification number, the source of multiplying the current market value must use that property for the origi- tity.This fee is in addition to any fees
funding for the property(including the or proceeds from sale by the Federal nally-authorized purpose,and must not the Federal awarding agency may as-
FAIN),who holds title,the acquisition awarding agency's percentage of par- encumber the property without ap- sess under the FOIA (5 U.S.C.
date,and cost of the property,percent- ticipation in the cost of the original
age of Federal participation in the purchase.If the equipment is sold,the Whenoenl of the Federal awardingdfor agency. 55(2)Public
nout longer needed for the origi- (2)Published research findings means
project costs for the Federal award Federal awarding agency may permit nally authorized purpose,disposition of when:
under which the property was acquired, the non-Federal entity to deduct and the intangible property must occur in (i)Research findings are published In
the location,use and condition of the retain from the Federal share$500 or accordance with the provisions in a peer-reviewed scientific or technical
property,and any ultimate disposition ten percent of the proceeds,whichever §200.313(e). journal;or
data Including the date of disposal and is less,for its selling and handling ex- (b)The non-Federal entity may copy- (ii)A Federal agency publicly and of-
sale price of the property. penses. right any work that is subject to copy- ficially cites the research findings in
(2)A physical inventory of the prop- (3) The non-Federal entity may right and was developed,or for which support of an agency action that has
arty must be taken and the results red- transfer title to the property to the ownership was acquired, under a Fed- the force and effect of law. "Used by
onciled with the property records at Federal Government or to an eligible eral award.The Federal awarding agen- the Federal Government in developing
least once every two years. third party provided that, in such cy reserves a royalty-free, nonexclu- an agency action that has the force and
(3)A control system must be devel- cases,the non-Federal entity must be sive and irrevocable right to reproduce, effect of law" is defined as when an
sped to ensure adequate safeguards to entitled to compensation for its attrib- publish,or otherwise use the work for agency publicly and officially cites the
prevent loss, damage, or theft of the utable percentage of the current fair Federal purposes,and to authorize oth- research findings in support of an agen-
property. Any loss, damage, or theft market value of the property. ers to do so. cy action that has the force and effect
must be investigated. (9)In cases where a non-Federal enti- (c)The non-Federal entity is subject of law.
(9)Adequate maintenance procedures ty falls to take appropriate disposition to applicable regulations governing (3)Research data means the recorded
must be developed to keep the property actions, the Federal awarding agency patents and inventions,including gov- factual material commonly accepted In
in good condition. may direct the non-Federal entity to ernmentwide regulations issued by the the scientific community as necessary
(5) If the non-Federal entity is au- take disposition actions. Department of Commerce at 37 CFR to validate research findings,but not
thorized or required to sell the prop- part 901, "Rights to Inventions Made any of the following:Preliminaryanal-
erty, proper sales procedures must be §200.314 Supplies. by Nonprofit Organizations and Small yses,drafts of scientific
g papers,plans
established to ensure the highest pos- See also§200.953. Business Firms Under Government for future research, peer reviews, or
sible return. (a)Title to supplies will vest in the Awards, Contracts and Cooperative communications with colleagues.This
(e)Disposition. When original or re- non-Federal entity upon acquisition.If Agreements." "recorded"material excludes physical
placement equipment acquired under a there is a residual inventory of unused (d)The Federal Government has the objects (e.g., laboratory samples). Re-
Federal award is no longer needed for supplies exceeding$5,000 in total aggre- right to: search data also do not include:
the original project or program or for gate value upon termination or (1)Obtain,repdatacp, e n e a )Trade secrets,i commercial held
other activities currently or previously elation of the project or program and erwise use the data produced under a motion,materials necessary to be held
supported by a Federal awarding ages- the supplies are not needed for any Federal award;and confidential by a researcher until they
cy, except as otherwise provided in other Federal award, the non-Federal (2)Authorize others to receive,repro- are published, or similar information
Federal statutes,regulations, or Fed- entity must retain the supplies for use duce, publish, or otherwise use such which is protected under law;and
oral awarding agency disposition in- on other activities or sell them, but data for Federal purposes. (ii)Personnel and medical informa-
structions, the non-Federal entity must, in either case, compensate the (e)(1)In response to a Freedom of In- tion and similar information the dis-
must request disposition instructions Federal Government for its share.The formation Act (FOIA) request for re- closure of which would constitute a
121 122
OMB Guidance §200.318 §200.319 2 CFR Ch.II(1-1-22 Edition)
clearly unwarranted invasion of per- covering conflicts of interest and gov- (e)To fostergreater economyand of-
sonal privacy,such as information that erning the actions of its employees en- (i)The actual cost of materials;and
could be used to identify a particular gaged in the selection,award and ad- ficiency,and in accordance with efforts (if) Direct labor hours charged at
person in a research study. ministration of contracts. No em- to promote cost-effective use of shared fixed hourly rates that reflect wages,
ployee, officer, or agent may parties- services across the Federal Govern- general and administrative expenses,
§200.318 Property trust relationship. pate in the selection,award,or adman- mint,the non-Federal entity is encour- and profit.
an
Real property,equipment,and intan- istration of a contract supported by a gove governmentalt nter intoagreementsseate and or inter-en-
inter- (2) Since contractthi for price,ia a generatesime- d-
gible property,that are acquired or im- Federal award if he or she has a real or tityagreements
mte-for open-ended a oime-anve
proved with a Federal award must be apparentpityre ntor where appropriaten for materialsit incentive to providescontractor
ctor for
conflict of interest. Such a procurement use of common or profit the contractor for
held in trust by the non-Federal entity conflict of interest would arise when shared goods and services.Competition cost control or labor efficiency.There-
as trustee for the beneficiaries of the the employee, officer, or agent, any requirements will be met with docu- fore,each contract must set a ceiling
project or program under which the member of his or her immediate fam- minted procurement actions using price that the contractor exceeds at its
property was acquired or improved. sly,his or her partner,or an organize- strategic sourcing,shared services,and own risk.Further,the non-Federal en-
The Federal awarding agency may re- tion which employs or is about to em- other similaraquire the non-Federal entity to recordpprocurement arrange- sirs awarding a hih degree such of contract must der
liens or other appropriate notices of ploy any of the al orrs indicated here- menu. tort bhigh reasonable assurance
cein order
In,has a financial other interest in (f)The non-Federal entity is encour- to obtain assurance that
record to indicate that personal or real or a tangible personal benefit from a aged to use Federal excess and surplus the contractor is using efficient meth-
property has been acquired or improved firm considered for a contract,The of- property in lieu of purchasing new ode and effective cost controls.
with a Federal award and that use and ficers, employees, and agents of the equipment and property whenever such (k) The non-Federal entity alone
disposition conditions apply to the non-Federal entity may neither solicit use is feasible and reduces project must be responsible, in accordance
property. nor accept gratuities, favors, or any- costs. with good administrative practice and
PROCUREMENT STANDARDS thing of monetary value from contrac- (g)The non-Federal entity is encour- sound business judgment, for the set-
tors or parties to subcontracts. How- aged to use value engineering clauses tlement of all contractual and adminis-
§200.917 Procurements by states. ever, non-Federal entities may set in contracts for construction projects trative issues arising out of When procuring property and sere- procure-
standards for situations in which the of sufficient size to offer reasonable op- meets. These issues include, but are
portunities for cost reductions.Value not limited to,source evaluation,pro-
Ices under a Federal award, a State financial interest is not substantial or
the gift is an unsolicited Item of norm- engineering is a systematic and ore- tests, disputes, and claims. These
must follow the same policies and pro- nal value. The standards of conduct ative analysis of each contract item or standards do not relieve the non-Fed-
cedures it uses for procurements from must provide for disciplinary actions task to ensure that its essential Tune- oral entity of any contractual respon-
its non-Federal funds. The State will tion is provided at the overall lower sibilities under its contracts.The Fed-
comply with §§200.321, 200.322, and to be applied for violations of such cost. oral awarding agency will not sub-
200.323 and ensure that everystandards by officers, employees, or (h) The non-Federal entity moat judgment for that of the
purchasestitute its ud
order or other contract includes any agents of the non-Federal entity. award contracts only to responsible non-Federal entity unless the matter is
clauses required by§200.327.All other (2) If the non-Federal entity has a contractors possessing the ability to
non-Federal entities, including sub- parent,affiliate,or subsidiary organi- primarily
ofylaw will Federal concern.
referred to the
nation that is not a State,local perform successfullyo under thee termsu local,state,or Federal authorityhay-
procurement standards in §§200.318 ment,or Indian tribe,the non-Federal ment. Consideration will being proper jurisdiction.
given to
through 200.327. entity must also maintain written such matters as contractor integrity, [85 FR 99593,Aug.13,2020,as amended at 96
standards of conduct covering organi- compliance with public policy, record FR 10940,Feb.22,2021]
§200.918 General procurement stand- national conflicts of interest.Organiza- of past performance,and financial and
aids. tional conflicts of Interest means that technical resources.See also§200.219. §200.319 Competition.
(a)The non-Federal entity must have because of relationships with a parent (I) The non-Federal entitymust
procurementpro- company,affiliate,or subsidiaryor a- (a)All procurementoo eraysortsers for
and use documented g maintain records sufficient to detail the acquisition of property or services
cedures, consistent with State, local, nization,the non-Federal entity is un- the history of procurement. These required under a Federal award must
and tribal laws and regulations and the able or appears to be unable to be im- records will include,but are not nee- be conducted in a manner providing
standards of this section,for the acqui- partial in conducting a procurement essarily limited to,the following:Ra- full and open competition consistent
salon of property or services required action Involving a related organize- tionale for the method of procurement, with the standards of this section and
under a Federal award or subaward. tion. selection of contract type, contractor §200.320.
The non-Federal entity's documented (d) The non-Federal entity's proce- selection or rejection,and the basis for (b)In order to ensure objective con-
procurement procedures must conform dures must avoid acquisition of unnec- the contract price. tractor performance and eliminate un-
to the procurement standards Identi- essary or duplicative items.Consider- (j)(1)The non-Federal entity may use fair competitive advantage, contrac-
fied in§§200.317 through 200.327. ation should be given to consolidating a time-and-materials type contract tom that develop or draft specifica-
(b)Non-Federal entities must main- Or breaking out procurements to ob- only after a determination that no tions, requirements, statements of
tain oversight to ensure that contrac- taro a more economical purchase. other contract is suitable and if the work, or invitations for bids or ro-
tors perform in accordance with the Where appropriate,an analysis will be contract includes a ceiling price that quests for proposals must be excluded
terms,conditions,and specifications of made of lease versus purchase alter- the contractor exceeds at its own risk. from competing for such procurements.
their contracts or purchase orders. natives, and any other appropriate Time-and-materials type contract Some of the situations considered to be
(c)(1) The non-Federal entity must analysis to determine the most eco- means a contract whose cost to a non- restrictive of competition include but
maintain written standards of conduct nominal approach. Federal entity is the sum of: are not limited to:
123 124
OMB Guidance §200.320
§200.320 2 CFR Ch.II(1-1-22 Edition)
(1) Placing unreasonable require- technical requirements,a"brand name
manta on firms in order for them to or equivalent"description may be used extent practicable,the non-Federal en- non-federal entity must submit a re-
qualify to do business; as a means to define the performance tity should distribute micro-purchases quest with the requirements included
(2)Requiring unnecessary experience or other salient requirements of pro- equitably among qualified suppliers. in paragraph(a)(1)(iv)of this section.
and excessive bonding; curement.The specific features of the (ii)Micro-purchase awards.Micro-pur- The increased threshold is valid until
(3)Noncompetitive pricing practices named brand which must be met by of- chases may be awarded without solic- there is a change in status in which the
between firms or between affiliated fers must be clearly stated;and iting competitive price or rate justification was approved.
companies; (2) Identify all requirements which quotations if the non-Federal entity (2)Small purchases—(i)Small purchase
(4)Noncompetitive contracts to con- the offerors must fulfill and all other considers the price to be reasonable procedures.The acquisition of property
suitants that are on retainer contracts; factors to be used in evaluating bids or based on research,experience,purchase or services, the aggregate dollar
(5) Organizational conflicts of inter- proposals. history or other information and docu- amount of which is higher than the
est; (e)The non-Federal entity must en- ments it files accordingly. Purchase micro-purchase threshold but does not
(6) Specifying only a "brand name" sure that all prequalified lists of per- cards can be used for micro-purchases exceed the simplified acquisition
product instead of allowing"an equal" sons,firms,or products which are used if procedures are documented and ap- threshold.If small purchase procedures
product to be offered and describing in acquiring goods and services are cur- proved by the non-Federal entity, are used,price or rate quotations must
the performance or other relevant re- rent and include enough qualified (iii) Micro-purchase thresholds. The be obtained from an adequate number
quirements of the procurement;and sources to ensure maximum open and non-Federal entity is responsible for of qualified sources as determined ap-
(7)Any arbitrary action in the pro- free competition.Also,the non-Federal determining and documenting an ap- propriate by the non-Federal entity.
curement process. propriate micro-purchase threshold
entity must not preclude potential bid- (ii) Simplified acquisition thresholds.
(c)The non-Federal entity must con- ders from qualifying during the solici- based on internal controls,an evalua- The non-Federal entity is responsible
duct procurements in a manner that lotion period. tion of risk, and its documented pro- {or determining an appropriate sim-
prohibits the use of statutorily or ad- curement procedures. The micro-pur-
ministratively imposed state,local,or (i)Noncompetitive procurements can chase threshold used by the non-Fed- Plified acquisition threshold based on
only be awarded in accordance with eral entityinternal controls,an evaluation of risk
tribal geographical preferences in the must be authorized or not and its documented procurement roce-
evaluation of bids or proposals,except §200.320(e). prohibited under State,local,or tribal dures which must not exceed the
in those cases where applicable Federal laws or regulations.Non-Federal enti-
§200.320 Methods of procurement to ties may establish a threshold hi threshold established in the FAR.
shed
statutes expressly mandate or encour- be followed. When applicable,a lower simplified ac-
age geographic preference.Nothing in than the Federal threshold established
this section preempts state licensing The non-Federal entity must have in the Federal Acquisition Regulations quisition threshold used by the non-
laws. When contracting for architec- and use documented procurement pro- (FAR) in accordance with paragraphs Federal entity must be authorized or
and engineering (A/E) services,
cedures,consistent with the standards (a)(1)(iv)and(v)of this section. not prohibited under State, local, or
geographic location may be a selection of this section and §§200.317, 200.318, (iv)Non-Federal entity increase to the tribal laws or regulations.
criterion provided its application and 200.319 for any of the following micro-purchase threshold up to $50,000. (b)Formal Procurement methods.When
leaves an appropriate number of quail- methods of procurement used for the Non-Federal entities may establish a the value of the procurement for prop-
fled firms,given the nature and size of acquisition of property or services re- threshold higher than the micro-pur- erty or services under a Federal Dean-
the project, to compete for the con- quired under a Federal award or sub- chase threshold identified in the FAR coal assistance award exceeds the SAT,
tract. award. in accordance with the requirements of or a lower threshold established by a
(d)The non-Federal entity must have (a) Informal procurement methods. this section. The non-Federal entity non-Federal entity, formal procure-
written procedures for procurement When the value of the procurement for may self-certify a threshold up to ment methods are required. Formal
transactions. These procedures must property or services under a Federal $50,000 on an annual basis and must procurement methods require following
ensure that all solicitations: award does not exceed the simplified ac- maintain documentation to be made documented procedures. Formal pro-
(1) Incorporate a clear and accurate quisition threshold(SAT), as defined in available to the Federal awarding curement methods also require public
description of the technical require- §200.1,or a lower threshold established agency and auditors in accordance with advertising unless a non-competitive
menu for the material, product, or by a non-Federal entity, formal pro- §200.334.The self-certification must in- Procurement can be used in accordance
service to be procured. Such descrip- curement methods are not required. elude a justification, clear identifica- with§200.319 or paragraph(c) of this
tion must not,in competitive procure- The non-Federal entity may use infer- tion of the threshold, and supporting section.The following formal methods
ments,contain features which unduly mal procurement methods to expedite documentation of any of the following: of procurement are used for procure-
restrict competition. The description the completion of its transactions and (A) A qualification as a low-risk ment of property or services above the
may include a statement of the quali- minimize the associated administra- auditee,in accordance with the criteria simplified acquisition threshold or a
tative nature of the material,product tive burden and cost. The informal in§200.520 for the most recent audit; value below the simplified acquisition
or service to be procured and, when methods used for procurement of prop- (B)An annual internal institutional threshold the non-Federal entity deter-
necessary, must set forth those min- erty or services at or below the SAT in- risk assessment to identify, mitigate, mines to be appropriate:
imum essential characteristics and elude: and manage financial risks;or, (1)Sealed bids.A procurement method
standards to which it must conform if (1) Micro-purchases—(1) Distribution. (C)For public institutions,a higher in which bids are publicly solicited and
It is to satisfy its intended use. De- The acquisition of supplies or services, threshold consistent with State law. a firm fixed-price contract(lump sum
tailed product specifications should be the aggregate dollar amount of which (v)Non-Federal entity increase to the or unit price)is awarded to the respon-
avoided if at all micro-purchase threshold over $50,000. sable bidder whose bid,conforming with
possible. When it is does not exceed the micro-purchase Micro-purchase thresholds higher than all the material terms and conditions
impractical or uneconomical to make threshold(See the definition of micro- $50,000 must be approved by the cog- of the invitation for bids,is the lowest
clear and accurate description of the purchase in §200.1). To the maximum nizant agency for indirect costs. The in price.The sealed bids method is the
125 126
OMB Guidance §200.320 §200.321 2 CFR Ch.II(1-1-22 Edition)
preferred method for procuring con- Proposals must be solicited from an §200.321 Contracting with small and initial melting stage through the appli-
struction,if the conditions. adequate number of qualified offerors. minority businesses,women's bust- cation of coatings, occurred in the
(i)In order for sealed bidding to be Any response to publicized requests for noes enterprises,and labor surplus United States.
feasible, the following conditions proposals must be considered to the area firms. (2) "Manufactured products" means
should be present: maximum extent practical; (a)The non-Federal entity must take items and construction materials corn-
(A)A complete, adequate, and real- (it) The non-Federal entity must all necessary affirmative steps to as- posed in whole or in part of non-ferrous
Istic specification or purchase descrip- have a written method for conducting sure that minority businesses,women's metals such as aluminum;plastics and
tion is available; technical evaluations of the proposals business enterprises,and labor surplus Polymer-based products such as poly-
(B)Two or more responsible bidders received and making selections; area firms are used when possible. vinyl chloride pipe;aggregates such as
are willing and able to compete effec- (iii) Contracts must be awarded to (b)Affirmative steps must include: concrete;glass,including optical fiber;
Lively for the business;and the responsible offeror whose (1) Placing qualified small and mi- and lumber.
(C)The procurement lends itself to a Proposal
firm fixed price contract and the selec-
is most advantageous to the non-Fed- nority businesses and women's business §200 323 Procurement of recovered
tion of the successful bidder can be eral entity, with price and other fac- enterprises on solicitation lists; materials.
made principally on the basis of price. tors considered;and (2)Assuring that small and minority
(ii) IC sealed bids are used, the fol- (iv)The non-Federal entity may use businesses, and women's business en- A non-Federal entity that is a state
lowing requirements apply: competitive proposal procedures for terprises are solicited whenever they agency or agency of a political subdivi-
(A) Bids must be solicited from an qualifications-based procurement of ar- are potential sources; soon of a state and its contractors must
adequate number of qualified sources, chitectural/engineering (A/E) profes- (3)Dividing total requirements,when comply with section 6002 of the Solid
economically feasible, into smaller Waste Disposal Act,as amended by the
providing them sufficient response sional services whereby offeror's quali-
time prior to the date set for opening fications are evaluated and the most tasks or quantities to permit max- Resource Conservation and Recovery
Imam participation by small and mi- Act.The requirements of Section 6002
the bids, for local,and tribal govern- qualified offeror is selected,subject to nority businesses, and women's bust- Include procuring only items des-
ments,the invitation for bids must be negotiation of fair and reasonable com- ness enterprises; ignated In guidelines of the Environ-
publicly advertised; pensation.The method,where price is (4) Establishing delivery schedules, mental Protection Agency(EPA)at 90
(B) The invitation for bids, which not used as a selection factor,can only where the requirement permits,which CFR part 247 that contain the highest
will include any specifications and per- be used in procurement of A/E rofes-
tinent attachments, must define the p p mi encourage participation by small and ticablpercee,
consistentge oi with materials ingpra a
items or services in order for the bidder purchase services.. It cannot et servicesb used to ness enterprises;minority isessses,and women's bust- satisfactorys , competition,peting a
to properly respond; A/Efirms otherre types ottasourcethc to ness Usingh where level roi im
(C) All bids will be opened at the ME that area potential to (5)Using the services and assistance, the purchase price of the item
time and place prescribed in the invita- perform the proposed effort, as appropriate,of such organizations as exceeds $10,000 or the value of the
tion for bids,and for local and tribal (c)Noncompetitive procurement.There the Small Business Administration and quantity acquired during the preceding
governments,the bids must be opened are specific circumstances in which the Minority Business Development fiscal year exceeded$10,000; procuring
publicly; noncompetitive procurement can be Agency of the Department of Corn- solid waste management services in a
(D)A firm fixed price contract award used.Noncompetitive procurement can merce;and manner that maximizes energy and re-
will be made in writing to the lowest only be awarded if one or more of the (0)Requiring the prime contractor,if source recovery;and establishing an af-
responsive and responsible bidder. following circumstances apply: subcontracts are to be let,to take the firmative procurement program for
Where specified in bidding documents, (1) The acquisition of property or affirmative steps listed in paragraphs procurement of recovered materials
factors such as discounts, transpor- services, the aggregate dollar amount (b)(1)through(5)of this section. identified in the EPA guidelines.
lotion cost,and life cycle costs must of which does not exceed the micro-
be considered in determining which bid purchase threshold (see paragraph curements.
is lowest.Payment discounts will only (a)(1)of this section); (a)The non-Federal entity must per-
be used to determine the low bid when (2)The item is available only from a (a)Aa appropriate and to the extent form a cost or price analysis in connec-
prior experience indicates that such single source; consistent with law, the non-Federal tion with every procurement action in
discounts are usually taken advantage (3)The public exigency or emergency entity should, to the greatest extent excess of the Simplified Acquisition
of;and for the requirement will not permit a practicable under a Federal award,pro- Threshold including contract modifica-
(E)Any or all bids may be rejected If vide a preference for the purchase,ac- tions.The method and degree of anal-
delay resulting from publicizing a corn- quisition,or use ofgoods,products,or
there is a sound documented reason. rounding is dependent on the facts procurement
petitiveTsolicitation; materials produced in the United the
(2) either
A procurement method (4)The Federal awarding agency or States (including but not limited to situation,but so af starting point,the
in which either a fixed price or cost-re- pass-through entity expressly author- iron, aluminum, steel, cement, and non-Federal entit must make inde-
imbursement type contract is awarded. Y
Proposals are generally used when con- lees a noncompetitive procurement in other manufactured products).The re- pendent estimates before receiving bids
ditions are not appropriate for the use response to a written request from the quirements of this section must be in- or proposals.
of sealed bids.They are awarded in ac- non-Federal entity;or eluded in all subawards including all (b)The non-Federal entity must ne-
cordance with the following require- (5)After solicitation of a number of contracts and purchase orders for work gotiate profit as a separate element of
ments: sources,competition is determined in- or products under this award. the price for each contract in which
(i) Requests for proposals must be adequate. (b)For purposes of this section: there is no price competition and in all
publicized and identify all evaluation (1)"Produced in the United States" cases where cost analysis is performed.
factors and their relative importance, means,for iron and steel products,that To establish a fair and reasonable prof-
all manufacturing processes,from the it,consideration must be given to the
127 128
OMB Guidance §200.326 §200.327 2 CFR Ch.II(1-1-22 Edition)
complexity of the work to be per- (2) The procurement is expected to non-Federal entity
formed, the risk borne by the con- exceed the Simplified Acquisition Feder Provided that the effectiveward coulmond
signifngicantly
of the Federal
pro-
tractor, pro-
the contractor's investment, Threshold and is to be awarded without through
awarding agency t pass- award outcomes,r coe siani preferablyef affectinthe amount of subcontracting, the competition or only one bid or offer is tiothrough theey Federalhas made a determine-de- gram ionwithand ncereporting.ng
quality of its record of past perform- received in response to a solicitation; qua that d.Ifsuch interest isene- Theordi Federal
with awardingpd agency
mususe
ance,and Industry profit rates in the (3) The procurement, which is ex- hasa protected.If a determine- The OMB-approved
d onen informationmost use
surrounding geographical area for petted to exceed the Simplified Acqui- tion not been made,the minimum OMBcapproved commonb he
requirements(a A bidmust be fromas leach viding
of na as applicable, when pre-
similar work. sition Threshold, specifies a "brand (a)A bid guarantee each bidder vidin financial and performance re-
(c)Costs or prices based on estimated name"product; equivalent to five
costs for contracts under the Federal (4) The proposed contract Is morepercent the bid porting information.
than the Simplifiedprice. The "bid guarantee" ust con-
award are allowable only to the extent Acquisition slat of a firm commitment
mennmust
t such as a §200.329 Monitoring and reporting
that costs incurred or cost estimates Threshold and is to be awarded to bid bond,certified check,or other ne- program performance.
included In negotiated prices would be other than the apparent low bidder gotiable instrument accompanying a
allowable for the non-Federal entity under a sealed bid procurement;or bid as assurance that the bidder will, (a)The Monitoring bythe non-Federal r pen-
under subpart E of this part.The non- (5)A proposed contract modification upon acceptance of the bid, execute Bible
afor
non-Federal of entity isoperations of
Federal entity may reference its own changes the scope of a contract or in- such contractual documents as may be slble for oversight the of
cost principles that comply with the creases the contract amount by more required within the time specified. the Federal award supported activities.
Federal cost principles. than the Simplified Acquisition The ct non-Federal entityrmust rdtto
(b)A performance bonder the part of
Threshold. its activities under Federal awards to
(d)The cost plus a percentage of cost the contractor for 100 percent of the
and percentage of construction cost (c)The non-Federal entity is exempt contract price.A assure compliance with applicable Fed-
"performance bond"
methods of contracting must not be from the pre-procurement review in is one executed in connection with a oral requirements and performance ex-
used. paragraph(b)of this section If the Fed- contract to secure fulfillment of all the pectations are being achieved. Moni-
eral awarding agency or pass-through contractor's requirements under such taring by the non-Federal entity must
$200.325 Federal awarding agency or entity determines that its procurement contract. cover each program,function or activ-
pass-through entity review. systems comply with the standards of (c)A payment bond on the part of the ity.See also§200.332.
this part. contractor for 100 percent of the con- (b) Reporting program performance.
(a) The non-Federal entity must (1) The non-Federal entity may re- tract price.A"payment bond"is one The Federal awarding agency must use
make available, upon request of the quest that its procurement system beOMB-approved common information
Federal awarding agency or pass- executed in connection with a contract
reviewed by the Federal awarding collections, as applicable, when pro-
through entity, technical specifics- agency or pass-through entityto deter- of assure pee payment asirequiredlao by law viding financial and
re-
tions on proposed procurements wherewr g of all in the persons supplying labor and ma- performancepprope
mine rds in order its system meets these vided o the the contra of the work pro- and in information.ten.with appropriate
ethe Federal awarding agency or pass- standards in for its system to be ulnae for in contract. and in accordance above men-
through entity believes such review is certified. Generally, these reviews tioned information collections, the
needed to ensure that the item or serv- must occur where there is continuous §200.327 Contract provisions. Federal awarding agency must require
ice specified is the one being proposed high-dollar funding, and third-party the recipient to relate financial data
for acquisition. This review generally contracts are awarded on a regular The non-Federaltain entity's provisions and accomplishments to g must contain the applicable provisions p performance
will take place prior to the time the basis; goals and objectives of the Federal
specification is incorporated into a so- entitymay described in appendix II to this part.
licitation document. However, if the (2)The non-Federaltsyself- maentioned
Also,in common information
with above
certify its procurement system. Such PERFORMANCE AND FINANCIAL mentioned information collec-
non-Federal entity desires to have the self-certification must not limit the MONITORING AND REPORTING tiona,and when required by the terms
review accomplished after a solicits- Federal awarding agency's right to our- and conditions of the Federal award,
tion has been developed, the Federal vey the system. Under a self-certiff- $200.328 Financial reporting. recipients must provide cost informa-
awarding agency or pass-through enti- cation procedure,the Federal awarding Unless otherwise approved by OMB, tion to demonstrate cost effective
ty may still review the specifications, agency may rely on written assurances the Federal awarding agency must so- practices(e.g.,through unit cost data).
with such review usually limited to the from the non-Federal entity that it is licit only the OMB-approved govern- In some instances (e.g., discretionary
technical aspects of the proposed pur- complying with these standards. The mentwide data elements for collection research awards), this will be limited
chase. non-Federal entity must cite specific of financial information to the requirement to submit technical
(b) The non-Federal entity must policies, procedures, regulations, or (at time of
publication the Federal Financial Re- performance reports(to be evaluated in
make available upon request, for the standards as being in compliance with port or such future, OMB-approved, accordance with Federal awarding
Federal awarding agency or pass- these requirements and have its system governmentwide data elements avail- agency policy). Reporting require-
through entity pre-procurement re- available for review. able from the OMB-designated stand- ments must be clearly articulated such
view,procurement documents,such as arda lead. This information must be that, where appropriate, performance
requests for proposals or invitations $200.326 Bonding requirements. collected with the frequency required during the execution of the Federal
for bids,or independent cost estimates, For construction or facility improve- by the terms and conditions of the Fed- award has a standard against which
when: ment contracts or subcontracts exceed- eral award,but no less frequently than non-Federal entity performance can be
(1)The non-Federal entity's procure- ing the Simplified Acquisition Thresh- annually nor more frequently than measured.
ment procedures or operation fails to old, the Federal awarding agency or quarterly except in unusual Mr- (c) Non-construction performance re-
comply with the procurement stand- pass-through entity may accept the cumstances, for example where more ports. The Federal awarding agency
ards in this part; bonding policy and requirements of the frequent reporting is necessary for the must use standard, governmentwide
129 130
OMB Guidance §200.330 §200.331 2 CFR Ch.II(1-1-22 Edition)
in which the Federal Government re- (4)Is responsible for adherence to ap-
OMB-approved data elements for col- will be useful. Where performance tains an interest,unless the Federal in- plicable Federal program requirements
lection of performance information in- trend data and analysis would be in- terest in the real property extends 15 specified In the Federal award;and
eluding performance progress reports, formative to the Federal awarding
Research Performance Progress Re- agency program,the Federal awarding years or longer. In those instances (5)In accordance with its agreement,
ports. agency should include this as a per- where the Federal interest attached is uses the Federal funds to carry out a
(1)The non-Federal entity must sub- formance reporting requirement. for a period of 15 years or more, the program for a public purpose specified
mit performance reports at the inter- (ii) The reasons why established Federal awarding agency or pass- in authorizing statute, eas
s opposed to
val required by the Federal awarding goals were not met,if appropriate. through entity,at its option,may re- providing goods or services for the ben-
agency or pass-through entity to best (iii)Additional pertinent information quire the non-Federal entity to report efit of the pass-through entity.
inform improvements in program out- including, when appropriate, analysis at various multi-year frequencies(e.g., (b)Contractors.A contract is for the
comes and productivity.Intervals must and explanation of cost overruns or every two years or every three years, purpose of obtaining goods and services
be no less frequent than annually nor high unit costs. not to exceed a five-year reporting pe-
and the non-Federal entity's own use
more frequent than quarterly except in clod;or a Federal awardingagency or and creates a procurement relationship
(d) Construction performance reports. g Y with the contractor.See the definition
unusual circumstances, for example For the most part,onsite technical in- pass-through entity may require an- of contract in§200.1 of this part.Char-
where more frequent reporting is nec- spections and certified percentage of nual reporting for the first three years aeterlstics indicative of a procurement
essary for the effective monitoring of completion data are relied on heavily of a Federal award and thereafter re-
the Federal award or could signifi- by Federal awarding agencies and pass- quire reporting every five years). e between ne non-Federal
cantly affect program outcomes. Re- through entities to monitor progress cnlationship nity and a contractoor are when the
ports submitted annually by the non- under Federal awards and subawards SUBRECIPIENT MONITORING AND contractor:
Federal entity and/or pass-through en- for construction.The Federal awarding MANAGEMENT (1) Provides the goods and services
tity must be due no later than 90 cal- agency may require additional per- within normal business operations;
ender days after the reporting period. formance reports only when considered $200.331 Subrecipient and contractor (2)Provides similar goods or services
Reports submitted quarterly or semi- necessary. determinations. to many different purchasers;
annually must be due no later than 30 (e) Significant developments. Events The non-Federal entity may concur- (3)Normally operates in a competi-
tivecalendar days after the reporting pe- may occur between the scheduled per- rently receive Federal awards as a re- (4 eviroment;
Mod.Alternatively,the Federal award- formance reporting dates that have sig- ci ient, a subrecipient, and a con- are Provides goods Sr operationsetns thatth
ing agency or pass-through entity may nificant impact upon the supported ac- p p ancillary program;to the of the
require annual reports before the anni- its agreements
mdeents withng on the substance gf Federal Is notub and
fluffy. In such cases,the non-Federal its agreements Federal awarding
versary dates of multiple year Federal entity must inform the Federal award- (5)Is not subject dte compliance re-
versary
awards. The final performance report ing agency or pass-through entity as agencies and pass-through entities. result is of the Federal program as a
submitted by the non-Federal entity soon as the followingtypesTherefore,a pass-through entity must result of the agreement,though similar
of tonne- make case-by-ease determinations requirements mayapply for other rea-
and/or pass-through entity must be due q pp y
flans become known:
no later than 120 calendar days after (1)Problems,delays,or adverse con- whether each agreement it makes for sons.
the period of performance end date.A ditions which will materially impair the disbursement of Federal program (c) Use of judgment in making deter-
subrecipient must submit to the pass- funds casts the party receiving the urination. In determining whether an
through entity, no later than 90 cal- the ability to meet the objective of the funds in the role of a subrecipient or a agreement between a pass-through en-
ender days after the period of perform- Federal award.This disclosure moat en- contractor. The Federal awarding tity and another non-Federal entity
ance end date,all finalperformance re- elude a statement of the action taken, agency maysupply and require reel i- casts the latter as a subrecipient or a
org Y PP Y 9 P P
ports as required bythe terms and con- ne contemplated, and any assistance
needed to resolve the situation. ants to comply with additional guid- contractor, the substance of the rela-
ditions of the Federal award.See also (2)Favorable developments which en- ance to support these determinations tionship is more important than the
§200.344. If a justified request is sub- able meeting time schedules and objec- provided such guidance does not con- form of the agreement.All of the char-
mitted by a non-Federal entity, the flirt with this section. acteristics listed above may not be
Federal agency may extend the due fives sooner or at less cost than antici-
pated or producing more or different (a) Subrecipients. A subaward is for present in all cases, and the pass-
date for any performance report. beneficial results than originally the purpose of carrying out a portion of through entity must use judgment in
(2)As appropriate in accordance with classifying each agreement as a
above mentioned performance report- planned. a Federal award and creates a Federal subaward or a procurement contract.
Ina,these reports will contain,for each (O Site visits. The Federal awarding assistance relationship with the sub-
Federal award, brief information on agency may make site visits as war- recipient. See definition for subaward §200.332 Requirements for pass.
the following unless other data ale- ranted by program needs. in §200.1 of this part. Characteristics through entities.
ments are approved by OMB in the (g) Performance report requirement which support the classification of the All pass-through entities must:
agency information collection request: waiver. The Federal awarding agency non-Federal entity as a subrecipient
(I) A comparison of actual accom- may waive any performance report re- include when the non-Federal entity:•
(a) Ensure that every subaward is
plishments to the objectives of the quired by this part if not needed. (I)Determines who is eligible to re- aal subsearly and anded to the subrecipient followinglo ag
Federal award established for the pe- ceive what Federal assistance; information subaward Lathe the f
riod. Where the accomplishments of $200.330 Reporting on real property. (2)Has itsperformance measured in at the time of the
subaward and if any of these data ele-
the Federal award can be quantified,a The Federal awarding agency or pass- relation to whether objectives of a Fed- ments change, include the changes in
computation of the coat(for example, through entity must require a non-Fed- eral program were met; subsequent subaward modification.
related to units of accomplishment) oral entity to submit reports at least (3) Has responsibility for pro- When some of this information is not
may be required If that information annually on the status of real property grammatic decision-making; available, the pass-through entity
131 132
OMB Guidance §200.332 §200.333 2 CFR Ch.II(1-1-22 Edition)
must provide the best information sibility to the Federal awarding agency (3)Whether the subrecipient has new not eliminate the responsibility of the
available to describe the Federal award including identification of any required personnel or new or substantially pass-through entity to issue subawards
and subaward. Required information financial and performance reports; changed systems;and that conform to agency and award-ape-
includes: (4)(i) An approved federally recog- (4)The extent and results of Federal cific requirements, to manage risk
(1)Federal award identification. sized indirect cost rate negotiated be- awarding agency monitoring (e.g., if through ongoing subaward monitoring,
(i) Subrecipient name (which must tween the subrecipient and the Federal the subrecipient also receives Federalond-
match the name associated with its Government.If no approved rate exists, p and to thatare monitor cif status la the the
awards directlyy from a Federal award- Ingo are specifically related to the
unique entity identifier); the pass-through entity must deter- ing agency). aubaward.
(ii) Subrecipient's unique entity mine the appropriate rate In collabora-
identifier; upon s(c) Consider imposing specific (e)Depending upon the pass-through
tion with the subrecipient,which is ei- subaward conditions a ub-
(iii) Federal Award Identification ther: recipient if appropriate as described in entity's assessment of risk posed by
Number(FAIN); (A)The negotiated indirect cost rate §200.208. the subrecipient(as described in para-
(iv)Federal Award Date(see the defi- between the pass-through entity and (d)Monitor the activities of the sub- graph(b)of this section),the following
nition of Federal award date in§200.1 of the subrecipient;which can be based on recipient as necessary to ensure that monitoring tools may be useful for the
this part)of award to the recipient by a prior negotiated rate between a dif- the subaward is used for authorized pass-through entity to ensure proper
the Federal agency; ferent PTE and the same subrecipient. purposes, in compliance with Federal accountability and compliance with
(v)Subaward Period of Performance If basing the rate on a previously sego- statutes, regulations, and the terms program requirements and achieve-
Start and End Date; tiated rate,the pass-through entity is and conditions of the subaward; and ment of performance goals:
(vi) Subaward Budget Period Start not required to collect information jus- that subaward performance goals are (1) Providing subrecipients with
and End Date; tifying this rate,but may elect to do achieved. Pass-through entity meal- training and technical assistance on
(vii)Amount of Federal Funds Obli- so; toring of the subrecipient must in- program-related matters;and
gated by this action byre the pass-
(B) The de minimis indirect cost elude: (2)Performing on-site reviews of the
through entity to the subrecipient; g
(viii)Total Amount of Federal Funds rate. (1)Reviewing financial and perform- subrecipient's program operations;
Obligated to the subrecipient by the (ii)The pass-through entity must not once reports required by the pass- (3)Arranging for agreed-upon-proce-
require use of a de minimis indirect through entity.
pass-through entity including the cur-
cost rate if the subrecipient has aFed- dares engagements as described in
rent financial obligation; P (2) Following-up and ensuring that §800.928,
orallyof approved rate.Subrecipients can the subrecipient takes timely and ap- (f)Verify that every subrecipient is
Award committed to the subrecipient elect to use the cost allocation method propriate action en all deficiencies per- audited as required by Subpart F of
to account for indirect costs in accord- tailing to the Federal award provided
by the pass-through entity; this part when it is expected that the
(xe Federal award project description, ante with§200.reme. to the subrecipient from the pass- subrecipient's Federal awards expended
as required to be responsive to the Fed- (5) A requirement that the sub- .through entity detected through au- during the respective fiscal year
oral Funding Accountability and recipient permit the pass-through anti- dits,on-site reviews,and written con-
Transparency Act(FFATA); ty and auditors to have access to the firmation from the subrecipient,high- equaled or exceeded the threshold set
(xi)Name of Federal awarding agen- subrecipient's records and financial lighting the status of actions planned forth in§200.501.
cy, pass-through entity, and contact statements as necessary for the pass- or taken to address Single Audit find- (g) Consider whether the results of
information for awarding official of the through entity to meet the require- ings related to the particular the subrecipient's audits, on-site re-
Pass-through entity; manta of this part;and subaward. views, or other monitoring indicate
(xii)Assistance Listings number and (6)Appropriate terms and conditions (3)Issuing a management decision for conditions that necessitate adjust-
Title; the pass-through entity must concerning closeout of the subaward. applicable audit findings pertaining ments to the pass-through entity's own
identify the dollar amount made avail- (b)Evaluate each subrecipient's risk only to the Federal award provided to records.
able under each Federal award and the of noncompliance with Federal stat- the subrecipient from the pass-through (h)Consider taking enforcement ac-
Assistance Listings Number at time of utes, regulations, and the terms and entity as required by§200.521. tion against noncompliant subrecipi-
disbursement; conditions of the subaward for purposes (4)The pass-through entity is respon- ents as described in§200.339 of this part
(xiii) Identification of whether the of determining the appropriate sub- sible for resolving audit findings ape- and in program regulations.
award is R&D;and recipient monitoring described in pars- cifically related to the subaward and
(xiv)Indirect cost rate for the Fed- graphs(d)and(e)of this section,which not responsible for resolving cross- [85 FR 99543,Aug.13,2020,as amended at 86
oral award(including if the de minimis may include consideration of such fax- cutting findings.If a subrecipient has a FR 10990,Feb.22,20211
rate is charged)per§200.414. tors as: current Single Audit report posted in §200 993 Fixed amount subawards.
(2)All requirements imposed by the (1) The subrecipient's prior experi- the Federal Audit Clearinghouse and
pass-through entity on the sub- ence with the same or similar sub- has not otherwise been excluded from With prior written approval from the
recipient so that the Federal award is awards; receipt of Federal funding (e.g., has Federal awarding agency, a pass-
used in accordance with Federal stat- (2)The results of previous audits in- been debarred or suspended),the pass- through entity may provide subawards
utes, regulations and the terms and eluding whether or not the sub- through entity may rely on the sub- based on fixed amounts up to the Sim-
conditions of the Federal award; recipient receives a Single Audit in ac- recipient's cognizant audit agency or plified Acquisition Threshold,provided
(3)Any additional requirements that cordance with Subpart F of this part, cognizant oversight agency to perform that the subawards meet the require-
the pass-through entity imposes on the and the extent to which the same or audit follow-up and make management ments for fixed amount awards in
subrecipient in order for the pass- similar subaward has been audited as a decisions related to cross-cutting find- §200,201.
through entity to meet its own respon- major program; ings in accordance with section
§200.513(a)(3)(vii). Such reliance does
133
134
OMB Guidance §200.336
§200.337 2 CFR Ch.II(1-1-22 Edition)
RECORD RETENTION AND ACCESS ments and their supporting records:In-
direct cost rate computations or pro- through entity must always provide or retained. Federal awarding agencies
§200.334 Retention requirements for posals,cost allocation plans,and any accept paper versions of Federal award- and pass-through entities must not im-
records. similar accounting computations of related information to and from the pose any other access requirements
Financial records, supporting docu- the rate at which a particular group of non-Federal entity upon request. If upon non-Federal entities.
manta, statistical records, and all costs is chargeable(such as computer paper copies are submitted,the Federal
other non-Federal entity records perti- usage chargeback rates or composite awarding agency or pass-through enti- §200.339 Restrictions on public access
nent to a Federal award must be re- fringe benefit rates). ty must not require more than an to records.
tailed for a period of three years from (1)If submitted for negotiation.If the original and two copies.When original No Federal awarding agency may
the date of submission of the final ex- proposal,plan,or other computation is records are electronic and cannot be al- place restrictions on the non-Federal
tered,there is no need to create and re-
penditure report or,for Federal awards required to be submitted to the Federal entity that limit public access to the
that are renewed quarterly or annu- Government (or to the pass-through tail paper copies. When original y perti-
records records of the non-Federal,
ally,from the date of the submission of entity)to form the basis for negotia- records are paper, electronic versions nent to a Federal award, except for
the quarterly or annual financial re- tion of the rate,then the 3-year reten- may be substituted through the use of protected personally identifiable infor-
port, respectively, as reported to the tion period for its supporting records duplication or other forms of nice- mation (PH) or when the Federal
Federal awarding agency or pass- starts from the date of such aubmis- tronic media provided that they are awarding agency can demonstrate that
through entity in the case of a sub- Mon. subject to periodic quality control re- such records will be kept confidential
recipient. Federal awarding agencies (2)If not submitted for negotiation. H views, provide reasonable safeguards
g against alteration, and remain read- and would have been exempted from
and pass-through entities must not im- the proposal,plan, or other computa- disclosure pursuant to the Freedom of
pose any other record retention re- tion is not required to be submitted to able.
4 Information Act(5 U.S.C.552)or con-
quirements upon non-Federal entities. the Federal Government (or to the §200.337 Access to records. trolled unclassified information pursu-
The only exceptions are the following: pass-through entity) for negotiation ant to Executive Order 13556 if the
(a)If any litigation,claim,or audit purposes,then the 3-year retention pe- (a)Records of non-Federal entities.The records had belonged to the Federal
is started before the expiration of the riod for the proposal,plan,or computa- Federal awarding agency, Inspectors awarding agency.The Freedom of In-
3-year period,the records must be re- tion and its supporting records starts General, the Comptroller General of formation Act (5 U.S.C. 552) (FOIA)
tailed until all litigation, claims, or from the end of the fiscal year (or the United States, and the pass- does not apply to those records that re-
audit findings involving the records other accounting period) covered by through entity,or any of their author- main under a non-Federal entity's con-
have been resolved and final action the proposal,plan, or other computa- bed representatives, must have the trol except as required under§200.315.
taken. Lion. right of access to any documents,pa- Unless required by Federal, state,
(b) When the non-Federal entity Is pars,or other records of the non-Fed- local, and tribal statute, non-Federal
notified in writing by the Federal §200.335 Requests for transfer of oral entity which are pertinent to the entities are not required to permit pub-
awarding agency,cognizant agency for records. Federal award, in order to make au- lie access to their records. The non-
audit,oversight agency for audit,cog- The Federal awarding agency must dits,examinations,excerpts,and toss- Federal entity's records provided to a
nizant agency for indirect costs, or request transfer of certain records to scripts.The right also includes timely Federal agency generally will be sub-
pass-through entity to extend the re- its custody from the non-Federal anti- and reasonable access to the non-Fed- jest to FOIA and applicable exemp-
tention period. ty when it determines that the records coal entity's personnel for the purpose lions.
(a) Records for real property and possess long-term retention value. of interview and discussion related to
equipment acquired with Federal funds However, in order to avoid duplicate such documents. REMEDIES FOR NONCOMPLIANCE
must be retained for 3 years after final recordkeeping, the Federal awarding (b) Extraordinary and rare cir-
disposition. agency may make arrangements for cumst¢nces. Only under extraordinary §200.339 Remedies for noncompliance.
(d)When records are transferred to or the non-Federal entity to retain any and rare circumstances would such ac-
If anon-Federal entity fails to com-
maintained by the Federal awarding records that are continuously needed
cess include review of the true name of
agency or pass-through entity, the 3- for joint use. victims of a crime.Routine monitoring ply with the U.S.Constitution,Federal
year retention requirement is not ap- cannot be considered extraordinary and statutes,regulations or the terms and
plicable to the non-Federal entity. §200.336 Methods for collection,trans- rare circumstances that would oozes- conditions of a Federal award,the Fed-
(e) Records for program income mission,and storage of information. sitate access to this information.When oral awarding agency or pass-through
transactions after the period of per- The Federal awarding agency and the access to the true name of victims of a entity may impose additional condi-
formance. In some cases recipients non-Federal entity should, whenever crime is necessary,appropriate steps to tions, as described in§200.206. If the
must report program income after the practicable, collect, transmit, and protect this sensitive information must Federal awarding agency or pass-
period of performance.Where them is store Federal award-related informs- be taken by both the non-Federal enti- through entity determines that non-
such a requirement, the retention pe- tion in open and machine-readable for- ty and the Federal awarding agency, compliance cannot be remedied by im-
Any such-access, other than under a Posing additional conditions,the Fed-
earning of the program income starts on paper in accordance with applicable court order or subpoena pursuant to a oral awarding agency or pass-through.
from the end of the non-Federal enti- legislative requirements. A machine- bona fide confidential investigation, entity may take one or more of the fol-
ty's fiscal year in which the program readable format is a format in a stand- must be approved by the head of the lowing actions, as appropriate in the
income is earned. and computer language (not English Federal awarding agency or delegate. circumstances:
(f) Indirect cost rate proposals and text)that can be read automatically by (c)Expiration of right of access. The (a)Temporarily withhold cash pay-
cost allocations plans.This paragraph a web browser or computer system.The rights of access in this section are not ments pending correction of the defi-
applies to the followin typeslimited to the required retention pe- cfency by the non-Federal entity or
g of docu- Federal awarding agency or pass- riod but last as long as the records are more severe enforcement action by the
135 136
OMB Guidance §200.340 §200.341 2 CFR Ch.II(1-1-22 Edition)
Federal awarding agency or pass- (5)By the Federal awarding agency awarding agency who posted the infor- oral awarding agencies. The non-Fed-
through entity. or pass-through entity pursuant to ter- mation,that some of the information eral entity may submit comments to
(b)Disallow(that is,deny both use of mination provisions included in the made publicly available is covered by a the awardee integrity and performance
and any applicable matching Federal award. disclosure exemption under the Free- portal accessible through SAM (cur-
fundscredit for)all or part of the cost of the (b)A Federal awarding agency should darn of Information tlon Act, the Federal rently Federal ).
activity or action not in compliance. clearly and unambiguously specify ter-
mation agency who posted the infer- (5)s awarding agencies will
(c)Wholly or partly suspend or ter- mination provisions applicable to each mation must remove the posting with- consider non-Federal entity comments
the Federal award. Federal award, in applicable regula- in seven calendar days of receiving the when determining whether the non-
minate(d)Initiate suspension or debarment tions or in the award,consistent with assertion.Prior to therep Federalting thegene releas- Federal entity is qualified for a future
this section, able information, the agency Federal award.
proceedings as authorized under 2 CFR must resolve the issue in accordance
part 160 and Federal awarding agency (c)When a Federal awarding agency with the agency's Freedom of Informs- (c) Upon termination of a Federal
regulations(or in the case of a pass- terminates a Federal award prior to award, the Federal awarding agency
the end of the tion Act procedures.
through entity,recommend such a pro- period of performance (d)When.a Federal award is termi- must provide the information required
needing be initiated by a Federal due to the non-Federal entity's mate- noted or partially terminated,both the under FFATA to the Federal ements
awarding agency). rial failure to comply with the Federal established to fulfill the requirements
e
Federal awarding agency or pass-
e)Withhold further Federal awards award terms and conditions, the Fed-
through entity and the non-Federal en- of FFATA, and update or notify any
for the project or program. oral awarding agency must report the tity remain responsible for compliance other relevant anygovernmentwide sys-
(f)Take other remedies that may be termination to the OMB-designated in- with the requirements in§§200.349 and terns or entities of any indications of
legally available. tegrity and performance system acces- 200.345. poor performance as required by 41
sible through SAM(currently FAPHS). U.S.C.417b and 31 U.S.C.3321 and im-
§200.340 Termination. (1) The information required under §200.341 Notification of termination plementing guidance at 2 CFR part 77
(a) award be termi- paragraph(c)of this section is not to requirement. (forthcoming at time of publication).
noted Thein whole Federal in part as may be be reported to designated integrity and (a) The Federal agency or pass- See also the requirements for 100-
(1) By the Federal awardingagency performance system until the non-Fed- through entity must provide to the sion and Debarment at 2 CFR part 180.
g y oral entity either—
or pass-through entity, if a non-Fed- (I)Has exhausted its opportunities to non-Federal entity a notice of termi- §200.342 Opportunities to object,hear.
oral entity fails to comply with the object or challenge the decision, see nation. logs,and appeals.
terms and conditions of a Federal §200.342;or (b)If the Federal award is terminated Upon taking any remedy for non-
award; for the non-Federal entity's material
(ii)Has not,within 30 calendar days failure to comply with the U.S. Con- compliance, the Federal awarding
(2)By the Federal awarding agency after being notified of the termination, stitution, Federal statutes, re agency must provide the non-Federal
gala-
or pass-through entity,to the greatest informed the Federal awarding agency entityan opportunity
extent authorized by law,if an award that it intends to appeal the Federal Lions, or terms and conditions of thema to object and
no longer effectuates the program awarding agency's decision to termi- tion and documenta-
Federal award, the notification must tion lchallende o ing the suspension or ter-
goals or agency priorities; nate. state that— challenging
(1)The termination decision will be written
mination action, in accordance with
(3)By the Federal awarding agency (2) If a Federal awarding agency, reported to the OMB-designated integ- writte processes and procedures pub-
or pass-through entity with the con- after entering information into the rlty and performance system accessible lished by the Federal awarding agency.
sent of the non-Federal entity, in designated integrity and performance through SAM(currently FAPIIS); The Federal awarding agency or pass-
which case the two parties must agree system about a termination, subse- (2)The information will be available through entity must comply with any
upon the termination conditions, in- quently:
in the OMB-designated integrity and requirements for hearings, appeals or
eluding the effective date and, in the (i)Learns that any of that informs- performance system for a period of five other administrative proceedings to
case of partial termination,the portion tion is erroneous,the Federal awarding years from the date of the termination, which the non-Federal entity is enti-
to be terminated; agency must correct the information in then archived; tied under any statute or regulation
(4) By the non-Federal entity upon the system within three business days; (3) Federal awarding agencies that applicable to the action involved.
sending to the Federal awarding agen- (11)Obtains an update to that infor- consider making a Federal award to
cy or pass-through entity written noti- mation that could be helpful to other the non-Federal entity during that five §200.343 Effects of suspension and ter-
fication setting forth the reasons for Federal awarding agencies,the Federal year period must consider that infer- mination.
such termination, the effective date, awarding agency is strongly encour- mation in judging whether the non- Costs to the non-Federal entity re-
and,in the case of partial termination, aged to amend the information In the Federal entity is qualified to receive suiting from financial obligations in-
the portion to be terminated.However, system to incorporate the update in a the Federal award, when the Federal curred by the non-Federal entity dur-
if the Federal awarding agency or pass- timely way. share of the Federal award is expected ing a suspension or after termination
through entity determines in the ease (3)Federal awarding agencies,must to exceed the simplified acquisition of a Federal award or subaward are not
of partial termination that the reduced not post any information that will be threshold over the period of perform- allowable unless the Federal awarding
or modified portion of the Federal made publicly available in the non-
award or subaward will not accomplish public segment of designated integrity ante; agency or pass-through entity ex-
the purposes for which the Federal and performance system that is cot- (4)The non-Federal entity may corn- fessly authorizes them in the notice
o
subse-
award was made,the Federal awarding ered by a disclosure exemption under meet on any information the OMB-des- of suspension or termination or ignated integrity and performance sys- quently.However,costs during suspen-
agency or pass-through entity may ter- the Freedom of Information Act.If the tern contains about the non-Federal en- sion or after termination are allowable
minate the Federal award in its en- non-Federal entity asserts within tity for future consideration by Fed- if:
tirety;or seven calendar days to the Federal
137 138
OMB Guidance §200.344 §200.345 2 CFR Ch.II(1-1-22 Edition)
(a) The costs result from financial as specified in the terms and conditions non-Federal entity's material failure COLLECTION OF AMOUNTS DUE
obligations which were properly in- of the Federal award. to comply with the terms and condi-
curred by the non-Federal entity before (c)The Federal awarding agency or tions of the award with the OMB-des- §200.340 Collection of amounts due.
the effective date of suspension or ter- pass-through entity must make prompt ignated integrity and performance sys- (a)Any funds paid to the non-Federal
mination,are not in anticipation of it; payments to the non-Federal entity for tem (currently FAPIIS). Federal entity in excess of the amount to
and costs meeting the requirements in Sub- awarding agencies may also pursue which the non-Federal entity is finally
(b) The costs would be allowable if Part E of this part under the Federal other enforcement actions per§200,339. determined to be entitled under the
the Federal award was not suspended award being closed out. terms of the Federal award constitute
or expired normally at the end of the (d) The non-Federal entity must POST-CLOSEOUT ADJUSTMENTS AND
ral Government.If
period of performance In which the ter- Promptly refund any balances of unob- CONTINUING RESPONSIBILITIES not epaid within 90ecalendar days after
mination takes effect. ligated cash that the Federal awarding
agency or pass-through entity paid in *200.345 Post•closeout a demand,the Federal awarding agency
adjustments may reduce the debt by:
CLOSEOUT advance or paid and that are not au- and continuing responsibilities. (1) Making an administrative offset
thorized to be retained by the non-Fed- (a)The closeout of a Federal award against other requests for reimburse-
§200.344 Closeout. oral entity for use in other projects. does not affect any of the following: ments;
The Federal awarding agency or pass- See OMB Circular A-129 and see
through entity will close out the Fed- §200.346, for requirements regarding (1)The right of the Federal awarding Withholding advance payments
oral award when it determines that all unreturned amounts that become de- agency or pass-through entity to dis- ottheherwlse due to the non-Federal enti-
linquent debts. allow costs and recover funds on the y;or
applicable administrative actions and basis of a later audit or other review. (3)Other action permitted by Federal
all required work of the Federal award (e) Consistent with the terms andstatute.
have been completed bythe non-Fed- conditions of the Federal award, the The Federal awarding agency or pass-
Federal awarding agency or pass- through entity must make any cost (b)Except where otherwise provided
oral entity. If the non-Federal entity through entity must make a settle- disallowance determination and notify by statutes or regulations,the Federal
fails to complete the requirements,the meat for any upward or downward ad- the non-Federal entity within the awarding agency will charge interest
Federal awarding agency or pass-
on on an overdue debt in accordance with
through entitywill justments to the Federal share of costs record retention period.
g proceed to close the Federal Claims Collection Stand-
out the Federal award with the infor- after closeout reports are received. (2)The requirement for the non-Fed- ards(31 CFR parts 900 through 999).The
motion available.This section specifies (f)The non-Federal entity must ac- oral entity to return any funds due as date from which interest 1s computed
the actions the non-Federal entity and count for any real and personal prop- a result of later refunds,corrections,oris not extended by litigation or the ffl-
Federal awarding agency or pass- erty acquired with Federal funds or re- other transactions including final indi- ing of any form of appeal.
through entity must take to complete ceived from the Federal Government in rent cost rate adjustments.
this process at the end of the period of accordance with §§200.310 through (3)The ability of the Federal award- Subpart E—Cost Principles
performance. 200.316 and 200.330. ing agency to make financial adjust-
(a) The recipient must submit, no (g)When a recipient or subrecipient meets to a previously closed award GENERAL PROVISIONS
completes all closeout requirements, such as resolving indirect cost pay-
later than 120 calendar days after the the Federal awarding agency or pass- ments and making final payments. §200.400 Policy guide.
end date of the period of performance, through entity must promptly corn-
all financial, performance, and other plete all closeout actions for Federal (4)this past requirements in subpart F The is based of h these cost ental
reports as required by the terms andof part, premi is based on the fundamental
conditions of the Federal award.A sub- awards. The Federal awarding agency O Property management and dis-must make every effort to complete po5 gpremises that:
reopen-
recipient must submit to the pass- closeout actions no later than one year through requirements in §§200.310 (a)l The henef non-Federal entityeffective isad-
through entity, no later than 90 cal- after the end of the period of perform- through 200.316 of this subpart. Bible for the efficient and endar days(or an earlier date as agreed once unless otherwise directed by au- (6)Records retention as required in ministration of the Federal award
upon by the pass-through entity and thorizing statutes.Closeout actions in- §§200.334 through 200.337 of this sub- through the application of sound man-
subrecipient)after the end date of the dude Federal awarding agency actions part. agement practices.
period of performance, all financial, in the grants management and pay- (b) After closeout of the Federal (b)The non-Federal entity assumes
performance, and other reports as re- ment systems. award,a relationship created under the responsibility for administering Fed-
quired by the terms and conditions of (h)If the non-Federal entity does not Federal award may be modified or oral funds in a manner consistent with
the Federal award.The Federal award- submit all reports in accordance with ended in whole or in part with the con- underlying agreements,program objec-
ing agency or pass-through entity may this section and the terms and condi- sent of the Federal awarding agency or fives,and the terms and conditions of
approve extensions when requested and tions of the Federal Award,the Federal pass-through entity and the non-Fed- the Federal award.
justified by the non-Federal entity,as awarding agency must proceed to close oral entity, provided the responsibil- (c) The non-Federal entity, in rec-
applicable. out with the information available sties of the non-Federal entity referred ognition of its own unique combination
(b)Unless the Federal awarding agen- within one year of the period of per- to in paragraph(a)of this section,in- of staff,facilities,and experience,has
cy or pass-through entity authorizes an formance end date. eluding those for property management the primary responslf sou for employ-
extension, a non-Federal entity must (i)If the non-Federal entity does not as applicable,are considered and provi- ing whatever form of sound organize-
liquidate all financial obligations in- submit all reports in accordance with sions made for continuing r•esponsibfl- flan and management techniques may
curred under the Federal award no this section within one year of the pe- sties of the non-Federal entity,as ap- be necessary in order to assure proper
later than 120 calendar days after the riod of performance end date,the Fed- prepriate. and efficient administration of the
end date of the period of performance oral awarding agency must report the Federal award.
139 140
OMB Guidance §200.401 §200.402 2 CFR Ch.II(1-1-22 Edition)
(d)The application of these cost prin- scholarships,fellowships, traineeships, be similar to for-profit entities for pur- (g) Be adequately documented. See
ciples should require no significant or other fixed amounts based on such pose of applicability of cost principles. also §§200.300 through 200.309 of this
changes in the internal accounting items as education allowance or pub- Such nonprofit organizations must op- part.
policies and practices of the non-Fed- lished tuition rates and fees. crate under Federal cost principles ap- during
oral entity. However, the accounting (2) For IHEs, capitation awards, o (h)Cost must be period.ncurred the
practices of the non-Federal entity which are awards based on case counts 48iCFR 1..A listingst of entities located at approved ding budgetey authorized,The at Federals
must be consistent with these cost tions CFR 3 contained of these xr to- awarding, towaiveon ispriorwritten ap-
principles and supportor number of beneficiaries according to 1s in appendix VIII
the accumula- the terms and conditions of the Federal this part. Other organizations, as ap- discretion, carry unobligated
tion of costs as required by the prin- award. proved by the cognizantbalance to b geries
ciples, and must provide for adequate added fromr for in- balances to210,3 subsequent budget periods
documentation to support costs (3) Fixed amount awards. See also direct costs, may be time pursuant to§200.308(e)(3).
charged to the Federal award. §200.1 Definitions and 200.201, to time.
Is)In reviewing,negotiating and ap- (9)Federal awards to hospitals(see [78 FR 78608,Dec.26,2013,as amended at 85 [78 FR 78608,Dec.26,2013,as amended at 85
proving cost allocation plans or indi- appendix IX to this part). FR 49562,Aug.13,2020] FR 49562,Aug.13,20207
rect cost proposals,the cognizant agen- (5) Other awards under which the
cy for indirect costs should generally non-Federal entity is not required to BASIC CONSIDERATIONS §200.404 Reasonable costs.
assure that the non-Federal entity is account to the Federal Government for A cost is reasonable if,in its nature
applying these coat accounting prin- actual costs incurred. $200.402 Composition of costs. and amount, It does not exceed that
ciples on a consistent basis during (b)Federal contract.Where a Federal Total cost.The total cost of a Federal which would be incurred by a prudent
their review and negotiation of indirect contract awarded to a non-Federal en- award is the sum of the allowable di- Person under the circumstances pre-
cost proposals. Where wide variations tity is subject to the Cost Accounting rect and allocable indirect costs less vailing at the time the decision was
exist in the treatment of a given cost Standards (CAS), it incorporates the any applicable credits. made to incur the cost.The question of
item by the non-Federal entity, the applicable CAS clauses,Standards,and reasonableness is particularly impor-
reasonableness and equity of such CAS administration requirements per §200.403 Factors affecting allowability tont when the non-Federal entity is
treatments should be fully considered. the 98 CFR Chapter 99 and 48 CFR part of costs. predominantly federally-funded.In de-
See the definition of indirect(facilities& 30(FAR Part 30).CAS applies directly Except where otherwise authorized termining reasonableness of a given
administrative (F&A))costs in§200.1 of to the CAS-covered contract and the by statute, costs must meet the fol- cost,consideration must be given to:
this part. Cost Accounting Standards at 48 CFR lowing general criteria in order to be (a)Whether the cost is of a type gen-
(1)For non-Federal entities that edu- parts 9904 or 9905 takes precedence over allowable under Federal awards: orally recognized as ordinary and nee-
cate and engage students in research, the cost principles in this subpart E (a)Be necessary and reasonable for essary for the operation of the non-
the dual role of students as both train- with respect to the allocation of costs. the performance of the Federal award Federal entity or the proper and effi-
ees and employees(including pre-and When a contract with a non-Federal and be allocable thereto under these cient performance of the Federal
post-doctoral staff)contributing to the entity is subject to full CAS coverage, principles. award.
completion of Federal awards for re- the allowability of certain costs under (b)Conform to any limitations or ex- (b) The restraints or requirements
search must be recognized in the appli- the cost principles will be affected by elusions set forth in these principles or imposed by such factors as:sound busi-
cation of these principles. the allocation provisions of the Cost in the Federal award as to types or ness practices; arm's-length bar-
(g)The non-Federal entity may not Accounting Standards(e.g., CAS 914- amount of cost items. gaining; Federal, state, local, tribal,
earn or keep any profit resulting from 48 CFR 9904.919, Cost of Money as an (c) Be consistent with policies and and other laws and regulations; and
Federal financial assistance,unless ex- Element of the Cost of Facilities Cap- procedures that apply uniformly to terms and conditions of the Federal
plicitly authorized by the terms and ital,and CAS 417-98 CFR 9904.417,Cost both federally-financed and other ac- award.
conditions of the Federal award. See of Money as an Element of the Cost of tivities of the non-Federal entity. (c) Market prices for comparable
also§200.307. Capital Assets Under Construction), (d)Be accorded consistent treatment.
[78 FR 78608,Dec.26,2013,as amended at 79 apply rather the allowability provi- A cost maynot be assigned to a Fed- goods or services for the geographic
g area.
FR 75885,Dec.19,2014;85 FR 49561,Aug.13, ricer of §200.999. In complying with eral award as a direct cost if any other (d) Whether the individuals con-
2020] those requirements, the non-Federal cost incurred for the same purpose in corned acted with prudence in the cir-
entity's application of cost accounting like circumstances has been allocated cumstances consideringtheir respon-
sibilities Application. practices for estimating, accumu- to the Federal award as an indirect
(a)General.These principles must be lating, and reporting costs for other cost. to the non-Federal entity,its
stu-
used in determining the allowable costs Federal awards and other cost objec- (e)Be determined in accordance with employees, where applicable its
of work performed by the non-Federal tives under the CAS-covered contract generally accepted accounting grin- dents or membership, the public at
entity under Federal awards. These still must be consistent with its cost ciples (GAAP), except, for state and large,and the Federal Government.
principles also must be used by the accounting practices for the CAS-cov- local governments and Indian tribes (e) Whether the non-Federal entity
non-Federal entity as a guide in the ered contracts. In all cases, only one only,as otherwise provided for in this significantly deviates from its estab-
pricing of fixed-price contracts and set of accounting records needs to be part. lished practices and policies regarding
subcontracts where costs are used in maintained for the allocation of costs (f)Not be included as a cost or used the incurrence of coats, which may
determining the appropriate price.The by the non-Federal entity. to meet cost sharing or matching re- unjustifiably increase the Federal
principles do not apply to: (c)Exemptions.Some nonprofit ergs- quirements of any other federally-fi- award's cost.
(1) Arrangements under which Fed- nizations,because of their size and na- nanced program in either the current [78 FR 78608,Dec.26,2013,as amended at 79
oral financing is in the form of loans, ture of operations,can be considered to or a prior period.See also§200.306(b). FR 75885,Dec.19,20191
141 142
OMB Guidance §200.407 §200.408 2 CFR Ch.II(1-1-22 Edition)
$200.405 Allocable costs. award,the costs are assignable to the determine. In order to avoid subse- (y)§200.475 Travel costs.
(a)A cost is allocable to a particular Federal award regardless of the use quent disallowance or dispute based on [78 FR 78608,Dec.26,2013,as amended at 79
Federal award or other cost objective if that may be made Of the equipment or unreasonableness or nonallocabill ty, FR 75885,Dec.19,2014;85 FR 49562,Aug.13,
the goods or services involved are other capital asset Involved when no the non-Federal entity may seek the 20201
chargeable or assignable to that Fed- longer needed for the purpose for which prior written approval of the cognizant
oral award or cost objective in accord- it was originally required. See also agency for indirect costs or the Federal §200.408 Limitation on allowance of
once with relative benefits received. §§200.310 through 200.316 and 200.939. awarding agency in advance of the in- costs.
This standard is met if the cost: (e)If the contract is subject to CAS, currence of special or unusual costs. 1
(1) Is incurred specifically for the costs must be allocated to the contract Prior written approval should include The Federal award may be subject to
Federal award; pursuant to the Cost Accounting the timeframe or scope of the agree- statutory requirements that limit the
Standards.To the extent that CAS is ment.The absence of prior written ap- allowability of costs. When the max-
(2) Benefits both the Federal award applicable, the allocation of costs in royal on anyelement of cost will not, imum amount allowable under a limi-
and other work of the non-Federal en- accordance with CAS takesprecedence in itself,affect the reasonableness or tation is less than the total amount de-
tity and can be distributed in proper- termined in accordance with the
lions that may be approximated using over the allocation provisions in this allocability of that element, unless prin-
reasonable methods;and part• prior approval is specifically required ciples in this part,the amount not re-
(3)Is necessary to the overall oper- for allowability as described under car- coverable under the Federal award may
P L78 FR 786De Dec.26,2013,es amended at 79 tale circumstances In the following not be charged to the Federal award.
ation of the non-Federal entity and is FR 75885,Dec.19,2019;85 FR 49562,Aug.13,
assignable in part to the Federal award 2020] sections of this part: §200.409 Special considerations.
in accordance with the principles in §200.406 Applicable credits. (a)§200.201 Use of grant agreements p
this subpart. PP I (including fixed amount awards),coop- In addition to the basic consider-
(b)All activities which benefit from (a)Applicable credits refer to those erative agreements, and contracts, ations regarding the allowability of
the non-Federal entity's indirect(F&A) receipts or reduction-of-expenditure- paragraph(b)(5); costs highlighted in this subtitle,other
cost, including unallowable activities type transactions that offset or reduce (b)§200.306 Cost sharing or matching; subtitles in this part describe special
and donated services by the non-Fed- expense items allocable to the Federal (c)§200.307 Program income; considerations and requirements appli-
eral entity or third parties,will receive award as direct or indirect(F&A)costs. (d) §200.306 Revision of budget and cable to states,local governments,In-
an appropriate allocation of indirect Examples of such transactions are:pur- program plans; than tribes,and IHEs.In addition,cer-
costs. chase discounts,rebates or allowances, (e)§200.311 Real property; tale provisions among the items of cost
(c)Any cost allocable to a particular recoveries or indemnities on losses,in- (f)§200.313 Equipment; in this subpart are only applicable to
Federal award under the principles pro- surance refunds or rebates,and adjust- (g)§200.333 Fixed amount subawards; certain types of non-Federal entities,
Added for in this part may not be mints of overpayments or erroneous (h) §200.913 Direct costs, paragraph as specified in the following sections:
charged to other Federal awards to charges.To the extent that such cred- (c); (a)Direct and Indirect(F&A) Costs
overcome fund deficiencies,to avoid re- its accruing to or received by the non- (1) §200.430 Compensation-personal (§§200.912-200.415)of this subpart;
strictions imposed by Federal statutes, Federal entity relate to allowable services,paragraph(h); (b)Special Considerations for States,
regulations,or terms and conditions of costs, they must be credited to the (j)§200.431 Compensation-fringe ben-
Local Governments and Indian Tribes
the Federal awards, or for other rea- Federal award either as a cost reduc- efits;
sons. However, this prohibition would tion or cash refund,as appropriate. (k)§200.933 Entertainment costs; ($$200.916 and 200.417) of this subpart;
not preclude the non-Federal entity (b) In some instances, the amounts (1)§200.439 Equipment and other cap- and
from shifting costs that are allowable received from the Federal Government ital expenditures; (e) Special Considerations for Insti-
under two or more Federal awards in to finance activities or service oper- (m)§200.440 Exchange rates; tutions of Higher Education(§§200.430
accordance with existing Federal stat- ations of the non-Federal entity should (n)§200.941 Fines,penalties,damages and 200.919)of this subpart.
utes,regulations,or the terms and con- be treated as applicable credits. Spa- and other settlements; [85 FR 99562,Aug.13,2020]
ditfona of the Federal awards. cifically, the concept of netting such (o)$200.992 Fund raising and invest-
(d)Direct cost allocation principles: credit items (including any amounts mint management costs; §200.410 Collection of unallowable
If a cost benefits two or more projects used to meet cost sharing or matching (p)$200.445 Goods or services for per- costs.
or activities in proportions that can be requirements) must be recognized in send use; Payments made for costs determined
determined without undue effort or determining the rates or amounts to be (q) §200.997 Insurance and indem- to be unallowable by either the Federal
cost,the cost must be allocated to the charged to the Federal award. (See nification; awarding agency,cognizant agency for
projects based on the proportional ben- §§200.436 and 200.968,for areas of poten- (r) §200.959 Memberships, subscrlp- indirect costs,or pass-through entity,
efit. If a cost benefits two or more tial application in the matter of Fed- dons, and professional activity costs, either as direct or Indirect costs,must
projects or activities in proportions oral financing of activities.) paragraph(c); be refunded(including interest)to the
that cannot be determined because of Dec,20 (s)§200.455 Organization costs; Federal Government in accordance
[78 FR 78608, ,2013,as amended at 79 (t)§200.456 Participant support costa;the interrelationship of the work in- FR 75885,Dec.19,2014;85 FR 99562,Aug.13, with instructions from the Federal(u)§200.458 Pre-award costs;volved, then, notwithstanding para- 2020] agency that determined the costs are
rah(c)of this section,the costs may (v) §200.462 Rearrangement and re-
graph unallowable unless Federal statute or
be allocated or transferred to bane- $200.407 Prior written approval(prior conversion costs; regulation directs otherwise. See also
fitted projects on any reasonable docu- approval). (w) §200.967 Selling and marketing §§200.300 through 200.309 In subpart D of
minted basis. Where the purchase of Under any given Federal award,the costs; this part.
equipment or other capital asset is spe- reasonableness and allocability of cer- (x) §200.970 Taxes (including Value
cifically authorized under a Federal taro items of costs may be difficult to Added Tax);and [85 FR 49562,Aug.la,2020]
143144
OMB Guidance §200.413 §200.414 2 CFR Ch.II(1-1-22 Edition)
§200.411 Adjustment of previously no. DIRECT AND INDIRECT(F&A)COSTS charging of these costs may be appro- (9)Conferences except those held to
gotiated indirect (FAA) cost rates priate only if all of the following condi- conduct the general administration of
containing unallowable costs. §200.412 Classification of costs. tions are met: the non-Federal entity. See also
(a) Negotiated indirect (F&A) cost There is no universal rule for (1) Administrative or clerical serv- §200.932.
rates based on a proposal later found to classifying certain costs as either di- ices are integral to a project or activ- (5)Maintenance,protection,and in-
have included costs that: rest or indirect(F&A)under every ac- ity; vestment of special funds not used in
(1) Are unallowable as specified by counting system.A cost may be direct (2)Individuals involved can be spa- operation of the non-Federal entity.
Federal statutes, regulations or the with respect to some specific service or cifically identified with the project or See also§200.992.
terms and conditions tiona of a Federal function,but indirect with respect to activity; (6)Administration of group benefits
award;or the Federal award or other final cost (3)Such costs are explicitly included on behalf of members or clients, in-
(2)Are because they are objective. Therefore, it is essential in the budget or have the prior written eluding life and hospital insurance,an-
n(2 allocable unallowablea to the Federal ecaus thaweyd s, that each item of cost incurred for the approval of the Federal awarding agen- nuity or retirement plans, and finan-
() same purpose be treated consistently cy;and cial aid.See also§200.931.
must be adjusted,or a refund must be in like circumstances either as a direct (9)The costs are not also recovered [78 FR 78608,Dec.26,2013,as amended at 79
made, in accordance with the require- or an indirect(F&A)cost in order to as indirect costs. FR 75885,Dec.19,2019;85 FR 49562,Aug.13,
ments of this section. These adjust- avoid possible double-charging of Fed- (d) Minor items. Any direct cost of 20201
meats or refunds are designed to cur- oral awards.Guidelines for determining minor amount may be treated as an in-
§200.414 Indirect(F&A)costs.
rect the proposals used to establish the direct and indirect(F&A)costs charged direct(F&A)cost for reasons of practi-
rates and do not constitute a reopening to Federal awards are provided in this cality where such accounting treat- (a)Facilities and administration classi-
of the rate negotiation. The adjust- subpart. meet for that item of cost is consist- fication. For major Institutions of
ments or refunds will be made regard- Higher Education(IHE)and major non-
less of the type of rate negotiated(pre- §200.413 Direct costs. aptly applied to all Federal and non-
Federal cost objectives. profit organizations, indirect (FAA)
determined, final, fixed, or proof- (a) General. Direct costs are those (e)The costs of certain activities are costs must be classified within two
sional). costs that can be identified specifically not allowable as charges to Federal broad categories: "Facilities" and
(b)For rates covering a future fiscal with a particular final cost objective, awards. However, even though these "Administration." "Facilities" is de-
year of the non-Federal entity,the un- such as a Federal award,or other inter- costs are unallowable for purposes of fined as depreciation on buildings,
allowable costs will be removed from pally or externally funded activity,or computing charges to Federal awards, equipment and capital improvement,
the indirect(F&A)cost pools and the that can be directly assigned to such they nonetheless must be treated as di- interest on debt associated with cer-
rates appropriately adjusted. activities relatively easily with a high rect costs for purposes of determining rain buildings,equipment and capital
(c)For rates covering a past period, degree of accuracy.Costs incurred for indirect(F&A)cost rates and be allo- improvements, and operations and
the Federal share of the unallowable the same purpose in like circumstances cated their equitable share of the non- maintenance expenses. "Administra-
costs will be computed for each year must be treated consistently as either Federal entity's indirect costs if they tion"is defined as general administra-
involved and a cash refund(including direct or indirect(F&A)costs.See also represent activities which: tion and general expenses such as the
interest chargeable in accordance with §200.905. (1)Include the salaries of personnel, director's office,accounting,personnel
applicable regulations)will be made to (b) Application to Federal awards. (2)Occupy space,and and all other types of expenditures not
the Federal Government. If cash re- Identification with the Federal award (3)Benefit from the non-Federal enti- listed specifically under one of the sub-
Identification are made forpast periods covered rather than the nature of the goods and categories of "Facilities" (including
P ty's indirect(FAA)costs.
by provisional or fixed rates, appro- services involved is the determining cross allocations from other pools,
factor in distinguishing direct from in- (f) For nonprofit organizations, the where applicable). For nonprofit
priate adjustments will be made when direct(FAA)costs of Federal awards. costs of activities performed by the nizations,library expenses are included
the rates are finalized to avoid dupli- Typical costa charged directly to a non-Federal entity primarily as a serv- in the"Administration"category; for
cate recovery of the unallowable costs Federal award are the compensation of ice to members,clients,or the general DIES,they are included to the definl-
by the Federal Government. employees who work on that award, public when significant and necessary ties"category.Major IHEs are defined
(d)For rates covering the current pe- their related fringe benefit costa, the to the non-Federal entity's mission as those required to use the Standard
rind,either a rate adjustment or a re- costs of materials and other items of must be treated as direct costs whether Format for Submission as noted in ap-
fund,as described in paragraphs(b)and expense incurred for the Federal award. equor not allowable,and be allocated an pendix III to this part,and Rate Deter-
(c)of this section,must be required by If directly related to a specific award, Some examplesa share of indirect types of costs. Educationuca for graph C.11. ofa non-
theHigher
(c) cognizant agency for indirect costs. certain costs that otherwise would be Some lude: of these of activi- ogorganizations
are h. a whichor rThe choice of method must be at the treated as indirect costs may also be ties include: profit organizations millionons re-
The
discretion of the cognizant agency for considered direct costs. Examples in- )Maintenance pus of membershipadrelated atls, directrec more than$10 dollars in
indirect costs,based on Its judgment as elude extraordinary utility consume- subscriptions,e publications,and Federal funding.
to which method would be most prac- tion, the cost of materials supplied functions.See also services§200.95a9. (ca Diversity the nonprofit organizations.
tical. from stock or services rendered by spe- (2) Providing and informs- Because of diverse characteristics
lion to members,legislative or(e)The amount or proportion of unal- cialized facilities, program evaluation See also and accounting practices of nonprofit
lowable costs included in each year's costs,or other institutional service op- istrative bodies,or the public. also organizations, it is not possible to
rate will be assumed to be the same as orations. §§200.954 and 200.950. specify the types of cost which may be
the amount or proportion of unallow- (c)The salaries of administrative and (3) Promotion, lobbying, and other classified as indirect(FAA)cost in all
able costs included in the base year clerical staff should normally be treat- forms of public relations. See also situations. Identification with a Fed-
proposal used to establish the rate. ed as indirect (FAA) costs. Direct §§200.921 and 200.950. oral award rather than the nature of
145 146
OMB Guidance §200.414 §200.415 2 CFR Ch.II(1-1-22 Edition)
the goods and services involved is the (1)Appendix III to Part 200—Indirect (h)The federally negotiated indirect the non-Federal entity that submits
determining factor in distinguishing (FAA)Costs Identification and Assign- rate, distribution base, and rate type the proposal.
direct from indirect (F&A) costs of ment,and Rate Determination for In- for a non-Federal entity(except for the (2)Unless the non-Federal entity has
Federal awards. However, typical ex- stitutions of Higher Education(IHEs); Indian tribes or tribal organizations,as elected the option under§200.919(0,the
amples of indirect(FAA)cost for many (2)Appendix IV to Part 200—Indirect defined in the Indian Self Determina- Federal Government may either dis-
lion,Education and Assistance Act,25 allow all Indirect(FAA)costs or uni-
nonprofit organizations may include (FAA)Costs Identification and Assign-
depreciation on buildings and equip- most,and Rate Determination for Non- U.S.C. 950b(1))must be available pub- laterally establish such a plan or rate
most,the costs of operating and main- profit Organizations; licly on an OMB-designated Federal when the non-Federal entity fails to
taming facilities,and general adminis- (3) Appendix V to Part 200—State/ website. submit a certified proposal for estab-
tration and general expenses,such as Local Governmentwide Central Service [78 FR 78608,Dec.26,2013,as amended at 79 lishing such a plan or rate in accord-
the salaries and expenses of executive Cost Allocation Plans; FR 75886,Dec.19,2019;85 FR 99563,Aug.13, once with the requirements. Such a
officers,personnel administration,and (9)Appendix VI to Part 200—Public 20201 plan or rate may be based upon audited
accounting. Assistance Cost Allocation Plans; historical data or such other data that
(c)Federal Agency Acceptance of Nego- (5)Appendix VII to Part 200—States §200.415 Required certifications. have been furnished to the cognizant
tiated Indirect Cost Rates. (See also and Local Government and Indian Required certifications include: agency for indirect costs and for which
§200.306.) Tribe Indirect Cost Proposals;and (a)To assure that expenditures are it can be demonstrated that all unal-
(1)The negotiated rates must be ac- (6)Appendix IX to Part 200—Hospital proper and in accordance with the lowable costs have been excluded.
terms and conditions of the Federal When a cost allocation plan or indirect
cepted by all Federal awarding agen- Cost Principles.
ties. A Federal awarding agency may (f)In addition to the procedures out- award and approved project budgets, cost rate is unilaterally established by
use a rate different from the negotiated lined in the appendices in paragraph(e) the annual and final fiscal reports or the Federal Government because the
rate for a class of Federal awards or a of this section,any non-Federal entity vouchers requesting payment under the non-Federal entity failed to submit a
single Federal award only when re- that does not have a current nego- agreements must include a certifi- certified proposal,the plan or rate es-
single by Federal statute or regula- tiated(including provisional)rate,ex- cation,signed by an official who is au- tablished will be set to ensure that po-
tion, or when approved by a Federal teat for those non-Federal entities de-
eral to legally bind the non-Fed- tentially unallowable costs will not be
awarding agency head or delegate scribed in appendix VII to this part, eral entity,which reads as follows:"By reimbursed.
based on documented justification as signing this report,I certify to the best (c)Certifications by nonprofit orga-
described in paragraph paragraph D.1.b,may elect to charge a
g p (c)(3) of this de minimis rate of 10% of modified of my knowledge and belief that the re- nizations as appropriate that they did
port is true, complete, and accurate, not meet the definition of a major non-
section. total direct Costs(MTDC)which may
(2)The Federal awarding agency head be used indefinitely.No documentation and the expenditures, disbursements profit organization as defined in
or delegate must notify OMB of any an- is required to justify the 10%de mini- and cash receipts are for the purposes §200.914(a).
and objectives set forth in the terms (d) See also§200.450 for another re-
proved deviations, mis indirect cost rate.As described in
(3) The Federal awarding agency §200.903, costs must be consistently and conditions of the Federal award,I paired certification.
must implement, and make publicly charged as either indirect or direct am aware that any false,fictitious,or [78 FR 78608,Dee.26,2013,as amended at 79
available,the policies,procedures and costs,but may not be double charged fraudulent information, or the orris- FR 75886,Dec.19,2019;85 FR 99563,Aug.13,
general decision-making criteria that or Inconsistently charged as both. If Sion of any material fact,may subject 20201
their programs will follow to seek and chosen,this methodology once elected me to criminal,civil or administrative
justify deviations from negotiated must be used consistently for all Fed- penalties for fraud, false statements, SPECIAL CONSIDERATIONS FOR STATES,
rates. eral awards until such time as a non- false claims or otherwise. (U.S. Code LOCAL GOVERNMENTS AND INDIAN
(9) As required under §200.209, the Federal entity chooses to negotiate for Title 18,Section 1001 and Title 31,Sec- TRIBES
Federal awarding agency must include a rate, which the non-Federal entity lions 3729-3730 and 3801-3812)."
in the notice of funding opportunity may apply to do at any time. (b) Certification of cost allocation §200.416 Cost allocation plans and in.
the policies relating to indirect cost (g)Any non-Federal entity that has a plan or indirect(FAA) cost rate pro- direct cost proposals.
posal.Each cost allocation plan or in- (a)For states,local governments and
rate reimbursement,matching,or cost current federally-negotiated indirect
direct (FAA) cost rate proposal must Indian tribes,certain services,such as
share as approved under paragraph cost rate may apply for a one-time ex-
(e)(1) of this section. As appropriate, tension of the rates in that agreement comply with the following: motor pools, computer centers, pur-
the Federal agency should Incorporate for a period of up to four years.This (1)A proposal to establish a cost alto- chasing,accounting,etc.,are provided
discussion of these policies into Fed- extension will be subject to the review cation plan or an indirect(F&A)cost to operating agencies on a centralized
oral awarding agency outreach activi- and approval of the cognizant agency rate,whether submitted to a Federal basis. Since Federal awards are per-
ties with non-Federal entities prior to for indirect costs. If an extension is cognizant agency for indirect costs or formed within the individual operating
maintained en file by the non-Federal agencies, there needs to be a process
the posting of a notice of funding oP- granted the non-Federal entity may
entity, must be certified by the non- whereby these central service costs can
portunity. not request a rate review until the ex-
(d)Pass-through entities are subject tension period ends.At the end of the Federal entity using the Certificate of be identified and assigned to benefitted
to the requirements in§200.332(a)(9). 9-year extension,the non-Federal enti- Cost Allocation Plan or Certificate of activities on a reasonable and con-
(e) Requirements for development ty must re-apply to negotiate a rate. Indirect Costs as set forth in apace- sistent basis.The central service cost
and submission of indirect(FAA)cost Subsequent one-time extensions(up to dices III through VII, and IX of this allocation plan provides that process.
rate proposals and cost allocation four years)are permitted if a renegoti- part.The certificate must be signed on (b) Individual operating agencies
plans are contained in Appendices III- atlon is completed between each exten- behalf of the non-Federal entity by an (governmental department or agency),
VII and Appendix IX as follows: Sion request. individual at a level no lower than vice normally charge Federal awards for in-
president or chief financial officer of direct costs through an indirect cost
147
146
OMB Guidance §200.419 §200.420 2 CFR Ch.II(1-1-22 Edition)
rate. A separate indirect cost rate(s) cordance with applicable Federal cost in advance of a disclosed practice being the change has a material effect on
proposal for each operating agency is accounting principles In this part;and changed to comply with a new or modi- Federal awards and the changes are
usually necessary to claim indirect (c)The costs are not otherwise borne fied standard, or when a practice is deemed appropriate by the cognizant
costs under Federal awards. Indirect directly or indirectly by the Federal changed for other reasons.An IHE may agency for indirect costs.
costs include: Government. proceed with implementing the change (6) Responsibilities. The cognizant
(1)The indirect costs originating in after it has notified the Federal cog- agency for indirect cost must:
[78 FR 78608,Dec.26,2013,as amended at 85
each department or agency of the gov- FR 99564,Aug.13,20201 nizant agency for indirect costs.If the (i) Determine cost adjustments for
ernmental unit carrying out Federal change represents a variation from 2 all Federal awards in the aggregate on
awards and §200.419 Cost accounting standards CFR part 200,the change may require behalf of the Federal Government.Ac-
(2)The costs of central governmental and disclosure statement. approval by the Federal cognizant tions of the cognizant agency for indi-
services distributed through the cen- (a)An IHE that receive an aggregateagency for indirect costs,in accordance
nt
tral service cost allocation plan and deral with 200.102(b. rect cost determinations mamus °bet t
not otherwise treated as direct costs. aw r s a d instr or more in Fed this § ) Amendments i e D e- wihlaffemust be coordinated wari
awards and instruments subject to this 2 may be submitted at any time.Re- with all affected Federal awarding
(c)The requirements for development subpart(as specified in§200.101)in its submission of a complete,updated DS- agencies to the extent necessary.
and submission of cost allocation plans most recently completed fiscal year 2 is discouraged except when there are
(for central service costs and public as- must comply with the Cost Accountingextensive changes to disclosedprac- (ii)e Prescribe guidelineso and establish
deter-
sistance programs) and indirect cost tires. mine al procedures the promptly Govern-
rate proposals are contained in appen- Standards Board'se cost accounting mine on that behalf of adequately
s
dices V.VI and VII to this part. standards02, located and a 48 CFR AS-coy- (3)Cast and fundingsteadjustments.Cost meat a cost cotingdiscloses
9905.502,9905.505, 9905.506.CAS-cov- adjustments must be made by the cog- the IHE's accounting practices
[78 FR 78608,Dec.26,2013,as amended at 86 ered contracts and subcontracts award- nizant agency for indirect costs if an and that the disclosed practices are
FR 10990,Feb.22,2021] ed to the IHEs are subject to the broad- IHE falls to comply with the cost poll- compliant with applicable CAS and the
er range of CAS requirements at 48 cies in this part or fails to consistently requirements of this part.
§200.417 Interagency service. CFR 9900 through 9999 and 48 CFR part follow its established or disclosed cost (lii)Distribute to all affected Federal
The cost of services provided by one 30(FAR Part 30). accounting practices when estimating, awarding agencies any DS-2 determina-
agency to another within the govern- (b)Disclosure statement.An IHE that accumulating or reporting the costs of tion of adequacy or noncompliance.
mental unit may include allowable di- receives an aggregate total$50 million Federal awards,and the aggregate cost
rect costs of the service plus a pro- or more in Federal awards and Matra- impact on Federal awards is material. C78 FR 78608,Dec.26,2013,as amended at 79
rated share of indirect costs.A stand- ments subject to this subpart(as specs- The cost adjustment must normally be FR 75886,Dec.19,2014;85 FR 49564,Aug.13,
and indirect cost allowance equal to fled in §200.101) during its most re- made on an aggregate basis for all of- 2020]ten percent of the direct salary and cently completed fiscal year must dis- fected Federal awards through an ad- GENERAL PROVISIONS FOR SELECTED
wage cost of providing the service(ex- close their cost accounting practices justment of the IHE's future F&A costs ITEMS OF CosT
eluding overtime,shift premiums,and by filing a Disclosure Statement(DS- rates or other means considered appro-
fringe benefits)may be used in lieu of 2),which is reproduced in Appendix III priate by the cognizant agency for indi- §200.420 Considerations for selected
determining the actual indirect costs to Part 200. With the approval of the rest costs.Under the terms of CAS cov- items of cost.
of the service.These services do not in- cognizant agency for indirect costs,an ered contracts, adjustments in the This section provides principles to be
elude centralized services included in III);may meet the DS-2 submission by amount of funding provided may also applied in establishing the allowabllity
central service cost allocation plans as submitting the DS-2 for each business be required when the estimated pro- of certain items involved in deter-
described in Appendix V to Part 200. unit that received$50 million or more posal costs were not determined in ac-
in Federal awards and instruments. cordance with established cost ac- mining cost,in addition to the require-
(85 FR 99569,Aug.13,2020] ments of Subtitle II of this subpart.
(1) The DS-2 must be submitted to counting practices.
SPECIAL CONSIDERATIONS FOR the cognizant agency for indirect costs (4) Overpayments. Excess amounts These principles apply whether or not a
INSTITUTIONS OF HIGHER EDUCATION with a copy to the IHE's cognizant paid in the aggregate by the Federal particular item of cost 1s properly
agency for audit.The initial DS-2 and Government under Federal awards due treated as direct cost or indirect(F&A)
$200.918 Costs incurred by states and revisions to the DS-2 must be sub- to a noncompliant cost accounting cost. Failure to mention a particular
local governments. mitted in coordination with the IHE's practice used to estimate,accumulate, item of cost is not intended to imply
Costs incurred or paid by a state or indirect(F&A)rate proposal,unless an or report costs must be credited or re- that it is either allowable or unallow-
local government on behalf of its IHEs earlier submission is requested by the funded, as deemed appropriate by the able;rather,determination as to allow-
for fringe benefit programs, such as cognizant agency for indirect costs. cognizant agency for indirect costs.In- ability in each case should be based on
pension costs and FICA and any other IHEs with CAS-covered contracts or terest applicable to the excess amounts the treatment provided for similar or
costs specifically incurred on behalf of, subcontracts meeting the dollar paid in the aggregate during the period related items of
es cost,and based on the
and in direct benefit to,the IHEs,are threshold in 48 CFR 9903.202-1(f)must of noncompliance must also be deter- principles described in §§200.902
allowable costs of such IHEs whether submit their initial DS-2 or revisions mined and collected in accordance with through 200.411. In case of a discrep-
or not these costs are recorded in the no later than prior to the award of a applicable Federal agency regulations. ones between the provisions of a spe-
accounting records of the institutions, CAS-covered contract or subcontract. (5) Compliant cost accounting practice cific Federal award and the provisions
subject to the following: (2)An IHE must maintain an accu- changes. Changes from one compliant below,the Federal award governs.Cri-
(a)The costs meet the requirements rate DS-2 and comply with disclosed cost accounting practice to another teria outlined in§200.903 must be ee
of§200.402-411 of this subpart; cost accounting practices. An IHE compliant practice that are approved plied In determining allowability.See
(b)The costs are properly supported must file amendments to the DS-2 to by the cognizant agency for indirect also§200.102.
by approved cost allocation plans in ao- the cognizant agency for indirect costs costs may require cost adjustments if [85 FR 99564,Aug.13,2020]
149 150
OMB Guidance §200.425 §200.426 2 CFR Ch.II(1-1-22 Edition)
$200.421 Advertising and public rela. (1) All advertising and public rela- have been conducted but not in accord- eral entity requires similar assurance,
Bons. tions costs other than as specified in ance therewith;and including: bonds as bid, performance,
(a)The term advertising costs means paragraphs(b)and(d)of this section; (2)Any costs of auditing a non-Fed- payment, advance payment, infringe-
the costs of advertising media and cor- (2) Costs of meetings, conventions, oral entity that is exempted from has- meat,and fidelity bonds for employees
celery administrative costs. Adver- convocations, or other events related leg an audit conducted under the Sin- and officials.
tiring media include magazines,news- to other activities of the entity (see gee Audit Act and subpart F of this (b)Costs of bonding required pursu-
papers, radio and television, direct also§200.432),including: part because its expenditures under ant to the terms and conditions of the
mail, exhibits,electronic or computer (I)Costs of displays,demonstrations, Federal awards are less than $750,000 Federal award are allowable.
transmittals,and the like. and exhibits; during the non-Federal entity's fiscal (c)Costs of bonding required by the
(b) The only allowable advertising (ii) Costs of meeting rooms, hospi- year. non-Federal entity in the general con-
costs are those which are solely for: tality suites,and other special facili- (b)The costs of a financial statement duct of its operations are allowable as
(1)The recruitment of personnel re- ties used in conjunction with shows audit of a non-Federal entity that does an indirect cost to the extent that such
quired by the non-Federal entity for and other special events;and not currently have a Federal award bonding is in accordance with sound
performance of a Federal award(See (Hsi)Salaries and wages of employees may be included in the indirect cost business practice and the rates and pre-
also§200.463); engaged in setting up and displaying pool for a cost allocation plan or indi- miums are reasonable under the cir-
(2) The procurement of goods and exhibits, making demonstrations, and rect cost proposal. cumatances.
services for the performance of a Fed- providing briefings; (c)Pass-through entities may charge
eral award; (3) Costs of promotional items and Federal awards for the cost of agreed- $200.428 Collections of improper pay-
(3)The disposal of scrap or surplus memorabilia, including models, gifts, upon-procedures engagements to mon- ments.
materials acquired in the performance and souvenirs; itor subrecipients(in accordance with The costs incurred by a non-Federal
of a Federal award except when non- (4)Costs of advertising and public re- subpart D, §§200.331-333) who are ex- entity to recover improper payments
Federal entities are reimbursed for dis- lations designed solely to promote the empted from the requirements of the are allowable as either direct or indi-
posal costs at a predetermined amount; non-Federal entity. Single Audit Act and subpart F of this root costs, as appropriate. Amounts
Or [78 FR 76808,Dec.26,2013,as amended at 85 part.This cost is allowable only if the collected may be used by the non-Fed-
(9)Program outreach and other spe- FR 99569,Aug.13,2020] agreed-upon-procedures engagements oral entity in accordance with cash
cific purposes necessary to meet the re- are: management standards set forth in
quirements of the Federal award. §200.422 Advisory councils. (1) Conducted in accordance with §200.305.
(c)The term "public relations" in- Costa incurred by advisory councils GALAS attestation standards; [85 FR 49565,Aug.13,2020]
eludes community relations and means or committees are unallowable unless (2)Paid for and arranged by the pass-
those activities dedicated to maintain- through entity;and
authorized by statute, the Federal $200ion Commencement and convoca-
ing the image of the non-Federal entity awarding agency or as an indirect cost (3)Limitednin scopeecto one orli more of lion costs.
re-
or maintaining or promoting under- the following types iofe compliance where allocable to Federal awards.See quirements: activities allowed or For IHEs, costs incurred for com-
standing and favorable relations with §200.444,applicable to States,local gov- mencements and convocations are un-
the community or public at large or ernments,and Indian tribes. unallowed; allowable costs/cost prin- allowable, except as
°Hiles;eligibility;and reporting. P provided for in
any segment of the public. (B)(9) Student Administration and
(d) The only allowable public rela- (85 FR 99569,Aug.13,2020] (78 FR 78608,Dec.26,2013,as amended at 85 Services,in appendix III to this part,
tires costs are: §200.423 Alcoholic beverages. FR 99569,Aug.13,2020] as activity costs.
(1)Costs specifically required by the
Federal award; Costa of alcoholic beverages are unal- §200.426 Bad debts. [85 FR 99565,Aug.13,2020]
(2)Costs of communicating with the lowable. Bad debts(debts which have been de-
public and press pertaining to specific termined to be uncollectable), includ- $20 s'erv43 ices.Oompenantion-personal
activities or accomplishments which $200.424 Alumni/ae activities. ing losses (whether actual or esti- sery
result from performance of the Federal Costs incurred by IHEs for,or in sup- mated)arising from uncollectable ae- (a) General. Compensation for per-
award(these costs are considered nec- Port of,alumni/ae activities are anal- counts and other claims,are unallow- sonal services includes all remunera-
essary as part of the outreach effort for lowable. able.Related collection costs,and re- tion, paid currently or accrued, for
the Federal award);or lated legal costs, arising from such services of employees rendered during
(3)Costs of conducting general leas- §200.425 Audit services. debts after they have been determined the period of performance under the
son with news media and government (a)A reasonably proportionate share to be uncollectable are also unallow- Federal award,including but not sod-
public relations officers,to the extent of the costs of audits required by,and able.See also§200.428. essarily limited to wages and salaries.
that such activities are limited to com- performed in accordance with,the Sin- Compensation for personal services
munication and liaison necessary to gle Audit Act Amendments of 1996(31 [85 FR 99565,Aug.13,20201 may also include ein fringe benefitswhich
are addressed ble.Costs of court
keep the public informed on matters of U.S.C.7501-7507),as implemented by re- §200.427 Bonding costs. sensation are allowable to the extent
public concern,such as notices of fund- quirements of this part,are allowable. (a)Bonding costs arise when the Fed- that they satisfy the specific require-
ing opportunities, financial matters, However,the following audit costs are eral awarding agency requires assur- manta of this part,and that the total
etc. unallowable: ance against financial loss to itself or compensation for individual employ-
(e)Unallowable advertising and pub- (1)Any costs when audits required by others by reason of the act or default ees:
lie relations costs include the foe- the Single Audit Act and subpart F of - of the non-Federal entity. They arise (1)Is reasonable for the services ren-
lowing: this part have not been conducted or also in instances where the non-Fed- dered and conforms to the established
151 152
OMB Guidance §200.430 §200.430 2 CFR Ch.II(1-1-22 Edition)
written policy of the non-Federal enti- that they constitute personnel corn- special consideration and possible limi- (3) Intra-Institution of Higher Edu-
ty consistently applied to both Federal pensation. tations in determining allowable per- cation(IHE)consulting.Intra-IHE con-
and non-Federal activities; (2) The allowable compensation for sonnel compensation costs under Fed- suiting by faculty should be under-
(2)Follows an appointment made in certain employees is subject to a ceil- eral awards. Among such conditions taken as an IHE responsibility requir-
accordance with a non-Federal entity's ing in accordance with statute.For the are the following: ing no compensation in addition to
laws and/or rules or written policies amount of the ceiling for cost-reim- (I) Allowable activities. Charges to IBS.However, in unusual cases where
and meets the requirements of Federal bursement contracts,the covered corn- Federal awards may include reasonable consultation is across departmental
statute,where applicable;and pensation subject to the ceiling, the amounts for activities contributing lines or involves a separate or remote
(3) Is determined and supported as covered employees,and other relevant and directly related to work under an operation,and the work performed by
provided in paragraph(i) of this sec- provisions, see 10 U.S.C. 2324(e)(1)(P), agreement, such as delivering special the faculty member is in addition to
Lion,when applicable. and 91 U.S.C.1127 and 4304(a)(16). For lectures about specific aspects of the his or her regular responsibilities,any
(b)Reasonableness.Compensation for other types of Federal awards, other ongoing activity, writing reports and charges for such work representing ad-
employees engaged in work on Federal statutory ceilings may apply. articles, developing and maintaining ditional compensation above IBS are
awards will be considered reasonable to (e)Special considerations.Special con- protocols(human,animals,etc.),man- allowable provided that such con-
the extent that it is consistent with siderations in determining allowability aging substances/chemicals, managing suiting arrangements are specifically
that paid for similar work in other ac- of compensation will begiven to anyand securing
tivities of the non-Federal entity. In search-subject data, ci- provided for writing n Federal the award al
cases where the kinds of employees re- penchange in a non-Federal resultingult in suity's corn- patingordin inng research subjects,seminars,p con-c - approved gn y by Federal
quired for Federal awards are not found Mal increasee pelicy ml e a slevel of in appropriate te awarding Extraxt agency.
rep-
in the other activities of the non-Fed- Mal in its employees'level of suiting with colleagues and graduate se Service Pay normally eral entity,compensation will be con- compensation (particularly when the students,and attending meetings and resents overload compensation,subject
sidered reasonable to the extent that it change was concurrent with an in- conferences. to institutional compensation policies
is comparable to that paid for similar crease in the ratio of Federal awards to (ii) Incidental activities. Incidental for services above and beyond IBS.
work in the labor market in which the other activities)or any change in the activities for which supplemental com- Where extra service pay is a result of
non-Federal entity competes for the treatment of allowability of specific pensation is allowable under written Infra-IHE consulting, it is subject to
kind of employees involved. types of compensation due to changes institutional policy(at a rate not to the same requirements of paragraph(b)
in Federal policy. exceed institutional base salary)need above.It is allowable if all of the fol-
(c) Professional activities outside the (f) Incentive compensation. Incentive not be included in the records described lowing conditions are met:
non-Federal entity. Unless an arrange- compensation to employees based on in paragraph(I)of this section to di- (1) The non-Federal entity estab-
ment is specifically authorized by a
Federal awarding agency, a non-Fed- cost reduction, or efficient perform- redly charge payments of incidental lishes consistent written policies which
seal entity must follow its written non- ance,suggestion awards,safety awards, activities,such activities must either apply uniformly to all faculty mem-
Federal entity-wide policies and prat- etc.,is allowable to the extent that the be specifically provided for in the Fed- bers,not just those working on Federal
overall compensation is determined to
tices concerning the permissible extent eral award budget or receive prior writ- awards.
of professional services that can be pro- be reasonable and such costs are paid ten approval by the Federal awarding (ii) The non-Federal entity estab-
vided outside the non-Federal entity or accrued pursuant to an agreement agency. lishes a consistent written definition of
for non-organizational compensation. entered into in good faith between the (2)Salary basis.Charges for work per- work covered by IBS which is specific
Where such non-Federal.entity-wide non-Federal entity and the employees formed on Federal awards by faculty enough to determine conclusively when
written policies do not exist or do not before the services were rendered, or members during the academic year are work beyond that level has occurred.
adequately define the permissible ex- pursuant to an established plan fol- allowable at the IBS rate. Except as This may be described in appointment
tent of consulting or other non-organi- lowed by the non-Federal entity so noted in paragraph(h)(1)(11)of this sec- letters or other documentations.
national activities undertaken for consistently as to imply,in effect,an tion,in no event will charges to Fed- (iii) The supplementation amount
extra outside pay,the Federal Govern- agreement to make such payment. seal awards,irrespective of the basis of paid is commensurate with the IBS
meet may require that the effort of (g)Nonprofit organizations. For tom- computation,exceed the proportionate rate of pay and the amount of addi-
professional staff working on Federal pensation to members of nonprofit or- share of the IBS for that period.This tional work performed.See paragraph
awards be allocated between: ganizations,trustees,directors,associ- principle applies to all members of fac- (h)(2)of this section.
(1)Non-Federal entity activities,and ates,officers,or the immediate tams- ulty at an institution.IBS is defined as (iv) The salaries, as supplemented,
(2) Non-organizational professional lies thereof, determination must be the annual compensation paid by an fall within the salary structure and
IH
activities. If the Federal awarding made that such compensation is red- E for an individual's appointment, pay ranges established by and deco-
agency considers the extent of non-or- sonable for the actual personal services whether that individual's time is spent mented in writing or otherwise applica-
ganizational professional effort exces- rendered rather than a distribution of on research, instruction, administra- ble to the non-Federal entity.
sive or inconsistent with the conflicts- earnings in excess of costs.This may - tion,or other activities.IBS excludes (v)The total salaries charged to Fed-
of-interest terms and conditions of the include director's and executive tom- any income that an individual earns eral awards including extra service pay
Federal award, appropriate arrange- mittee member's fees, incentive outside of duties performed for the are subject to the Standards of Docu-
ments governing compensation will be awards,allowances for off-site pay,in- DIE.Unless there is prior approval by mentation as described in paragraph(i)
negotiated on a case-by-case basis. centive pay,location allowances,hard- the Federal awarding agency,charges of this section.
(d) Unallowable costs.(1)Costs which ship pay, and cost-of-living differen- of a faculty member's salary to a Fed- (5)Periods outside the academic year.
are unallowable under other sections of tials. eral award must not exceed the proper- (I)Except as specified for teaching ac-
these principles must not be allowable (h) Institutions of Higher Education tionate share of the IBS for the period tivity in paragraph(h)(5)(ii)of this sec-
under this section solely on the basis (IHEs). (1) Certain conditions require during which the faculty member tics, charges for work performed by
worked on the award. faculty members on Federal awards
153 154
OMB Guidance §200.430 §200.430 2 CFR Ch.II(1-1-22 Edition)
during periods not included in the base pensated by the non-Federal entity, categories of activities expressed as a vided in paragraph(1)(5)(lii)of this sec-
salary period will be at a rate not in not exceeding 100%of compensated ac- percentage distribution of total activi- Lion;
excess of the IBS. tivities(for IHE,this per the IHE's def- ties• (B)The entire time period involved
(ii) Charges for teaching activities inition of IBS); (x)It is recognized that teaching,re- must be covered by the sample;and
performed by faculty members on Fed- (iv)Encompass federally-assisted and search,service,and administration are (C)The results must be statistically
oral awards during periods not included all other activities compensated by the often inextricably intermingled in an valid and applied to the period being
in IBS period will be based on the nor- non-Federal entity on an integrated academic setting.When recording sala- sampled.
mal written policy of the IHE gov- basis,but may include the use of sub- ries and wages charged to Federal (ii) Allocating charges for the sam-
erning compensation to faculty mem- sidiary records as defined in the non- awards for IHEs,a precise assessment
bers for teaching assignments during Federal entity's written policy; of factors that contribute to costs is pled employees' supervisors, clerical
such periods. (v)Comply with the established ac- therefore not always feasible,nor is it and support staffs,based on the results
(6)Part-time faculty.Charges for work counting policies and practices of the expected. of the sampled employees,will be ac-
performed on Federal awards by fac- non-Federal entity (See paragraph (2)For records which meet the stand- ceptable.
ulty members having only part-time (h)(1)(ii) above for treatment of foci- ards required in paragraph(1)(1)of this (iii)Less than full compliance with
appointments will be determined at a dental work for IHEs.);and section,the non-Federal entity will not the statistical sampling standards
rate not in excess of that regularly (vi)[Reserved] be required to provide additional sup- noted in subsection (5)(1)may be ac-
paid for part-time assignments. (vii)Support the distribution of the port or documentation for the work cepted by the cognizant agency for in-
(7) Sabbatical leave costs. Rules for employee's salary or wages among spe- performed,other than that referenced direct costs if it concludes that the
sabbatical leave are as follow: cific activities or cost objectives if the in paragraph(1)(3)of this section. amounts to be allocated to Federal
(i)Costs of leaves of absence by em- employee works on more than one Fed- (3)In accordance with Department of awards will be minimal, or if it con-
ployees for performance of graduate oral award; a Federal award and non- Labor regulations implementing the eludes that the system proposed by the
work or sabbatical study,travel,or re- Federal award;an indirect cost activ- Fair Labor Standards Act(FLSA)(29 non-Federal entity will result in lower
search are allowable provided the IHE ity and a direct cost activity; two or CFR part 516),charges for the salaries costs to Federal awards than a system
has a uniform written policy on sab- more indirect activities which are allo- and wages of nonexempt employees,in which complies with the standards.
batical leave for persons engaged in in- cated using different allocation bases; addition to the supporting documents- (6) Cognizant agencies for indirect
struction and persons engaged in re- or an unallowable activity and a direct tion described in this section, must costs are encouraged to approve alter-
. search.Such costs will be allocated on or indirect cost activity. also be supported by records indicating native proposals based on outcomes
an equitable basis among all related (viii) Budget estimates (i.e., esti- the total number of hours worked each and milestones for program perform-
activities of the IHE. mates determined before the services day. ance where these are clearly docu-
(ii) Where sabbatical leave is in- are performed)alone do not qualify as (4)Salaries and wages of employees minted.Where approved by the Federal
eluded in fringe benefits for which a support for charges to Federal awards, used in meeting cost sharing or match- cognizant agency for indirect costs,
coat is determined for assessment as a but may be used for interim accounting ing requirements on Federal awards these plans are acceptable as an alter-
direct charge,the aggregate amount of purposes,provided that: must be supported in the same manner native to the requirements of alter-
direct assessments applicable to all (A)The system for establishing the as salaries and wages claimed for rein- graph(i)(1)of this section.
work of the institution during the base estimates produces reasonable approxi- bursement from Federal awards.
period must be reasonable in relation mations of the activity actually per- (5)For states,local governments and (7)For Federal awards of similar pm.-
to the IHE's actual experience under formed; Indian tribes, substitute processes or pose activity or instances of approved
its sabbatical leave policy. (B) Significant changes in the cor- systems for allocating salaries and blended funding,a non-Federal entity
(8) Salary rates for non-faculty mem- responding work activity(as defined by wages to Federal awards may be used may submit performance plans that in-
bees.Non-faculty full-time professional the non-Federal entity's written poli- in place of or in addition to the records corporate funds from multiple Federal
personnel may also earn"extra service cies)are identified and entered into the described in paragraph(1)if approved awards and account for their combined
pay"in accordance with the non-Fed- records in a timely manner.Short term by the cognizant agency for indirect use based on performance-oriented
oral entity's written policy and con- (such as one or two months) fluctua- cost. Such systems may include, but metrics, provided that such plans are
sistent with paragraph(h)(1)(i)of this tion between workload categories need are not limited to, random moment approved in advance by all involved
section. not be considered as long as the dis- sampling,"rolling"time studies,case Federal awarding agencies.In these in-
(1)Standards for Documentation of Per- tribution of salaries and wages is rea- counts,or other quantifiable measures stances, the non-Federal entity must
sonnet Expenses(1)Charges to Federal sonable over the longer term;and of work performed. submit a request for waiver of the re-
awards for salaries and wages must be (C)The non-Federal entity's system (1) Substitute systems which use quirements based on documentation
based on records that accurately re- of internal controls includes processes sampling methods(primarily for Tem- that describes the method of charging
fleet the work performed. These to review after-the-fact interim porary Assistance for Needy Families costs,relates the charging of costa to
records must: charges made to a Federal award based (TANF), the Supplemental Nutrition the specific activity that is applicable
(I)Be supported by a system of inter- on budget estimates.All necessary ad- Assistance Program(SNAP),Medicaid, to all fund sources, and is based on
nal control which provides reasonable justment must be made such that the and other public assistance programs)
assurance that the charges are accu- final amount charged to the Federal
must meet acceptable statistical sam- quantifiable measures of the activity
rate,allowable,and properly allocated; award is accurate,allowable,and prop- piing standards including: in relation to time charged.
(ii)Be incorporated into the official erly allocated. (A)The sampling universe must in- (0) For a non-Federal entity where
records of the non-Federal entity; (ix)Because practices vary as to the elude all of the employees whose sala- the records do not meet the standards
(iii)Reasonably reflect the total ac- activity constituting a full workload ries and wages are to be allocated described in this section, the Federal
tivity for which the employee is corn- (for IHEs, IBS), records may reflect based on sample results except as pro-
155 156
OMB Guidance §200.431 §200.431 2 CFR Ch.11(1-1-22 Edition)
Government may require personnel ac- accounting, allowable leave costs are holding positions of similar responsi- denotes and other penalties imposed
tivity reports,including prescribed cer- the lesser of the amount accrued or bility are allowable only to the extent under ERISA are unallowable.
tifications, or equivalent documenta- funded. that the insurance represents adds- (6)Pension plan costs may be com-
tion that support the records as re- (c)Fringe benefits.The cost of fringe tonal compensation.The costs of such puted using a pay-as-you-go method or
quired in this section. benefits in the form of employer con- insurance when the non-Federal entity an acceptable actuarial cost method in
178 FR 78608,Dec.26,2013,as amended at 79 tributioes or expenses for social secu- is named as beneficiary are unallow- accordance with established written
FR 75886,Dec.19,2019;85 FR 49565,Aug.13, rity; employee life,health,unemploy- able. policies of the non-Federal entity.
2020] ment, and worker's compensation in- (3)Actual claims paid to or on behalf (i) For pension plans financed on a
surance (except as indicated in of employees or former employees for Pay-as-you-go method,allowable costs
§200.431 Compensation—fringe bene- §200.447);pension plan costs(see para- workers'compensation,unemployment will be limited to those representing
fits. graph (i) of this section); and other compensation,severance pay,and simi- actual payments to retirees or their
(a)General.Fringe benefits are allow- similar benefits are allowable,provided lar employee benefits(e.g.,post-retire- beneficiaries.
ances and services provided by employ- such benefits are granted under estab- ment health benefits),are allowable in (11)Pension costs calculated using an
ers to their employees as compensation lished written policies. Such benefits, the year of payment provided that the actuarial cost-based method recognized
in addition to regular salaries and must be allocated to Federal awards non-Federal entity follows a consistent by GAAP are allowable for a given fie-
wages.Fringe benefits include,but are and all other activities in a manner costing policy. cal year if they are funded for that
not limited to,the costs of leave(vaca- consistent with the pattern of benefits (f)Automobiles.That portion of auto- year within six months after the end of
tion,family-related,sick or military), attributable to the individuals or mobile costs furnished by the non-Fed- that year. Costs funded after the six-
employee insurance,pensions,and un- group(s) of employees whose salaries oral entity that relates to personal use month period(or a later period agreed
employment benefit plans. Except as and wages are chargeable to such Fed- by employees(including transportation to by the cognizant agency for indirect
provided elsewhere in these principles, oral awards and other activities, and to and from work) is unallowable as costs)are allowable in the year funded.
the costs of fringe benefits are allow- charged as direct or indirect costs in fringe benefit or indirect(F&A)costs The cognizant agency for indirect costs
able provided that the benefits are red- accordance with the non-Federal enti- regardless of whether the cost is re- may agree to an extension of the six-
sonable and are required by law,non- ty's accounting practices. month period if an appropriate adjust-
Federal entity-employee agreement,or ported as taxable income to the em- ment is made to compensate for the
an established policy of the non-Fed- may be assigneda objectives. Fringe benefits ployeea. timing of the charges to the Federal
ifgspecific cost is to types by (g) Pension plan erredts.in Pensioncc plan
eral entity. identifying benefits to specific costs which are incurred accordance Government and related Federal reim-
(b)Leave.The cost of fringe benefits individual employees or by allocating with the established policies of the bursement and the non-Federal enti-
in the form of regular compensation on the basis of entity-wide salaries and non-Federal entity are allowable, pro- ty's contribution to the pension fund.
paid to employees during periods of au- Adjustments may be made by cash re-
wages of the employees receiving the vided that:
thorized absences from the job,such as fund or other equitable procedures to
for annual leave,family-related leave, benefits. When the allocation method (1)Such policies meet the test of red- compensate the Federal Government
is used, separate allocations must be sonableness.
sick leave,holidays,court leave,mill- made to selective groupings of employ- for the time value of Federal reim-
made leave, administrative leave, and (2)The methods of cost allocation are bursements in excess of contributions
ees,unless the non-Federal entity dem- not discriminator
other similar benefits,are allowable if onetrates that costs in relationship to y' to the pension fund.
all of the following criteria are met: salaried and wages do not differ slgnlfi- (3)Except for State and Local Gov- (iii)Amounts funded by the non-Fed-
(1) They are provided under estab- candy for different groups of employ- ernments,the cost assigned to each fis- eral entity in excess of the actuarially
lished written leave policies; cal year should be determined in ac- determined amount for a fiscal year
(2)The costs are equitably allocated ees. cordance with GAAP. may be used as the non-Federal enti-
to all related activities,including Fed- (e) Insurance. See also §200.447(d)(1) (4)The costs assigned to a given fis- ty's contribution in future periods.
and(2). planp (iv)When a non-Federal entity con-
oral awards;and, cal year are funded for all artici-
(3)The accounting basis(cash or ac- (1) Provisions for a reserve under a pants within six months after the end verts to an acceptable actuarial cost
cruel)selected for costing each type of self-insurance program for unemploy- of that year.However,increases to nor- method,as defined by GAAP,and funds
leave is consistently followed by the ment compensation or workers' com- mal and past service pension costs pension costs in accordance with this
non-Federal entity or specified group- pensation are allowable to the extent caused by a delay in funding the actu- method,the unfunded liability at the
ing of employees. that the provisions represent reason- anal liability beyond 30 calendar days time of conversion is allowable if am-
(i) When a non-Federal entity uses able estimates of the liabilities for after each quarter of the year to which ortized over a period of years in accord-
the cash basis of accounting,the cost such compensation, and the types of such costs are assignable are unallow- ance with GAAP.
of leave is recognized in the period that coverage,extent of coverage,and rates able.Non-Federal entity may elect to (v)The Federal Government must re-
the leave is taken and paid for. Pay- and premiums would have been allow- follow the"Cost Accounting Standard ceive an equitable share of any pre-
ments for unused leave when an em- able had insurance been purchased to for Composition and Measurement of viously allowed pension costs(includ-
ployee retires or terminates employ- cover the risks.However,provisions for Pension Costs"(48 CFR 9904.412). ing earnings thereon)which revert or
ment are allowable in the year of pay- self-insured liabilities which do not be- (5) Pension plan termination insur- inure to the non-Federal entity in the
ment. come payable for more than one year once premiums paid pursuant to the form of a refund,withdrawal,or other
(ii) The accrual basis may be only after the provision is made must not Employee Retirement Income Security credit.
used for those types of leave for which exceed the present value of the lfabil- Act(ERISA)of 1974(29 U.S.C.1301-1461) (h)Post-retirement health.Post-retire-
a liability as defined by GAAP exists ity. are allowable. Late payment charges ment health plans (PRHP) refers to
when the leave is earned.When a non- (2)Costs of insurance on the lives of on such premiums are unallowable.Ex- costs of health insurance or health
Federal entity uses the accrual basis of trustees, officers, or other employees vise taxes on accumulated funding defi- services not included in a pension plan
157 158
OMB Guidance §200.431 §200.432 2 CFR Ch.I1(1-1-22 Edition)
covered by paragraph(g)of this section pose of providing post-retirement bene- management control over, or owner- not these costs are recorded in the ac-
for retirees and their spouses,depend- fits to retirees and other beneficiaries. ship of,the non-Federal entity's assets, counting records of the non-Federal en-
ents, and survivors. PRHP costs may (6)The Federal Government must re- are unallowable. titles,subject to the following:
be computed using a pay-as-you-go ceive an equitable share of any (4)Severance payments to foreign na- (1)The costs meet the requirements
method or an acceptable actuarial cost amounts of previously allowed post-re- tionals employed the non-Federal (1)The costs meet the requirements
by of Basic Considerations in §§200.402
method in accordance with established tirement benefit costs(including earn- entity outside the United States, to through 200.411;
written policies of the non-Federal en- logs thereon)which revert or inure to
tity. the extent tor alingntac exceeds the (2)The costs are properly supported
the non-Federal, entity t the c edit of a customaryn-F a prevailingentity thei n for by approved cost allocation
(1) For PRHP financed on a pay-as- refund,withdrawal,or other credit. the non-Federal entity in the United cordance with applicableplans in ac-
you-go method,allowable costs will be (i)Severance pay.(1)Severance pay, States, are unallowable, unless they Federal cost
limited to those representing actual also commonly referred to as dismissal are necessary for the performance of accounting principles;and
payments to retirees or their bene- wages,is a payment in addition to reg- Federal programs and approved by the (3)The coats are not otherwise borne
ficiaries. ular salaries and wages,by non-Federal Federal awarding agency. directly or indirectly by the Federal
(2) PRHP costs calculated using an entities to workers whose employment (5)Severance payments to foreign na- Government.
actuarial cost method recognized by is being terminated.Costs of severance tlonals employed by the non-Federal [85 FR 49565,Aug.13,20207
GAAP are allowable if they are funded pay are allowable only to the extent entity outside the United States due to
for that year within six months after that in each case,it is required by the termination of the foreign national §200.432 Conferences.
the end of that year.Costs funded after (i)Law; as a result of the closing of,or curtail-
the six-month period(or a later period A conference is defined as a meeting,
agreed to by the cognizant agency)are (ii)Employer-employee agreement; meat of activities by,the non-Federal retreat, seminar, symposium, work-
allowable in the year funded.The Fed- (iii) Established policy that con- entity in that country, are unallow- shop or event whose primary purpose is
stitutes, in effect, an implied agree- able,unless they are necessary for the
oral cognizant agency for indirect costs the dissemination of technical infor-
may agree to an extension of the six- moot on the non-Federal entity's part; performance of Federal programs and motion beyond the non-Federal entity
month period if an appropriate adjust- or approved by the Federal awarding
(Iv)Circumstances of theparticular agency. and Is necessary and reasonable for
meat is made to compensate for the successful performance under the Fed-
timing of the charges to the Federal employment. (j)For IHEs only. (1)Fringe benefits
Government and related Federal reim- (2)Costs of severance payments are in the form of undergraduate and grad-
paid award.Allowable conference costa
bursements and the non-Federal enti- divided into two categories as follows: uate tuition or remission of tuition for Paid by the non-Federal entity as a
ty's contributions to the PRHP fund. (I)Actual normal turnover severance individual employees are allowable, sponsor or host of the conference may
Adjustments may be made by cash re- payments must be allocated to all ac- provided such benefits are granted in include rental of facilities, speakers'
fund,reduction in current year's PRHP tivities;or,where the non-Federal en- accordance with established non-Fed- fees,costs of meals and refreshments,
costs,or other equitable procedures to tits provides for a reserve for normal oral entity policies,and are distributed local transportation, and other items
compensate the Federal Government severances, such method will be ac- to all non-Federal entity activities on incidental to such conferences unless
for the time value of Federal reim- ceptable if the charge to current oper- an equitable basis.Tuition benefits for further restricted by the terms and 1
bursements in excess of contributions ations is reasonable in light of pay- family members other than the em- conditions of the Federal award. As
to the PRHP fund. ments actually made for normal ployee are unallowable. needed, the costs of identifying, but
(3)Amounts funded in excess of the severances over a representative past (2)Fringe benefits in the form of tui- not providing,locally available depend-
actuarially determined amount Cora period,and if amounts charged are al- tion or remission of tuition for Indi- ent-care resources are allowable.Con-
fiscal year may be used as the non-Fed- located to all activities of the non-Fed- vidual employees not employed by ference hosts/sponsors must exercise
oral entity contribution in a future pe- oral entity. IHEs are limited to the tax-free discretion and judgment in ensuring
clod. (ii) Measurement of costs of abnor- amount allowed per section 127 of the that conference costs are appropriate,
(4) When a non-Federal entity con- maw or mass severance pay by means of Internal Revenue Code as amended. necessary and managed in a manner
verts to an acceptable actuarial cost an accrual will not achieve equity to (3)IHEs may offer employees tuition that minimizes costs to the Federal
method and funds PRHP costs in ac- both parties. Thus, accruals for this waivers or tuition reductions,provided award. The Federal awarding agency
cordance with this method,the initial purpose are not allowable. However, that the benefit does not discriminate may authorize exceptions where appro-
unfunded liability attributable to prior the Federal Government recognizes its in favor of highly compensated employ- priate for programs including Indian
years is allowable if amortized over a responsibility to participate,to the ex- ees.Employees can exercise these ben- tribes, children, and the elderly. See
period of years in accordance with tent of its fair share, in any specific efits at other institutions according to also§§200.438,200.456,and 200.475.
GAAP,or,if no such GAAP period ex- payment. Prior approval by the Fed- institutional policy. See §200.466, for [85 FR 99567,Aug.13,2020]
ists,over a period negotiated with the eral awarding agency or cognizant treatment of tuition remission pro-
cognizant agency for indirect costs. agency for indirect cost, as appro- vided to students. §200.453 Contingency provisions.
(5) To be allowable in the current priate,is required. (k) Fringe benefit programs and other
year,the PRHP costs must be paid ei- (3) Costs Incurred in certain sever- benefit costs.For IHEs whose costs are (a) Contingency is that part of a
ther to: ance pay packages which are in an paid by state or local governments, budget estimate of future costs(typi-
(i)An insurer or other benefit pro- amount in excess of the normal sever- fringe benefit programs(such as pen- cally of large construction projects,IT
eider as current year costs or pre- ance pay paid by the non-Federal enti- sfon costs and FICA) and any other systems,or other items as approved by
miums,or ty to an employee upon termination of benefits costs specifically incurred on the Federal awarding agency)which is
(ii)An insurer or trustee to maintain employment and are paid to the em- behalf of,and in direct benefit to,the associated with possible events or con-
s trust fund or reserve for the sole pur- ployee contingent upon a change In non-Federal entity,are allowable costs ditiona arising from causes the precise
of such non-Federal entities whether or outcome of which is indeterminable at
159
160
OMB Guidance §200.434 §200.435 2 CFR Ch.II(1-1-22 Edition)
the time of estimate,and that experi- erty is not counted towards cost shar- (1) Donated personal property and ing of a false certification)commenced
ence shows will likely result,in aggro- ing or matching requirements. use of space may be furnished to a non- by the Federal Government, a state,
gate, in additional costs for the ap- (c) Services donated or volunteered Federal entity. The value of the per- local government, or foreign govern-
proved activity or project.Amounts for to the non-Federal entity may be fur- sonal property and space may not be ment,or joined by the Federal Govern-
major project scope changes, unfore- nished to a non-Federal entity by pro- charged to the Federal award either as ment(Including a proceeding under the
seen risks, or extraordinary events fessional and technical personnel,con- a direct or indirect cost. False Claims Act), against the non-
may not be included. sultants, and other skilled and un- (2)The value of the donations may be Federal entity,(or commenced by third
(b)It is permissible for contingency skilled labor.The value of these serv- used to meet cost sharing or matching parties or a current or former em-
amounts other than those excluded in ices may not be charged to the Federal share requirements under the condi- ployee of the non-Federal entity who
paragraph(a)of this section to be ex- award either as a direct or indirect tions described in§200.300 of this part. submits a whistleblower complaint of
plicitly included in budget estimates, cost. However, the value of donated The value of the donations must be de- reprisal in accordance with 10 U.S.C.
to the extent they are necessary to im- services may be used to meet cost shar- termined in accordance with §200.300. 2909 or 91 U.S.C.4712),are not allowable
prove the precision of those estimates. ing or matching requirements in ac- Where donations are treated as indirect if the proceeding:
Amounts must be estimated using cordance with the provisions of costs,indirect cost rates will separate (1)Relates to a violation of,or failure
broadly-accepted cost estimating §200.306. the value of the donations so that re- to comply with,a Federal,state,local
methodologies,specified in the budget (d) To the extent feasible, services imbursement will not be made. or foreign statute, regulation or the
documentation of the Federal award, donated to the non-Federal entity will [78 FR 78608,Dec.26,2013,as amended at 79 terms and conditions of the Federal
and accepted by the Federal awarding be supported by the same methods used FR 75886,Dec.19,2014;85 FR 49567,Aug.13, award,by the non-Federal entity(in-
agency.As such,contingency amounts to support the allocability of regular 20201
are to be included in the Federal personnel services. eluding its agents and employees);and
award. In order for actual costs in- (e)The following provisions apply to §200.935 Defense and prosecution of Op Results in any of the following
tarred to be allowable,they must tom- nonprofit organizations. The value of criminal and civil proceedings, dispositions:
claims,appeals and patent infringe-
ply with the cost principles and other services donated to the nonprofit or a- c In a criminal proceeding,a con-
menu. viction.in this part (see also nization utilized in the performance of
tion.
§§200.300 and 200.403 of this part); be a direct cost activity must be consid- (a)Definitions for the purposes of this (B)In a civil or administrative pro-
necessary and reasonable for proper ered in the determination of the non- section.(1)Conviction means a judgment ceeding involving an allegation of
and efficient accomplishment of Federal entity's indirect cost rate(s) or conviction of a criminal offense by fraud or similar misconduct, a deter-
project or program objectives,and be and,accordingly, must be allocated a any court of competent jurisdiction, mination of non-Federal entity liabil-
verifiable from the non-Federal enti- proportionate share of applicable indi- whether entered upon verdict or a plea, ity.
ty's records. rest costs when the following cir- including a conviction due to a plea of (C)In the case of any civil or admin-
(c) Payments made by the Federal cumstances exist: n010 contenders. istrative proceeding, the disallowance
awarding agency to the non-Federal (1)The aggregate value of the serv- (2) Costs include the services of in- of costs or the imposition of a mone-
entity's"contingency reserve"or any ices is material; house or private counsel,accountants, tary penalty,or an order issued by the
similar payment made for events the (2)The services are supported by a consultants, or others engaged to as- Federal awarding agency head or dele-
occurrence of which cannot be foretold significant amount of the indirect sist the non-Federal entity before,dur- gate to the non-Federal entity to take
with certainty as to the time or inten- costs incurred by the non-Federal anti- ing,and after commencement of a Judi- corrective action under 10 U.S.C.2409
sity,or with an assurance of their hap- ty; cial or administrative proceeding,that or 41 U.S.C.4712.
pening, are unallowable, except as (1)In those instances where there is bear a direct relationship to the pro- (D)A final decision by an appropriate
noted in§§200.431 and 200.447. no basis for determining the fair mar- ceeding. Federal official to debar or suspend the
[78 FR 78608,Dec.26,2013,as amended at 79 ket value of the services rendered,the (i)(3)Fraud means: non-Federal entity,to rescind or void a
FR 75886,Dec.19,2014,85 FR 49567,Aug.13, non-Federal entity and the cognizant tempts Actsto defraudo fraud ther corruptionFederal or rnat- Federal award,or to terminate a Fed-
20201 agency for indirect costs must nego- mento nt, Govern- eral award by reason of a violation or
tfate an appropriate allocation of indi- men)Acts to corruptat its tauteta, failure to comply with a statute,regu-
§200.434 Contributions and donations. rest cost to the services. (11) that constitute a cause for lotion,or the terms and conditions of
debarme(a)Costs of contributions and dona- (ii)Where donated services directly in agency
go suspension and(as specified the Federal award.
tions, including cash, property, and benefit a project supported by the Fed- (iin agencytegwhich regulations), (E)A disposition by consent or corn-
services, from the non-Federal entityeral award,the indirect costs allocated Claimsii) Acts which violate3729-3732)the False
n -k Act(31kU.S.C. U.S.C. 0a- promise, if the action could have re-
to other entities,are unallowable. to the services will be considered as a Anti-kickback Act (41 U.S.C. 1320a- suited In any of the dispositions de-
(b)The value of services and property part of the total costs of the project. 7b(b)) scribed in paragraphs (b)(1)(11)(A)
donated to the non-Federal entity may Such indirect costs may be reimbursed (4)Penalty does not include restitu- through(D)of this section.
not be charged to the Federal award el- under the Federal award or used to tion,reimbursement,or compensatory (2) If more than one proceeding an-
ther as a direct or indirect(F&A)cost. meet cost sharing or matching require- damages. volves the same alleged misconduct,
The value of donated services and prop- masts. (5)Proceeding includes an investiga- the costs of all such proceedings are
erty may be used to meet cost sharing (f) Fair market value of donated tion. unallowable if any results in one of the
or matching requirements (see services must be computed as described
§200.306). Depreciation on donated as- in§200.306. scribed Costs. 1)Except otherwise on- dispositions shown in paragraph(b)of
sets is permitted in accordance with herein, costs incurred in con- this section.
(g) Personal Property and Use of section with any criminal,civil or ad- (c)If a proceeding referred to in para-
§200.436,as long as the donated prop- Space. ministrative proceedin
g g(including file graph(b)of this section is commenced
161 162
OMB Guidance §200.436 §200.437 2 CFR Ch.II(1-1-22 Edition)
by the Federal Government and is re- eluding the cost of all relief necessary fair market value at the time of the do- then be depreciated over its estimated
solved by consent or compromise pur- to make such employee whole, where nation must be considered as the acqui- useful life. The building components
suant to an agreement by the non-Fed- the non-Federal entity was found liable sition cost.Such assets may be depre- must be grouped into three general
eral entity and the Federal Govern- or settled,are unallowable. ciated or claimed as matching but not components of a building: building
ment, then the costs incurred may be (g) Costs of prosecution of claims both.For the computation of deprecia- shell (including construction and de-
allowed to the extent specifically pro- against the Federal Government, in- tion,the acquisition cost will exclude: sign costs), building services systems
vided in such agreement. cluding appeals of final Federal agency (1)The cost of land; (e.g., elevators, HVAC, plumbing sys-
(d)If a proceeding referred to in para- decisions,are unallowable. (2)Any portion of the cost of build- tem and heating and air-conditioning
graph(b)of this section is commenced (h) Costs of legal, accounting, and ings and equipment borne by or do- system) and fixed equipment (e.g.,
by a state,local or foreign government, consultant services,and related costs, nated by the Federal Government,irre- sterilizers,casework,fume hoods,cold
the authorized Federal official may incurred in connection with patent in- spective of where title was originally rooms and glassware/washers). In ex-
allow the costs incurred if such author- fringement litigation,are unallowable vested or where it is presently located; ceptional eases, a cognizant agency
ized official determines that the costs
were incurred as a result of: unless otherwise provided for in the (3)Any portion of the cost eofd build- may authorize a non-Federal entity to
(1)A specific term or condition of the Federal award, ings and equipment contributed areby or use more than these three groupings.
Federal award,or (i) Costs which may be unallowable for the non-Federal entity that al- When a non-Federal entity elects to de-
(2) Specific written direction of an under this section, including directly ready claimed as matching or where nests,tt its buildings by its eompo-
authorized official of the Federal associated costs, must be segregated law or agreement prohibits recovery; nests,the same depreciation methods
(4)Any asset acquired solely for the must be used for indirect(F&A)pur-
awarding agency. and accounted for separately. During performance of a non-Federal award; poses and financial statements pur-
e)Costs incurred in connection with the pendency of any proceeding covered
and poses,as described in paragraphs(d)(1)
proceedings described in paragraph(b) by paragraphs(b) and (f) of this sec- (d) When computing depreciation and(2)of this section.
of this section,which are not made un- tion, the Federal Government must charges, the following must be ob- (9) No depreciation may be allowed
allowable by that subsection, may be generally withhold payment of such served: on any assets that have outlived their
allowed but only to the extent that: costs.However,if in its best interests, (1) The period of useful service or depreciable lives.
(1)The costs are reasonable and net- the Federal Government may provide useful life established in each case for (5)Where the depreciation method is
essary in relation to the administra- for conditional payment upon provision usable capital assets must take into p
allow-
Non of the Federal award and activi- of adequate security,or other adequate consideration such factors as type of introducedcemethod,to replaceep the use must
be
ties required to deal with the pro- assurance,and agreement to repay all construction,nature of the equipment, com depreciation had meet --
ceeding and the underlying cause of ac- unallowable costs,plus interest,if the technological developments in the par- prcomputed overs if the entireret been de-
ceeding
tion; costs are subsequently determined to ticular area, historical data, and the theeciated its ws life u(i.r.,from
(2)Payment of the reasonable, nec- q y renewal and replacement date the asset was acquired and
be unallowable. P policies tole ready for use to the date of disposal or
essary, allocable and otherwise allow- lowed for the individual items or class- withdrawal from service). The total
able costs incurred is not prohibited by [78 FR 78608,Dec.26,2013,as amended at 79 es of assets involved. amount of use allowance and deprecia-
any other provision(s) of the Federal FR 75886,Dec.19,2014] (2)The depreciation method used to
de-
award; charge the cost of an asset(or group of tits for an asset(includingalo imputed fo
(3)The costs are not recovered from §200.436 Depreciation. assets)to accounting periods must re- tpre nation conversion
frome to periods pow-
the Federal Government or a third (a)Depreciation is the method for al- fleet the pattern of consumption of the a the method ass wellthe use allow-
party,either directly as a result of theasset duringits useful life.In the ab- ante er n) as depreciation
exceed
proceeding or otherwise;and, locating the cost from fixed assetets to peal-
sence of clear evidence indicatingthat after the conversion) may not exceed
ode bederal use. The the total acquisition cost of the asset.
(4) An authorized Federal official non-Federal entity may be com- the expected consumption of the asset (e)Charges for depreciation must be
must determine the percentage of coats pensated for the use of its buildings, will be significantly greater in the supported by adequate property
allowed considering the complexity of capital improvements,equipment,and early portions than in the later pore records,and physical
litigation, generally accepted prin- tions of its useful life,the straight-line inventories must
ciples governing the award of legal fees software projects capitalized in accord- method must be presumed to be the ape be taken at least once every two years
in civil actions involvingthe United once with GAAP, provided that they to ensure that the assets exist and are
are used,needed in the non-Federal en- propriatemethod. Depreciation meth- usable, used, and needed. Statistical
States,and such other factors as may tity's activities,and properly allocated ods onceused may not be changed - sampling techniques may be used in
be appropriate. Such percentage must to Federal awards.Such compensation less approved in advance by the coege- taking these inventories. In addition,
not exceed 80 percent.However, if an must be made by computing deprecia- nizant agency.The depreciation meth- adequate depreciation records showing
agreement reached under paragraph(c) tits. ods used to calculate the depreciation the amount of depreciation must be
of this section has explicitly consid- amounts for indirect(F&A) rate pur-
ered this 80 percent limitation and per- (b) The allocation for depreciation poses must be the same methods used maintained.
mitted a higher percentage, then the must be made in accordance with Ap- by the non-Federal entity for its finan- [78 FR 78608,Dec.26,2013,as amended at 79
full amount of costs resulting from pendices III through IX. cial statements. FR 75886,Dec.19,2014;85 FR 49568,Aug.13,
that agreement are allowable. (c)Depreciation is computed apply- (3)The entire building,including the 20201
(f)Costs incurred by the non-Federal ing the following rules.The computa- shell and all components,may be §200.437 Em 1 ee health and welfare
treat-
entity in connection with the defense tion of depreciation must be based on ed as a single asset and depreciated
Poy reciated costs.
of suits brought by its employees or ex- the acquisition cost of the assets in- over a single useful life. A building
employees under section 2 of the Major volved. For an asset donated to the may also be divided into multiple com- (a)Costs incurred in accordance with
Fraud Act of 1988(18 U.S.C. 1031), in- non-Federal entity by a third party,its ponents. Each component item may the non-Federal entity's documented
163 164
OMB Guidance §200.440 §200.441 2 CFR Ch.II(1-1-22 Edition)
policies for the improvement of work- (3)Capital expenditures for improve- additional federal funding before the §200.443 Gains and losses on disposi-
ing conditions, employer-employee re- ments to land,buildings,or equipment expiration date of the Federal award. tion of depreciable assets.
lations,employee health,and employee which materially increase their value Subsequent adjustments for currency (a)Gains and losses on the sale,re-
performance are allowable. or useful life are unallowable as a di- increases may be allowable only when tirement,or other disposition of depre-
(b) Such costs will be equitably ap- rect cost except with the prior written the non-Federal entity provides the ciable property must be included in the
portioned to all activities of the non- approval of the Federal awarding agen- Federal awarding agency with ads- year in which they occur as credits or
Federal entity.Income generated from ey,or pass-through entity.See§200.436, brute source documentation from a charges to the asset cost grouping(s)in
any of these activities will be credited for rules on the allowability of depre- commonly used source in effect at the which the property was included.The
to the cost thereof unless such income elation on buildings, capital improve- time the expense was made,and to the amount of the gain or loss to be in-
has been irrevocably sent to employee ments, and equipment. See also extent that sufficient Federal funds are eluded as a credit or charge to the ap-
welfare organizations. §200.965. available.
(c) Losses resulting from operating (9)When approved as a direct charge propriate asset cost grouping(s)is the
food services are allowable only if the pursuant to paragraphs(b)(1) through [78 FR 78608,Dec.26,2013,as amended at 79 difference between the amount realized
non-Federal entity's objective is to op- (3)of this section,capital expenditures FR 75886,Dec.19,2014] on the property and the undepreciated
crate such services on a break-even will be charged in the period in which §200.441 Fines, penalties, damages (bbasis of the property.
basis.Losses sustained because of°per- the expenditure is incurred,or as oth- and other settlements. on Gains and losses propertyfrom the u notf
ating objectives other than the above erwise determined appropriate and ne- be cosized depreciablesa aae must
are allowable only: gotiated with the Federal awarding Costs resulting from non-Federal en- be recognized the a separate credit or
(1)Where the non-Federal entity can agency, tity violations of,alleged violations of, charge under following conditions:
demonstrate unusual circumstances; (5)The unamortized portion of any or failure to comply with, Federal, (1) The gain or loss is processed
and equipment written off as a result of a state,tribal,local or foreign laws and through a depreciation account and is
(2) With the approval of the cog- change in capitalization levels may be regulations are unallowable, except reflected in the depreciation allowable
nizant agency for indirect costs. recovered by continuing to claim the when incurred as a result of compl- under§§200.938 and 200.439.
otherwise allowable depreciation on ance with specific provisions of the (2)The property is given in exchange
$200.938 Entertainment costs. the equipment, or by amortizing the Federal award, or with prior written as part of the purchase price of a simi-
Costs of entertainment, Including amount to be written off over a period approval of the Federal awarding ages- far item and the gain or loss is taken
cy.See also§200.435. into account in determining
amusement, diversion, and social ac- of years negotiated with the Federal the depre-
tivities and any associated costs are cognizant agency for indirect cost. [85 FR 49568,Aug.13,2020] elation cost basis of the new Item.
unallowable, except where specific (6)Cost of equipment disposal.If the (3)A loss results from the failure to
costs that might otherwise be consid- non-Federal entity is instructed by the $200.442 Fund raising and investment maintain permissible insurance,except
ered entertainment have a pro- Federal awarding agency to otherwise management costs. as otherwise provided in§200.497.
grammatic purpose and are authorized dispose of or transfer the equipment (a) Costs of organized fund raising, (9)Compensation for the use of the
either in the approved budget for the the costs of such disposal or transfer including financial campaigns, endow- property was provided through use al-
Federal award or with prior written ap- are allowable. meat drives, solicitation of gifts and lowances in lieu of depreciation.
proval of the Federal awarding agency. (7)Equipment and other capital ex- bequests,and similar expenses incurred (5) Gains and losses arising from
penditures are unallowable as indirect to raise capital or obtain contributions mass or extraordinary sales, retire-
§200.439 Equipment and other capital costs.See$200.436. are unallowable.Fund raising costs for ments, or other dispositions must be
expenditures. the purposes of meeting the Federal considered on a case-by-case basis.
[78 FR 78608,Dec.26,2013,as amended at 79
(a) See §200.1 for the definitions Of FR 75886,Dec.19,2014;85 FR 99568,Aug.13, program objectives are allowable with (c)Gains or losses of any nature aria-
capita/ expenditures, equipment, special 2020] prior written approval from the Fed- ing from the sale or exchange of prop-
purpose equipment, general purpose eral awarding agency. Proposal costs erty other than the property covered in
equipment, acquisition cost, and capital 4200.490 Exchange rates. are covered in§200.460. paragraph(a)of this section,e.g.,land,
assets. (a)Cost increases for fluctuations in (b)Costs of investment counsel and must be excluded in computing Federal
(b) The following rules of allow- exchange rates are allowable coats sub- staff and similar expenses incurred to award costs,
ability must apply to equipment and ject to the availability of funding. enhance income from investments are (d)When assets acquired with Fed-
other capital expenditures: Prior approval of exchange rate flue- unallowable except when associated eral funds, in part or wholly,are dis-
(1) Capital expenditures for general tuations is required only when the with investments covering pension, posed of, the distribution of the pro-
purpose equipment,buildings,and land change results in the need for addi- self-insurance,or other funds which in- seeds must be made in accordance with
are unallowable as direct charges,ex- tional Federal funding, or the in- elude Federal participation allowed by §§200.310 through 200.316 of this part.
cept with the prior written approval of creased costs result in the need to slg- this part. [71 FR 78608,Dec.26,2013,as amended at 79
the Federal awarding agency or pass- nificantly reduce the scope of the (c)Costs related to the physical sus- FR 75886,Dec.19,2014;85 FR 99568,Aug.13,
through entity. project. The Federal awarding agency tody and control of monies and securi- 20201
(2) Capital expenditures for special must however ensure that adequate ties are allowable.
purpose equipment are allowable as di- funds are available to cover currency (d) Both allowable and unallowable $200.449 General costs of government.
rect costs,provided that items with a fluctuations in order to avoid a viola- fund-raising and investment activities (a) For states, local governments,
unit cost of$5,000 or more have the tion of the Anti-Deficiency Act. must be allocated as an appropriate and Indian Tribes,the general costs of
prior written approval of the Federal (b) The non-Federal entity is re- share of indirect costs under the condi- government are unallowable(except as
awarding agency or pass-through enti- quired to make reviews of local cur- tions described in§200.413. provided in§200.975).Unallowable costs
ty. rency gains to determine the need for [85 FR 99568,Aug.13,2020] include:
165 166
OMB Guidance §200.446 §200A47 2 CFR Ch.II(1-1-22 Edition)
(1)Salaries and expenses of the Office $200.496 Idle facilities and idle eapac- year,depending on the initiative taken Federal entity's materials or work-
of the Governor of a state or the chief ity. to use,lease,or dispose of such facili- manship are unallowable.
executive of a local government or the (a) As used in this section the fol- ties. (6)Medical liability(malpractice)in-
chief executive of an Indian tribe; lowing terms have the meanings set (c)The costs of idle capacity are nor- surance.Medical liability insurance is
(2) Salaries and other expenses of a forth in this section: mal costs of doing business and are a an allowable cost of Federal research
state legislature, tribal council, or (1) Facilities means land and build- factor In the normal fluctuations of programs only to the extent that the
similar local governmental body,such lags or any portion thereof,equipment usage or indirect cost rates from period Federal research programs involve
as a county supervisor, city council, individually or collectively, or any to period. Such costs are allowable, human subjects or training of partici-
school board,etc.,whether incurred for other tangible capital asset,wherever provided that the capacity is reason- pants in research techniques. Medical
purposes of legislation or executive di- located, and whether owned or leased ably anticipated to be necessary to liability insurance costs must be treat-
rection; by the non-Federal entity. carry out the purpose of the Federal ed as a direct cost and must be as-
(3)Costs of the judicial branch of a (2) Idle facilities means completely award or was originally reasonable and signed to individual projects based on
government; unused facilities that are excess to the is not subject to reduction or elimi- the manner in which the insurer alto-
government;Costs of prosecutorial activities non-Federal entity's current needs. nation by use on other Federal awards, cater the risk to the population cov-
(4) stsof a cuto activities
to va roes (3) Idle capacity means the unused subletting,renting,or sale,in accord- ered by the insurance.
ulc unlessp treated asi directauthorized costb statute capacity of partially used facilities.It ance with sound business,economic,or (c) Actual losses which could have
ci reprogramion (however,f thisdoes not is the difference between: security practices.Widespread idle ea- been covered by permissible insurance
(i) That which a facility could parity throughout an entire facility or (through a self-insurance program or
preclude the allowability of other legal achieve under 100 percent operating among a group of assets having sub- otherwise)are unallowable,unless ex-
activities of the Attorney General as time on a one-shift basis less operating stantially the same function maybe
presslyward providedw , for n thee because
e eral
ruse
described in§200.935);and interruptions resulting from time lost considered idle facilities. award.However,costs incurred because
(5) Costs of other general types of for repairs,setups,unsatisfactory ma- of losses not covered under nominal de-
government services normally provided terials,and other normal delays and; §200.fl447 Insurance and indemnifica- ductible insurance coverage provided
to the general public,such as fire and (Ii)The extent to which the facility oe• in keeping with sound management
police,unless provided for as a direct was actually used to meet demands (a)Costs of insurance required or ap- practice,and minor losses not covered
cost under a program statute or regula- during the accounting period.A multi- proved and maintained, pursuant to by insurance,such as spoilage,break-
tion. shift basis should be used if it can be the Federal award,are allowable. age, and disappearance
(b)For Indian tribes and Councils of shown that this amount of usage wouldithe smallr hand
normally be expected for the type of fa- (b)Costs ofthe other general insurance ti con- tools, of ph occur in ordinary
Governments(COGS)(see definition for section with conduct of ac- course operations,are allowable.
Local government in§200.1 of this part), cility involved. tivities are allowable subject to the (d)Contributions to a reserve for cer-
up to 50%of salaries and expenses di- (4) Cost of idle facilities or idle ca- following limitations: tam self-insurance programs including
rectly attributable to managing and Parity means costs such as mainte- (1)Types and extent and cost of cov- workers'compensation,unemployment
operating Federal programs by the Hance,repair,housing,rent,and other erage are in accordance with the non- compensation, and severance pay are
chief executive and his or her staff can related costs,e.g.,insurance,interest, Federal entity's policy and sound bust- allowable subject to the following pro-
be included in the indirect cost cal- and depreciation.These costs could in- ness practice, visions:
culation without documentation. elude the costs of idle public safety (2)Costs of insurance or of contribu- (1)The type facilities, telecommuni- of coverage and the ex-
[78 FR 78608,Dec.26,2013,as amended at 79 cations,or information technology sys- tions to any reserve covering the risk tent of coverage and the rates and pre-
FR 75886,Dec.19,2019;85 FR 99568,Aug.13, tem capacity that is built to withstand of loss of,or damage to,Federal Gov- mlums would have been allowed had in-
2020) major fluctuations in load, e.g., con- ernment property are unallowable ex- surance (including reinsurance) been
solidated data centers. cept to the extent that the Federal purchased to cover the risks.However,
$200.495 Goods or services for per. (b)The costs of idle facilities are un- awarding agency has specifically re- provision for known or reasonably esti-
sonal use. allowable except to the extent that: quired or approved such costs. mated self-insured liabilities,which do
(a)Costs of goods or services for per- (1)They are necessary to meet work- (3)Costs allowed for business inter- not become payable for more than one
renal use of the non-Federal entity's load requirements which may fluctuate ruption or other similar insurance year after the provision is made,must
employees are unallowable regardless and are allocated appropriately to all must exclude coverage of management not exceed the discounted present
of whether the cost is reported as tax- benefiting programs;or fees. value of the liability.The rate used for
able income to the employees. (2) Although not necessary to meet (9)Costs of insurance on the lives of discounting the liability must be deter-
Corte of housing (e.g., deprecia- fluctuations in workload, they were trustees, officers, or other employees mined by giving consideration to such
(b)
(b) maintenance, utilities,.gde fur- necessary when acquired and are now holding positions of similar reapon- factors as the non-Federal entity's set-
idle because of changes in program re-
tion, sibilities are allowable only to the ex- tlement rate for those liabilities and
nishings,rent),housing allowances and quirements,efforts to achieve more ec- tent that the insurance represents ad- its investment rate of return.
personal living expenses are only al- onomical operations, reorganization, ditional compensation (see §200.431). (2)Earnings or investment income on
Towable as direct costs regardless of termination, or other causes which The cost of such insurance when the reserves must be credited to those re-
whether reported as taxable income to could not have been reasonably fore- non-Federal entity is identified as the serves.
the employees.In addition,to be allow- seen. Under the exception stated in beneficiary is unallowable. (3)(i)Contributions to reserves must
able direct costs must be approved in this subsection,costs of idle facilities (5)Insurance against defects.Costs of be based on sound actuarial principles
advance by a Federal awarding agency. are allowable for a reasonable period of insurance with respect to any costs in- using historical experience and reason-
time, ordinarily not to exceed one curred to correct defects In the non- able assumptions.Reserve levels must
167 168
OMB Guidance §200.448 §200.449 2 CFR Ch.II(1-1-22 Edition)
be analyzed and updated at least bien- §200.448 Intellectual property. result of less-than-arm's-length bar- an unrelated third party);or claims re-
nially for each major risk being in- (a) Patent costs. (1) The following gaining,such as: imbursement of actual interest cost at
(1)Royalties paid to persons,includ- a rate available via such a transaction.
sured and take into account any rein- costs related to securing patents and
surance,coinsurance,etc.Reserve lev- ing corporations, affiliated with the (4) The non-Federal entity limits
non-Federal entit
copyrights are allowable: y, claims for Federal reimbursement of
ell related to employee-related cov-
erages will normally be limited to the (i)Costs of preparing disclosures,re- (ii) Royalties paid to unaffiliated interest costs to the least expensive al-
value of claims: ports,and other documents required by parties, including corporations, under p
the Federal award,and of searching the ternative. For example, a lease con-
(A) Submitted and adjudicated but art to the extent necessar to make an agreement entered into in con- tract that transfers ownership by the
not paid; such disclosures; y temptation that a Federal award would end of the contract may be determined
(B) Submitted but not adjudicated; (fi)Costs of preparing documents and be made. less costly than purchasing through
and any other patent costs in connection (111) Royalties paid under an agree- other types of debt financing,in which
(C)Incurred but not submitted. with the filing and prosecution of a ment entered into after a Federal case reimbursement must be limited to
(ii) Reserve levels in excess of the United States patent application where award is made caseo a non-Federal patent ory. the ngamountee interest determined if
amounts based on the above must be title or royalty-free license is required (3)In any formerly involving a nr leasing had bean used.
identified and justified in the cost allo- oe copyright tiy, he amountwned b the non-
cation plan or indirect cost rate pro- by the Federal Federal over m nt con- allowedFederal entity,theexceed o royalty
(5) The non-Federalallow entity expenses
veyed to the Government;and or capitalizes allowable interest cost in
posal. ouldhave must not llow the cost which
(9) Accounting records, actuarial (iii)to General counseling copyr services re- would l been allowed title had the non-. accordanceEarningsstg GAAP.
latingc to patent on patent copyright and
matters, Federal entity retained thereto. ment(6) generated pendingby the invest-
studies, thi
and cost allocations (or alit- such as advice on and copyright of borrowed funds their
hogs) must recognize any significant laws, regulations, clauses, and em- [78 FR 78608,Dec.26,2013,as amended at 79 disbursement for the asset costs are
differences due to types of insured risk ployee intellectual property agree- FR 75886,Dec.19,2014;85 FR 49569,Aug.13, used to offset the current period's al-
and losses generated by the various in- ments(See also§200.459). 20201 lowable interest cost, whether that
sured activities or agencies of the non- (2)The following costs related to se- §200.949 Interest. cost is expensed or capitalized. Earn-
Federal entity. If individual depart- curing patents and copyrights are unal- ings subject to being reported to the
manta or agencies of the non-Federal lowable: (a)General.Costs incurred for inter- Federal Internal Revenue Service
entity experience significantly dif- (I)Costs of preparing disclosures,re- est on borrowed capital,temporary use under arbitrage requirements are ex-
ferent levels of claims for a particular ports, and other documents, and of of endowment funds,or the use of the cludable.
risk,those differences are to be recog- searching the art to make disclosures non-Federal entity's own funds, how- (7) The following conditions must
nized by the use of separate allocations not required by the Federal award; ever represented,are unallowable. Fl- apply to debt arrangements over Sl
or other techniques resulting in an eq- (i1) Costs in connection with filing nancing costs (including interest) to million to purchase or construct faclli-
uftable allocation. acquire, construct, or replace capital
and prosecuting any foreign patent ap- ties, unless the non-Federal entity
(5) Whenever funds are transferred plication,or any United States patent assets are allowable, subject to the makes an initial equity contribution to
from a self-insurance reserve to other application, where the Federal award conditions in this section. the purchase of 25 percent or more.For
accounts (e.g., general fund or unre- does not require conveying title or a (b)Capital assets.(1)Capital assets is this purpose, "initial equity are,bu-
striated account), refunds must be royalty-free license to the Federal defined as noted in§200.1 of this part. tion" means the amount or value of
made to the Federal Government for Government. An asset cost includes(as applicable)
Its share of funds transferred,includingacquisition costs, construction costs, contributions made by the non-Federal
(b)Royalties cs and other costs for use of entity for the acquisition of facilities
earned or imputed interest from the and other costs capitalized in accord-
patents and copyrights.(1)or Royalties onprior to occupancy.
date of transfer and debt interest,if ap- a patent or copyright or amortization once with GAAP.
plicable,chargeable in accordance with of the cost of acquiring by purchase a (2) For non-Federal entity fiscal (1)The non-Federal entity must re-
Years beginning on or after January 1, duce claims for reimbursement of in-
applicable Federal cognizant agency copyright, patent, or rights thereto,
for indirect cost,claims collection reg- necessary for the proper performance 2016,intangible assets include patents terest cost by an amount equal to im-
ulations. and computer software. For software puted interest earnings on excess cash
of the Federal award are allowable un- flow attributable to the
(e)Insurance refunds must be cred- less: development projects,only interest at- portion of the
ited against Insurance costs in the year (i)The Federal Government already tributable to the portion of the project facility used for Federal awards.
the refund is received. costs capitalized in accordance with (ii)The non-Federal entity must im-
(f)Indemnification includes securin has a license or the right to free use of GAAP is allowable. putt interest on excess cash flow as fol-
g the patent or copyright.
the non-Federal entity against Habil- (11)The patent or copyright has been (e)Conditions for all non-Federal anti- lows:
ities to third persons and other losses adjudicated to be invalid,or has been ties.(1)The non-Federal entity uses the (A)Annually,the non-Federal entity
not compensated by insurance or oth- administratively determined to be in- capital assets in support of Federal must prepare a cumulative (from the
erwise.The Federal Government is ob- valid. awards; inception of the project) report of
ligated to indemnify the non-Federal (iii)The patent or copyright is con- (2)The allowable asset costs to ac- monthly cash inflows and outflows,re-
quire facilities and equipment are lim- gardless of the funding source.For this
entity only to the extent expressly pro- sidered to be unenforceable.
vided for in the Federal award,except (iv) The patent or copyright is ex- ited to a fair market value available to purpose,inflows consist of Federal re-
theas provided in paragraph(c)of this sec- non-Federal entity from an unre- imbursement for depreciation,amorti-
pired.
ilea. (2)Special care should be exercised in later(armThe s oFe thire patty. zattereston of capitalized constructiont. utin-
[78 FR 78600,Dec.26,2013,as amended at 85 determining reasonableness where the (3) The non-Federalentity obtains terest, and anonual initial interest cost.contribu-
FR -
99568,Aug.13,20201 royalties may have been arrived at as a the financingctio ( via an arm's-lengthactionwi flows consist in equityment (lessth
transaction(that is,a transaction with tions,debt principal payments the
169 170
OMB Guidance §200.450 §200.450 2 CFR Ch.II(1-1-22 Edition)
pro-rata share attributable to the cost 9903.201-2(a). The non-Federal entity's action committee, or other organize- lowable unless incurred to offer testi-
of land),and interest payments. Federal awards are instead subject to tion established for the purpose of in- mony at a regularly scheduled Congres-
(B)To compute monthly cash inflows CAS 414 (48 CFR 9904.414), "Cost of flueneing the outcomes of elections in sional hearing pursuant to a written
and outflows, the non-Federal entity Money as an Element of the Cost of Fa- the United States; request for such presentation made by
must divide the annual amounts deter- cilities Capital",and CAS 417(48 CFR (iii)Any attempt to influence: the Chairman or Ranking Minority
mined in step (I) by the number of 9904.417),"Cost of Money as an Element (A) The introduction of Federal or Member of the Committee or Sub-
months in the year(usually 12) that of the Cost of Capital Assets Under state legislation; committee conducting such hearings;
the building is in service. Construction". (B)The enactment or modification of (i1) Any lobbying made unallowable
(C) For any month in which cumu- [78 FR 78608,Dec.26,2013,as amended at 80 any pending Federal or state legisla- by paragraph(c)(1)(1fi)of this section
lative cash inflows exceed cumulative FR 54409,Sept.10,2015;85 FR 49569,Aug.13, tion through communication with any to influence state legislation in order
outflows, interest must be calculated 2020] member or employee of the Congress or to directly reduce the cost,or to avoid
on the excess inflows for that month state legislature (including efforts to material impairment of the non-Fed-
and
be treated as a reduction to allow- §200.450 Lobbying. influence state or local officials to en- eral entity's authority to perform the
able interest cost.The rate of interest (a)The cost of certain influencing ac- gage in similar lobbying activity); grant,contract,or other agreement;or
to be used must be the three-month tivitfes associated with obtaining (C)The enactment or modification of (iii)Any activity specifically author-
Treasury bill closing rate as of the last grants,contracts,or cooperative agree- any pending Federal or state legisla- [zed by statute to be undertaken with
business day of that month. ments,or loans Is an unallowable cost. tion by preparing, distributing, or funds from the Federal award.
(8)Interest attributable to a fully de- Lobbying with respect to certain using publicity or propaganda, or by (iv)Any activity excepted from the
predated asset is unallowable. grants, contracts, cooperative agree- urging members of the general public, definitions of "lobbying" or "influ-
(d) Additional conditions for states, ments, and loans is governed by rel- or any segment thereof,to contribute encing legislation" by the Internal
local governments and Indian tribes. event statutes, including among nth- to or participate in any mass dem- Revenue Code provisions that require
For costs to be allowable,the non-Fed- ers,the provisions of 31 U.S.C.1352,as onstration, march, rally, fund raising nonprofit organizations to limit their
eral entity must have Incurred the in- well as the common rule, "New Re- drive, lobbying campaign or letter participation in direct and "grass
terest costs for buildings after October striations on Lobbying" published on writing or telephone campaign;or roots" lobbying activities In order to
1,1980,or for land and equipment after February 26,1990,including definitions, (D)Any government official or em- retain their charitable deduction eta-
September 1,1995. and the Office of Management and ployee in connection with a decision to tus and avoid punitive excise taxes,
(1)The requirement to offset interest Budget"Governmentwide Guidance for sign or veto enrolled legislation; I.R.C.§§501(c)(3),501(h),4911(a),Includ-
earned on borrowed funds against cur- New Restrictions on Lobbying"and no- (iv)Legislative liaison activities,in- ing:
rent allowable interest cost(paragraph tices published on December 20, 1989, eluding attendance at legislative ses- (A) Nonpartisan analysis, study, or
(c)(5), above)also applies to earnings June 15,1990,January 15,1992,and Jan- lions or committee hearings,gathering research reports;
on debt service reserve funds. uary 19,1996. information regarding legislation,and (B)Examinations and discussions of
(2)The non-Federal entity will nego- (b)Executive lobbying costs. Costs in- analyzing the effect of legislation, broad social, economic, and similar
tiate the amount of allowable interest curred in attempting to improperly in- when such activities are carried on in problems;and
cost related to the acquisition of facilf- fluence either directly or indirectly,an support of or in knowing preparation (C) Information provided upon re-
ties with asset costs of$1 million or employee or officer of the executive for an effort to engage in unallowable quest by a legislator for technical ad-
more,as outlined in paragraph(c)(7)of branch of the Federal Government to lobbying. vice and assistance,as defined by I.R.C.
this section. For this purpose,a non- give consideration or to act regarding a (2) The following activities are ex- §4911(d)(2) and 26 CFR 56.4911-2(c)(1)-
Federal entity must consider only cash Federal award or a regulatory matter cepted from the coverage of paragraph (c)(3).
inflows and outflows attributable to are unallowable, Improper influence (c)(1)of this section: (v)When a non-Federal entity seeks
that portion of the real property used means any influence that Induces or (I) Technical and factual presen- reimbursement for indirect (F&A)
for Federal awards. tends to induce a Federal employee or tations on topics directly related to costs,total lobbying costs must be sep-
(e) Additional conditions for IHEs. officer to give consideration or to act the performance of a grant, contract, arately identified in the indirect(F&A)
For costs to be allowable, the IHE regarding a Federal award or regu- or other agreement (through hearing cost rate proposal, and thereafter
must have incurred the interest costs latory matter on any basis other than testimony, statements, or letters to treated as other unallowable activity
after July 1, 1982, in connection with the merits of the matter. the Congress or a state legislature,or costs in accordance with the proce-
acquisitions of capital assets that oc- (c)In addition to the above,the fo1- subdivision,member,or cognizant staff dares of§200.413.
curred after that date. lowing restrictions are applicable to member thereof),in response to a docu- (vi)The non-Federal entity must sub-
(I)Additional condition for nonprofit nonprofit organizations and IHEs: mented request (including a Congres- mit as part of its annual indirect
organizations. For costs to be allow- (1) Costs associated with the fo1- sional Record notice requesting testi- (F&A)cost rate proposal a certification
able, the nonprofit organization in- lowing activities are unallowable: mony or statements for the record at a that the requirements and standards of
curred the interest costs after Sep- (I) Attempts to influence the out- regularly scheduled hearing) made by this section have been complied with.
tember 29,1995,in connection with ac- comes of any Federal, state, or local the non-Federal entity's member of (See also§200.415.)
quisitions of capital assets that oc- election, referendum, initiative, or congress,legislative body or a subdivi- (vif)(A)Time logs,calendars,or siml-
curred after that date. similar procedure, through in-kind or sion, or a cognizant staff member tar records are not required to be ere-
(g) The interest allowability provi- -cash contributions,endorsements,pub- thereof, provided such information is ated for purposes of complying with
sions of this section do not apply to a licity,or similar activity; readily obtainable and can be readily the record keeping requirements in
nonprofit organization subject to"full (ii)Establishing,administering,con- put in deliverable form, and further §200.302 with respect to lobbying costs
coverage" under the Cost Accounting tributing to,or paying the expenses of provided that costs under this section during any particular calendar month
Standards(CAS),as defined at 48 CFR a political party, campaign, political
for travel,lodging or meals are unal- when:
171 172
OMB Guidance §200.453 §200.454 2 CFR Ch.II(1-1-22 Edition)
(1)The employee engages in lobbying the appropriate indirect cost rate base §200.454 Memberships, subscriptions, §200.458 Pre-award costs.
(as defined in paragraphs (c)(1) and for allocation of indirect costs. and professional activity costs. Pre-award costs are those incurred
(c)(2)of this section)25 percent or less (a)Costs of the non-Federal entity's prior to the effective date of the Fed-
of the employee's compensated hours of §200.452 Maintenance and repair membership in business,technical,and oral award or subaward directly pursu-
employment during that calendar costs, professional organizations are allow- ant to the negotiation and in anticipa-
month;and Costs incurred for utilities, insur- able. tion of the Federal award where such
(2)Within the preceding five-year pe- once,security,necessary maintenance, (b)Costs of the non-Federal entity's costs are necessary for efficient and
rind, the non-Federal entity has not janitorial services,repair,or upkeep of subscriptions to business,professional,
materially misstated allowable or un- p p timely performance of the scope of
allowable costs of any nature,includ- buildings and equipment (including and technical periodicals are allowable. work.Such costs are allowable only to
ing legislative lobbying costs. Federal property unless otherwise pro- (c)Costs of membership in any civic the extent that they would have been
(B) When conditions in paragraph vided for)which neither add to the per- or community organization are allow- allowable if incurred after the date of
(c)(2)(vii)(A)(1)and (2)of this section manent value of the property nor ap- able with prior approval by the Federal the Federal award and only with the
are met, non-Federal entities are not preciably prolong its intended life,but awarding agency or pass-through enti- written approval of the Federal award-
required to establish records to support keep it in an efficient operating condi- ty ing agency. If charged to the award,
the allowability of claimed costs in ad- tion,are allowable.Costs incurred for (d)Costs of membership in any coun- these costs must be charged to the tni-
try club or social or dining club or or- tial budget period of the award,unless
ditfon to records already required or improvements which add to the perms-
- maintained. Also, when conditions in nent value of the buildings and equip- ganization are unallowable. otherwise specified by the Federal
paragraphs (c)(2)(vii)(A)(1) and (2) of meet or appreciably prolong their in- (e)Costs of membership in organiza- awarding agency or pass-through enti-
this section are met, the absence of tended life must be treated as capital tions whose primary purpose is lob- ty.
time logs,calendars,or similar records expenditures(see§200.439).These costs bying are unallowable. See also [85 FR 99569,Aug.13,2020]
will not serve as a basis for disallowing are only allowable to the extent not §200.450.
costs by contesting estimates of lob- paid through rental or other agree- [78 FR 78608,Dec.26,2013,as amended at 85 §200A59 Professional service costs.
bying time spent by employees during ments. FR 99569,Aug.13,2020] (a)Costs of professional and consult-
a calendar month. ant services rendered by persons who
(vial) The Federal awarding agency [85 FR 49569,Aug.13,2020] §200.455 Organization costs. are members of a particular profession
must establish procedures for resolving §200.453 Materials and supplies costs, Costs such as incorporation fees,bro- or possess a special skill,and who are
in advance,in consultation with OMB, including coats of computing de- kers'fees,fees to promoters,organizers not officers or employees of the non-
any significant questions or disagree- vices. or management consultants,attorneys, Federal entity, are allowable, subject
ments concerning the interpretation or accountants,or investment counselor,
application of this section. Any such (a)Costs incurred for materials,sup- whether or not employees of the non- when paragraphs reasonable(b and(c)ao this sectionh
advance resolutions must be binding in plies,and fabricated parts necessary to Federal entityin connection with es- rendered and rwelation nn to the
contin-
anysubsequent settlements,audits,or carry out a Federal award are allow- gnt services rendered of the nots rm
4 tablishment or reorganization of an or- gent upon recovery the costs from
investigations with respect to that able.
grant or contract for purposes of inter- (b)Purchased materials and supplies with prior
are unallowableeexceptder the Federalandrelateda services
e In addition,
pp prior approval of the Federal legal and services are limited
pretation of this part,provided,how- must be charged at their actual prices, awarding agency. under§200.935.
ever, that this must not be construed net of applicable credits.Withdrawals (b)In determining the allowability of
to prevent a contractor or non-Federal from general stores or stockrooms §200.456 Participant support costs.
costs in n particular case, single fac-
entity from contesting the lawfulness must be charged at their actual net Participant support costs as defined for or any special combination
naa tioo o
n of fan-
of such a determination. cost under any recognized method of in§200.1 are allowable with the prior tors is necessarily determinative.How-
[78 FR 78608,Dec.26,2013,as amended at 85 pricing inventory withdrawals,consist- approval of the Federal awarding agen- ever,the following factors are relevant:
FR 99569,Aug.13,2020] ently applied.Incoming transportation cy. (1)The nature and scope of the serv-
charges are a proper part of materials [85 FR 99569,Aug.13,2020] ice rendered in relation to the service
§200.451 Losses on other awards or and supplies costs. required.
contracts. (c) Materials and supplies used for §200.457 Plant and security costs. (2)The necessity of contracting for
Any excess of costs over income the performance of a Federal award the service, considering the non-Fed-
Necessaryunder any other award or contract of may be charged as direct costs.In the and reasonable expenses eral entity's capability in the anypar-
nature is unallowable. This in- incurred for protection and security of ocular area.
specific case of computing for
facilities,personnel,and work products
eludes,but is not limited to,the non- charging as direct costs is allowable for are allowable.Such costs include,but (3) The past pattern of such costs,
Federal entity's contributed portion by devices that are essential and allo- are not limited to,wages and uniforms particularly in the years prior to Fed-
reason of cost-sharing agreements or cable,but not solely dedicated,to the of personnel engaged in security activi- eral awards.
any under-recoveries through negotia- (4)The impact of Federal awards on
tion of flat amounts for indirect F&A performance of a Federal award. ties; equipment; barriers; protective
( ) the non-Federal entity's business(i.e.,
costs.Also,any excess of costs over au- (d) Where federally-donated or fur- (non-military)gear,devices,and equip- what new problems have arisen).
thorized funding levels transferred Wished materials are used in per- meet; contractual security services; (5)Whether the proportion of Federal
from any award or contract to another forming the Federal award,such mate- and consultants. Capital expenditures work to the non-Federal entity's total
award or contract is unallowable.All vials will be used without charge. for plant security purposes are subject business is such as to influence the
losses are not allowable indirect(F&A) [78 FR 78608,Dec.26,2013,as amended at 79 to§200.439. non-Federal entity in favor of incur-
costs and are required to be included in FR 75887,Dec.19,2014) [85 FR 99569,Aug.13,2020] ring the cost, particularly where the
173 174
OMB Guidance §200.463 §200.464 2 CFR Ch.II(1-1-22 Edition)
services rendered are not of a con- (3) The non-Federal entity may not meet the test of reasonableness or (3)The reimbursement does not ex-
tinufng nature and have little relation- charge the Federal award during close- do not conform with the established ceed the employee's actual(or reason-
ship to work under Federal awards. out for the costs of publication or shar- practices of the non-Federal entity,are ably estimated)expenses.
(6) Whether the service can be per- ing of research results if the costs are unallowable. (b) Allowable relocation costs for
formed more economically by direct not incurred during the period of per- (e) Where relocation costs incurred current employees are limited to the
employment rather than contracting. formance of the Federal award. If incident to recruitment of a new em- following:
(7) The qualifications of the lent- charged to the award,these costs must ployee have been funded in whole or in (1)The costs of transportation of the
vidual or concern rendering the service be charged to the final budget period of part to a Federal award,and the newly employee,members of his or her imme-
and the customary fees charged,espe- the award, unless otherwise specified hired employee resigns for reasons diate family and his household, and
cially on non-federally funded activi- by the Federal awarding agency. within the employee's control within 12 personal effects to the new location.
ties. [78 FR 78608,Dec.26,2013,as amended at 85 months after hire,the non-Federal en- (2)The costs of finding a new home,
(I) Adequacy of the contractual FR 99569,Aug.13,2020) tity will be required to refund or credit such as advance trips by employees and
agreement for the service(e.g.,descrip- the Federal share of such relocation spouses to locate living
tion of the service,estimate of time re- §200.462 Rearrangement and recon- P quarters and
quired,rate of compensation,and ter- version costs. costs to the Federal Government.See temporary lodging during the tranai-
mination provisions). also§200.464. tion period,up to maximum period of
(c)In addition to the factors in pare- (a) Costs incurred for ordinary and (d)Short-term,travel visa costs(as 30 calendar days.
normal rearrangement and alteration opposed to longer-term, immigrationClosingg
graph(b)of this section, to be allow- of facilities are allowable as indirect penses (3) costs,such as brokerage,
able, retainer fees must be supported costs.Special arrangements and alter- visas)are generally allowable expenses legal, and appraisal fees, incident to
by evidence of bona fide services avail- ations costs incurred specifically for a that may be proposed as a direct cost, the disposition of the employee's
able or rendered. Since short-term visas are issued for a former home. These costs, together
Federal award are allowable as a direct specific period and purpose,they can be with those described in(9),are limited
[78 FR 78608,Dec.26,2013,as amended at 85 cost with the prior approval of the Fed- clearly identified as directly connected to 8 per cent of the sales price of the
FR 99569,Aug.13,2020] eral awarding agency or pass-through to work performed on a Federal award. employee's former home.
entity.
§200.460 Proposal costs. (b)Costs incurred in the restoration For these costs to be directly charged (4)The continuing costs of ownership
Proposal costs are the costs of pre- or rehabilitation of the non-Federal en- to a Federal award,they must: (for up to six months) of the vacant
paring bids, proposals,or applications tity's facilities to approximately the (1)Be critical and necessary for the former home after the settlement or
on potential Federal and non-Federal same condition existing Immediately conduct of the project; lease date of the employee's new per-
awards or projects,including the devel- prior to commencement of Federal (2)Be allowable under the applicable manent home,such as maintenance of
opment of data necessary to support awards, less costs related to normal cost principles; buildings and grounds(exclusive of fix-
the non-Federal entity's bids or pro- wear and tear,are allowable. (3) Be consistent with the non-Fed- ing-up expenses), utilities, taxes, and
posals. Proposal costs of the current oral entity's cost accounting practices property insurance.
accounting period of both successful §200.463 Recruiting costa. and non-Federal entity policy;and (5) Other necessary and reasonable
and unsuccessful bids and proposals (a)Subject to paragraphs(b)and(c) (4) Meet the definition of "direct expenses normally incident to reloca-
normally should be treated as indirect of this section,and provided that the cost" as described in the applicable tion,such as the costs of canceling an
(F&A)costs and allocated currently to size of the staff recruited and main- cost principles. unexpired lease,transportation of per-
all activities of the non-Federal entity. tamed is in keeping with workload re- sonal property, and purchasing insur-
No proposal costs Of past accounting quirements,coats of"help wanted"ad- [78 FR 78608,Dec.26,2013,as amended at 79 once against loss of or damages to per-
periods will be allocable to the current vertising, operating costs of an em- FR 75887,Dec.19,2019;85 FR 99569,Aug.13, sonal property.The cost of canceling
period. ployment office necessary to secure 20207 an unexpired lease is limited to three
and maintain an adequate staff, costs §200.464 Relocation costs of employ- times the monthly rental.
§200.461 Publication and printing of operating an aptitude and edu- ees. (c)Allowable relocation costs for new
costs. cational testing program,travel costs employees are limited to those de-
(a) Publication costs for electronic of employees while engaged in recruit- (a) Relocation costs are costs into- scribed in paragraphs(b)(1)and(2)of
and print media, including distribu- ing personnel, travel costs of appli- dent to the permanent change of duty this section.When relocation costs in-
tion, promotion,and general handling cants for interviews for prospective assignment(for an indefinite period or curved incident to the recruitment of
are allowable. If these costs are not employment, and relocation costs in- for a stated period of not less than 12 new employees have been charged to a
identifiable with a particular cost ob- curved incident to recruitment of new months) of an existing employee or Federal award and the employee re-
jective,they should be allocated as in- employees,are allowable to the extent upon recruitment of a new employee. signs for reasons within the employee's
direct costs to all benefiting activities that such costs are incurred pursuant Relocation costs are allowable,subject control within 12 months after hire,
of the non-Federal entity. to the non-Federal entity's standard to the limitations described in pars- the non-Federal entity must refund or
(b) Page charges for professional recruitment program. Where the non- graphs
),(c),and(d)of this section, credit the Federal Government for its
journal publications are allowable Federal entity uses employment agen- providedshare of the cost.If dependents are not
where: cies, costs not in excess of standard (1)The move is for the benefit of the permitted at the location for any rea-
(1)The publications report work sup- commercial rates for such services are employer. son and the costs do not include costs
ported by the Federal Government;and allowable. (2)Reimbursement to the employee of transporting household goods, the
(2)The charges are levied impartially (b)Special emoluments,fringe bane- is in accordance with an established costs of travel to an overseas location
on all items published by the journal, fits,and salary allowances incurred to written policy consistently followed by must be considered travel costs In ac-
whether or not under a Federal award. attract professional personnel that do the employer. cordance with §200.474 Travel costs,
175 176
OMB Guidance §200.465 §200.466 2 CFR Ch.II(1-1-22 Edition)
and not this relocations costs of em- rectly or through corporations,trusts, are allowable to the extent they meet (5) It is the IHE's practice to simi-
ployees(See also§200.464). or similar arrangements in which they the criteria in §200.449. Unallowable tarty compensate students under Fed-
(d)The following costs related to re- hold a controlling interest.For exam- costs include amounts paid for profit, eral awards as well as other activities.
location are unallowable: pie,the non-Federal entity may estab- management fees,and taxes that would (b)Charges for tuition remission and
(1) Fees and other costs associated lish a separate corporation for the sole not have been incurred had the non- other forms of compensation paid to
with acquiring a new home. purpose of owning property and leasing Federal entity purchased the property. students as,or in lieu of,salaries and
(2) A loss on the sale of a former It back to the non-Federal entity. (e)Rental or lease payments are al- wages must be subject to the reporting
home. (4) Family members include one lowable under lease contracts where requirements in§200.430,and must be
(3) Continuing mortgage principal party with any of the following rela- the non-Federal entity is required to treated as direct or indirect cost in ac-
and interest payments on a home being tionships to another party: recognize an intangible right-to-use cordance with the actual work being
sold. (i)Spouse,and parents thereof; lease asset(per GASB)or right of use performed. Tuition remission may be
(4)Income taxes paid by an employee (ii)Children,and spouses thereof; operating lease asset (per FASB) for charged on an average rate basis.See
related to reimbursed relocation costs. (iii)Parents,and spouses thereof;
[78 FR 78608,Dee.26,2013,as amended at 79 (iv)Siblings,and spouses thereof; purposes withof financial reporting in ac- also 31.
(v) Grandparents and cordance GAAP. [78 FR 78608,Dec.26,2013,as amended at 85
FR 75887,Dec.19,2014;85 FR 49570,Aug.13, P grandchildren, (I)The rental of any property owned FR 99569,Aug.13,2020]
2020] and spouses thereof; by any individuals or entities affiliated
(vi) Domestic partner and parents with the non-Federal entity,to include §200.467 Selling and marketing costs.
§200.465 Rental costs of real property thereof,including domestic partners of
and equipment. any individual in 2 through 5 of this commerciale or residential realm estate,o Costs of selling and marketing any
(a) Subject to the limitations de- definition;and for is hall aw the home office entity nr services of the non-Federal
workspace is unallowable. entity(unless allowed under§200.921)
scribed in paragraphs(b)through(d)of (vii)Any individual related by blood
this section,rental costs are allowable or affinity whose close association with [78 FR 78608,Dec.26,2013,as amended at 85 are unallowable,except as direct costs,
to the extent that the rates are reason- the employee is the equivalent of a FR 99569,Aug.13,2020] with prior approval by the Federal
able in light of such factors as:rental family relationship. awarding agency when necessary for
coats of comparable property, if any; (5) Rental costs under leases which §200.466 Scholarships and student aid the performance of the Federal award.
market conditions in the area; alter- are required to be treated as capital costa. [85 FR 49570,Aug.13,2020]
natives available;and the type,life ex- leases under GAAP are allowable only (a)Costs of scholarships,fellowships,
pectancy, condition, and value of the up to the amount(as explained in pars- and other programs of student aid at §200.466 Specialised service facilities.
property leased. Rental arrangements graph(b)of this section)that would be IHEs are allowable only when the pur- (a)The costs of services provided by
should be reviewed periodically to de- allowed had the non-Federal entity pose of the Federal award is to provide highly complex or specialized facilities
termine if circumstances have changed purchased the property on the date the training to selected participants and operated by the non-Federal entity,
and other options are available. lease agreement was executed.The pro- the charge is approved by the Federal such as computing facilities,wind tun-
(b)Rental costs under"sale and lease visions of GAAP must be used to deter- awarding agency.However,tuition re- nels, and reactors are allowable, pro-
back"arrangements are allowable only mine whether a lease is a capital lease. mission and other forms of compensa- vided the charges for the services meet
up to the amount that would be al- Interest costs related to capital leases tion paid as,or in lieu of,wages to stu- the conditions of either paragraph(b)
lowed had the non-Federal entity con- are allowable to the extent they meet dents performing necessary work are or(c)of this section,and,in addition,
tinued to own the property. This the criteria in§200.449 Interest.Ural- allowable provided that: take into account any items of income
amount would include expenses such as lowable costs include amounts paid for (1)The individual is conducting ac- or Federal financing that qualify as ap-
depreciation, maintenance, taxes, and profit, management fees, and taxes tivities necessary to the Federal plicable credits under§200.406.
insurance. that would not have been incurred had award; (b)The costs of such services, when
(c) Rental costs under "less-than- the non-Federal entity purchased the (2)Tuition remission and other sup- material,must be charged directly to
arm's-length"leases are allowable only property. port are provided in accordance with applicable awards based on actual
up to the amount(as explained in para- (6)The rental of any property owned established policy of the IHE and con- usage of the services on the basis of a
graph(b)of this section).For this pur- by any individuals or entities affiliated sistently provided in a like manner to schedule of rates or established meth-
pose,a less-than-arm's-length lease is with the non-Federal entity,to include students in return for similar activities odology that:
one under which one party to the lease commercial or residential real estate, conducted under Federal awards as (1)Does not discriminate between ac-
agreement is able to control or sub- for purposes such as the home office well as other activities;and tivities under Federal awards and other
stantially influence the actions of the workspace is unallowable. (3)During the academic period, the activities of the non-Federal entity,an-
other.Such leases include,but are not (d) Rental costs under leases which student is enrolled in an advanced de- eluding usage by the non-Federal enti-
limited to those between: are required to be accounted for as a fi- gree program at a non-Federal entity ty for internal purposes,and
(1)Divisions of the non-Federal enti- nanced purchase under GASB stand- or affiliated institution and the actfvi- (2)Is designed to recover only the ag-
ty; ards or a finance lease under FASB ties of the student in relation to the gregate costs of the services.The costs
(2) The non-Federal entity under standards under GAAP are allowable Federal award are related to the degree of each service must consist normally
common control through common offi- only up to the amount(as explained in program; of both its direct costs and its allocable
cers,directors,or members;and paragraph (b) of this section) that (4)The tuition or other payments are share of all indirect(F&A)costs.Rates
(3)The non-Federal entity and a di- would be allowed had the non-Federal reasonable compensation for the work must be adjusted at least biennially,
rector, trustee, officer, or key em- entity purchased the property on the performed and are conditioned explic- and must take into consideration over/
ployee of the non-Federal entity or an date the lease agreement was executed. itly upon the performance of necessary under-applied costs of the previous pe-
immediate family member, either di- Interest costs related to these leases work;and riod(s).
177 178
OMB Guidance §200.471 §200.472 2 CFR Ch.II(1-1-22 Edition)
(c) Where the costs incurred for a tion afforded the Federal Government (b)Obligating or expending covered (c) Loss of useful value of special
service are not material,they may be and,in the latter case,when the Fed- telecommunications and video surveil- tooling, machinery, and equipment is
allocated as indirect(F&A)costs. eral awarding agency makes available lance services or equipment or services generally allowable if:
(d) Under some extraordinary cir- the necessary exemption certificates, as described in§200.216 to: (1)Such special tooling,special ma-
cumatances,where it is In the best in- (if) Special assessments on land (1) Procure or obtain, extend or chinery, or equipment is not reason-
terest of the Federal Government and which represent capital improvements, renew a contract to procure or obtain; ably capable of use in the other work of
the non-Federal entity to establish al- and (2)Enter into a contract(or extend
ternative costing arrangements, such (iii)Federal income taxes. or renew a contract)to procure;or the non-Federal entity,
arrangements may be worked out with (2)Any refund of taxes,and any pay- (3)Obtain the equipment,services,or (2)The interest of the Federal Gov-
the Federal cognizant agency for indi- ment to the non-Federal entity of in- systems. ernmen
or is protected by transfer of
rest costs. terest thereon,which were allowed as title or by other means deemed appro-
L78 FR 78608,Dec.26,2013,as amended at 85 Federal award costs, will be credited [85 FR 99570,Aug.13,2020] priate by the Federal awarding agency
FR 99569,Aug.13,2020] either as a cost reduction or cash re- §200.472 Termination costs. (see also§200.313(d)),and
fund, as appropriate, to the Federal Termination of a Federal award (3)The loss of useful value for any
§200.469 Student activity costs. Government.However,any interest ac- gen- one terminated Federal award is lim-
tually paid or credited to an non-Fed- erally gives rise to the incurrence of ited to that portion of the acquisitionto
Costs incurred for intramural activi- costs,or the need for special treatment
ties, student publications, student eral entity incident to a refund of tax, cost whichqbears the t as ratiothe o the
clubs,and other student activities,are interest, and penalty will be paid or of costs,whiche would not have arisen total acquisition cost as the termi-
hadthe stepri award not been tthese
unallowable, unless specifically pro- credited to the Federal Government Hated. Cost principles covering these Hated portion of the Federal award
vided for in the Federal award. only to the extent that such interest items are set forth in this section. bears to the entire terminated Federal
accrued over the period during which award and other Federal awards for
§200.470 Taxes (including Value the non-Federal entity has been reim- They aree to be used provisionsin of this tion
which the special tooling,machinery,
Added Tax). horsed by the Federal Government for with the other aton of this part or equipment was acquired.
(a)For states,local governments and the taxes,interest,and penalties. in termination)Thecost
of itemstsne. (d) Rental costa under unexpired
Indian tribes: (c)Value Added Tax(VAT) Foreign ble The non-Federal reasonably user leases are generally allowable where
on the entity'su other
(I)Taxes that a governmental unit is taxes charged for the purchase of goods work must not be allowable unless the clearly shown to have been reasonably
legally required to pay are allowable, or services that a non-Federal entity is non-Federal entity submits evidence necessary for the performance of the
except for self-assessed taxes that die- legally required to pay in country is an that it would not retain such items at terminated Federal award less the re-
proportionately affect Federal pro- allowable expense under Federal cost without sustaining a loss.In de- sidual value of such leases,if:
grams or changes in tax policies that awards.Foreign tax refunds or applica- tiding whether such Items are reason- (1) The amount of such rental
disproportionately affect Federal pro- ble credits under Federal awards refer ably usable on other work of the non- claimed does not exceed the reasonable
grams. to receipts, or reduction of expend[- Federal entity, the Federal awarding use value of the property leased for the
(2) Gasoline taxes, motor vehicle tures,which operate to offset or reduce agency should consider the non-Federal period of the Federal award and such
fees,and other taxes that are in effect expense items that are allocable to entity's plans and orders for current further period as may be reasonable,
user fees for benefits provided to the Federal awards as direct or indirect and scheduled activity. Contempora- and
Federal Government are allowable. costs.To the extent that such credits nests purchases of common items by (2)The non-Federal entity makes all
(3) This provision does not restrict accrued or received by the non-Federal the non-Federal entity must be re- reasonable efforts to terminate,assign,
the authority of the Federal awarding entity relate to allowable cost, these garded as evidence that such items are settle,or otherwise reduce the cost of
agency to identify taxes where Federal costs must be credited to the Federal reasonably usable on the non-Federal such lease.There also may be included
participation is inappropriate. Where awarding agency either as costs or cash entity's other work.Any acceptance of the cost of alterations of such leased
the identification of the amount of un- refunds.If the costs are credited back common items as allocable to the ter- property, provided such alterations
allowable taxes would require an inor- to the Federal award,the non-Federal minated portion of the Federal award were necessary for the performance of
dinate amount of effort,the cognizant entity may reduce the Federal share of must be limited to the extent that the the Federal award, and of reasonable
agency for indirect costs may accept a costs by the amount of the foreign tax quantities of such items on hand, in restoration required by the provisions
reasonable approximation thereof. reimbursement, or where Federal transit, and on order are in excess of of the lease.
(b) For nonprofit organizations and award has not expired,use the foreign the reasonable quantitative require-
IHEs: government tax refund for approved ac- manta of other work. (e)Settlement expenses including the
(1)In general, taxes which the non- tivities under the Federal award with (b)If in a particular case,despite all following are generally allowable:
Federal entity is required to pay and prior approval of the Federal awarding reasonable efforts by the non-Federal (1) Accounting, legal, clerical, and
which are paid or accrued in accord- agency. entity,certain costs cannot be discon- similar costs reasonably necessary for:
ance with GAAP,and payments made tinned immediately after the effective (1)The preparation and presentation
to local governments in lieu of taxes §200.471 Telecommunication costs and date of termination, such costs are to the Federal awarding agency of set-
which are commensurate with the local video surveillance costs. generally allowable within the limita- tlement claims and supporting data
government services received are al- (a) Costs incurred for telecommuni- tions set forth in this part,except that with respect to the terminated portion
lowable,except for: cations and video surveillance services any such costs continuing after term[- of the Federal award,unless the term]-
(1)Taxes from which exemptions are or equipment such as phones,internet, nation due to the negligent or willful nation is for cause(see subpart D,in-
available to the non-Federal entity di- video surveillance,cloud servers are al- failure of the non-Federal entity to die- eluding§§200.339-200.343);and
rectly or which are available to the lowable except for the following cir- continue such coats must be unallow- (fi)The termination and settlement
non-Federal entity based on an exemp- cumstances: able. of subawards.
179 180
OMB Guidance §200.475 §200.476 2 CFR Ch.II(1-1-22 Edition)
(2)Reasonable costs for the storage, official business of the non-Federal en- (d)In the absence of an acceptable, §200.476 Trustees.
transportation,protection,and dleposl- tity.Such costs may be charged on an written non-Federal entity policy re- Travel and st-
subsistence costs of trust-
tion tion of property provided by the Fed- actual cost basis, on a per diem or garding travel costs, the rates and ees(or directors)at Inca and nonprofitust-
eral Government or acquired or pro- mileage basis in lieu of actual costs in- amounts established under 5 U.S.C. organizations are allowable. See also
duced for the Federal award. curred,or on a combination of the two, 5701-11, ("Travel and Subsistence Ex-
(f)Claims under subawards,including provided the method used is applied to penses; Mileage Allowances"), or by §200.975.
the allocable portion of claims which an entire trip and not to selected days the Administrator of General Services, [85 FR 49571,Aug.13,2020]
are common to the Federal award and of the trip,and results In charges con- or by the President(or his or her des-
to other work of the non-Federal anti- sistent with those normally allowed in
ty,are generally allowable.An appro- like circumstances in the non-Federal such subchpursuaaptter
mustto any provisionslrelof Subpart F-Audit Requirements
priate share of the non-Federal entity's entity's non-federally-funded activities under s Federalea d apply CFRto 1.205l
indirect costs may be allocated to the and in accordance with non-Federal en- Federal awards (98 31.205- GENERAL
amount of settlements with contrac- tity's written travel reimbursement 46(a)).
tors and/or subrecipients,provided that (e) Commercial air travel. (1) Airfare §200.500 Purpose.
the amount allocated is otherwise con- policies. Notwithstanding the provi- costs in excess of the basic least aspen- This part sets forth standards for ob-
sistent with the basic guidelines con- sions of covered by4, travel costs of loallow- sive unrestricted accommodations taming consistency and uniformity
tamed in§200.414.The indirect costs so a priory that section n are approval f class offered by commercial airlines among Federal agencies for the audit
allocated must exclude the same and able with thel ngwr tenagencyor of are unallowable except when such ac- of non-Federal entities expending the ugFeheenl aw hing ey Fed-
similarpasa-
costs claimed directly or indi- through entity when they are specifi- commodations would: coal awards.
rattly as settlement expenses. cally related to the Federal award. (1)Require circuitous routing;
[78 FR 78608,Dec.26,2013.Redesignated and (b)Lodging and subsistence.Costs in- (1I) Require travel during unreason- AUDITS
amended at 85 FR 99570,Aug.13,2020] curred by employees and officers for able hours;
travel,including costs of lodging,other (iii)Excessively prolong travel; §200.501 Audit requirements.
§200.973 Training and education costs. subsistence, and incidental expenses, (iv) Result In additional costs that (a)Audit required.A non-Federal anti-
The cost of training and education must be considered reasonable and oth- would offset the transportation say- ty that expends 5750,000 or more during
provided for employee development is amiss allowable only to the extent legs;or the non-Federal entity's fiscal year in
allowable. such costs do not exceed charges nor- (v)Offer accommodations not reason- Federal awards must have a single or
[78 FR 78608,Dec.26,2013.Redesignated at 85 mally allowed by the non-Federal enti- ably adequate for the traveler's mad- program-specific audit conducted for
FR 49570,Aug.13,2020] ty in its regular operations as the re- Ical needs. The non-Federal entity that year in accordance with the provi-
suit of the non-Federal entity's written must justify and document these condi- sions of this part.
§200.474 Transportation casts. travel policy.In addition,if these costs tions on a case-by-case basis in order (b)Single audit.A non-Federal entity
Costs incurred for freight, express, are charged directly to the Federal for the use of first-class or business- that expends $750,000 or more during
cartage, postage, and other transpor- award documentation must justify class airfare to be allowable in such the non-Federal entity's fiscal year in
tation services relating either to goods that: cases. Federal awards must have a single
purchased,in process,or delivered,are (1)Participation of the individual is (2)Unless a pattern of avoidance is audit conducted in accordance with
allowable.When such costs can readily necessary to the Federal award;and detected,the Federal Government will §200.514 except when it elects to have a
be identified with the items involved, (2)The costs are reasonable and con- generally not question a non-Federal program-specific audit conducted in ac-
they may be charged directly as trans- sistent with non-Federal entity's es- entity's determinations that sus- cordance with paragraph(c)of this sec-
ion costs or added to the cost of ta blished travel policy. tion.
such items.Where identification with (c)(1) Temporary dependent care tomary standard airfare or other dis-
such l
the materials received cannot readily costs (as dependent is defined in 26 count airfare is unavailable for specific (c) Program-specific audit election.
When an auditee expends Federal
trips if the non-Federal entity can
be made, inbound transportation cost U.S.C. 152) above and beyond regular dtte that such airfare was not awards under only one Federal pro-
demonstrate
may be charged to the appropriate in- dependent care that directly results gram(excluding R&D)and the Federal
direct l cost accounts if the non- from travel to conferences is allowable available in the specific case.
Federal entity follows a consistent,eq- provided that: (f)Air travel by other than commercial termsprogr and statutes,regulations,edor the
uitable procedure in this respect.Out- (I)The costs are a direct result of the carrier. Costs of travel by non-Federal award
corequirenditions of the state-
boundFederal
freight, if reimbursable under individual's travel for the Federal entity-owned, -leased, or -chartered award ud t not he a financialthe the terms and conditions of the Federal award; aircraft include the cost of lease,char- ment electtt of the auditee, auditee
award, should be treated as a direct (fi)The costs are consistent with the ter, operation (including personnel may uto have a cprogram-specificrncewith
cost. non-Federal entity's documented tray- costs), maintenance, depreciation, in- audit conducted program-specificin accordance auditaue may
[78 FR 78608,Dec.26,2013.Redesignated at 85 el policy for all entity travel;and surance, and other related costs. The §not be elected A for allhe
FR 99570,Aug.13,2020] (iii) Are only temporary during the portion of such costs that exceeds the d r for R&De unless received f the
travel period. cost of airfare as provided for in para- from
samerds Feexderal
g werec ,
§200.475 Travel costs. (2) Travel costs for dependents are graph (d) of this section, is unallow- from the same agencyyl agency,or samethe
(a)General.Travel costs are the ex- unallowable,except for travel of dura- able. same Federalgh and the d
penses for transportation,lodging,sub- tion of six months or more with prior pass-through entity, and that Federal
sistence,and related items incurred byapproval [78 FR 78608,Dec.26,2013,as amended at 79 agency, or pass-through entity in the
of the Federal awarding agen- FR 75887, Dec. 19, 2014. Redesignated and case of a subrecipient,approves in ad-
employees who are in travel status on cy.See also§200.932. amended at 85 FR 99570,Aug.13,2020] vance a program-specific audit.
181 182
OMB Guidance §200.502 §200.503 2 CFR Ch.II(1-1-22 Edition)
(d)Exemption when Federal awards ex- meets,as necessary,to ensure compli- (3)Any interest subsidy,cash,or ad- (j) Certain loans provided by the Na-
pended are less than$750,000.A non-Fed- ante by for-profit subrecipients. The ministrative cost allowance received. tional Credit Union Administration. For
era] entity that expends less than agreement with the for-profit sub- (c)Loan and loan guarantees(loans)at purposes of this part,loans made from
$750,000 during the non-Federal entity's recipient must describe applicable IHEs.When loans are made to students the National Credit Union Share Insur-
fiscal year in Federal awards is exempt compliance requirements and the for- of an IHE but the IHE does not make ance Fund and the Central Liquidity
from Federal audit requirements for profit subrecipient's compliance re- the loans,then only the value of loans Facility that are funded by contribu-
that year,except as noted in§200.503, sponsibility.Methods to ensure compli- made during the audit period must be tions from insured non-Federal entities
but records must be available for re- ance for Federal awards made to for- considered Federal awards expended in are not considered Federal awards ex-
view or audit by appropriate officials profit subrecipients may include pre- that audit period.The balance of loans Fended.
of the Federal agency,pass-through en- award audits, monitoring during the for previous audit periods Is not in- [78 FR 78608,Dec.26,2013,se amended at 79
tity, and Government Accountability agreement,and post-award audits.See eluded as Federal awards expended be- FR 75887,Dec.19,2019]
Office(GAO). also§200.332. cause the lender accounts for the prior
(e)Federally Funded Research and De- balances. §200.503 Relation to other audit re-
quirements.Centers (FFRDC). Manage- [78 FR 78608,Dec.26,2013,as amended at 79 quirements.
ment of an auditee that owns or Rued- FR 75887,Dec.19,2019;85 FR 99571,Aug.13, (d) rLoansa then ne loan guarantees
etas a FFRDC may elect to treat the 2020] (loans). proceeds of which (a)An audit conducted in accordance
FFRDC as a separate entityt fore pure were received and expended in prior with this part must be in lieu of any fi-
§200.502 Basis for determiningFed. years, are not considered Federal nancial audit of Federal awards which
poses of this part. eral awards expended. awards expended under this part when a non-Federal entity is required to un-
(f) Subrecipients and contractors. An the Federal statutes,regulations, and dergo under any other Federal statute
auditee may simultaneously be a re- (a) Determining Federal awards ex- the terms and conditions of Federal or regulation.To the extent that such
ciplent, a subrecipient, and a con- Pendell. The determination of when a awards pertaining to such loans impose audit provides a Federal agency with
tractor.Federal awards expended as a Federal award is expended must be
recipient or a subrecipient are subject based on when the activity related to no continuing compliance require- the information it requires to carry
to audit under this part.The payments the Federal award occurs. Generally, meets other than to repay the loans. out its responsibilities under Federal
received for goods or servicesprovided the activity pertains to events that re-
balance Endowment funds.The cumulative statute or regulation,a Federal agency
must rely upon and use that lnforma-
as a contractor are not Federal awards. quire the non-Federal entity to comply balance of Federal awards for endow-
ment funds that are federallyLion.
Section§200.331 sets forth the consider- with Federal statutes,regulations,and re-
Section (b)Notwithstanding subsection(a),a
atlons in determiningwhetherpay- the terms and conditions of Federal striated are considered Federal awards
expended in each auditperiod in which Federal agency,Inspectors General,or
manta constitute a Federal award or a awards, such as: expenditure/expense GAO may conduct or arrange for addi-
a providedtransactions associated with awards in- the funds are still restricted.
addi-
payment cont for goods or services eluding grants, cost-reimbursement (f) Free rent. Free rent received bytionalarr audits which are necessary tor
as a contractor. carry out its responsibilities bion, prundo-
(g) Compliance responsibility for con- contracts under the FAR, compacts itself is not considered a Federal award Federal statute or regulation.The pro-
tractors. In most cases, the auditee'a with Indian Tribes,cooperative agree- expended under this part.However,free visions of this
compliance responsibilityfor contras- meets, and direct appropriations; the rent received as part of a Federal part edntity
not authorize
any non-Federal u e to constrain,in
tors is only to ensure that the procure- disbursement of funds to subrecipients; award to carry out a Federal program any manner,such Federal agency from
meet, receipt,and payment for goods the use of loan proceeds under loan and must be included in determining Fed- carrying out or arranging for such ad-
and services comply with Federal stat- loan guarantee programs;the receipt of eral awards expended and subject to ditlonal audits,except that the Federal
utes, regulations, and the terms and property; the receipt of surplus prop- audit under this part.
be
conditions of Federal awards. Federal erty;the receipt or use of program in- (g) Valuingnon-cash assistance. Fed- agencyplicmust of plan other such dustss to not al
duplicative r e Federal
award compliance requirements nor- come; the distribution or use of food eral non-cash assistance,such as free awards.Prior to commencing such an
mally do not pass through to contras- commodities; the disbursement of rent,food commodities,donated prop- audit, the Federal agency or pass-
tors. However, the auditee is respon- amounts entitling the non-Federal en- arty,or donated surplus property,must through entity must review the FAC
sible for ensuring compliance for pro- tity to an interest subsidy;and the pe- be valued at fair market value at the
riod when insurance is in force. for Federalrece entity,t audits submitteddto xy etns non-
curement transactions which are strut- time of receipt or the assessed value and to the extent such
Lured such that the contractor is re- (b)Loan and loan guarantees(loans). provided by the Federal agency. audits meet a Federal agency or pass-
sponsible for program compliance or Since the Federal Government Is at (h)Medicare.Medicare payments to a through entity's needs, the Federal
the contractor's records must be re- risk for loans until the debt is repaid, non-Federal entity for providing pa- agency or pass-through entity must
viewed to determine program compli- the following guidelines must be used tient care services to Medicare-eligible g rely upon and use such audits.Any ad-
ance. Also, when these procurement to calculate the value of Federal individuals are not considered Federal ditional audits must be planned and
transactions relate to a major pro- awards expended under loan programs, awards expended under this part. performed in such a way as to build
gram,the scope of the audit must in- except as noted in paragraphs(c)and (I)Medicaid.Medicaid payments to a u
elude determining whether these trans- (d)of this section: P Y upon work performed, ladling, and
actions are in compliance with Federal (1) Value of new loans made or re- subrecipient Medicaid-eligiblefoe providing patient care audit documentation,dpe sampling,b and
statutes, regulations, and the terms ceived during the audit period;plus uals services noto re iawards testing already performed, by other
sets are considered Federal awards auditors.
and conditions of Federal awards. (2)Beginning of the audit period bal- expended under this part unless a state (c)The provisions of this part do not
(h)For-profit subrecipient. Since this ance of loans from previous years for requires the funds to be treated as Fed- limit the authority of Federal agencies
part does not apply to for-profit sub- which the Federal Government imposes eral awards expended because reim- to conduct,or arrange for the conduct
recipients, the pass-through entity is continuing compliance requirements; bursement is on a cost-reimbursement of, audits and evaluations of Federal
responsible for establishing require- plus basis. . awards,nor limit the authority of any
183 184
OMB Guidance §200.507 §200.507 2 CFR Ch.11(1-1-22 Edition)
Federal agency Inspector General or ton or statute,in effect on January 1, policies used in preparing the schedule, complied with laws, regulations, and
other Federal official.For example,re- 1987, to undergo its audits less fre- a summary schedule of prior audit find- the terms and conditions of Federal
quirements that may be applicable quently than annually,is permitted to fogs consistent with the requirements awards which could have a direct and
under the FAR or CAS and the terms undergo Its audits pursuant to this of§200.511(b), and a corrective action material effect on the Federal pro-
and conditions of a cost-reimbursement part biennially.This requirement must plan consistent with the requirements gram;and
contract may include additional appli- still be in effect for the biennial period. of§200.511(c). (iv)A schedule of findings and ques-
cable audits to be conducted or ar- (b) Any nonprofit organization that (3)The auditor must: toned costs for the Federal program
ranged for by Federal agencies. had biennial audits for all biennial pe- (I)Perform an audit of the financial that includes a summary of the audi-
(d)Federal agency to pay for additional Mods ending between July 1,1992,and statement(s)for the Federal program tor's results relative to the Federal
audits.A Federal agency that conducts January 1,1995,is permitted to under- in accordance with GAGAS; program in a format consistent with
or arranges for additional audits must, go its audits pursuant to this part bi- (ii)Obtain an understanding of inter-
consistent with other applicable Fed- §20n.d costsst) and findingsemand the re-
PP ennially. nal controls and perform tests of inter- toned consistent with re-
eral statutes and regulations,arrange nal controls over the Federal program quirements of§200.515(d)(3).
for funding the full cost of such addi- §200.505 Sanctions. consistent with the requirements of
tional audits. In cases of continued inability or un- §200.514(c)fora major program; (c)audits.d submission)Theufor mustpro b com-
(e)Request for a program to be audited willingness to have an audit conducted (i11)Perform procedures to determine cific (1) reportingit be do by
as a major program.A Federal awarding in accordance with this part, Federal whether the auditee has complied with pparted and the required on
agency may request that an auditee agencies and pass-through entities Federal statutes, regulations,and the submittedubed within(ci(2)or the(c)(3) f this section 0
cal-
have a particular Federal program au- must take appropriate action asera ec earlier of 30 udidited as a major program in lieu of the pro- termsatand conditions direct Federal awardsa ender days after receipt of the after
video in§200.339. that could have a and material the's report(s), or nine id,months after
Federal awarding agency conducting or effect on the Federal program con-
arranging for the additional audits.To [85 FR 49571,Aug.13,25101 theifend of the audits cifiod,in a a
pro-
allow for planning, such requests sistent with the requirements of different period is specified a
§200.506 Audit costs. §200.514(d)for a major program; eshould be made at least 180 calendarup gram-specific audit guide. Unless re-
days prior to the end of the fiscal year See§200.425. (iv)Follow ed re prior audit findings, the ed by Federal law or regulation,
perform procedures to assess the rec-
to be audited.The auditee, after con- [85 FR 49571,Aug.13,2020] sonableness of the summary schedule the auditee must make report copies
sultatfon with its auditor, should available for public inspection.
res and to such a request byof prior ina accordancerc findings withpt theed qy the Auditees and auditors must ensure
promptly P Q §200.507 Program-specific audits. auditee requira-
Informing the Federal awarding agency (a)Program-specific audit guide avail- ments of§200.511,and report,as a cur- that their respective parts of the re-
whether the program would otherwise able.In some cases,a program-specific rent year audit finding,when the audi- porting package do not include pro-
be audited as a major program using audit guide will be available to provide for concludes that the summary ached- tected personally identifiable fnforma-
the risk-based audit approach de- specific guidance to the auditor with ale of prior audit findings materially tion.
scribed in§200.518 and,if not,the esti- respect to internal controls, compli- misrepresents the status of any prior (2) When a program-specific audit
mated incremental cost. The Federal once requirements, suggested audit audit finding;and guide is available, the auditee must
awarding agency must then promptly procedures, and audit reporting re- (v) Report any audit findings con- electronically submit to the FAC the
confirm to the auditee whether it data collection form prepared in ac-
wants the program audited as a major quirements. A listing of current pro- sistent with the requirements of cordance with§200.512(b),as applicable
gram-specific audit guides can be found §200.516.
program, If the program is to be au- in the compliance supplement,Part 8, (4)The auditor's report(s)may be in to a program-specific audit,and the re-
dited as a major program based upon Appendix VI, Program-Specific Audit the form of either combined or sepa- porting required by the program-spe-
this Federal awarding agency request, Guides,which includes a website where rate reports and may be organized dif- cific audit guide.
and the Federal awarding agency a copy of the guide can be obtained. ferently from the manner presented in (3) When a program-specific audit
agrees to pay the full incremental When a current program-specific audit this section. The auditor's report(s) guide is not available, the reporting
costs,then the auditee must have the guide is available, the auditor must must state that the audit was con- package for a program-specific audit
program audited as a major program.A follow GAGAS and the guide when per- ducted in accordance with this part must consist of the financial state-
pass-through entity may use the provi- forming a program-specific audit. and include the following: ment(s)of the Federal program,a sum-
/of this paragraph for a sub- (b) Program-specific audit guide not (i)An opinion(or disclaimer of spin- mary schedule of prior audit findings,
recipient. available.(1)When a current program- ion)as to whether the financial state- and a corrective action plan as de-
(78 FR 78608,Dec.26,2013,as amended at 85 specific audit guide is not available, ment(s)of the Federal program is pre- scribed in paragraph(b)(2)of this sec-
FR 99570,Aug.13,2020] the auditee and auditor must have ba- sented fairly in all material respects in tion, and the auditor's report(s) de-
§200.504 Frequency of audits. sically the same responsibilities for the accordance with the stated accounting scribed in paragraph(b)(4)of this sec-
§200.504 Federal program as they would have policies; tion.The data collection form prepared
Except for the provisions for biennial for an audit of a major program in a (i1)A report on internal control re- in accordance with§200.512(b),as appli-
audits provided in paragraphs(a)and single audit, lated to the Federal program, which cable to a program-specific audit,and
(b)of this section,audits required by (2)The auditee must prepare the fi- must describe the scope of testing of one copy of this reporting package
this part must be performed annually. nancial statement(s) for the Federal internal control and the results of the must be electronically submitted to
Any biennial audit must cover both program that includes,at a minimum, tests; the FAC.
years within the biennial period. a schedule of expenditures of Federal (iii)A report on compliance which in- (d) Other sections of this part may
(a)A state,local government,or In- awards for the program and notes that eludes an opinion (or disclaimer of apply.Program-specific audits are sub-
dian tribe that is required by constitu- describe the significant accounting opinion) as to whether the auditee ject to:
185 186
OMB Guidance §200.510 §200.511 2 CFR Ch.II(1-1-22 Edition)
(1)200.500 Purpose through 200.503 Re- for audit services, the objectives and and prepare separate financial state- (6) Include notes that describe that
lotion to other audit requirements, scope of the audit must be made clear ments. significant accounting policies used in
paragraph(d); and the non-Federal entity must re- (b)Schedule of expenditures of Federal preparing the schedule, and note
(2) 200.504 Frequency of audits quest a copy of the audit organization's awards.The auditee must also prepare whether or not the auditee elected to
through 200.506 Audit costs; peer review report which the auditor is a schedule of expenditures of Federal use the 10% de minimis cost rate as
(3) 200.508 Auditee responsibilities required to provide under GALAS.Fac- awards for the period covered by the covered in§200.414.
through 200.509 Auditor selection; tors to be considered in evaluating auditer's financial statements which [78 FR 7860B,Dec.26,2013,as amended at 79
(4)200.511 Audit findings follow-up; each proposal for audit services include must include the total Federal awards FR 75887,Dec.19,2014;85 FR 49572,Aug.13,
[5) 200.512 Report submission, Para- the responsiveness to the request for expended as determined in accordance 20201
graphs(e)through(h); proposal, relevant experience, avail- with§200.502. While not required,the
(6)200.513 Responsibilities; ability of staff with professional quail- auditee may choose to provide infor- §200.511 Audit findings follow-up.
(7) 200.516 Audit findings through fications and technical abilities, the motion requested by Federal awarding (a)General.The auditee is responsible
200.517 Audit documentation; results of peer and external quality agencies andforn
(8)200.521 Management decision;and pass-throughu entities to all audit in and correctiveAsaction this re-
(9)Other referenced provisions of this control l reviews,eand punt poi- makem the schedule easierrto rap. Fas all audit findings. di part thisre
part unless contrary to the provisions possible,the auditee m make ses example,when a Federalarprogram has sa summary
ysc the auditee mustu it find-
of this section, a program-specific tiin effortst utilize small businesses,womn's multiple F st l award years,f the a summary schedule of prior audit r a
audit guide, or program statutes and business
enterprises,minority-owned
fires,in, and women's auditeewardsmay listthe ramounta of Federal ings.The auditee mast also preparent a
regulations. business enterprises,in procuring audit awards expended for each Federal corrective action plan for current year
services as stated in §200.321, or the award year separately.At a minimum, audit findings.The summary schedule
[78 FR 78608,Dec.26,2013,as amended at 79 FAR(48 CFR part 42),as applicable. the schedule must: of prior audit findings and the correc-
FR 75887,Dec.19,2019;85 FR 99571,Aug.13, (b)Restriction on auditor preparing in- (1)List individual Federal programs Live action plan must include the ref-
2020] direct cost proposals. An auditor who by Federal agency.For a cluster of pro- erence numbers the auditor assigns to
AVDITEE5 prepares the indirect cost proposal or grams, provide the cluster name, list audit findings under§200.516(c). Since
cost allocation plan may not also be se- individual Federal programs within the the summary schedule may include
§200.508 Auditee responsibilities. lected to perform the audit required by cluster of programs, and provide the audit findings from multiple years, it
this part when the indirect costs recov- applicable Federal agency name.. For must include the fiscal year in which
The auditee must: ered by the auditee during the prior R&D, total Federal awards expended the finding Initially occurred.The cor-
(a)Procure or otherwise arrange for rective action plan and summary
the audit required by this part in ac- year exceeded$1 million.This eedi restric- must be shown either by individual schedule of prior audit findings must
cordance with performed
§200.509,and ensure it is tion applies to the base year used in Federal award or by Federal agency include findings relating to the linen-
properly performed and submitted the preparation of the indirect cost and major subdivision within the Fed- cial statements which are required to
when due in accordance with§financial proposal or cost allocation plan and eras agency.For example,the National be reported in accordance with
(b) Prepare appropriate any subsequent years in which the re- Institutes of Health is a major subdivi- GAGAS.
statements, including the schedule of salting indirect cost agreement or cost sign in the Department of Health and (b) Summary schedule of prior audit
expenditures of Federal awards in ac- allocation plan is used to recover costs. Human Services.
f
cordance with§200.510. (c) Use of Federal auditors. Federal (2)For Federal awards received as a findings.pir The summaryingsmustschedule e
(c)Promptly follow up and take cor- auditors may perform all or part of the subrecipient, the name of the pass- status
audit afiudit findings
report the
work required under this part if they through entity and identifying number the prior of all audit schedulechu ofin findingsndd
ein
luding
actionpep on audit andfnga, ry te 's ts. of mmry
eluding preparation of a summary comply fully with the requirements of assigned by the pass-through entity and questioned costs. The summary
schedule of prior audit findings and a this part. must be included. schedule must also include audit find-
corrective action plan in accordance [78 FR 78608,Dee.26,2013,as amended at 85 (3)Provide total Federal awards ex- logs
sum-
with§200.511(b)and(c),respectively. FR 99572,Aug.13,2020;86 FR 10490,Feb.22, pended for each individual Federal pro- mary reported in the priorprroa audittffi
(d)Provide the auditor with access to 20211 gram and the Assistance Listings Num- schedule as cor-
personnel, accounts, books, records, r except ina accordancec findings listed paragraph cor-
bee s Listings number onwh isn rected witho rvali
supporting documentation, and other §200.510 Financial statements. the Assistance Listings information is (b)(1)of this section,or no longer valid
information as needed for the auditor (a) Financial statements.The auditee not available. For a cluster of pro- or not warranting further action in ac-
ts perform the audit required by this must prepare financial statements that grams also provide the total for the cordance with paragraph(b)(3)of this
part. reflect its financial position,results of cluster. section.
[78 FR 78608,Dec.26,2013,as amended at 85 operations or changes in net assets, (9)Include the total amount provided (1) When audit findings were fully
FR 99572,Aug.13,2020] and,where appropriate,cash flows for to subrecipients from each Federal pro- corrected,the summary schedule need
the fiscal year audited. The financial gram. only list the audit findings and state
§200.509 Auditor selection. statements must be for the same orga- (5) For loan or loan guarantee pro- that corrective action was taken.
(a)Auditor procurement.In procuring nizational unit and fiscal year that is grams described in§200.502(b),identify (2)When audit findings were not cor-
audit services,the auditee must follow chosen to meet the requirements of in the notes to the schedule the bal- rooted or were only partially corrected,
the procurement standards prescribed this part.However,non-Federal entity- ances outstanding at the end of the the summary schedule must describe
by the Procurement Standards in wide financial statements may also in- audit period.This is in addition to in- the reasons for the finding's recurrence
§§200.317 through 200.327 of subpart D of elude departments,agencies,and other eluding the total Federal awards ex- and planned corrective action,and any
this part or the FAR(98 CFR part 42), organizational units that have separate pended for loan or loan guarantee pro- partial corrective action taken. When
as applicable. In requesting proposals audits in accordance with §200.519(a) grams in the schedule. corrective action taken is significantly
187 188
OMB Guidance §200.512 §200.513 2 CFR Ch.II(1-1-22 Edition)
different from corrective action pre- spection. Auditees and auditors must exercised,the auditee becomes respon- of the reporting package described in
viously reported in a corrective action ensure that their respective parts of Bible for submitting the reporting paragraph(c)of this section on file for
plan or in the Federal agency's or pass- the reporting package do not include package directly to any pass-through three years from the date of submis-
through entity's management decision, protected personally identifiable infor- entities through which it has received sion to the FAC.
the summary schedule must provide an mation. a Federal award and to pass-through (g)FAC responsibilities.The FAC must
explanation. (b)Data collection.The FAC is the re- entities for which the summary sched- make available the reporting packages
(3) When the auditee believes the pository of record for subpart F of this ule of prior audit findings reported the received in accordance with paragraph
audit findings are no longer valid or do part reporting packages and the data status of any findings related to Fed- (c)of this section and§200.507(c)to the
not warrant further action,the reasons collection form. All Federal agencies, oral awards that the pass-through enti- public, except for Indian tribes exer-
for this position must be described in pass-through entities and others inter- ty provided.Unless restricted by Fed- doing the option in(b)(2)of this sec-
the summary schedule.A valid reason ested in a reporting package and data oral statute or regulation, if the tion,and maintain a data base of com-
for considering an audit finding as not collection form must obtain it by ac- auditee opts not to authorize publica- plated audits, provide appropriate in-
warranting further action is that all of cessing the FAC. tion,it must make copies of the report- formation to Federal agencies,and fol-
the following have occurred: (1)The auditee must submit required ing package available for public inspec- low up with known auditees that have
(I)Two years have passed since the data elements described in Appendix X tion.
collec-
audit report in which the findingoc- not submitted the requiredr data P to Part 200, which state whether the (3)Using the information included in tion forms and reporting
curred was submitted to the FAC; n il g packages.
(ii) The Federal agency or pass- audit this
part and
accordance the reporting package describedsection, audi-in (h)tmust
ude electronict this
-
submis-
through entity is not currentlyfol- with tau the and providesitsF Federal
o- paragraph complete this applicablethedata part preclude ras
tionraabout auditee,ul Federal pro-, eon must oftedata the cionrm• mayys to the FAGd in such. manner as lowing up with the auditee on the audit grams, and the results of the audit. elements of the collection form.
finding;and The data must include information The auditor must sign a statement to be approved by OMB.
(iii)A management decision was not available from the audit required by be included as part of the data collec- l78 FR 78606,Dee.26,2013,as amended at 79
issued. this part that is necessary for Federal tion form that indicates, at a min- FR 75887,Dec.19,2014;85 FR 49573,Aug.13,
(c)Corrective action plan.At the com- agencies to use the audit to ensure in- imum, the source of the information 20201
Motion of the audit,the auditee must tegrity for Federal programs.The data included In the form,the auditor's re-
prepare, in a document separate from elements and format must be approvedFEDERAL AGENCIES
the auditor's findings described in the formbllity for the information, that
§200.516,a corrective action plan to ad- by OMB,available from the FAC,and the is not a substitute for the re- 1200.513 Responsibilities.
dress each audit finding included In the include collections of information fromparagraph
p
the reporting (c)portingofthis package section, n thata the era
re-
current year auditor's reports.The cor- package section.Absd seniorn o f the foislimited and content onsib Cognizant -Fade for entitytxrective action plan must paragraph(c)eao veth ofs auditee .g of form o to the collectionM pilities. A non-Federal million in
provide the level representative the (e.g., of informationprescribedpending
name(s) of the contact person(s) re- state controller, director of finance, ge. The OMB. Federalawardsr than st0 have
a year in
sponsible for corrective action,the cor- chief executive officer,or chief finan- (c)Reporting package. reporting agency foru must a atedico cognizant
action planned,and the antici- package must statementsinclude the: ydit.The designated cthe
pated completion date. If the auditee bbe i includedoffider)must signf a statement to a Financial ofFederal
and sched- Feder agency for audit must provides s
does not agree with the audit findings tion hats ya part of the data collec-m dis of expendituresi § 00.5 a)and(b),awards Federal awardingintamountoun thatf funding ior believes corrective action is not re- that says that the auditee corns discussed in§200.510(a)and(b),respec- the predominant of die
quired,then the corrective action plan pat,lied thewitdh the requirements of thisrd tively; Schedulerectld of funding)(ase listedofFederal
the
part, data were prepared in accord-
must include an explanation and ape- ance with this part(and the instruc- (2)findings Summary scain§20ule of511(b);prior audit w , of exp§200.510(b))enditures to of on-Fed-
cific reasons. 3) Auditor's discussed report(s) discussed awards, see nlOM to a gnates a
tions accompanying the form),the re- (3) in anal entity unless OMB designates a
[78 FR 78608,Dec.26,2013,as amended at 85 porting package does not include pro- §200.515;and specific cognizant agency for audit.
FR 49572,Aug.13,2020] tected personally identifiable informa-
tion, the information included in its (4) Corrective action plan discussed When the direct funding represents less
§200.512 Report submission. entirety is accurate and complete,and in(d)§2 Submission
than 25 percent eat ando the total subawards)e by the
p Submronic to AC. The auditeeFAG tun (as d enct henthe
by the
(a) General. (1) The audit must be that the FAC is authorized to make the must electronically submit to the FAC non-Federal entity, then the Federal
completed and the data collection form reporting package and the form pub- the data collection form described in agency with the predominant amount
described in paragraph(b)of this sec- licly available on a website. paragraph (b) of this section and the of total funding is the designated cog-
tion and reporting package described in (2) Exception for Indian Tribes and reporting package described in nizant
pare- agency for audit.
paragraph(c)of this section must be Tribal Organizations.An auditee that is graph(c)of this section. (2)To provide for continuity of cog-
submitted within the earlier of 30 cal- an Indian tribe or a tribal organization (e) Requests for management letters nizance,the determination of the pre-
ender days after receipt of the audi- (as defined in the Indian Self-Deter- issued by the auditor.In response to re- dominant amount of direct funding
tor's report(s), or nine months after mination, Education and Assistance quests by a Federal agency or pass- must be based upon direct Federal
the end of the audit period.If the due Act (ISDEAA), 25 U.S.C. 450b(1)) may through entity,auditees must submit a awards expended in the non-Federal en-
date falls on a Saturday, Sunday, or opt not to authorize the FAC to make copy of any management letters issued tity's fiscal years ending in 2019, and
Federal holiday,the reporting package the reporting package publicly avail- by the auditor. every fifth year thereafter.
is due the next business day. able on a Web site,by excluding the au- (I) Report retention requirements. (3) Notwithstanding the manner in
(2)Unless restricted by Federal stat- thorization for the FAG publication in Auditees must keep one copy of the which audit cognizance is determined,
utes or regulations, the auditee must the statement described in paragraph data collection form described in a Federal awardingagency with
cog-
make
copies available for public in- (b)(1)of this section.If this option ispara- g y graph(b)of this section and one copy nizance for an auditee may reassign
189 190
OMB Guidance §200.513 §200.514 2 CFR Ch.II(1-1-22 Edition)
cognizance to another Federal award- ciencies require corrective action by (c) Federal awarding agency respon- (iii)Responsible for desi natin the
ing agency that provides substantial the auditor. When advised of defi- g g
sin-
funding and agrees to be the cognizant ciencies, the auditee must work with msiustiep.The Federal following
agency gle Federal agency's key management must perform thetmakes
(See for the ale audit liaison.de
agency for audit. Within 30 calendar the auditor to take corrective action. Federal awards it makes(See also the (6)Provide OMB with the name of a
days after any reassignment,both the If corrective action is not taken, the requirements of§200.211): key management single audit liaison
old and the new cognizant agency for cognizant agency for audit must notify (1)Ensure that audits are completed who must:
audit must provide notice of the the auditor,the auditee,and applicable and reports are received in a timely (I) Serve as the Federal awarding
change to the FAC,the auditee,and,if Federal awarding agencies and pass- manner and in accordance with the re- agency's management point of contact
known, the auditor. The cognizant through entities of the facts and make quirements of this part. for the single audit process both within
agency for audit must: recommendations for follow-up action. (2) Provide technical advice and and outside the Federal Government.
(1)Provide technical audit advice and Major inadequacies or repetitive sub- counsel to auditees and auditors as re- (ii) Promote interagency coordina-
liaison assistance to auditees and audi- standard performance by auditors must quested. tion,consistency,and sharing in areas
tors. be referred to appropriate state licens- (3)Follow-up on audit findings to en- such as coordinating audit follow-up;
(II)Obtain or conduct quality control ing agencies and professional bodies for sure that the recipient takes appro- identifying higher-risk non-Federal en-
reviews on selected audits made by disciplinary action. priate and timely corrective action.As titles;providing input on single audit
non-Federal auditors, and provide the (vi) Coordinate, to the extent prac- part of audit follow-up, the Federal and follow-up policy; enhancing the
results to other interested organiza- tical,audits or reviews made by or for awarding agency must: utility of the FAC;and studying ways
tions.Cooperate and provide support to Federal agencies that are in addition (I) Issue a management decision as to use single audit results to improve
the Federal agency designated by OMB to the audits made pursuant to this prescribed in§200.521; Federal award accountability and best
to lead a governmentwide project to part,so that the additional audits or (ii)Monitor the recipient taking ap- practices.
determine the quality of single audits reviews build upon rather than dupli- propriate and timely corrective action; (iii)Oversee training for the Federal
by providing a reliable estimate of the cate audits performed in accordance (iii)Use cooperative audit resolution awardingagency's
program manage-
extent that single audits conform to with this part. mechanisms(see the definition of coop- ment personnel related to thea single
applicable requirements, standards, (vii)Coordinate a management deci- erative audit resolution in§200.1 of this audit process.
and procedures; and to make rev- sion for cross-cutting audit findings part)to improve Federal program out- (iv) Promote the Federal awarding
ommendationa to address noted audit (see in§200.1 of this part)that affect comes through better audit resolution, agency's use of cooperative audit reso-
quality issues,including recommenda- the Federal programs of more than one follow-up,and corrective action;and lution mechanisms.
tions for any changes to applicable re- agency when requested by any Federal (iv)Develop a baseline,metrics,and (v)Coordinate the Federal awarding
quirements, standards and procedures awarding agency whose awards are in- targets to track,over time,the effec- agency's activities to ensure appro-
indicated by the results of the project. eluded in the audit finding of the tiveness of the Federal agency's proc- priate and timely follow-up and correc-
The governmentwide project can rely auditee. efts to follow-up on audit findings and tive action on audit findings.
on the current and on-going quality (viii)Coordinate the audit work and on the effectiveness of Single Audits in (vi) Organize the Federal cognizant
control review work performed by the reporting responsibilities among audi- improving non-Federal entity account- agency for audit's follow-up on cross-
agencies, State auditors, and profes- tors to achieve the most cost-effective ability and their use by Federal award- cutting audit findings that affect the
sional audit associations.This govern- audit. ing agencies in making award deci- Federal programs of more than one
mentwide audit quality project must (ix)Provide advice to auditees as to sions. Federal awarding agency.
be performed once every 6 years(or at how to handle changes in fiscal years. (4) Provide OMB annual updates to (vii) Ensure the Federal awarding
such other interval as determined by (b)Oversight agency for audit reopen- the compliance supplement and work agency provides annual updates of the
OMB),and the results must be public. sibilities.An auditee who does not have with OMB to ensure that the compli- compliance supplement to OMB.
(iii)Promptly inform other affected a designated cognizant agency for ance supplement focuses the auditor to (viii) Support the Federal awarding
Federal agencies and appropriate Fed- audit will be under the general over- test the compliance requirements most agency's single audit accountable offi-
eral law enforcement officials of any sight of the Federal agency determined likely to cause improper payments, vial's mission.
direct reporting by the auditee or its in accordance with §200.1 oversight fraud, waste,abuse or generate audit [78 FR 7860B,Dec.26,2013,as amended at 79
auditor required by OAGAS or statutes agency for audit.A Federal agency with finding for which the Federal awarding FR 75887,Dec.19,2014;85 FR 49573,Aug.13,
and regulations. oversight for an auditee may reassign agency will take sanctions. 20201
(iv) Advise the community of inde- oversight to another Federal agency (5)Provide OMB with the name of a
pendent auditors of any noteworthy or that agrees to be the oversight agency single audit accountable official from AUDITORS
important factual trends related to the for audit.Within 30 calendar days after among the senior policy officials of the
quality of audits stemming from qual- any reassignment,both the old and the Federal awarding agency who must be: §200.514 Scope of audit.
Ity control reviews. Significant prob- new oversight agency for audit must (i)Responsible for ensuring that the (a) General. The audit must be con-
lems or quality issues consistently provide notice of the change to the agency fulfills all the requirements of ducted in accordance with GALAS.The
identified through quality control re- FAC, the auditee, and, if known, the paragraph(c)of this section and effec- audit must cover the entire operations
views of audit reports must be referred auditor. The oversight agency for tively uses the single audit process to of the auditee,or,at the option of the
to appropriate state licensing agencies audit: reduce improper payments and improve auditee,such audit must include a se-
and professional bodies. (1)Must provide technical advice to Federal program outcomes. ries of audits that cover departments,
(v) Advise the auditor, Federal auditees and auditors as requested. ([i)Held accountable to Improve the agencies, and other organizational
awarding agencies, and, where appro- (2)May assume all or some of the re- effectiveness of the single audit process units that expended or otherwise ad-
priate, the auditee of any deficiencies aponsibilltles normally performed by a based upon metrics as described in ministered Federal awards during such
found in the audits when the defi- cognizant agency for audit. paragraph(c)(3)(iv)of this section. audit period, provided that each such
191 192
OMB Guidance §200.514 §200.515 2 CFR Ch.II(1-1-22 Edition)
audit must encompass the financial rial weakness in accordance with audit findings materially misrepre- the terms and conditions of Federal
statements and schedule of expendi- §200.516,assess the related control risk sents the status of any prior audit find- awards which could have a direct and
tures of Federal awards for each such at the maximum,and consider whether ing. The auditor must perform audit material effect on each major program
department,agency,and other organs- additional compliance tests are re- follow-up procedures regardless of and refer to the separate schedule of
zational unit, which must be consid- quired because of ineffective internal p
whether a priorin audit findingrr relates to i findingsar and(d)o fit costs io described
ered to be a non-Federal entity.The fi- control. a major program in the current year. in paragraph(d)of this section.
• nancial statements and schedule of ex- (d)Compliance.(1)In addition to the (f)Data collection form.As required in (d)A schedule of findings and ques-
penditures of Federal awards must be requirements of GAGAS, the auditor §200.512(b)(3), the auditor must corn- tioned costs which must include the
for the same audit period. must determine whether the auditee plete and sign specified sections of the following three components:
(b) Financial statements. The auditor has complied with Federal statutes, data collection form. (1) A summary of the auditor's re-
must determine whether the financial regulations,and the terms and condi- [78 FR 78608,Dec.26,2013,as amended at 79 salts,which must include:
statements of the auditee are presented tions of Federal awards that may have
fairly in all material respects in ac- a direct and material effect on each of FR 75887,Dec.19,2014;85 FR 49574,Aug.13, (1) The type of report the auditor
with generally accepted ac- its major programs. 2020;86 FR 10990,Feb.22,2021] issued on whether the financial state-
cordanceaccord-
counting principles.The auditor must (2)The principal compliance require- §200.515 Audit reporting. ments audited were prepared in also determine whether the schedule of ments applicable to most Federal pro- ance with GAAP opinion,(i unmodified od neon,
grams and the compliance require- The ofa eithertor's combinedd)or separatemae be n the ion,qualifiedm on adverse opinion,
expenditures of Federal awards is stet- form
ed fairly in all material respects in re- ments of the largest Federal programs re- or disclaimer of applicable,
latton to the auditee's financial state- are included in the compliance supple- ports and may beorganized idn
sec- (ii)u Where significant
a statement
es
meats as a whole. ment. from the manner presented in this t to about whethert knesses nt internal
con-
(c) Internal control. (1) The compli- (3)For the compliance requirements tion.The auditor's report(s)must state trol
material weaknesses byys in iaudit o con-
(c)
ance supplement provides guidance on related to Federal programs contained that the with thist was part conducted includei theac- f na were disclosed the audit of the
internal controls over Federal fo o and the financial statements;
pro- in the compliance supplement,an audit following:
grams based upon the guidance in of these compliance requirements will (a) Financial statements.The auditor (ill)A statement as to whether the
Standards for Internal Control in the meet the requirements of this part. must determine and provide an opinion audit disclosed any noncompliance
Federal Government issued by the Where there have been changes to the (or disclaimer of opinion)whether the that is material to the financial state-
Comptroller General of the United compliance requirements and the financial statements of the auditee are meats of the auditee;
States and the Internal Control—Inte- changes are not reflected in the corn- presented fairly in all materials re- (iv) Where applicable, a statement
grated Framework,issued by the Com- pliance supplement, the auditor must spects in accordance with generally ac- about whether significant deficiencies
mittee of Sponsoring Organizations of determine the current compliance re- cepted accounting principles(or a ape- or material weaknesses in internal con-
the Treadway Commission(COSO). quirements and modify the audit prose- trol over major programs were dis-
(2)In addition to the requirements of dures accordingly. For those Federal modifiedol purpose framework sucho as cash, closed by the audit;
GAGAS,the auditor must perform pro- programs not covered in the compli- cash, or regulatory as re- (v) The type of report the auditor
cedures to obtain an understanding of ance supplement,the auditor must fol- quiredlsodecide b state law).the The scauhedule
of must issued on compliance for major pro-
internal control over Federal programs low the compliance supplement'sguid- also of whetherd nsisttedex- gramsunmodified opinion,
p g g PP fairly
in
ral awards stated (i.e.,( P quali-
sufficient to plan the audit to support ance for programs not included In the fairly in all material respects in rela- fled opinion, adverse opinion, or (IIs-
a low assessed level of control risk of supplement. lion to the auditee's financial state- claimer of opinion);
noncompliance for major programs. (4)When internal control over some meats as a whole. (vi)A statement as to whether the
(3) Except as provided in paragraph or all of the compliance requirements (b)A report on internal control over audit disclosed any audit findings that
(c)(4)of this section,the auditor must: for a major program are likely to be in- financial reporting and compliance the auditor is required to report under
(i)Plan the testing of internal con- effective in preventing or detecting with provisions of laws, regulations, §200.516(a);
trol over compliance for major pro- noncompliance, the planning and per- contracts,and award agreements,non- (vii)An identification of major pro-
grams to support a low assessed level forming of testing described in pars- compliance with which could have a grams by listing each individual major
of control risk for the assertions rel- graph(c)(3)of this section are not re- material effect on the financial state- program;however,in the case of a clue-
avant to the compliance requirements quired for those compliance require- ments.This report must describe the ter of programs,only the cluster name
for each major program;and ments.However,the auditor must re- scope of testing of internal control and as shown on the Schedule of Expendi-
(ii)Perform testing of internal con- port a significant deficiency or mate- compliance and the results of the tests, tures of Federal Awards is required;
trol as planned In paragraph(c)(3)(1)of rial weakness in accordance with and,where applicable,it will refer to (viii) The dollar threshold used to
this section. §200.516,assess the related control risk the separate schedule of findings and distinguish between Type A and Type B
(4)When internal control over some at the questioned costs described in para- programs,as described in§200.518(b)(1)
or all of the compliance requirements (e)Audit follow-up.The auditor must graph(d)of this section. or(3)when a recalculation of the Type
for a major program are likely to be in- follow-up on prior audit findings,per- (c)A report on compliance for each A threshold is required for large loan
effective in preventing or detecting form procedures to assess the reason- major program and a report on internal or loan guarantees;and
noncompliance, the planning and per- ableness of the summary schedule of control over compliance. This report (ix)A statement as to whether the
forming of testing described in pare- prior audit findings prepared by the must describe the scope of testing of auditee qualified as a low-risk auditee
graph(c)(3)of this section are not re- auditee in accordance with§200.511(b), internal control over compliance, in- under§200.520.
quired for those compliance require- and report, as a current year audit elude an opinion or disclaimer of spin- (2)Findings relating to the financial
ments. However, the auditor must re- finding, when the auditor concludes ion as to whether the auditee complied statements which are required to be re-
port a significant deficiency or mate- that the summary schedule of prior with Federal statutes,regulations,and ported in accordance with GAGAS.
193 194
OMB Guidance §200.516 §200.517 2 CFR Ch.II(1-1-22 Edition)
(3)Findings and questioned costs for quirement for a major program identi- legal proceedings or to make an addi- recipient,to permit them to determine
Federal awards which must include fled in the compliance supplement. tional reporting when the auditor con- the cause and effect to facilitate
audit findings as defined in§200.516(a). (3)Known questioned costs that are firms that the fraud was reported out- prompt and proper corrective action.A
(1)Audit findings(e.g.,internal con- greater than$25,000 for a type of corn- side the auditor's reports under the di- statement of the effect or potential ef-
trol findings, compliance findings, pliance requirement for a major pro- rect reporting requirements of GAGAS. feet should provide a clear,logical link
questioned costs,or fraud)that relate gram. Known questioned costs are (7) Instances where the results of to establish the impact or potential
to the same issue must be presented as those specifically identified by the audit follow-up
a single audit finding.Wherepractical, evaluating proceduresh disclosed impact of the difference between the
g auditor. In the effect of that the summary schedule of prior condition and the criteria.
audit findings should be organized by questioned costs on the opinion on audit findings prepared by the auditee (6)Identification of questioned costs
Federal agency or pass-through entity. compliance, the auditor considers the in accordance with§200.511(b)materi- and how they were computed.Known
(ii)Audit findings that relate to both best estimate of total costs questioned ally misrepresents the status of any questioned costs must be identified by
the financial statements and Federal (likely questioned costs), not just the prior audit finding. applicable Assistance Listings num-
awards, as reported under paragraphs questioned costs specifically identified (b) Audit finding detail and clarity. ber(s) and applicable Federal award
(d)(2)and(d)(3)of this section,respec- (known questioned costs).The auditor Audit findings must be presented in identification number(s).
tively, must be reported in both sec- must also report known
bona of the schedule.However,the re- p questioned sufficient detail and clarity for the (7)Information to provide proper pur-
porting in one section of the schedule costs when likely questioned costs are auditee to prepare a corrective action copsesPective for judging the prevalence and
may be in summary form with a ref- greater than rem,$25,000 for a type of com- plan and take corrective action, and consequences of the audit findings,
erence to a detailed reporting in the rep-
pliance requirement for a major pro- for Federal agencies and pass-through such as whether the audit findings rep-
other section of the schedule. gram. In reporting questioned costs, entities to arrive at a management de- resent an isolated instance or a sys-
(e) Nothing in this the auditor must Include information cision.The following specific informs- tomb problem.Where appropriate,in-
part precludes to provide proper perspective for joust tion must be included,as applicable,in stances identified must be related to
combining of the audit reporting re- audit findings: the universe and the number of cases
ing the prevalence and consequences of g
quired by this section with the report- (1)Federal program and specific Fed- examined and be quantified in terms of
ing required by §200.512(b) when al- the questioned costa.
lowed byGAGAS and appendix (4)Known questioned costs that are eral award identification including the dollar value.The auditor should report
X to Assistance Listings title and number, whether the sampling was a atatis-
thfs part. greater than S25,000 for Federal pro- ticallyvalid sample.
gram which is not audited as a major Federal award identification number
of
[78 FR 78608,Dec.26,2013,as amended at 79 program. Except for audit follow-up, and year,name of Federal agency,and audit finding(8) waatsion a re eat er of ahfinding
FR 75887,Dee.19,2014;85 FR 49574,Aug.13, the auditor Is not required under this name of the applicable pass-through in the immediatelP g
2020] part to perform audit procedures for entity.When Information,such as the Y prior audit and if
Assistance Listings title and number so any applicable prior year audit find-
4200.516 Audit findings. such a Federal program;therefore,the or Federal award identification num- ing numbers.
auditor will normally not find ques- ber,is not available,the auditor must (9)Recommendations to prevent fu-
(a)Audit findings reported.The audi- tioned costs for a program that is not ture occurrences of the deficiency
for must report the followingas audit provide the best information available iden-
audited as a major program.However, to describe the Federal award. tified in the audit finding.
findings in a schedule of findings and if the auditor does become aware of (2) (10)Views of responsible officials of
questioned costs: questioned costs for a Federal program ea The criteria or specific require- the auditee.
(1)Significant deficiencies and mate- p g meat upon which the audit finding is
rial weaknesses in internal control based,including the Federal statutes, (d Reference numbers. Each audit
that is not audited as a major program
over major programs and significant (e.g.,as part of audit follow-up or other regulations, or the terms and condi- finding In the schedule of findings and
instances of abuse relating to major audit procedures)and the known clues- tions of the Federal awards. Criteria er estionu coats must include aa ref-
tioned costs are greater than S25,000, generally identifythe requirederence number Sn the format lletin
programs.The auditor's determination then the auditor must report this as an sired state or expectation with respect the requirements of the data collection
of whether a deficiency in internal con- audit finding, to the ( )
trol is a significant deficiency or a ma- program or operation. Criteria form submission required by§200.512 b
terlal for the purpose of re- (5) The circumstances concerning provide a context for evaluating evi- to allow for easy referencing of the
why the auditor's report on compliance dence and understandingfindings.
audit findings during follow-up.
porting weaknessan audit finding is in relation p g
to a type of compliance requirement for each major program is other than (3) The condition found, including [78 FR 78608,Dec.26,2013,as amended at 85
for a major program identified in the an unmodified opinion,unless such cir- facts that support the deficiency Men- FR 49574,Aug.13,2020]
Compliance Supplement. cumstances are otherwise reported as tified in the audit finding.
(2)Material noncompliance with the audit findings in the schedule of find- (4)A statement of cause that Mend- §200.617 Audit documentation.
provisions of Federal statutes,regula- ings and questioned costs for Federal lies the reason or explanation for the (a)Retention of audit documentation.
tions, or the terms and conditions of awards. condition or the factors responsible for The auditor must retain audit docu-
Federal awards related to a major pro- (6)Known or likely fraud affecting a the difference between the situation mentation and reports for a minimum
gram. The auditor's determination of Federal award, unless such fraud is that exists(condition)and the required of three years after the date of
whether a noncompliance with the pro- otherwise reported as an audit finding or desired state(criteria), which may issuance of the auditor's report(s) to
visions of Federal statutes, regula- in the schedule of findings and ques- also serve as a basis for recommends- the auditee,unless the auditor is nota-
tions, or the terms and conditions of tioned costs for Federal awards.This tions for corrective action. fied in writing by the cognizant agency
Federal awards is material for the par- paragraph does not require the auditor (5) The possible asserted effect to for audit, oversight agency for audit,
pose of reporting an audit finding is in to report publicly information which provide sufficient information to the cognizant agency for indirect costs,or
relation to a type of compliance re- could compromise investigative or auditee and Federal agency, or pass- pass-through entity to extend the re-
through entity in the case of a sub- tention period. When the auditor is
195 196
OMB Guidance §200.518 §200.519 2 CFR Ch.11(1-1-22 Edition)
aware that the Federal agency, pass- (2) Federal programs not labeled programs as required under§200.515(c); (2)All Type B programs identified as
through entity, or auditee is con- Type A under paragraph(b)(1)of this or high-risk under step three(paragraph
testing an audit finding, the auditor section must be labeled Type B pro- (lii)Known or likely questioned costs (d)of this section).
must contact the parties contesting grams. that exceed five percent of the total (3)Such additional programs as may
the audit finding for guidance prior to (3)The inclusion of large loan and Federal awards expended for the pro- be necessary to comply with the per-
destruction of the audit documentation loan guarantees(loans)must not result gram. tentage of coverage rule discussed in
and reports. In the exclusion of other programs as paragraph(f)of this section.This may
(b) Access to audit documentation. Type A programs.When a Federal pro- (2) Notwithstanding paragraph (c)(1) require the auditor to audit more pro-
Audit documentation must be made gram providing loans exceeds four of this section, OMB may approve a
available upon request to the cognizant times the largest non-loan program it Federal awarding agency's request that grams as major programs than the
g p g a Type A program may not be consid- number of Type A programs.
or oversight agency for audit or its des- is considered a large loan program,and (f)Percentage of coverage rule. If the
ignee, cognizant agency for indirect the auditor must consider this Federal ered low risk for a certain recipient. auditee meets the criteria In§200.520,
cost,a Federal agency,or GAO at the program as a Type A program and ex- For example,it may be necessary for a the auditor need only audit the major
completion of the audit, as part of a elude its values in determining other large Type A program to be audited as programs identified in Step 4 (pare,-
quality review, to resolve audit find- Type A programs.This recalculation of a major program each year at a par- graphs(e)(1)and(2)of this section)and
ings,or to carry out oversight respon- the Type A program is performed after titular recipient to allow the Federal such additional Federal programs with
sibilities consistent with the purposes removing the total of all large loan awarding agency to comply with 31 Federal awards expended that, in ag-
of this part. Access to audit docu- programs. For the purposes of this U.S.C. 3515. The Federal awarding gregate,all major programs encompass
mentation includes the right of Federal paragraph a program Is only considered agency must notify the recipient and, at least 20 percent(0.20)of total Fed-
agencies to obtain copies of audit docu- to be a Federal program providing if known, the auditor of OMB's aP- eral awards expended. Otherwise, the
mentation, as is reasonable and nee- loans if the value of Federal awards ex- proval at least 180 calendar days prior auditor must audit the major programs
essary. pended for loans within the program to the end of the fiscal year to be au- identified in Step 9 (paragraphs(e)(1)
comprises fifty percent or more of the dated. and(2)of this section)and such addi-
§200.518 Major program determine- total Federal awards expended for the (d) Step three. (1) The auditor must tional Federal programs with Federal
tion. program. A cluster of programs is identify Type B programs which are awards expended that,in aggregate,all
(a) General. The auditor must use a treated as one program and the value high-risk using professional judgment major programs encompass at least 40
risk-based approach to determine of Federal awards expended under a and the criteria in §200.519. However, percent(0.40)of total Federal awards
which Federal programs are major pro- loan program is determined as de- the auditor is not required to identify expended.
grams.This risk-based approach must scribed in§200.502. more high-risk Type B programs than (g)Documentation of risk.The auditor
include consideration of: current and (4) For biennial audits permitted at least one fourth the number of low- must include in the audit documenta-
prior audit experience, oversight by under §200.504, the determination of risk Type A programs identified as low- tion the risk analysis process used in
Federal agencies and pass-through en- Type A and Type B programs must be risk under Step 2(paragraph(c)of this determining major programs.
titles,and the inherent risk of the Fed- based upon the Federal awards ex- section). Except for known material (h) Auditor's judgment. When the
oral program. The process In para- pended during the two-year period. weakness In internal control or compli- major program determination was per-
graphs(b) through(h)of this section (c) Step two. (1) The auditor must once problems as discussed in formed and documented in accordance
must be followed. identify Type A programs which are §200.519(b)(1)and(2)and(c)(1),a single with this Subpart, the auditor's judg-
(b) Step one. (1) The auditor must low-risk. In making this determine- criterion In risk would seldom cause a meet in applying the risk-based ap-
identify the larger Federal programs, tion,the auditor must consider wheth- preach to determine major programs
which must be labeled Type A pro- er the requirements 1n§200.519(c),the Type B program to be considered high- must be presumed correct.Challenges
risk. When identifying which Type B
grams.Type A programs are defined as results of audit follow-up, or any Federal agencies and pass-through
Federal programs with Federal awards changes in personnel or systems affect-
encouraged to risk assess,the auditor Is entities must only be for clearly im-
expended during the audit period ex- ing the program indicate significantly encouraged to use an approach which proper use of the requirements in this
seeding the levels outlined in the table increased risk and preclude the pro- provides an opportunity for different part. However,pass-through entities Federal agencies and
ram from being low risk.For a Type
high-risk Type B programs to be au- may provide
in this paragraph(b)(1): g
A program to be considered low-risk,it dited as major over a period of time. auditors guidance about the risk of a
Total Federal awards ex- Type SIB threshold must have been audited as a major pro- (2)The auditor is not expected to per- particular Federal program and the
vended gram in at least one of the two most form risk assessments on relatively auditor must consider this guidance in
equal to or exceed$750,000 $750,000. recent audit periods(in the most re- small Federal programs.Therefore,the determining major programs in audits
but less than or equal to cent audit period in the case of a Bien- auditor is only required to perform risk not yet completed.
$25 million. nial audit), and, in the most recent assessments on Type B programs that
Exceed$25 million but less Total Federal awards ex- audit period, the program exceed twenty-five [78 FR 78608,Dec.26,2013,as amended at 79
manor equal to glue mil- pended times.03. P g m must have percent(0.25)of the FR 75887,Dec.19,2019;85 FR 99574,Aug.13,
Son. not had: Type A threshold determined in Step 1 20203
Exceed$100 million but less 13 million. (1) Internal control deficiencies (paragraph(b)of this section).
than a equal toll billion. which were identified as material (e) Step four. At a minimum, the $200.519 Criteria for Federal program
Total
Exceed$1 billion but lass To Federal awards ex- weaknessesin thedit 's report on auditor must audit all of the risk.
following auditor's
than or equal to$1 o barn. ed times.003. P g
Exceed$10 billion but less $30 million. internal control for major programs as as major programs: (a)General.The auditor's determisa-
than or equal 0125 biter, required under§200.515(c); (1)All Type A programs not identi- tion should be based on an overall eval-
Exceed$20 billion................. Total Federal awards ex. (If) A modified opinion on the pro- fled as low risk under step two(pars- uation of the risk of noncompliance so-
penaed times 0015. gram in the auditor's report on major graph(c)(1)of this section). curring that could be material to the
197 198
OMB Guidance §200.520 §200.521 2 CFR Ch.II(1-1-22 Edition)
Federal program. The auditor must will provide this identification in the biennial audits does not qualify as a required, the Federal agency or pass-
consider criteria,such as described in compliance supplement. low-risk auditee. through entity may also issue a man-
paragraphs(b),(c),and(d)of this sec- (d) Inherent risk of the Federal pro- (b)The auditor's opinion on whether agement decision on findings relating
tion, to identify risk in Federal pro- gram. (1)The nature of a Federal pro- the financial statements were prepared to the financial statements which are
grams.Also,as part of the risk anal- gram may indicate risk.Consideration in accordance with GAAP,or a basis of required to be reported in accordance
ysis,the auditor may wish to discuss a should be given to the complexity of accounting required by state law,and with GALAS.
particular Federal program with the program and the extent to which the auditor's in relation to opinion on (b) Federal agency. As provided in
auditee management and the Federal the Federal program contracts for the schedule of expenditures of Federal §200.513(a)(3)(vii),the cognizant agency
agency or pass-through entity. goods and services.For example,Fed- awards were unmodified. for audit must be responsible for co-
(b)Current and prior audit experience. eral programs that disburse funds (e)There were no deficiencies in in- ordinating a management decision for
(1)Weaknesses in internal control over through third-party contracts or have ternal control which were identified as audit findings that affect the programs
Federal programs would indicate high- eligibility criteria may be of higher material weaknesses under the require- of more than one Federal agency. As
er risk.Consideration should be given risk. Federal programs primarily in- ments of GAGAS. provided in §200.513(c)(3)(i), a Federal
.to the control environment over Fed- volving staff payroll coats may have (d)The auditor did not report a sub- awarding agency is responsible for
eral programs and such factors as the high risk for noncompliance with re- stantial doubt about the auditee's abil- issuing a management decision for
expectation of management's adher- quirements of§200.930, but otherwise ity to continue as a going concern. findings that relate to Federal awards
ence to Federal statutes, regulations, be at low risk. (e)None of the Federal programs had it makes to non-Federal entities.
and the terms and conditions of Fed- (2)The phase of a Federal program in audit findings from any of the fol- (c)Pass-through entity.As provided in
eral awards and the competence and its life cycle at the Federal agency lowing in either of the preceding two §200.332(d), the pass-through entity
experience of personnel who administer may indicate risk.For example,a new audit periods in which they were classi- must be responsible for issuing a man-
the Federal programs. Federal program with new or interim fled as Type A programs: agement decision for audit findings
(I)A Federal program administered regulations may have higher risk than (1)Internal control deficiencies that that relate to Federal awards it makes
under multiple Internal control struc- an established program with time-test- were-identified as material weaknesses to subrecipients.
tures may have higher risk. When as- ed regulations. Also, significant In the auditor's report on internal con- (d) Time requirements. The Federal
sassing risk in a large single audit,the changes in Federal programs,statutes, trol for major programs as required awarding agency or pass-through enti-
auditor must consider whether weak- regulations, or the terms and condi- under§200.515(c); ty responsible for issuing a manage-
nesses are isolated in a single oper- tions of Federal awards may Increase (2) A modified opinion on a major ment decision must do so within six
ating unit(e.g.,one college campus)or risk. program in the auditor's report on months of acceptance of the audit re-
pervasive throughout the entity. (3)The phase of a Federal program in major programs as required under port by the FAC.The auditee must ini-
(Ii)When significant parts of a Fed- its life cycle at the auditee may indi- §200.515(c);or tiate and proceed with corrective ac-
eral program are passed through to cate risk.For example,during the first (3)Known or likely questioned costs tion as rapidly as possible and correc-
subrecipients,a weak system for moni- and last years that an auditee partici- that exceeded five percent of the total tive action should begin no later than
toring subrecipfents would indicate pates in a Federal program, the risk Federal awards expended for a Type A upon receipt of the audit report.
higher risk. may be higher due to start-up or close- program during the audit period. (e) Reference numbers. Management
(2) Prior audit findings would indi- out of program activities and staff. [78 FR 78608,Dec.26,2013,es amended at 85 decisions must include the reference
sate higher risk,particularly when the (9)Type B programs with larger Fed- FR 49575,Aug.13,2020] numbers the auditor assigned to each
situations identified In the audit find- eral awards expended would be of high- audit finding in accordance with
ings could have a significant impact on er risk than programs with substan- MANAGEMENT DECISIONS §200.516(c).
a Federal program or have not been tially smaller Federal awards ex-
§200.621 Management decision F8 FR 5,Au Dec.06,2013,as amended at 85
corrected. pended.
(3)Federal programs not recently au- (a) General. The management deci- FR 99575 Aug.13,2020]
dated as major programs may be of [78 FR 78608,Dec.26,2013,as amended at 85 sion must clearly state whether or not
APPENDIX I TO PART 200—FULL Y OF
higher risk than Federal programs re- FR 99575,Aug.13,2020] the audit finding is sustained,the rea- NOTICE OF FUNDINGGOPPORTUNITY
cently audited as major programs with- sons for the decision,and the expected
out audit findings. $200.520 Criteria for a low-risk auditee action to repay disallowed The full text of the notice of funding op-
(c)Oversight exercised by Federal agen- nuditee, costs, make financial adjustments, or portuelty is organized in sections.The re
ties and pass-through entities. (1)Over- An auditee that meets all of the fol- take other action. If the auditee has quired format outlined In this appendix indi-
sight exercised by Federal agencies or lowing conditions for each of the pre- not completed corrective action, a setts section w e then t atlowing the creq it each
in
pass-through entities could be used to ceding two audit periods mustP vy whether that section is required award-
assess d-
qualify timetable for follow-upisingshould be every agency
option.ement or it a t Federal nod so
assess risk.For example,recent moni- as a low-risk auditee and be eligible for given. Prior to issuing the manage- ing agency option.The format is designed so
toring or other reviews performed by reduced audit coverage in accordance ment decision, the Federal agency or that similar
an oversight entity that disclosed no with§200.518. g Y types of leis announcements
en.appear
pass-through entity may request addi- in the same sections in announcements of
significant problems would indicate (a)Single audits were performed on tional information or documentation different Federal funding opportunities.To-
lower risk, whereas monitoring that an annual basis in accordance with the from the auditee, including a request ward that end,there is text in each of the
disclosed significant problems would provisions of this Subpart, including for auditor assurance related to the followtio sections to describe the types of in-
indicate higher risk. submitting the data collection form documentation,as a wayof mitigating formation that a Federal awarding agency
(2)Federal agencies,with the concur- and the reporting package to the FAC g g would include in that section of an actual
P g P g disallowed costs.The management de- announcement.
rence of OMB, may identify Federal within the timeframe specified in elision should describe any appeal pros- A Federal awarding agency that wishes to
programs that are higher risk. OMB §200.512.A non-Federal entity that has ess available to the auditee.While not include information that the format does not
199 200
OMB Guidance Pt.200,App.I Pt.200,App.I 2 CFR Ch.II(1-1-22 Edition)
specifically discuss may address that subject nouncement;the expected performance indi-
in whatever section(s)is most appropriate. caters,targets,baseline data,and data col- types of domestic applicants other than tads- accessceptable.However,since high-speed Internet
For example,if a Federal awarding agency lection;the anticipated number of Federal portios). This section should refer to any access Is not yet universally available for
chooses to address performance goals in the wards;the expected amounts of individual portion of Section D specifying documents- downloading documents,and applicants may
announcement,it might do so In the funding Federal awards(which may be a range);the tion that most be submitted to support an have additional accessibility requirements,
opportunity description,the application con- amount of funding per Federal award,on av- eligibility determinationetermi (e.g., proof ai there also should be a way for potential ls,
tent,or the reporting requirements. erage,experienced in previous years;and the Rene(3)status as determined by the Internal each is to request paper copies of materials,
ad-
Similarly, when this format calls for a anticipated start dates and periods of per-
elution).Service or en authorizing tribal res- such as a U.S.Postal Service mailing type of information to be in a particular sec- formance for new Federal awards.This sec- elution).To the extent that any funding re- dress,telephone or FAX number,Telephone
• teen,a Federal awarding agency wishing to tion also should address whether applica- strtetion In Section D.6 could affect the ell- Device for the Deaf(TDD),Text Telephone
address that subject in other sections may tions for renewal or supplementation of ex-
nouncement of an applicant or project,the an- Relay number,and/or Federal Information
elect to repeat the information in those see- (sting projects are eligible to compete with nouncement must either restate that restref- Relay Service(FIRS)number.
tions or use cross references between the sec- applications for new Federal awards. ilea in this section or provide across-ref- 2.Content and Form of Application identify-
tions(there should be hyperllnks for cross- This section also must indicate the type(s) ranee to its description in Section D.6. shoe—Required. This section must
and
references in any electronic versions of the of assistance Instrument(e.g.,grant,cooper- n 2.Cost Sharing or Matching her there
i An- the formssrod contentrmatsof an applicationicantmust
re-
announcement). For example, a Federal p nouncements must state whether there Is re- the or formats that an applicant
alive agreement)that may be awarded if ap- use to submit It.If any areements are
par-
awarding agency may want to include Sex- qu(red cost sharing,matching,or cost par-
plicattons are successful. If cooperative wouldtton without which an applicationstated elsewhere because they general re-
lion A information about the types of non- agreements may be awarded,this section ei-
Federal entities who are eligible to apply. be ineligibleannouncement
(if cost sharing is not tly orirdmengs that apply to,this se It programs
Cher should at me the "substantial al in- tree, the announcement must explicitly or funding where those
re,requirements section may be
The format specifies a standard location for say be car-
that information in Section C.1 but does not volenp ant"that the Federal awarding agen- so).Required cost sharing may a car- refernto those ohouldn be
preclude repeating the information in Sec- cy expects to have or should reference where tat()percentage or amount,or may be in the found.This section also should include ra-
cy A or creating a cross reference between the potential applicant can find that infer- form of contributions of specified items or mitred forms or formats as part of the an-
Section Asad Cl.. as log as a potential ap- motion(e.g.,in the funding opportunity de- activities(e.g.,provision of equipment).It is nouncement or state where the applicant
plicant can find the Information quickly and scription in Section A.or Federal award ad- important that the announcement be clear may obtain them.
easily from the standard location. ministration information in Section D. If about any restrictions on the types of cost c This section should specifically address
The sections of the full text of the an- this
and form or format requirements
procurement contracts also may be awarded, (e.g.,In-kind contributions)that are accept-
nouncement are described in the following this must he stated. able as cost sharing.Cost sharing as an ellgt- for:
r
b(1(ty criterion Includes requirements based I. Pre-appltratloea, letters of intent, o
paragraphs. C.ELIGIHII.TTY INFORMATION In statute or regulation, as described in white papers required er encouraged (see
A.PROGRAM DESCRIPTION—REQUIRED 4200.306 of this Part. This section should Section D.9),including any limitations on
This section addresses the considerations the number of pages or other formatting re-
This section contains the full program de- or factors that determine applicant or apple- refer to the appropriate portion(s)of section
cation eligibility. This includes the eligi- D.stating any pre-award requirements for 4uirements similar to those for full appltca-
acriptton of the funding opportunity.It maybans*
be as long as needed to adequately comma- bility of particular types of applicant organs- submission of letters or other documentation
nicate to potential applicants the areas in zationa,any factors affecting the eligibility to verify commitments to meet cost-sharing II.The application missions,this would Include
a whole.For all Sub-
requits if a Federal award(s made. clude any limitations
requirements
which funding may be provided.It describes of the principal investigator or project direr- on the number of pages,font size and type-
the Federal awarding agency's funding prior- tor,and any criteria that make particular 3.Other—Required,if applicable.If there are face,margins,paper size,number of copies,
ities or the technical or focus areas In which projects ineligible.Federal agencies should other eligibility criteria(i.e.,criteria that and sequence or assembly requirements.If
have the effect of makingapplication
the Federal awarding agency intends to pro- make clear whether an applicant's failure to an or
electronic submission Is permitted or re-
vide assistance.As appropriate,it may in- meet an eligibility criterion by the time of re-
project ineligible for Federal awards, a , queued, this could include special require-
er referred to as"responsiveness"critit eriaia,
chide any program history(e.g.,whether this an application deadline will result in the "go-no go"criteria,"threshold"criteria,or m ants for formatting or signatures.
is a new program or a new or changed area of Federal awarding agency returning the ap- ill. Component pieces of the application
in other ways),must be clearly stated and
program emphasis). This section must in- plication without review or,even though an must Include a reference to the regulation of
(e.g.,if all copies of the application must
elude program goals and objectives,a ref- application may be reviewed,will preclude bear original signatures on the face page or
erence to the relevant Assistance Listings,a the Federal awardingas airemabt that example,
the entitlese thata, a agency from making a the program narrative may not exceed 10
as applicable.For example,if
description of how the award will contribute Federal award.Key elements to be addressed pages).This includes any pieces that may be
to the achievement of the program's goals are: have been foundaltt be in violationi of a par- submittedsor separately by third parties(mit-
p perform- 1.Eligible Applicants—Required.Announce- import Federal statute are ineligible,must
t is
and objectives, and the expected q important to say so.This section must also references or letters confirming commis_
goals,indicators,targets,baseline data, meets must clearly identify the types of en- state any limit on the number of applica- mints from thirdioparties that will be shar-
data -
collection, and other outcomes such titles that are eligible to apply.If there are tires ae applicant may submit under the an- trlbuttng a portion of any required cost Federal awarding agency expects to achieve, no restrictions on eligibility, this section nouncement and make clear whether the fig)'
and may include examples of successful may simply indicate that all potential apple- limitation is on the submitting organization, muivst
Informationsumitafterthat successful applicantsinte
to
projects that have been fundedmake submit notification,butprior of a intent al
previously. cants are,it i is imp rtan are restrictions about individual investigator/program also ddressr,any make a Federal award,but otoc a of Federal
This section also may include other informs- eligibility,it important to be clear both.This section should also address ward.This could include evidence of corn-
tion the Federal awarding agency deems nec- the specific types of entities that are eligi- eligibility criteria for beneficiaries or for phases with requirements relating to human
essary,and must at a minimum include cita- bale,not just the types that are Ineligible. program participants other than Federal subjects or information needed to comply
lions for authorizing statutes and regale- For example,if the program is limited to award recipients. with the National Environmental Policy Act
tions for the funding opportunity. nonprofit organizations subject to 26 U.S.C. (NEPA)(92 U.H.C.4321-4370h).
501(0)(3)of the tax code(26 U.H.C.501(c)(3)), D.APPLICATION AND SUBMISSION INFORMATION 3. Unique entity identifier and System for
B.FEDERAL AwAsm INFORMATION—Re@inReD the announcement should say so.Similarly,
1.Address to Request Application Package— Award Management (SAM)—Required. This
This section provides sufficient tnforma- it is better to state explicitly that Native Required.Potential applicants must be told paragraph must state clearly that each ac-
tion to help an applicant make an informed American tribal organizations are eligible how to get application forms,kits,or other plicant(unless the applicant is an individual
decision about whether to submit a proposal. than to assume that they can unambiguously materials needed to apply(if this announce- or Federal awarding agency that is excepted
Relevant information could include the total infer that from a statement that nonprofit meet contains everything needed,this sec- from those requirements under 2 CFR
amount of funding that the Federal awarding organizations may apply.Eligibility also can tion need only any so).An Internet address 25.110(b)or(c),or has an exception approved
agency expects to award through the an- be expressed by exception,(e.g.,open to all where the materials can be accessed is ac- by the Federal awarding agency under 2 CFR
201 202
OMB Guidance Pt.200,App.I Pt.200,App.I 2 CFR Ch.II(1-1-22 Edition)
25.110(d))is required to:(i)Be registered in elude the format of submission,i.e.,paper or If an applicant's proposed cost sharing will amount of Federal share greater than the
SAM before submitting its application;(ii) electronic,for each type of required submis- be considered In the review process(as op- simplified acquisition threshold,is required
Provide a valid unique entity identifier in its aeon.Applicants should not be required to posed to being an eligibility criterion de- to review and consider any Information
application;and(lit)Continue to maintain submit in more than one format and this sec-
must in Section address the announcement about the applicant that is in the designated
an active SAM registration with current in- lion should Indicate whether they may must d(e.g.,
how It will be con- integrity and performance system accessible
formation at all times during which it has an choose whether to submit applications in stdered(e.g.,to assign a certain number of through SAM (currently FAPIIS) (see 91
active Federal award or an application or additional points to applicants who offer U.S.C.2313);
hard copy or electronically,may submit only cost sharing,or to break ties among applies.-under consideration by a Federal award- to hard copy,or may submit only electronl- tions 11.That an applicant,at its option,may re-
in agency.It also must state that the Fed- with equivalent scores after evaluation view information in the designated integrity
oral awarding agency may not make a Fed- rally' against all other factors).If cost sharing will
This section also must Indicate where ap- not be considered In the evaluation,the an- and performance systems accessible through
oral award to an applicant until the appli- SAM and comment on any Information about
cant has complied with all applicable unique plicattona(and any pre-applications)must be nouncement should say so,so that there is Itself that a Federal awarding agency pre-
entity Identifier and SAM requirements and, submitted if sent by postal mall,electronic no ambiguity for potential applicants.Vague v(oualy entered and is currently in the des-
if an applicant has not fully complied with means, or hand-delivery. For postal mail statements that cost sharing is encouraged, (gneted integrity and performance system
the requirements by the time the Federal submission,this must Include the name of an without clarification as to what that means, accessible through SAM;
a
warding agency is ready to make a Federal office,official,individual or function(e.g., are unhelpful to applicants.It also Is(mpor- Ili That the Federal awarding agency will
award,the Federal awarding agency may de- application receipt center)and a complete tent that the announcement be clear about consider any comments by the applicant,in
termine that the applicant is not qualified to mailing address.For electronic submission, any restrictions on the types oC cost(e.g.,In- addition to the other information in the des-
kindecelve a Federal award and use that deter- this must include the URL or email address; contributions)that are acceptable as ignated integrity andperformance system,
mination as a basis for making a Federal whether a password(s)is required;whether cost staring. Ic ern,
p 2. Review and Selection Process—Required.
making a Judgment about the applicant's
award turn another applicnt. particular software or other electronic capa- This section may vary In the level of detail Integrity,business ethics,and record of per-
9. S b ise)ession Dates and Times—Required. bilities are required;what to do 1n the event provided.The announcement must list ae formance under Federal awards when corn-
Announcements must identify due dates and of system problems and a point of contact program orcy other factors
elements,y plating the review of risk posed by appli-
times for all submissions.This includes not who will be available in the event the appli- other thannmeritcriteria,that theselectl g ants as described in 4200.208.
only the full applications but also any pre- ant experiences technical diffilti u
llminary submissions(e.g.,letters of intent, ° cu es. official ma y use m selecting applications for 4. Anticipated Announcement and Federal
white papers,or pro-applications).It also In- Federal award(e.g.,geographical dispersion, Award Dates—Optional. This section is In-
cludes any other submissions of information E.APPLICATION REVIEW INFORMATION program balance,or diversity).Tha Federal tended to provide applicants with poses.Federal award that are separate from I.Criteria—Required.This section must ad- awarding agency may also include other ap- ilea they can use for planning purposes.If
the full application.If the funding oppor- dress the criteria that the Federal awarding proprfnte details.For example,this section there (s a single application deadline fol-
tueity is a general announcement that is agency will use to evaluate applications. may indicate who Is responsible for°value.- lowed by the simultaneous review of all ap-
open for a period of time with no specific due This includes the merit and other review cri- tern against the merit criteria ng agency for includeu in hiths action!awarding agency can
dates for applications,this section should ter(a that evaluators will use to d appli- to Federal to the Federalawarding agency or ip to this section for information about the
so.Note that the information on dates judge apt whomakes awarding agencypersonnel)and/or anticipated dates announcing applicants noels thy cations,preferencges
any leg.,sta minor,y statustutrry awards.
. the final multi-phase
for Federal fling successful and unsuccessful
that is included In this section also must ap- or other preferences minority or awards.If there is a multi-phase review tree- and for having Federal awards in placeIf
ap-
pear with other overview information in a lo- Native American tribal preferences) that ss(e.g.,an external panel advising internal
ation preceding the full text of the an-
will be applied In the review process.These Federal awarding agency personnel who p=locations are received and evaluated on a
nouncement(see§200.204 of this part). cling"basis at different times during an
5.Intergovernmental Review—Required,if ap-
that are distinct from eligibility criteria make final recommendations to the deciding extended period,it may be appropriate to
plicuble.If the funding opportunity is subject that are addressed before an application Is official),the announcement may describe the give applicants an estimate of the time need-
to Executive Order 12372, "Intergovern-
mental accepted for review and any program policy phases.It also may Include:the number of ed to process an application and notify the
mental Review of Federal Programs," the or other factors that are applied during the people on an evaluation panel and how it op- applicant of the Federal awarding agency's
notice must say so and applicants must con- selection process,after the review process is crates,the way reviewers are selected,re- decision.
tact their state's Single Point of Contact completed.The intent Is to make the appli- viewer qualifications,and the way that con-
(SPOC)to find out about and comply with cation process transparent so applicants can el cis of Interest are avoided.With respect to F.FEDERAL AWARD ADMINISTRATION
the state's process under Executive Order make informed decisions when preparing electronic methods for providing informs- INFORMATION
12372,It may be useful to Inform potential their applications to maximize fairness of ilea about funding opportunities or accept-
applhcants that the names and addresses of the process.The announcement should clear-
eahagch applicants'submissions of information, 1. Fedora! Award Notices—Required. This
the SPOCs are listed In the Office of Manage- ly describe all criteria,including any sub-
for Federal awarding agency is responsible section must address what aa successful seIne-
went and Budget's webeite. criteria.If criteria vary m importance,the for compliance with Section 508 of the Re.- cant can expect to receive following selec-
6. Funding Restrictions—Required. Notices announcement should specify the relative biIn addition,
Act ofthe197 e(2d U.S.C.ardin tics.If the proFedvide
separate agency's atan-
must include information on funding restric- percentages,weights,or other means used to In s applicants Federal ate su ge led cy Ibatics as to plicani a separate notice beforefe
tions in order to allow an applicant to de- distinguish among them.For statutory,reg- viewers ofheira to anpplications
suggested re- that to llyap makes has been selected, hi
velop an application and budget consistent ulatory,or other preferences,the announce- they feel their inappropriate
to sue tot those- s actually makes the placeto Federal award, this
with program requirements. Examples are that may b that or due to adeb- section letter is
sd be the ut le Indicatelontothat
mint should penes a detailed ex explanation filet of Interest,that Information should be the m a not the extent
authorization to begin
whether construction is an allowable activ- of those preferences with an explicit Indira- included in this section. performance(to extent that it allows
ity,If there are any limitations on direct talon of their effect(e.g.,whether they result 3.For any Federal award under a notice of charging to Federal awards of pre-award
costs such as foreign travel or equipment in additional points being assigned). funding opportunity,if the Federal awarding costs at the non-Federal entity's own risk).
purchases,and if there are any limits on in- agency anticipates that the total Federal This section should indicate that the notice
direct costs(or facilities and administrative share will be greater than the simplified ac- of Federal award signed by the grants officer
costs).Applicants must be advised if Federal 'With respect to electronic methods for quisithon threshold on any Federal award (or equivalent)Is the authorizing document,
Ards will not allow reimbursement of pre- providing information about funding oppor- under a notice of funding opportunity may and whether It is provided through postal
Federal award costs. tunithes or accepting applicants'submissions include,over the period of performance,this mail or by electronic means and to whom.It
7.Other Submission Requirements—Required. of Information,each Federal awarding agen- section must also inform applicants: also may address the timing,form,and con-
This section must address any other submis- cy is responsible for compliance with Section i.That the Federal awarding agency,prior tent of notifications to unsuccessful appli-
Mon requirements not included in the other 508 of the Rehabilitation Act of 1973 (29 to making a Federal award with a total cants.See also§200.211.
paragraphs of this section. This might In- U.S.C.799(1).
203 204
OMB Guidance Pt.200,App.II Pt.200,App.II 2 CFR Ch.II(1-1-22 Edition)
2. Administrative and National Policy Re- this requirement is to he as helpful as pus- the manner by which it will be effected and with 90 U.B.C.3702 and 3704,as supplemented
quirements-Required.This section must idea- Bible to potential applicants,so the Federal the basis for settlement. by Department of Labor regulations(29 CFR
tify the usual administrative and national awarding agency should consider approaches (C)Equal Employment Opportunity. Ex- Part 5).Under 40 U.S.C.3702 of the Act,each
policy requirements the Federal awarding such as giving: cept as otherwise provided under 41 CFR contractor must he required to compute the
agency's Federal awards may include.Pro- I.Points of contact who may be reached in Part 60,all contracts that meet the deism- wages of every mechanic and laborer on the
viding this information lets a potential ap- multiple ways(e.g.,by telephone,FAX,and/ tion of"federally assisted construction con- basis of a standard work week of 40 hours.
plicant identify any requirements with or email,as well as regular mail). tract"in 41 CFR Part 60-1.3 must Include the Work in excess of the standard work week is
which it would have difficulty complying if ii.A fax or email address that multiple equal opportunity clause provided under 41 permissible provided that the worker Is com-
its application is successful.n those cases, people access,so that someone will respond CFR 60-1.4(b),in accordance with Executive pensated at a rate of not less than one and a
early notification about the requirements al- even if others are unexpectedly absent dur- Order 11246, "Equal Employment Oppor- half times the basic rate of pay for all hours
lows the potential applicant to decide not to fug critical periods. tunity"(30 FR 12319,12935,3 CFR Part,1964- worked in excess of 40 hours in the work
apply or to take needed actions before re- 111.Different contacts for distinct kinds of 1965 Comp.,p.339),as amended by Executive week.The requirements of 40 U.S.C.3709 are
calving the Federal award. The announce- help(e.g.,one for questions of programmatic Order 11375, "Amending Executive Order applicable to construction work and provide
meat need not include an of the terms and content and a second for administrative 11246 Relating to Equal Employment Oppor- that no laborer or mechanic must be re-
conditions of the Federal award,but may questions). tunity,"and implementing regulations at 41 quired to work in surroundings or under
refer to a document(with information about CFR part 60, "Office of Federal Contract working conditions which are unsanitary,
how to obtain it)or Internet site where ap- H.OTHER INFORMATION-OPTIONAL Compliance Programs, Equal Employment hazardous or dangerous.These requirements
plfcants can see the terms and conditions.If This section may include any additional Opportunity,Department of Labor." do not apply to the purchases of supplies or
this funding opportunity will lead to Federal information that will assist a potential ap- (D)Davis-Bacon Act,as amended(40 U.S.C. materials or articles ordinarily available on
awards with some special terms and condi- plicant.Far example,the section might: 3191-3198).When required by Federal program the open market,or contracts for transpor-
tions that differ from the Federal awarding I.Indicate whether this is a new program legislation,all prime construction contracts tatlon or transmission of intelligence.
agency's usual(sometimes called"general") or
a one-time Initiative. In excess of$2,000 awarded by non-Federal (F) Rights to Inventions Made Under a
terms and conditions, this section should ll.Mention related programs or other up- entities must include a provision for compli- Contract or Agreement.If the Federal award
highlight those special terms and conditions. coming or ongoing Federal awarding agency ante with the Davis-Bacon Act (90 U.S.C. meets the definition of"funding agreement"
Doing so will alert applicants that have re- funding opportunities for similar activities. 3141-3144,and 3146-3148)as supplemented by under 37 CFR§401.2(a)and the recipient or
ceived Federal awards from the Federal Ili.Include current Internet addresses for Department of Labor regulations (29 CFR subrecipient wishes to enter into a contract
awarding agency previously and might not Federal awarding agency Web sites that may Part 5,"Labor Standards Provisions Appli- with a small business firm or nonprofit orga-
otherwise expect different terms and condi- be useful to an applicant in understanding cable to Contracts Covering Federally Fi- nization regarding the substitution of par-
tions.For the same reason,the announce- the program. need and Assisted Construction").In ac- ties,assignment or performance of experi-
ment should inform potential applicants iv.Alert applicants to the need to identify cordance with the statute,contractors must mental, developmental, or research work
about special requirements that could apply proprietary information and inform them be required to pay wages to laborers and me- under that"funding agreement,"the recipi-
to particular Federal awards after the review about the way the Federal awarding agency chanter at a rate not less than the prevailing eat or subrecipient must comply with the re-
of applications and other information,based will handle It. wages specified in a wage determination quirements of 37 CFR Part 401,"Rights to!n-
on the particular circumstances of the effort v.Include certain routine notices to appli- made by the Secretary of Labor.In addition, ventions Made by Nonprofit Organizations
to be supported lag.,If human subjects were cants(e.g.,that the Federal Government is contractors must be required to pay wages and Small Business Firms Under Govern-
to be Involved or if some situations may jus- not obligated to make any Federal award as not less than once a week.The non-Federal ment Grants, Contracts and Cooperative
tify special terms on intellectual property, a result of the announcement or that only entity must place a copy of the current pre- Agreements,"and any implementing regula-
data sharing or security requirements). grants officers can bind the Federal Govern- veiling wage determination issued by the De- dons issued by the awarding agency.
3. Reporting-Required.This section must ment to the expenditure of funds). partment of Labor in each solicitation.The (G)Clean Air Act(42 U.S.C.7401-7671q.)and
include general information about the type [78 FR 78608,Dec.26,2013,as amended at 80 decision to award a contract or subcontract the Federal Water Pollution Control Act(33
(e.g„ financial or performance), frequency, FR 93310,July 22,2015;65 FR 49575,Aug.13, must be conditioned upon the acceptance of U.S.C.1251-1387),as amended-Contracts and
m and m ns of submission (paper or elec- 20201 the wage determination.The non-Federal en- subgnts of amounts In excess of$150,000
tronic)eof post-Federal award reporting re- tity must report all suspected or reported must contain a provision that requires the
quirements.Highlight any special reporting APPENDIX II TO PART 200-CONTRACT violations to the Federal awarding agency. non-Federal award to agree to comply with
requirements for Federal awards under this PROVISIONS FOR NON-FEDERAL ENTI- The contracts must also include a provision all applicable standards, orders or regula-
funding opportunity that differ(e.g.,by re- for compliance with the Copeland "Anti- tions issued pursuant to the Clean Air Act
port type, frequency, form/format, or cir- TY CONTRACTS UNDER FEDERAL Kickback" Act(90 U.S.C.3145),as supple- (42 U.S.C.7401-7671q)and the Federal Water
cumstances for use)from what the Federal AWARDS mented by Department of Labor regulations Pollution Control Act as amended(33 U.S.C.
awarding agency's Federal awards usually In addition to other provisions required by (29 CFR Part 3, "Contractors and Sub- 1251-1387).Violations must be reported to the
r pro-Federal entity, contractors on Public Building or Public Federal awarding agency and the Regional
require.Federal awarding agencies must also the Federal agency y,all
Work Financed in Whole or in Part by Loans Office of the Environmental Protection
describe in this section all relevant require- c
meats such as those at 2 CFR 180.335 and contracts made by the non-federal entity saner the Fin tone cover or Grants from the United States").The Act Agency(EPA).
180.350. the award must contain prowl-g the following,as applicable, provides that each contractor or sub- (H)Debarment and Suspension(Executive
If the Federal share of any Federal award (A)Contracts for more than the simplified recipient must be prohibited from inducing, Orders 12549 and 12689)-A contract award
may include more than$500,000 over the pe- acquisition threshold,which is the inflation by any means,any person employed in the (see 2 CFR 0)must not be made to par-
clod of performance, this section must in- adjusted amount determined by the Civilian construction,completion,or repair of public ties listed onn the the governmentwide exclusions
form potential applicants about the post Agency Acquisition Council and the Defense work,to give up any part of the compensa- in the System for Award Management
award reporting requirements reflected in Acquisition Regulations Council (Councils) tion to which he or she is otherwise entitled. (SAM),in accordance with the OMB guide-
appendix XII to this part. as authorized by 41 U.S.C.1908,must address The non-Federal entity must report all sus- lines at 2 CFR 180 that implement Executive
G.FEDERAL AWARDING AGENCY CONTACr(5)- administrative, contractual, or legal rem- petted or reported violations to the Federal Orders 12549(3 CFR part 1986 Comp.,p.189)
edies in instances where contractors violate awarding agency. and 12669(3 CFR part 1989 Comp.,p.235),
RcgoIaan or breach contract terms, and (E) Contract Work Hours and Safety "Debarment and Suspension." SAM Exclu-
The announcement must give potential op- such sanctions and provide for Standards Act(40 U.S.C. 3701-3708). Where stops contains the names of parties debarred,
penalties of appropriate. applicable,all contracts awarded bythe non-qucanos a point(s)piof contact form hilerthe (B)All rminatio in excess of d,000 ont suspended, p otherwise declared byne agble
questions or helping with problems while the address termination for cause and for con- Federal entity In excess of$100,000 that in- ties, as well as parties declared ineligible
funding opportunity is open.The intent of venience by the non-Federal entity including volve the employment of mechanics or labor- under statutory or regulatory authority
era must include a provision for compliance other than Executive Order 12549.
205
206
OMB Guidance Pt.200,App.III Pt.200,App.III 2 CFR Ch.II(1-1-22 Edition)
(I) Byrd Anti-Lobbying Amendment (31 ciples, this activity may be considered a base period normally should coincide with basis,such expenses should be set aside as a
U.S.C. 1352)-Contractors that apply or bid major function even though an institution's the fiscal year established by the institution, separate cost grouping for distribution on
for an award exceeding$100,000 must file the accounting treatment may Include it in the but In any event the base period should be so such basis to organized research, nstruc-
required certification.Each tier certifies to instruction function. selected as to avoid inequities in the die- tloaal,and other activities at the institution
the tier above that it will not and has not (2)Departmental research means research, tribution of costs. or
r within the department.
used Federal appropriated funds to pay any development and scholarly activities that b.Need for cost groupings.The overall oh- (4) If activities provide their own pur-
person or organization for influencing or at- are not organized research and, con- jective of the indirect(F&A)cost allocation chasing,personnel administration,building
tempting to influence an officer or employee sequently,are not separately budgeted and process is to distribute the indirect(F&A) maintenance or similar service,the dtstribu-
of any agency,a member of Congress,officer accounted for. Departmental research, for costs described in Section B,Identification tion of general administration and general
or employee of Congress,or an employee of a purposes of this document,is not considered and assignment of indirect(F&A)costs,to expenses,or operation and maintenance ex-
member of Congress in connection with ob- as a major function,but as a part of the in- the major functions of the institution in pro- penses to such activities should be accom-
taining any Federal contract,groat or any atruction function of the Institution. portions reasonably consistent with the na- pushed through cost groupings which include
other award covered by 31 U.S.C.1352.Each (3)Only mandatory cost sharing or cost tura and extent of their use of the institu- only that portion of central indirect(F&A)
tier must also disclose any lobbying with sharing specifically committed in the project tiou's resources.In order to achieve this ob- costs (such as for overall management)
non-Federal funds that takes place in con- budget most be included in the organized re- jective,it may be necessary to provide for which are properly allocable to such activi-
section with obtaining any Federal award, search base for computing the indirect(F&A) selective distribution by establishing sepa- ties.
Such disclosures are forwarded from tier to cost rate or reflected in any allocation of in- rate groupings of oust within one or more of (5)If the institution elects to treat fringe
tier up to the non-Federal award. direct costs. Salary casts above statutory the Indirect(F&A)cost categories referred benefits as indirect (F&A) charges, such
(J)See§200.323. limits are not considered cost sharing. to in subsection 13.1. In general,the cost costs should be set aside as a separate cost
(K)See 5200.216. b. Organized research means all research groupings established within a category grouping for selective distribution to related
(L)See§200.322. and development activities of an institution should constitute, in each case,a pool of cost objectives.
that are separately budgeted and accounted those items of expense that are considered to
l78 FR 78608,Dec.26,2013,as amended at 79 for.It includes: be of like nature interms of their relative withinhe a number
categoryof
shouldseparate
becost
heldgroupings
with within
FR 75888,Dec.19,2014;85 FR 49577,Aug.13, (1)Sponsored research means all research contribution to (or degree of remoteness
after
20201 and development activities that are spun- from)the particular cost objectives to which pklonlcal thelimateriaHty takingof theInto omountsdis-
sured by Federal and non-Federal agencies distribution is appropriate. Cost groupings f precision attainable
APPENDIX III TO PART 200-INDIRECT and organizations.This term Includes activi- should be established considering the general through levolved andes selectivegre methods of attainable
(F&A) COSTS IDENTIFICATION AND ties involving the training of individuals In guides provided In subsection o of this sec- thou.
ASSIGNMENT,AND RATE DETERMINA- research techniques (commonly called re- ties.Each suck pool or cost grouping should
TION FOR INSTITUTIONS OF HIGHER search training)where such activities utilize then be distributed individually to the re- d.Selection of distribution method.
EDUCATION(IHES) the same facilities as other research and de- hated cost objectives,using the distribution (1)Actual conditions must be taken into
velopmest activities and where such activl- base or method most appropriate Inlight of account in selecting the method or base to
A.GENERAL ties are not included in the instruction tune- the guidelines set forth in subsection d of be used in distributing individual cost
This appendix provides criteria for dents- (2)
this section. groupings.The essential consideration in se-
(2)University research means
ns all research c.General considerations on cost groupings. looting a base is that it be the one best suit-
['sting and computing indirect (or indirect and development activities that are sepa- The extent to which separate cost groupings ed for assigning the pool of costs to cost ob-
(F&A))rates at IHEs(institutions).Indirect rately budgeted and accounted for by the in- and selective distribution would be appro- jectives In accordance with benefits derived;
(F&A)costs are those that are incurred for stitutlon under an internal application of in- priate at an institution is a matter of judg- with a traceable cause-and-effect relation-
common or joint objectives and therefore stitutional funds. University research, for meat to be determined on a case-by-case ship;or with logic and reason,where neither
cannot be identified readily and specifically purposes of this document, must be con- basis.Typical situations which may warrant benefit nor a cause-and-effect relationship is
with a particular sponsored project,an in- bleed with sponsored research under the the establishment of two or more separate determinable.
structional activity, or any other institu- function of organized research. cost groupings(based on account classffica- (2)If a cost grouping can be identified di-
tional activity.See subsection B.1 for a ells- c.Other sponsored activities means programs tion or analysis)within an indirect(F&A) ractly with the cost objective benefitted,It
cussion of the components of indirect(F&A) end projects financed by Federal and non- cost category Include but are not limited to should be assigned to that cost objective.
costs. Federal agencies and organizations which in- the following: (3)If the expenses in a cost grouping are
I.Major Functions of an Institution volve the performance of work other than in- (1)If certain items or categories of expense more general In nature,the distribution may
struction and organized research.Examples relate solely to one of the major functions of be based on a cost analysis study which re-
Refers to instruction,organized research, of such programs and projects are health the institution or to less than all functions, sults in an equitable distribution of the
other sponsored activities and other institu- service projects and community service pro- such expenses should be set aside as a sepa- costs.Such cost analysis studies may take
tional activities as defined in this section: grams.However,when any of these activities rate cost grouping for direct assignment or into consideration weighting factors,popu-
a. Instruction means the teaching and are undertaken by the institution without selective allocation in accordance with the lotion,or space occupied if appropriate.Cost
training activities of an institution.Except outside support,they may be classified as guides provided in subsections b and d. analysts studies,however,must(a)be appro-
for research training as provided in sub- other institutional activities. (2)If any types of expense ordinarily treat- priately documented in sufficient detail for
section b,this term includes all teaching and d.Other institutional activities means all ac- ed as general administration or depart- subsequent review by the cognizant agency
training activities,whether they are offered tivities of an institution except for instruc- mental administration are charged to Fed- for indirect costs,(b)distribute the costs to
for credits toward a degree or certificate or tion, departmental research, organized re- oral awards as direct costs,expenses opplica- the related cost objectives in accordance
on a non-credit basis,and whether they are search,and other sponsored activities,as de- ble to other activities of the institution with the relative benefits derived,(c)be sta-
offered through regular academic depart- fined in this section;indirect(F&A)cost ac- when incurred for the same purposes in like tistically sound,(d)be performed specifically
meats or separate divisions,such as a sum- tivities identified in this Appendix pars- circumstances must,through separate cost at the institution at which the results are to
mer school division or an extension division. graph B.Identlfiootlon and assignment of in- groupings, be excluded from the indirect be used,and(e)be reviewed periodically,but
Also considered part of this major function direct(F&A)costs;and specialized services (F&A) costs allocable to those Federal not less frequently than rate negotiations,
are departmental research, and, where facilities described in§200.468 of this part. awards and included In the direct cost of updated If necessary,and used consistently.
agreed to,university research, 2.Criteria for Distribution other activities for cost allocation purposes. Any assumptions made in the study must be
(1)Sponsored instruction and training means (3)If It is determined that certain expenses stated and explained.The use of cost anal-
specific instructional or training activity es- a.Base period.A base period for distrfbu- are for the support of a service unit or facil- solo studies and periodic changes in the
tabliehed by grant,contract,or cooperative tion of indirect(F&A)costs is the period ity whose output is susceptible of measure- method of cost distribution must be fully
agreement. For purposes of the cost prin- during which the costs are incurred.The meet on a workload or other quantitative justified. .
207 208
OMB Guidance Pl.200,App.III Pt.200,App.III 2 CFR Ch.II(1-1-22 Edition)
(4)If a cost analysis study is not per- (1)Depreciation on buildings used ex0lu- and disaster preparedness; environmental national institutions and other expenses of a
formed,or if the study does not result In an sively in the conduct of a single function, safety;hazardous waste disposal; property, general character which do not relate solely
equitable distribution of the costs,the dls- and on capital improvements and equipment liability and all other insurance relating to to any major function of the institution;i.e.,
tribution must be made in accordance with used in such buildings,must be assigned to property;space and capital leasing;facility solely to(1)instruction, (2)organized re-
the appropriate base cited in Section B,un- that function, planning and management,and central re- search,(3)other sponsored activities,or(4)
less one of the following conditions is met: (2)Depreciation on buildings used for more ceiving.The operation and maintenance ex- other institutional activities. The general
(a)It can be demonstrated that the use of than one function,and on capital improve- pense category should also include its alto- administration and general expense category
a different base would result in a more equl- ants and equipment used in such buildings, cable share of fringe benefit costs,deprecia- should also include its allocable share of
table allocation of the costs,or that a more must be allocated to the individual functions flea,and interest costs. fringe benefit costs,operation and mainte-
readily available base would not Increase the performed in each building on the basis of b.in the absence of the alternatives pro- Hance expense, depreciation, and interest
costs charged to Federal awards,or usable square feet of space,excluding corn- vided for in Section A.2.d,the expenses in- costs. Examples of general administration
(b)The institution qualifies for,and elects mon areas such as hallways,stairwells,and eluded in this category must be allocated in and general expenses Include:Those expenses
to use,the simplified method for computing rest rooms. the same manner as described in subsection incurred by administrative offices that serve
Indirect(F&A)cost rates described in Sec- (3)Depreciation on buildings,capital im- 2.b for depreciation. the entire university system of which the in-
Non D. provements and equipment related to space c.A utility cost adjustment of up to 1.3 stitution is a part;central offices of the in-.
(6)Notwithstanding subsection(3), effec- (e.g., individual rooms, laboratories) used percentage points may be included in the ne- stitution such as the President's or
tive July 1,1998,a cost analysis or base other Jointly by more than one function(as deter- gotiated indirect cost rate of the IHE for or- Chancellor's office, the offices for(nstitu-
than that in Section B must not be used to mined by the u of the space)must be ganleed research,per the computation alter- lien-wide financial management, business
distribute utility or student services costs. treated as follows.The cost of each Jointly natives in paragraphs(c)(1)and(2)of this services, budget and planning, personnel
Instead,subsection B.9.c,may be used in the used unit of space must be allocated to bens- section: management,and safety and risk manage-
recovery of utility casts. fitting functions on the basis of: (1)Where space is devoted to a single franc- went;the office of the General Counsel;and
e.Order of distribution. (a) The employee full-time equivalents tion and metering allows unambiguous mess- the operations of the central administrative
(1)Indirect(F&A)costs are the broad cat- (FTEs)or salaries and wages of those indi- urement of usage related to that space,costs management information systems.General
egories of costs discussed in Section Si.. vidual functions benefitting from the use of must be assigned to the function located in administration and general expenses must
(2)Depreciation, interest expenses,oper- that space;or that space. not include expenses incurred within non-
tion and maintenance expenses,and general (b)Institution-wide employee FTEs or sal- (2)Where space is allocated to different varsity-wide deans'offices,academic de-
administrative and general expenses should areas and wages applicable to the benefitting functions and metering does not allow seam- partments,organized research units,or sim[-
be allocated in that order to the remaining major functions(see Section Al). of the in- big..measurement of usage by function, ]ar organizational units.(See subsection 6.)
indirect(F&A)cost categories as well as to stitution. costs must be allocated as follows: b.In the absence of the alternatives pro-
the major functions and specialized service (9) Depreciation on certain capital lm- (i)Utilities costs should be apportioned to vided for in Section A.2.d,the expenses in-
facilities of the institution.Other cost cat- provements to land,such as paved parking functions In the same manner as deprecia- eluded in this category must be grouped first
egories may be allocated in the order deter- areas,fences,sidewalks,and the like,not in- tion,based on the calculated difference be- according to common major functions of the
mined to be most appropriate by the mstltu- eluded inthe cost of buildings,must be alto- tween the site or building actual square foot- institution to which they render services or
lions.When cross allocation of costs is made sated to user categories of students and em- age for monitored research laboratory space provide benefits.The aggregate expenses of
es provided in subsection(3),this order of al- ployees on a full-time equivalent basis.The (site,building,floor,or room),and a sops- each group must then be allocated to aerv-
location does not apply. amount allocated to the student category rate calculation prepared by the IHE using iced or henefitted functions on the modified
(3)Normally an indirect(F&A)cost cat- must be assigned to the instruction function the"effective square footage"described in total cost basis.Modified total costs consist
egory will be considered closed once it has of the institution.The amount allocated to subsection(c)(2)(il)of this section. of the same elements as those in Section C.2.
been allocated to other cost objectives,and the employee category must be further alto- (ii)"Effective square footage"allocated to When a activity included in this indirect
costs may not be subsequently allocated to cated to the major functions of the institu- research laboratory space must be calculated (F&A)cost category provides a service or
it.However,a cross allocation of costs be- tion in proportion to the salaries and wages as the actual square footage times the rel- product to another institution or organiza-
tween two or more indirect(F&A)cost cat- of all employees applicable to those Tune- ative energy utilization index(REUI)posted tion, an appropriate adjustment must be
egories may be used if such allocation will tines. on the OMB Web site at the time of a rate made to either the expenses or the basis of
result in a more equitable allocation of determination, allocation or both,to assure a proper alloca-
costs.If a cross allocation is used,an appro- 3.Interest A.This index Is the ratio of a laboratory tion of costs.
prlate modification to the composition of Interest on debt a sociated with certain energy use index (lab EUI) to the nor-
the indirect(F&A)cost categories described buildings, equipment and capital improve- responding Index for overall average college 6.Departmental Administration Expenses
in Section H is required. manta,as defined in§200.999,must be class[- or university space(college EUI). a. The expenses under this heading are
fled as an expenditure under the category B.In July 2012,values for these two indices those that have been incurred for adminis-
B.IDENTIFICATION AND ASSIGNMENT OF (taken respectively from the Lawrence supporting services that benefit
INDIRECT(F&A)COSTS Facilities.These costs must ec allocated a Berkeley Laboratory"Labs for the 21st Cen- common
and
the same manner as the depreciation on the common or joint departmental activities or
buildings,equipment and capital improve- muss' benehmarking tool and the US Depart- objectives in academic deans'offices, aca-
I.Definition of Facilities and Administration meats to which the interest relates. t of Energy Buildings Energy demic departments and divisions,and orga-
See§200.d19 which provides the basis for Databook"and were 310 kSto/sq tt-yr.and nixed research units. Organized research
these indirect cost requirements. 4.Operation and Maintenance Expenses 155 kBtalsq ft-yr.,so that the adjustment units include such units as institutes,study
a. The expenses under this heading are ratio is 2.0 by this methodology.To retain centers,and research centers.Departmental
2.Depreciation those that have been incurred for the adman- currency,OMB will adjust the EUI numbers administration expenses are subject to the
a.The expanses under this heading are the istration, supervision, operation, mainte- any
time to time(no more often than annu- following limitations.
portion of the costs of the institution's aance preservation,and protection of the in ny nor less often than every 5 years),suing (1)Academic deans'offices. Salaries and
reliable
buildings,capital improvements to land and stitution's physical plant.They Include ex- valu and publicly disclosed data.Current operating expenses are limited to those at-
buildings, and equipment which are corn- ponces normally incurred for such items as es of both the EUIs and the REUI will be trc le to administrative functions.
posted on the OMB website.
prated in accordance with§200.936. janitorial and utility services;repairs and (2)Academic departments:
b.In the absence of the alternatives pro- ordinary or normal alterations of buildings, 5.General Administration and General Expenses (a) Salaries and fringe benefits attrib-
vided for in Section A.2.d,the expenses in- furniture and equipment; care of groands; arable to the administrative work(Including
eluded In this category must be allocated in maintenance and operation of buildings and a. The expenses under this heading are bid and proposal preparation)of faculty(in-
the following manner: other plant facilities;security;earthquake those that have been Incurred for the general eluding department heads)and other proles-
executive and administrative offices of edu- sional personnel conducting research and/or
200 210
OMB Guidance Pt.200,App.III Pt.200,App.III 2 CFR Ch.!!(1-1-22 Edition)
instruction,must be allowed at a rate of 3.6 share of the expenses allocated in subsection (1)The student category must consist of activities described in subsections 2 through
percent of modified total direct costs.This (1)must be allocated to the appropriate funs- full-time equivalent students enrolled at the 9.
category does not include professional bust- tions of the department on the modified institution,regardless of whether they earn b.The Items in this group must be treated
nese or professional administrative officers. total cost basis. credits toward a degree or certificate. as a credit to the affected individual indirect
This allowance must be added to the tom- (2) The professional employee category (F&A)cost category before that category is
potation of the indirect(F&A)cost rate for 7.Sponsored Projects Administration must consist of all faculty members and allocated to benefitting functions.
major functions in Section C;the expenses other professional employees of the institu-
covered by the allowance must be excluded a The expenses under this heading are Hm C.DETERcDNAT1oN AND APPLICATION OF
from the departmental administration cost ited to those incurred by a separate organs- flea,on a full-time equivalent basis.This
pool.No documentation is required to sup- zatlon(s)established primarily to administer category may also include post-doctorate INDIRECT(F&A)COST RATE OR RATES
port this allowance. sponsored projects,including such functions fellows and graduate students.
(3)The they secs category must consist I.Indirect(F&A)Cost Pools
(b) Other administrative and supporting grant and contract administration(Fed- of a reasonable factor as determined by instl- a.(1)Subject to subsection b,the separate
se
expenses incurred within academic depart- Oral and non-Federal),special security,per- tutional records to account for all other categories of indirect(F&A)costs allocated
meats are allowable provided they are treat- chasing,personnel,administration,and edit- of library facilities. to each major function of the institution as
ed consistently in like circumstances.This leg and publishing of research and other re- users cAmount allocated in paragraph b of this
would include expenses such as the salaries Ports.They include the salaries and expenses P 8 prescribed in Section o must forbo aggregated
ha l -
of secretarial and clerical staffs,the salaries of the head of such organization,assistants, section must be assigned further as follows: and treated as a common pool that be di-
of administrative officers and assistants, and immediate staff,together with the sale- (1)s The amount in the student category lieu.The amount in each pool must di-
of be assigned to the instruction function vided by the distribution base described in
travel,office supplies,stockrooms,and the cup and expenses of personnel engaged r. of the institution.
like. supporting octivities maintained by the or- (2)The amount in the subsection r2 to arrive each fau a single indirect
(3)Other fringe benefit costs applicable to gnnization,such as stock rooms,print shops, professional the (F(2) cost rate for function.
the salaries and wages included In sub- and the like.This category also Includes an mleyae categoryis must be assigned to st The rate for each functiontis used individualto
sections(1)and(2)are allowable,as well as allocable share of fringe benefit costs,gen- lot functions ieof the institution in proper- distribute indirect(F&A)costs o Sncea
an appropriate share of general administra- Oral administration and general expenses, Non to the salaries and wages of all faculty Federal awards of that function. Since a
lion and general expenses, operation and operation and maintenance expenses,and de- members and other professional employees common pool Is established for each major
applicable to those
maintenance expenses,and depreciation. pred the oche
predation.Appropriate adjustments will be function of the Institution, separate inch-
maintenance Federal agencies may authorize ream- made for services provided to other functions (3)The amount in the other users category rent(F&A)cost rate would bea established for
must be assigned to the other institutional each of the major functions described in Sec.eass entand ofadditionalonly
cin
for dionaltmees or In the
activities function of the Institution. lion A.1 under which Federal awards are car-
heads
and faculty oncy In exceptional cases b.In the absence of the alternatives pre- rind out.
where an institution can demonstrate undue vided for In Section A.2.d,the expenses in- 9.Student Administration and Services (3)Each institution's indirect(F&A)cost
category
hardship or detriment to project perform- eluded in this category must be allocated to a. The expenses under this heading are rate process must be appropriately
signed
ante. the major functions of the institution under those that have been incurred for the admix- to ensure that Federalsponosdo snot in
b.The following guidelines apply to the de- which the sponsored projects are conducted istration of student affairs and for services any way subsidize the indirect(F&A)costs of
termination of departmental administrative on the basis of the modified total cost of to students,including expenses of such ac- other sponsors,specifically activities span-
costs as direct or Indirect(F&A)costs. sponsored projects. y
(1)In developing the departmental adman- c. An appropriate adjustment must be istratIvitr,
counselingas deans o andepla,ameadmn sereons,cep, cored Iny sly,each and allocation
methgoveod
usedt to
istratIon cost pool,special care should be ex- toItude ise and placement services, Accotf ,d,allohcate
telthetinn recthod A)c t
made to eliminate any duplicate charges es marry services, student health and unite- pools, de allocate the indirect F&A cost some d u ensure that costs incurred for the Federal awards when this category includesidentify and ( )
same purpose in like circumstances are similar or identical activities as those in- meat ocations. and scalaries
uas.9,must contain in Sections full a and of
treated consistently as either direct or Judi- eats and convocations. The salaries of through institution's
must the f amount or
eluded in the general administration and members of the academic staff whose tea on- the iappropria e modified total costs eor
d
rest technical
costs.For example,salaries ., general expense category orother indirect eibllities to the institution require admirals- other appropriate to units of measurement used
technical staff, laboratory ages,as (e.g., cce qu re a ppthpr a
chemicals),telephone toll charges,animals, cerement,
cost[toms,such as accounting,pro- may also work that benefits the extent
projects final
make the computations.In addition,the
animal care costs, computer costs, travel curement,or personnel administration. may be Included to extent that the final rate distribution base (as defined in
costs, and specialized shop costs most be B.Library Expenses portion charged to student administration is subsection 2)for each major function(orga-
treated as direct costs wherever Identifiable determined inaccordance with subpart E of oleetl research,instruction,etc.,as described
to a particular cost objective.Direct charg- a. The expenses under this heading are this Part. This expense category also In. in Section Al, functions of an institution)
leg of these costs may be accomplished those that have been incurred for the oper- eludes the fringe benefit costs applicable to must contain all the programs or activities
through specific identification of individual atlon of the library,including the cost of the salaries and wages Included therein,an which utilize the indirect(F&A)costs allo-
costs to benefitting cost objectives, o books and library materials purchased for appropriate share of general administration cated to that major function.At the time an
through recharge centers or specialized servr the library,less any items of library Income and general expenses,operation and mainte- indirect(F&A)cost proposal is submitted to
ice facilities,asappropriate under the car- that qualify asapplicable credits under aance,interest expense,and depreciation, a cognizant agency for indirect costs,each
cumstauces.See§§200.913(c)and 200.468. §200.906.The library expense category should b.In the absence of the alternatives pro- institution must describe the process it uses
(2)Items such as office supplies,postage, also Include the fringe benefits applicable to vided for in Section A.2.d,the expenses in to ensure that Federal funds are not used to
local telephone costs,and memberships must the salaries and wages included therein,an this category must be allocated to the in- subsidize industry and foreign government
normally be treated as indirect(F&A)costs, appropriate share of general administration etructlon function,and subsequently to Fed- funded programs.
c.In the absence of the alternatives pro- and general expense,operation and mainte- aril awards in that function.
vided for In Section A.2.d,the expenses in- nance expense, and depreciation.Costs in- 2.The Distribution Basis
10.
Other-
eluded in this category must be allocated as min rred in the purchases of rare books(mu- wise
set for Provided 1$Pr by the Federal Govern-leaf(F&A)Expenses Other- Indirect(F&A)costs must be distributed to
follows: seum-type books)with no value to Federal applicable Federal awards and other benefit-
(1) The administrative expenses of the awards should not be allocated to them. t ting activities within each major function
dean's office of each college and school must b.in the absence of the alternatives pro- a.The items to be accumulated under this (see section A.1)on the basis of modified
be allocated to the academic departments vided for in Section A.2.d,the expenses in. heading are the reimbursements and other total direct costs(MTDC),consisting of all
within that college or school on the modified eluded in this category must be allocated payments from the Federal Government salaries and wages,fringe benefits,materials
total cost basis. first on the basis of primary categories of which are made to the institution to support and supplies,services,travel,and up to the
(2) The administrative expenses of each users, Including students,professional em- solely,specifically,and directly,in whole or first 525,000 of each subaward(regardless of
academic department,and the department's ployees,and other users. in part,any of the administrative or service the period covered by the subaward).MTDC
211 212
OMB Guidance Pt.200,App.III Pt 200,App.III 2 CFR Ch.II(1-1-22 Edition)
is defined In§200.1.For this purpose.an indi- forward adjustment(over-or under-recovery) extend through the life of the Federal award tion or documentation of these costs r
rent(F&A)cost rate should be determined from the prior period,to the forecast die- at the time of the initial award,then the ae- quired(see subsection c).Where a negotiated
for each of the separate indirect
(F&A)cost trlbution base.Unrecovered amounts under gotiated rate for the last year of the Federal indirect(F&A)cost agreement includes this
pools developed pursuant to subsection 1. lump-sum agreements or cost-sharing provi- award must be extended through the end of alternative, an institution must make no
The rate in each case should be stated as the sloes of prior years must not be carried for- the life of the Federal award. further charges for the expenditure cat-
percentage which the amount of the par- ward for consideration in the new rate nego- b.Except as provided in§200.914,when an egories described in Section B.5,Section B.6,
Ocular indirect(F&A)cost pool is of the tiatton.There must,however,be an advance educational institution does not have a nego- Section B.7,and Section B.9.
modified total direct costs identified with understanding in each case between the in- tlated rate with the Federal Government at b.In negotiations of rates for subsequent
such pool. stitutlon and the cognizant agency for inch- the time of an award (because the edu- periods,an institution that has elected the
d.Negotiated Lump Sum for Indirect(F&A) rect costs as to whether these differences cational Institution is a new recipient or the option of subsection a may continue to exer-
Costs will be considered in the rate negotiation parties cannot reach agreement on a rate), else it at the same rate without further iden-
rather than making the determination after the provisional rate used at the time of the tification or documentation of costs.
A negotiated fixed amount In lieu of indi- the differences are known.Further,institu- award must be adjusted once a rate is nego- c. If an institution elects to accept a
rent(FAA)costs may be appropriate for self- Lions electing to use this carry-forward pro- tlated and approved by the cognizant agency threshold rate as defined in subsection a of
contained,off-campus,or primarily subcon- vision may not subsequently change without for indirect costs. this section,it is not required to perform a
traated activities where the benefits derived prior approval of the cognizant agency for detailed analysis of its administrative costs.
from an institution's indirect(F&A)services Indirect costs.In the event that an institu- 6.Limitation on Reimbursement of However,in order to compute the facilities
cannot be readily determined. Such nego- tion returns to a post-determined rate,any Administrative Costs components of its indirect(F&A)cost rate,
tinted Indirect(F&A)costs will be treated as over-or under-recovery during the period in a.Notwithstanding the provisions of sub- the institution must reconcile its indirect
an offset before allocation to instruction,or- which negotiated fixed rates and carry-for- section C.I.a, the administrative costs (F&A)cost proposal to its financial state-
ganized research,other sponsored activities, ward provisions were followed will be in- charged to Federal awards awarded o• meats and make appropriate adjustments
and other institutional activities.The base eluded in the subsequent post-determined amended (including continuation and re- and reclassifications to identify the costs of
on which such remaining expenses are allo- rates. Where multiple rates are used, the newel awards)with effective dates beginning each major function as defined in Section
cated should be appropriately adjusted. same procedure will be applicable for deter- on or after the start of the institution's first A.1,as well as to identify and allocate the fa-
4.Predetermined Rates for Indirect(F&A)Costs mining each rate. fiscal year which begins on or after October cilitles components. Administrative costs
Public Law 87-638(76 Stat.437)as amended 6.Provisional and Final Rates for Indirect 1,1991,must be limited to 26%of modified that are not identified as such by the in'
(41 U.S.C.9708)authorizes the use of pre- (F&A)Costs total direct costs(as defined in subsection 2) tutioncured
accounting system(such as those in-
for the total of General Administration and curred in academic departments) will be
determined rates in determining the"Inds- Where the cognizant agency for indirect General Expenses, Departmental Admin.- classified as instructional costs for purposes
rect costs"(Indirect(F&A)costs)applicable costs determines that cost experience and tratioa,Sponsored Projects Administration, of reconciling indirect(F&A)cost proposals
under research agreements with educational other pertinent facts do not justify the use and Student Administration and Services to financial statements and allocating radii-
institutions,The stated objectives of the law of predetermined rates,or a fixed rate with (including their allocable share of deprecia- ties costs.
are to simplify the administration of cost- a carry-forward, or If the parties cannot tion,interest costs,operation and mainte-
type research and development contracts(in- agree on an equitable rate,a provisional rate sauce expenses,and fringe benefits costs,as /0.individual Rate Components
eluding grants) with educational institu- must be established.To prevent substantial provided by Section B,and all other types of In order to provide mutually agreed-upon
tions,to facilitate the preparation of their overpayment or underpayment, the provi- expenditures not listed specifically under information for management purposes,each
budgets, and to permit more expeditious sional rate may be adjusted by the cognizant one of the subcategories of facilities in Sec- indirect(F&A)cost rate negotiation or de-
closeout of such contracts when the work is agency for indirect costs during the institu- Mon B. termination must include development of a
completed.In view of the potential advan- tion's fiscal year. Predetermined or fixed b.Institutions should not change their ac- rate for each indirect(F&A)cost pool as well
tages offered by this procedure,negotiation rates may replace provisional rates at any counting or cost allocation methods if the ef- as the overall indirect(F&A)cost rate.
of predetermined rates for indirect (F&A) time prior to the close of the institution's fact is to change the charging of a particular
costs for a period of two to four years should fiscal year.If a provisional rate is not re- type of cost from FAA to direct,or to reclas- II.Negotiation and Approval of Indirect(F&A)
be the norm In those situations where the placed by a predetermined or fixed rate prior ally costs,or increase allocations from the Rate
cost experience and other pertinent facts to the end of the institution's fiscal year,a administrative pools identified in paragraph a.Cognizant agency for indirect costs Is
available are deemed sufficient to enable the final rate will be established and upward or B.1 of this Appendix to the other FAA cost defined in Subpart A.
parties involved to reach an informed judg- downward adjustments will be made based on pools or fringe benefits.Cognizant agencies (1)Cost negotiation cognizance is assigned
ment as to the probable level of indirect the actual allowable costs incurred for the for indirect cost are authorized to allow to the Department of Health and Human
(F&A)costs during the ensuing accounting period Involved, changes where an institution's charging Services(HHS) or the Department of De-
periods. 7,Fixed Rates for the Life of the Sponsored practices are at variance with acceptable fense's Office of Naval Research(DOD),nor-
5.Negotiated Fixed Rates and Carry-Forward Agreement practices followed by a substantial majority many depending on which of the two agen-
Provisions of other institutions. cies(HHS or DOD)provides more funds di-
a.Except as provided in paragraph(c)(i)of S.Alternative Method for Administrative Costs rattly to the educational institution for the
When a fixed rate Is negotiated in advance §200.919,Federal agencies must use the nego- most recent three years. Information on
for a fiscal year(or other time period),the tlated rates in effect at the time of the Ins- a.Notwithstanding the provisions of sub- funding must be derived from relevant data
over-or under-recovery for that year may be tial award throughout the life of the Federal section C.l.a, an institution may elect to gathered by the National Science Founda-
included as an adjustment to the indirect award.Award levels for Federal awards may claim a fixed allowance for the"Adminis- tion.In cases where neither HHS nor DOD
(F&A) cost for the next rate negotiation. not be adjusted in future years as a result of tratioa"portion of indirect(F&A)costs.The provides Federal funding directly to an edu-
When the rate Is negotiated before the carry- changes to negotiated rates. "Negotiated allowance could be either 29% of modified cational institution, the cognizant agency
forward adjustment Is determined,the carry- rates"per the rate agreement include final, total direct costs or a percentage equal to for indirect costs assignment must default to
forward amount may be applied to the next fixed,and predetermined rates and exclude 95%of the most recently negotiated fixed or HHS.Notwithstanding the method for cog-
subsequent rate negotiation.When such ad- provisional rates."Life"for the purpose of predetermined rate for the cost pools in- nlzance determination described in this sec-
justments are to be made,each fixed rate ae- this subsection means each competitive sag- eluded under"Administration"as defined in tion,other arrangements for cognizance of a
gotiated in advance for a given period will be ment of a project.A competitive segment Is Section 13.1,whichever is less.Under this al- particular educational institution may also
computed by applying the expected indirect a period of years approved by the Federal ternative,no cost proposal need be prepared be based in part on the types of research per-
(F&A)costs allocable to Federal awards for awarding agency at the time of the Federal for the"Administration"portion of the indi- formed at the educational institution and
the forecast period plus or minus the carry- award.if negotiated rate agreements do not rent(F&A)cost rate nor is further identifica- must be decided based on mutual agreement
213 214
OMB Guidance Pt.200,App.III Pt.200,App.III 2 CFR Ch.II(1-1-22 Edition)
between HHS and DOD.Where a non-Federal to reach agreement with an educational in- (1)General administration and general ex- The distribution basis,that consists of all
entity only receives funds as a subrecipient, atitution with regard to rates or audit reso- penes(exclusive of costs of student adminis- institution's direct functions.
se
e§200.332. lotion,the appeal system of the cognizant tratioa and services,student activities,stu- d.Establish the indirect(FAA)cost rate,
(2)After cognizance Is established,It must agency for indirect costs must be followed dent aid,and scholarships), determined by dividing the amount in the in-
continue for a five-year period. for resolution of the disagreement. (2)Operation and maintenance of physical direct(F&A)cost pool,subsection b,by the
b.Acceptance of rates.See§200.914. plant and depreciation(after appropriate ad- amount of the distribution base,subsection
c. Correcting deficiencies. The cognizant 12.Standard Format for Submission justmeat for costs applicable to other instl- c.
agency for indirect costs must negotiate For facilities and (indirect tutional activities). e.Apply the indirect(F&A)cast rate to
changes needed to correct systems deft- arrate esand proposals,administrativenuvel indirect (3)Library. the modified total direct costs for individual
ciencles relating to accountability for Fed- (FAA)) (4) Department administration expenses, agreements to determine the amount of indi-
eral awards.Cognizant agencies for indirect tions must use the standard format,shown which will be computed as 20 percent of the rest (F&A) costs allocable to such agree-
costs must address the concerns of other af- in section E of this appendix,to submit their salaries and expenses of deans and heads of meats.
fatted agencies,as appropriate,and must ue- indirect (F&A) rate proposal to the cog- departments.
gotiate special rates for Federal agencies nlzant agency for indirect costs.The cog- In those oases where expenditures clad.- E.DcccMENTATION RSgmuanaNTs
that are required to limit recovery of Inds- nizant agency for indirect costs may,on an Bed under subsection (1) have previously The standard format for documentation re-
rect costs by statute. institution-by-Institution basis,grant excep- been allocated to other institutional activf- quirements for indirect(indirect(F&A))rate
d. Resolving questioned costs. The cog- tions from all or portions of Part D of the ties,they may be included In the indirect proposals for claiming costs under the rag-
nizant agency for indirect costs must con- standard format requirement.This require- (F&A)cast pool.The total amount of sale- vier method is available on the OMB
duct any necessary negotiations with an edu- meat does not apply to educational institu- ries and wages included in the indirect(F&A) website.
rational institution regarding amounts sues- tions that use the simplified method for cal- cost pool must be separately Identified.
tioned by audit that are due the Federal culatiag indirect(FAA)rates,as described in c.Establish a salary and wage distribution F.CzaTIFICATION
Government related to costs covered by a fie- Section D of this Appendix. base,determined by deducting from the total
gotiated agreement. As provided in section C.10 of this appen- of salaries and wages as established in sub- I.Certification of Charges
e.Reimbursement.Reimbursement to cog- section a from the amount of salaries and
die,each FAA cost rate negotiation or deter- To assure that expenditures for Federal
aizant agencies for indirect costs for workwages Establish
under irestction b.
performed under this Part may be made by for mina tion must include development of a rate d.Establish the indirect(F&A)cost rate, awards are proper and in accordance with
reimbursement billing under the Economy for each FAA cost pool as well as the overall determined by dividing the amount in the in- the agreement documents and approved
Act,31 U.S.C.1535. F&A rate. direct(FAA)cost pool,subsection b,by the project budgets,the annual and/or final fis-
f.Procedure for establishing facilities and amount of the distribution base,subsection cal reports or vouchers requesting payment
administrative rates must be established by D.SIMPLIFIED METHOD FOR SMALL c under the agreements will include a certifi-
INSTTTUTIDNS e.Apply the indirect(F&A)cost rate to di- cation,signed by an authorized official of
one of the following methods: rent salaries and wages for Individual agree- the university,which reads"By signing this
(1) Formal negotiation. The cognizant I General
agency for Indirect costs is responsible for meats to determine the amount of Indirect report,I certify to the best of my knowledge
negotiating and approving rates for an edu- a.Where the total direct cost of work coy- (FAA)costs allocable to such agreements. and belief that the report is true,complete,
national Institution on behalf of all Federal ered by this Part at an institution does not and accurate,and the expenditures,disburse-
agencies.Federal awarding agencies that do exceed$10 million In a fiscal year,the Rim-
3.Simplified Procedure—Modified Total Direct meets and cash receipts are for the purposes
not have cognizance for indirect costs must piffled procedure described in subsections 2 Cost Base and intent set forth in the award documents.
notify the cognizant agency for indirect or 3 may be used in determining allowable a.Establish the total costs incurred by the I am aware that any false, fictitious, or
fraudulentcosts of specific concerns(i.e.,a need to es- Indirect(FAA)costs.Under this simplified institution for the base period. nay information,or the omission too of
tablish special cost rates)which could affect procedure,the institution's most recent an- b.Establish an indirect(F&A)cost pool any material fct,may subject me to crimi-
the negotiation process.The cognizant ages- nual financial report and immediately avail- consisting of the expenditures(exclusive of nal, civil or administrative penalties for
cy for Indirect costs must address the con- able supporting information must be utilized capital items and other costs specifically fraud,
sad,false statements,false claims or oth-
cerns of all interested agencies,as appro- a basis for determining the indirect(F&A) identified as unallowable)which customarily Ise.(Sec Code,Title 18,Section 1001 and
prlate.A pre-negotiation conference may be cost rate applicable to all Federal awards. are classified under the following titles or Title 31,Sections 37�-3733 and 3801-3812)".
scheduled among all interested agencies,If The institution may use either the salaries their equivalents: 2.Certification of Indirect(F&A)Costs
necessary.The cognizant agency for indirect and wages (see subsection 2) or modified (1)General administration and general ex-
costs must then arrange a negotiation con- total direct costs(see subsection 3)n the penes(exclusive of costs of student a - a.Policy.Cognizant agencies must not ac-
ference with the educational institution. distribution basis. tratioa and services,student activities,stu- cept a proposed indirect cost rate unless
(2)Other than formal negotiation.The cog- b.The simplified procedure should not be dent aid,and scholarships). such costs have been certified by the edu-
nizant agency for Indirect costs and edu- used where It produces results which appear (2)Operation and maintenance of physical rational institution using the Certificate of
rational institution may reach an agreement inequitable to the Federal Government or justmPlant and for depreciationapapplicable
appropriate ti- Indirect(P&A)Costs set forth In subsection
an rates without a formal negotiation con- the institution.In any such case, indirect tutional
for ictsts applicable to other coati- F.b.c
ference; for example, through correspond- (FAA)coats should be determined through tut)Lib activities). b.The certificate must be signed financial
behalf
oruse of the simplified method de- nee of the regular procedure. - (3)Library. cer the institution by the chief[Inanclal offi-
acrlbedln this section D of this Appendix. (9) Department administration expenses, or an individual designated by an indi-
scribed Formalizing determinations and agree- 2.Simplified Procedure—Salaries and Wages which will be computed as 20 percent of the vldual at a level no lower than vice president
o salaries and expenses of deans and heads of r chief financial officer.
meats. The cognizant agency for indirect Base
costs must formalize all determinations or departments.In those cases where expends- An indirect(F&A)cost rate is not binding
agreements reached with an educational in- a.Establish the total amount of salaries tures classified under subsection (1) have upon the Federal Government if the most re-
stitution and provide copies to other agen- and wages paid to all employees of the insti- previously been allocated to other institu- cent required proposal from the institution
cies having an interest. Determinations ration. Clonal activities,they may be included in the has not been certified.Where It is necessary
should include a description of any adjust. b.Establish an indirect(FAA)cost pool indirect(F&A)cost pool.The modified total to establish indirect(F&A)cost rates,and
meats,the actual amount,both dollar and consisting of the expenditures(exclusive of direct costs amount included In the indirect the institution has not submitted a certified
percentage adjusted,and the reason for mak- capital items and other costs specifically (FAA)cost pool must be separately ltlenti- proposal for establishing such rates in ac-
ing adjustments. Identified as unallowable)which customarily fled. lion,ice with the requirements of this sec-
h.Disputes and disagreements.Where the are classified under the following titles or c.Establish a modified total direct coat ilea,the Federal Government moat unilater-
cognlzant agency for indirect coats is unable their equivalents: distribution base,as defined in Section C.2, ally establish such rates.Such rates may be
215 216
OMB Guidance Pt.200,App.IV Pt.200,App.IV 2 CFR Ch.II(1-1-22 Edition)
based upon audited historical data or such costs under the conditions described in base period as either direct or indirect,and of the allocation base which best measures
other data that have been furnished to the §200.413(d).After direct costs have been de- (ii) dividing the total allowable indirect the relative benefits provided to each farm-
cognizant agency for Indirect costs and for termined and assigned directly to awards or costs(net of applicable credits)by an equl- Mon.The groupings are classified within the
which it can be demonstrated that all anal- other work as appropriate,Indirect costs are table distribution base.The result of this two broad categories:"Facilities"and"Ad-
towable costs have been excluded.When Inch- those remaining to be allocated to benefit- process is en indirect cost rate which is used ministration,"as described in section A.3 of
rest(F&A)cost rates are unilaterally estab- ting cost objectives.A cost may not be allo- to distribute Indirect costs to individual this Appendix.The indirect cost pools are de-
fished by the Federal Government because of cated to a Federal award as an indirect cost Federal awards.The rate should be expressed fined as follows:
failure of the institution to submit a car- if any other cost incurred for the same pur- Cu the percentage which the total amount of (1)Depreciation.The expenses under this
tified proposal for establishing such rates in pose, in like circumstances, has been as- allowable indirect costs bears to the base se- heading are the portion of the costs of the
accordance with this section,the rates es- signed to a Federal award as a direct cost. lected. This method should also be used organization's buildings, capital improve-
tablished will be set at a level low enough to 2."Major nonprofit organizations"are de- where an organization has only on e major meats to land and buildings,and equipment
ensure that potentially unallowable costs fined in paragraph(a)of§200.414.See Indl- function encompassing a number of tndi- which are computed in accordance with
will not be reimbursed. rest cost rate reporting requirements in sec- vidual projects or activities, and may be
c. Certificate. The certificate required by tions B.2.0 and B.3.g of this Appendix. used where the level of Federal awards to an 4200.936. •
this section must be in the following form: organization Is relatively small. (2) Interest. Interest on debt associated
B.ALLOCATION OF INDIRECT COSTS AND b.Both the direct costs and the Indirect with certain buildings,equipment and cap-
Certificate of Indirect(F&A)Costs DETERMINATION OF INDIRECT COST RATES costs must exclude capital expenditures and fiat improvements are computed in accord-
unallowable costs. However, unallowable ance with§200.449.
This is to certify that to the best of my I.General knowledge and belief: costs which represent activities must be In- (3) Operation and maintenance expenses.
(1)I have reviewed the indirect(F&A)cost a"If a nonprofit orgaaizatlon has only one eluded in the direct costs under the condl- The expenses under this heading are those
proposal submitted herewith; major function,or where all its major funs- lions described in 5200.413(e). that have been incurred for the administra-
(2)All costs Included in this proposal[idea- none benefit from its indirect costs to ap- c.The distribution base may be total di- tion,operation, maintenance,preservation,
iffy date]to establish billing or final lndl- proximately the same degree,the allocation rent costs (excluding capital expenditures and protection of the organization's physical
of indirect costs and the computation of an and other distorting items, such as sub-
rect(F&A)costs rate for [identify period plant.They include expenses normally in-
rent cost rate may be accomplished awards for S25,000 o direct salaries
covered by rate]are allowable in accordance r more), rec tarred for such items as:janitorial and util-
through simplified allocation procedures,as and wages,or other base which results in an
with the requirements of the Federal agree- sty services;repairs and ordinary or normal
antis)to which they apply and with the described in section B.2 of this Appendix. equitable distribution.The distribution base alterations o[buildings,furniture and equip-
coat principles b. If an organization has several major must exclude participant support costs as de- m
p applicable to those agree- (unctions which benefit from its indirect fined in§200.1. ant;care of grounds;maintenance and op-
ments. costs m varying degrees,allocation of indi- d. Except where a special rate(s) is re- oration of buildings and other plant fap e-
(3)This proposal does not Include any costa such
costs may require the accumulation of qufred in accordance with section Be. of this ties;security;earthquake and disaster pre-
which are unallowable under subpart E of such costs Into separate cost groupings Appendix,the Indirect cost rate developed Paste di s;environmental safety;hazardous
this part such as(without limitation):Public which then are allocated individually to ben- under the above principles is applicable to waste disposal;property,liability and other
relations costs,contributions and donations, eflttieg functions by means of a base which all Federal awards of the organization.If a insurance relating to property; apace and
entertainment costs,fines and penalties,lob- best measures the relative degree of benefit. special rate(s)is required,appropriate modi- capital leasing;facility planning and man-
hying costs, and defense of fraud pro- The indirect costs allocated to each function [Ications must be made in order to develop agement; and central receiving, The oper-
ceedings;and are then distributed to individual Federal the special rate(s). ation and maintenance expenses category
(9)All costs included in this proposal are awards and other activities included in that e.For en organization that receives more must also include its allocable share of
properly allocable to Federal agreements on function by means of an Indirect cost rate(s). than S10 million in direct Federal funding in fringe benefit costs,depreciation,and inter-
the basis of a beneficial or causal relation- c.The determination of what constitutes a fiscal year,a breakout of the indirect cost est costs.
ship between the expenses incurred and the an organization's major functions will de- component Into two broad categories,Facili-
agreements to which they are allocated in (9s General expenses
under and general aex-
re
pond on itsr purpose t in being;the types o5, ties (a Administration is
as dred.The in ter prises.thatte have
been ncurr d this heading are
accordance with applicable requirements. services It renders to the
nI declare that the foregoing is true and cor- public,units clients, graph nn of§200.414,bestated required. pe rate in thosegeneral cuti bean Incurred tr the o ff des
rect. dev Rs mom such and the activitiese as f nf raid g,it whea c case must t as ice arrc direct theexecutive and administrative expenses
s offices
devotes c to such ndme b fundraising, which the amount Facilitiesof the par or Ad indirect of the naturewhichorganization and other tape solelyo of a
Institution of Higher Education: public information and membership activl- cost category ilia., or Adminfstra-
Signature: ties. tion)is of the distribution base identified general rfanion do not relate to
Name of Official: d.Specific methods for allocating indirect with that category. any gory [ant al of the ude its allocableion.Tble
Title: costs and computing indirect cost rates category must also include its
Date of Execution: along with the conditions under which each 3.Multiple Allocation Base Method share of fringe benefit costs,operation and
[78 FR 78608,Dec.26,2013,as amended at 79 method should be used are described in sec- a.General.Where an organization's inch- tmaintenance Example depreciation,cat, and in-
FR 75808,Dec.19,2014;80 FR 54409,Sept.10, lion B.2 through B.5 of this Appendix. rent costs benefit its major functions in elude
costs.Examples sucho this he dgory in-
FR 85 FR 49577,Aug.13,2020] e.The base parted for the allocation of in- varying degrees,indirect costs must be accu- elude central offices, as the director's
direct costs is the period in which such costs mutated into separate cost groupings,as de-
ices, the office of finance,business serv-
APPENDIX IV TO PART 200—INDIRECT are incurred and accumulated for allocation scribed to subparagraph b. Each grouping ices,budget andant,gplanning,personnel,safety
(F&A) COSTS IDENTIFICATION AND to work performed In that period.The base must then be allocated individually to bane- and risk management,general counsel,man-
ABSIGNMENT,AND RATE DETERMINA- period normally should coincide with the or- fitting functions by means of base which cools,agement information systems, and library
ganit be s's fiscal year but,in any event, best measures the relative benefits.The de- costs.
TION FOR NONPROFIT ORGANIZA- must be so selected as to avoid Inequities In fault allocation bases by cost pool are de- In developing this cost pool,special care
TIONS the allocation of the costs. scribed in section B.3.c of this Appendix. should be exercised to ensure that costs la-
A.GENERAL 2.Simplified Allocation Method b. Identification of indirect costs. Cost curred for the same purpose in like cir-
groupings must be established so as to per- cumstances are treated consistently as el-
l.Indirect costs are those that have been a.Where an organization's major functions mit the allocation of each grouping on the ther direct or indirect costs.For example,
Incurred for common or joint objectives and benefit from its indirect costs to approxi- basis of benefits provided to the major func- salaries of technical staff,project supplies,
cannot be readily identified with a par- mately the same degree,the allocation of in- lions.Each grouping must constitute a pool project publication,telephone toll charges,
titular final cost objective.Direct cost of direct costs maybe accomplished by(1)sepa- of expenses that are of like character in computer costs,travel costs,and specialized
minor amounts may be treated as indirect rating the organization's total costs for the terms of functions they benefit and in terms services costs must be treated as direct costs
217 218
OMB Guidance Pt.200,App.IV Pt.200,App.IV 2 CFR Ch.II(1-1-22 Edition)
wherever identifiable to a particular pro- (ii)organization-wide employee FTEs or f.Distribution basis.Indirect costs must ale Federal award or it may consist of work
gram.The salaries and wages of administra- salaries and wages applicable to the benefit-
be distributed to applicable Federal awards under a group of Federal swards performed
Live and pooled clerical staff eheoltl nor- ting functions of the organization' and other benefitting activities within each in a common environment. These factors
mally be treated as indirect costs.Direct (d) Depreciation on certain capital im- major function on the basis of MTDC(see may include the physical location of the
charging of these costs may be appropriate area mints to land,such as paved parking definition in§200.1), work,the level of administrative support re-
described in§200.413.Items such as office s,fences,sidewalks,and the like,not in- g.Individual Rate Components.An mdf- qufred,the nature of the facilities or other
supplies,postage,local telephone costs,pert- eluded in the cost of buildings,must be alto- rent cost rate must be determined for each resources employed,the scientific disciplines
odicals and memberships should normally he cared to user categories on a FTE basis and separate indirect cost pool developed.The or technical skills involved, the organiza-
treated as indirect costs. distributed to major functions in proportion rate in each case must be stated as the per- ttonal arrangements used,or any combina-
c. Allocation bases. Actual conditions to the salaries and wages of all employees tentage which the amount of the particular lion thereof.When a particular segment of
must be taken into account in selecting the applicable to the functions. indirect cost pool is of the distribution base work is performed in an environment which
base to be used in allocating the expenses in (2)Interest.Interest costs must be allo- identified with that pool.Each Indirect cost appears to generate a significantly different
each grouping to benefitting functions.The cared in the same manner as the deprecia- rate negotiation or determination agreement level of indirect costs,provisions should be
essential consideration in selecting a method tion on the buildings,equipment and capital must include development of the rate for made for a separate indirect cost pool monit-
or a base is that it is the one best suited for equipment to which the interest relates. each indirect cost pool as well as the overall cable to such work. The separate indirect
assigning the pool of casts to cost objectives (3)Operation and maintenance expenses. indirect cost rate.The Indirect cost pools cost pool should be developed during the
in accordance with benefits derived;a trace- Operation and maintenance expenses must must be classified within two broad cat- course of the regular allocation process,and
able cause and effect relationship;or logic be allocated in the same manner as the de- egortes:"Facilities"and"Administration,' the separate indirect cost rate resulting
and reason,where neither the cause nor the preciatlon. as described In§200.414(a). therefrom should be used,provided it is de-
effect of the relationship is determinable. (4)General administration and general ex- termined that(1) the rate differs signifi-
When an allocation can be made by assign- penses.General administration and general 4.Direct Allocation Method coolly from that which would have been ob-
ment of a cost grouping directly to the font- expenses must be allocated to benefitting e.Some nonprofit organizations treat all tamed under sections B.2,B.3,and B.4 of this
lion benefitted,the allocation must be made functions based on modified total costs Appendix, and(11)the volume of work to
In that manner.When the expenses in a cost (MTC).The MTC is the modified total direct costs as direct costs except general organs which the rate would apply is material.
grouping are more general in nature,the al- costs(MTDC),as described in§200.1,plus the zattratlon and general expenses.These organl-
locatton must be made through the use of allocated indirect cost proportion.The ex three generally separate their costs into C.NEGOTIATION AND APPROVAL OF INDIRECT
selected base which produces results that are penses included in this category could be three basin categories: x noes, Ill) fund-
equitable CosT RATES
equitable to both the Federal Governmentraislog and Oil)
other
expenses,functions fuIn-
ghe org nest according wh c majoryencero serv- raising,and other direct fin- ].Definitions
and the organization.The with
bases de- the organization provideven to which they render awards) projects costs,such
under Federalo As used in this section,the following terms
be made in accordance with the de- ices or benefits.The aggregate ex-
scribed herein unless it can be demonstrated awards).Joint such as depraclatlon,
that the use of a different base would result penses of each group must then be allocated rental costs,operation and maintenance of have the meanings set forth In this section:
Is benefitting functions based on MTC. a.Cognizant agency for indirect costs means
facilities,telephone expanses,and the like
in a more equitable allocation of the costs, d.Order of distribution. the Federal agency responsible for nefor a
(1)Indirect cost categories consisting of eac category
individuallynto as direct cosrd to
or that a more readilyavailable base wouldsting and approving indirect cast rates for a
g each ca tivity and to each Federal award lor e
Fed-
not increase the costs charged to Federal depreciation,interest,operation and mainte- other activity using a base most appropriate nonprofit organization on behalf of all Fed-
awards.The results of special cost studies nance,and general administration and gen- to the particular cost being prorated. orb.agencies.
(such as an engineering utility study)must oral expenses must be allocated in that order b.This method is acceptable,provided each b.Predetermined t rate specified
cn rnt indirect fu-
not be used to determine and allocate the in- to the remaining indirect cost categories as joint cost is prorated using a base which ac- rate,period,
use usually a the
organization's
orfcal
direct costs to Federal awards. well as to the major functions of the organs- curately measures the benefits provided to turn peh r,rateisbased
nran estimate fiscal
(1) Depreciation. Depreciation expenses nation.Other cost categories should be allo- costs to The is ed du in the p .of the
must be allocated in the following manner: dated in the order determined to be most a each must Federal awardestabl or other activity.The deter i be incurred not
t period.A pre-
must Depreciation on buildings used exctu- Of baseseas able be criteria noded in pp accordance be with meets
rate is not subject to adjust-
(a) by the organization,This order of reasonable and be supported by cur- ant.
sively in the conduct of a single function, allocation does not apply if cross allocation rent data.This method is compatible with Inc.Fixed rate means an indirect cost rate
and on capital improvements and equipment of costs is made as provided in section B.3.d.2 the Standards of Accounting and Financial which has the same characteristics as a pre-
used In such buildings,must be assigned to of this Appendix. Reporting for Voluntary Health and Welfare determined rate,except that the difference
that function. (2)Normally,an indirect cost category will Organizations Issued jointly by the National between the estimated costs and the actual
(b)Depreciation on buildings used for more be considered closed once it has been alto- Health Council,Inc.,the National Assembly costs of the period covered by the rate is car-
than one function,and on capital improve- dated to other cost objectives, and costs of Voluntary Health and Social Welfare Or- vied forward as an adjustment to the rate
meats and equipment used in such buildings, must not be subsequently allocated to it. gantzatlons,and the United Way of America. computation of a subsequent period.
must be allocated to the individual functions However,a cross allocation of costs between c.Under this method,indirect costs con- d.Final rate means an indirect cost rate
performed In each building on the bases of two or more indirect costs categories could slut exclusively of general administration applicable to a specified past period which is
usable square feet of space,excluding tom- be used if such allocation will result in a and general expenses.In all other respects, based on the actual costs of the period.A
•
mon areas,such as hallways,stairwells,and more equitable allocation of costs.If a cross the organization's Indirect cost rates must final rate is not subject to adjustment.
restrooms. allocation Is used,an appropriate modifica- be computed in the same manner as that de- e.Provisional role or hitting rate moons a
(c)Depreciation on buildings,capital(m- Lion to the composition of the indirect cost scribed In section B.2 of this Appendix. temporary indirect cost rate applicable to a
provements and equipment related space categories is required. specified period which is used for fanding,in-
(e.g., individual rooms, and laboratories) e. Application of indirect cost rate or 5.Special Indirect Cost Rates terim reimbursement,and reporting indirect
used jointly by more than one function(as rates.Except where a special indirect cost In some instances,a single indirect cost costs on Federal awards pending the estab-
determined by the users of the space)must rate(s)is required in accordance with section rate for all activities of an organization or lishment of a final rate for the period.
be treated as follows.The cost of each joint- B.5 of this Appendix,the separate groupings for each major function of the organization f. Indirect cost proposal means the docu-
ly used unit of space must be allocated to of indirect costs allocated to each major may not be appropriate,since it would not mentatlon prepared by an organization to
the benefitting functions on the basis of: function must be aggregated and treated as a take into account those different factors substantiate its claim for the reimbursement
(I)the employees and other users on a full- common pool for that function.The costs In which may substantially affect the indirect of indirect costs.This proposal provides the
time equivalent(FTE)basis or salaries and the common pool must then be distributed to costs applicable to a particular segment of basis for the review and negotiation leading
• wages of those Individual functions benefit- individual Federal awards included in that work.For this purpose,a particular segment to the establishment of an organization'stn-
ting from the use of that space;or function by use ofa single Indirect cost rate, of work may be that performed under a sin- direct cost rate.
219 220
OMB Guidance Pt.200,App.IV Pt.200,App.V 2 CFR Ch.II(1-1-22 Edition)
g.Cost objective means a function,organizes- lustment can be made;(il)the mix of Federal entertainment costs,fines and penalties,lob- able basis.Examples of such services might
tional subdivision,contract,Federal award, and non-Federal work at the organization is hying costs, and defense of fraud pro- include general accounting, personnel ad-
or other work unit for which cost data are too erratic to permit an equitable carry-for- ceedings;and ministration,purchasing,etc.
desired and for which provision is made to ward adjustment;or(iii)the organization's (4)All costs included in this proposal are 3.Billed central services means central serv-
accumulate and measure the cost of proc- operations fluctuate significantly from year properly allocable to Federal awards on the ices that are billed to benefitted agencies or
asses,projects,jobs and capitalized projects. to year. basis of a beneficial or causal relationship programs on an Individual fee-for-service or
L Provisional and final rates must be nege- between the expenses incurred and the Fed- similar basis.Typical examples of billed cen-
2.Negotiation and Approval of Rates tiated where neither predetermined nor fixed oral awards to which they are allocated in tral services include computer services,
a.
Unless different arrangements are rates are appropriate. Predetermined or accordance with applicable requirements. transportation services, insurance, and
agreed to by the Federal agencies concerned, fixed rates may replace provisional rates at I declare that the foregoing is true and cor- fringe benefits.
the Federal agency with the largest dollar any time prior to the close of the organize- rect. 4.Cognizant agency for indirect costs is de-
value of Federal awards directly funded to an tion's fiscal year. If that event does not Nonprofit Organization: fined in§200.1. The determination of cog-
organization will be designated as the cog- occur,a final rate will be established and up- Signature: insult agency for indirect costs for states
nizant agency for Indirect costs for the nego- ward or downward adjustments will be made Name of Official: and local governments is described in section
tiation and approval of the indirect cost based on the actual allowable costs incurred Title: F.1.
rates and,where necessary,other rates such for the period involved. Date of Execution: 5.Major local government means local gov-
es fringe benefit and computer charge-out g.The results of each negotiation must be emment that receives more than$100 million
anc rates.Once an agency is assigned cognize formalized in a written agreement between [78 FR 78608,Dec.26,2013,as amended at 80 in direct Federal awards subject to this Part.
for a particular nonprofit organization,the the cognizant agency for indirect costs and FR 54910,Sept.10,2015;85 FR 49579,Aug.13,
assignment will not be changed unless there the nonprofit Organization. The cognizant 20201 C.ScoPE OF THE CENTRAL SERVICE COST
Is a shift in the dollar volume of the Federal agency for indirect costs must make avail- ALLOCATION PLANS
wards directly funded to the organization able copies of the agreement to all concerned APPENDIX V TO PART 200—STATE/LOCAL The central service cost allocation plan
for at least three years.All concerned Fed- Federal agencies. GOVERNMENTWIDE CENTRAL SERVICE will include all central service costs that
oral agencies must be given the opportunity h.If a dispute arises in a negotiation of an COST ALLOCATION PLANS will be claimed(either as a billed or an alto-
to participate in the negotiation process but, indirect cost rate between the cognizant cated cost)under Federal awards and will be
after a rate has been agreed upon,it will be agency for indirect costs and the nonprofit A.GENERAL - documented as described in section E.omit:
accepted by all Federal agencies. When a organization,the dispute must be resolved In 1.Most governmental units provide certain ted from the plan will not be reimbursed.
Federal agency has reason to believe that accordance with the appeals procedures of services,such as motor pools,computer cen-
special operating factors affecting its Fed- the cognizant agency for indirect costs, tern,purchasing, accounting,etc.,to open- D.SOEMlasioN REQUIREMENPs
oral awards necessitate special indirect cost I.To the extent that problems are encoun- ating agencies on a centralized basis.Since 1.Each state will submit a plan to the be-
rates in accordance with section B.5 of this tered among the Federal agencies in connec- federally-supported awards are performed partment of Health and Human Services for
Appendix,it will,prior to the time the rates Lion with the negotiation and approval proc- within the individual operating agencies, each year in which it claims central service
are negotiated,notify the cognizent agency ess,OMB will lend assistance as required to there needs to be a process whereby these costs under Federal awards.The plan should
for indirect costs.(See also§200.419.)If the resolve such problems in a timely manner. central service costs can be Identified and include(a)a projection of the next year's al-
nonprofit does not receive any funding from assigned to benefitted activities on a reason-
any Federal agency,the pass-through entity D.Certification of Indirect(F&A)Costs located central service cost(based either on
Is responsible for the negotiation of the indl- able and consistent basis.The central service actual costs for the most recently completed
reef cost rates In accordance with (I)Required Certification.No proposal to cost allocation plan provides that process. year or the budget projection for the coming
§200.33 cost). establish indirect(F&A)cost rates must be All costs and other data used to distribute year),and(b)a reconciliation of actual silo-
b. Except as otherwise provided in acceptable unless such costs have been car- the costs included in the plan should be sup- cared central service costs to the estimated
§200.419(q, a nonprofit organization which tined by the nonprofit organization using ported by formal accounting and other costs used for either the most recently com-
has not previously established an indirect the Certificate of Indirect(F&A)Costs set records that will support the propriety of the plated year or the year immediately pre-
forth in section j.of this appendix.The ter- costs assigned to Federal awards, ceding the most recently cost rate with a Federal agency must submit tificate must be signed on behalf of the orga- 2.Guidelines d illustrations of central 2.Each ma completed year.
an
its initial indirect cost proposal immediately for local government is also re-
after the organization is advised that aFed- nizatlon by an individual at a level no lower service cost allocation plans are provided in quired to submit a plan to its cognizant
oral award will be made and,in no event, than vice president or chief financial officer a brochure published by the Department of agency for indirect costs annually.
later than three months after the effective for the organization. Health and Human Services entitled "A 3. All other local governments claiming
date of the Federal award. (2)Each indirect cost rate proposal must Guide for State,Local and Indian Tribal Goa- central service costs must develop a plan in
c.Unless approved by the cognizant agency be accompanied by a certification in the fol- ernments:Cost Principles and Procedures for accordance with the requirements described
for indirect coats in accordance with lowing form: Developing Cost Allocation Plans and Indirect in this Part and maintain the plan and re-
§200.919(g), organizations that have pre- Certificate of Indirect(F&A)Costs Cost Rates for Agreements with the Federal laced supporting documentation for audit.
viously established indirect cost rates must Government."A copy of this brochure may be These local governments are not required to
submit a new indirect cost proposal to the This is to certify that to the best of my obtained from the HHS Cost Allocation Serv- submit their plans for Federal approval un-
cognizant agency for indirect costs within knowledge and belief: ices or at their website. less they are specifically requested to do so
six months after the close of each fiscal year. (1)I have reviewed the indirect(F&A)cost B.DEFIMTiONS by the cognizant agency for indirect costs.
d.A predetermined rate may be negotiated proposal submitted herewith; Where a local government only receives
for use on Federal awards where there is rea- (2)All costs included in this proposal[lden- 1.Agency or operating agency means an or- funds as a subreciplent,the pass-through en-
sonable assurance,based on past experience tify date]to establish billing or final Indi- ganizational unit or sub-division within a tity will be responsible for monitoring the
and reliable projection of the organization's rect(F&A) costs rate for [identify period governmental unit that is responsible for the eubrecipient's plan.
costs,that the rate is not likely to exceed a covered by rate]are allowable in accordance performance or administration of Federal 4.All central service cost allocation plans
rate based on the orgenization's actual costs. with the requirements of the Federal awards awards or activities of the governmental will be prepared and, when required, sub-
e.Fixed rates may be negotiated where to which they apply and with subpart E of unit. milted within six months prior to the begin-
predetermined rates are not considered ap- this part. 2.Allocated central services means central ning of each of the governmental unit's fis-
propriate.A fixed rate,however,must not be (3)This proposal does not include any costs services that benefit operating agencies but cal years in which it proposes to claim cen-
negotiated If(I)all or a substantial portion which are unallowable under subpart E of are not billed to the agencies on a fee-for- tral service costs.Extensions may be grant-
of the organization's Federal awards are ex- this part such as(without limitation):Public service or similar basis.These costs are alto- ed by the cognizant agency for indirect costs
panted to expire before the carry-forward ad- relations costs,contributions and donations, cated to benefitted agencies on some reason- on a case-by-case basis.
221 222
OMB Guidance Pt.200,App.V Pt.200,App.V 2 CFR Ch.II(1-1-22 Edition)
E.DOCUMENTATION REQUIREMENTS Fon sheet for each fund based on individual ac- 4.Required Certification Department of the Interior—Indian tribal
SUEs¢TrED PLANS counts contained in the governmental unit's governments, territorial governments, and
accounting system;arevenue/expenses state- Each central service cost allocation plan
The documentation requirements described will be accompanied by a certification to the state and local park and recreational dis-
h this section may be modified,expanded,or meat,with revenues broken out by source, trios.
e.g.,regular biliinge,interest earned,etc.;a following form:
reduced by the cognizant agency for indirect Department of Labor—State and local labor
costs on a case-by-case basis.For example, listing of all non-operating transfers(as de- CERTIFICATE OF COST ALLOCATION departments.
the requirements may be reduced for those fined by GAAP)into and out of the fund;a PLAN Department of Education—School districts
central services which have little or no lm- description of the procedures(methodology) and state and local education agencies,
pact on Federal awards.Conversely,If a re- used to charge the costs of each service to This is to certify that I have reviewed the Department of Agriculture—State and local
view of a plan indicates that certain adds- users,including how billing rates are deter- cost allocation plan submitted herewith and agriculture departments.
Donal information Is needed,and will likely mined;a schedule of current rates;and,a to the best of my knowledge and belief: Department of Transportation—State and
be needed in future years,it may be rou- schedule comparing total revenues(induct- (1)All costs included in this proposal(idea- local airport and port authorities and transit
tinely requested In future plan submissions. lag imputed revenues)generated by the sere- tify date)to establish cost allocations or bll- districts.
Items marked with an asterisk(4)should be ice to the allowable costs of the service,as Image for[identify period covered by plan]are Department of Commerce—State and local
submitted only once; subsequent plans determined under this part,with an expla- allowable in accordance with the require- economic development districts.
should merely indicate any changes since the nation of how variances will be handled. manta of this Part and the Federal award(s) Department of Housing and Urban Develop-
last plan. (2)Revenues must consist of all revenues to which they apply.Unallowable costs have
generated by the service,including unbilled been adjusted for in allocating costs as had', meat—State and local housing and develop-
/.General and uncollected revenues.If some users were sated in the cost allocation plan. meat districts.
Pttion
All proposed plans must be accompanied by not billed for the services(or were not billed (2)All costs included in this proposal are inealawaEerental xnd sewer dlstrletsncy—state and
the following:an organization chart anal.- at the full rate for that class of users),a properly allocable to Federal awards on the •
clently detailed to show operations including schedule showing the full imputed revenues basis of a beneficial or causal relationship 2.Review
the central service activities of the state/ associated with these users must be pro- between the expenses incurred and the Fed-
local government whether or not they are vided.Expenses must be broken out by oh- oral awards to which they are allocated in All proposed central service cost allocation
shown as benefitting from central service Ject cost categories(e.g.,salaries,supplies, accordance with applicable requirements. plans that are required to be submitted will
functions;a copy of the Comprehensive An- etc.). Further, the same costs that have been be reviewed,negotiated,and approved by the
nual Financial Report(or a copy of the Exec- c.Self-insurance funds.For each self-insur- treated as indirect costs have not been cognizant agency for indirect costs on a
utive Budget if budgeted costs are being pro- mice fund,the plan must include:the fund claimed as direct costs. Similar types of timely basis.The cognizant agency for Nadi-
posed)to support the allowable costs of each balance sheet;a statement of revenue and costs have been accounted for consistently. rent costs will review the proposal within six
central service activity included in the plan; expenses including a summary of billings I declare that the foregoing is true and cor- months of receipt of the proposal and either
and,a certification(see subsection 4.)that and claims paid by agency;a listing of all rect. negotiate/approve the proposal or advise the
the plan was prepared In accordance with non-operating transfers into and out of the Governmental Unit: governmental unit of the additional docu-
this Part,contains only allowable costs,and fund; the type(s)of risk(s)covered by the Signature: m needed to support/evaluate the
was prepared in a manner that treated stint- fund (e.g., automobile liability, workers' Name of Official: — Prooposepose on d plan or the changes required to
ler costs consistently among the various compensation,etc.);an explanation of how Title: — make the proposal acceptable. Once an
Federal awards and between Federal and the level of fund contributions are deter- Date of Execution: agreement with the governmental unit has
non-Federal awards/activities. mined,including a copy of the current actu- been reached,the agreement will be accepted
anal report(with the actuarial assumptions F.NEGOTIATION AND AppROvAL OF CENTRAL and used by all Federal agencies,unless pro-
2.Allocated Central ServicesW used)if the contributions are determined on SERvlcE PLANS hibited or limited by statute. here a Fed-
For each allocated central service', the an actuarial basis;and,a description of the oral awarding agency has reason to believe
plan must also include the following:a brief procedures used to charge or allocate fund I.Federal Cognizant Agency for Indirect Costs that special operating factors affecting its
description of the service,an identification contributions to benefitted activities. Re- Assignments for Cost Negotiation Federal awards necessitate special consider-
of the unit rendering the service and the op- serve levels in excess of claims(1)submitted In general,unless different arrangements anion,the funding agency will,prior to the
°rating agencies receiving the service,the and adjudicated but not paid,(2)submitted are agreed to by the concerned Federal agen- time the plans are negotiated, notify the
items of expense included In the cost of the but not adjudicated,and(3)incurred but not Gies, for central service cost allocation cognizant agency for indirect costs.
service,the method used to distribute the submitted must be identified and explained. plans,the cognizant agency responsible for 3.Agreement
cost of the service to benefitted agencies, d.Fringe benefits.For fringe benefit costs, review and approval is the Federal agency and a summary schedule showing the alloca- the plan must include:a listing of fringe ben- with the largest dollar value of total Federal The results of each negotlatlon must be
lion of each service to the specific benefitted efits provided to covered employees,and the awards with a governmental unit.For Nadi-
formalized in a written agreement between
agencies. If any self-insurance funds or overall annual cost of each type of benefit; rest cost rates and departmental indirect the cognizant agency for indirect costs and
fringe benefits costs are treated as allocated current fringe benefit policies; and prone- cost allocation plans,the cognizant agency the governmental unit.This agreement will
(rather than billed)central services,docu- dares used to charge or allocate the costs of is the Federal agency with the largest dollar be subject to re-opening if the agreement is
mestation discussed In subsections lb.and the benefits to benefitted activities.In addf- value of direct Federal awards with a govern- subsequently found to violate a statute o
c.must also be included. lion,for pension and post-retirement health mental unit or component,as appropriate. the information upon which the plan was nor
insurance plans,the following information Once designated as the cognizant agency for gotiated is later found to be materially in-
3.Billed Services must be provided:the governmental unit's indirect coats,the Federal agency must re- complete or inaccurate.The results of the
a. General. The information described in funding policies,e.g.,legislative bills,trust main so for a period of five years.In addf- negotiation must be made available to all
this section must be provided for all billed agreements,or state-mandated contribution tion,the following Federal agencies continue Federal agencies for their use.
central services,including internal service rules, if different from actuarially deter- to be responsible for the indicated govern-
4.Adjustments
funds,self-insurance funds,and fringe ben- mined rates;the pension plan's costs accrued mental
ental entitles:
efit funds. for the year;the amount funded,and date(s) Department of Health and Human Services— Negotiated cost allocation plans based on a
b.Internal service funds. of funding;a copy of the current actuarial Public assistance and state-wide cost allots- proposal later found to have included costs
(1)For each internal service fund or siml- report(Including the actuarial assumptions); lion plans for all states(including the Din- that:(a)are unallowable(D as specified by
Ian activity with an operating budget of$5 the plan trustee's report; and, a schedule trict of Columbia and Puerto Rico), state law or regulation,III)as identified in subpart
million or more,the plan must include:A from the activity showing the value of the and local hospitals,libraries and health die- F,General Provisions for selected Items of
brief description of each service;a balance Interest cost associated with late funding. tricts. Cost of this Part,or(ill)by the terms and
223 224
OMB Guidance Pt.200,App.V Pt.200,App.VI 2 CFR Ch.II(1-1-22 Edition)
conditions of Federal awards,or(b)are anal- proved plan, or for unallowable costs that APPENDIX VI TO PART 200-PUBLIC D. SUBMISSION, DOCUMENTATION, AND AP-
lowable because they are Clearly not silo- must be reimbursed Immediately. ASSISTANCE COST ALLOCATION PLANS PnovAL OF PUBLIC ASSISTANCE COST ALLO-
cable to Federal awards,must be adjusted,or CATION PLANS
a refund must be made at the option of the 4.Adjustments of Billed Central Services A.GENERAL
cognizant agency for indirect costs,includ- 1.State public assistance agencies are re-
ing earned or imputed interest from the date Billing rates used to charge Federal awards Federally-financed programs administered quired to promptly submit amendments to
of transfer and debt interest,if applicable, slat be based is the estimated costs a pro- by state'public assistance agencies are the cost Allocation plan to HHS for review
viding the services,including an estimate of
chargeable In accordance with applicable fund-
ed predominately by the Department of end approval.
Federal cognizant agency for indirect costs the allocable revenue
service costs.Atom- Health and Human Services(NHS).In sup- 2.Under the coordination process outlined
regulations. Adjustments or cash refunds parison of the I di generated by each in section E,affected Federal agencies will
billed service (including total revenues port of its stewardship requirements,HHS review all new plans And 1 may include,at the option of the cognizant whether or not billed or collected)to the ac- has published requirements for the develop- pan amendments
agency for Indirect costs,earned or imputed i meat,documentation, submission, negotla- And provide comments, as appropriate, to
interest from the date of expenditure and de- tual allowable coats of the service will be HHS.The effective date of the plan or p1An
linquent debt Interest,if applicable,charge- made at least annually,and an adjustment tion,and approval of public assistance cost amendment will be the first day of the cal-
will be made for the difference between the allocation plans in Subpart E of 95 CFR Part ender quarter following
able M accordance with applicable cognizant revenue and the allowable costs.These ad- 95.All administrative costs(direct and indi- the event that to
agency claims collection regulations.These justments will be made through one of the rent)are normally charged to Federal awards quired the amendment unless Another date
adjustments or refunds are designed to tor- following adjustment methods:(a)a cash re- by implementing the public assistance cost ognizaspeci Cagelly Approved it HHS.HHS,as the
on
rect the plans and do not constitute a re- fund including earned or imputed interest allocation plan.This Appendixcognizant all any to Indirect agencies,
ie,acting will,
n extends these behalf s oc Federal wile
opening of the negotiation. from the date of transfer and debt interest,if requirements to all Federal awarding Agen- as necessary,conduct negotiations with the
G.OTHER POLICIES applicable, chargeable in accordance with ties whose programs are administered by a state public assistance agency and will in-
applicable Federal cognizant agency for indi- state public assistance agency.Major fader- form the state agency of the action taken on
1.Billed Central Service Activities rent costs regulations to the Federal Govern- ally-financed programs typically adminis- the plan or plan amendment.
trent for the Federal share of the adjust- tered by state public assistance agencies in-
Each billed central service activity must ment,(b)credits to the amounts charged to elude: Temporary Aid to Needy Families E.REVIEW OF IMPLEMENTATION OF APPROVED
separately account for all revenues(includ- the Individual programs,(c)adjustments to (TANF),Medicaid,Food Stamps,Child Sup- PLANS
lag imputed revenues)generated by the sere- future billing rates,or(d)adjustments to al- port Enforcement,Adoption Assistance and 1.Since public assistance cost allocation
Ice,expenses incurred to furnish the service, located central service costs.Adjustments to Foster Care, and Social Services Block plans are of a narrative nature,the review
and profit/loss. allocated central services will not be per- Grant. during the plan approval process consists of
milted where the total amount of the adjust-
evaluating the ap
propriateness ppropriateness of the pro-
2.Working Capital Reserves meat for a particular service(Federal share
antl non-Federal)share exceeds S500,000.Ad- H.DEFINITIONS posed groupings of casts(cost centers)and
Internal service funds are dependent upon 1. State the related allocation bases. As such, the
a reasonable level of working capital reserve justment methods may include,at the option pt<blte assistance agency means a Federal Government needs some assurance
of the cognizant agency,earned or imputed state agency administering or supervising
to operate from one billing cycle to the next. that the coat allocation plan has been imple-
Charges by an internal service activity to interest from the date of expenditure and de-
mented administration of one or more public as-
interest linquent debt interest,if applicable,charge- sista.°programs operated by the state as merited as Approved.This la accomplished by
provide o for the establishment and mainte- able in accordance with applicable cognizant identified in Subpart E of 45 CFR Part 95. reviews by the Federal awarding agencies,
ce f a reasonable level of working cap- single audits, or audits conducted by the
nan
ital reserve,in addition to the full recovery agency claims collection regulations. For the purpose of this Appendix,these pro- cognizant agency for indirect costs.
grams include all programs administered by 2. Where inappropriate charges affecting
of costs,are allowable.A working capital re- 5.Records Retention
serve as part of retained earnings of a to 60 the state public assistance agency.
g p 2.State public assistance agency costs means more than one Federal awarding agency are
calendar days cash expenses for normal le.oper-A All central service cost allocation plans identified,the cognizant HHS cost negotia-
ating purposes is considered reasonable.A and related documentation used as a basis all costs incurred by,or allocable to,the lion office will be advised and will take the
working capital reserve exceeding 60 cal- for claiming costs under Federal awards state public assistance agency, except ex- lead In resolving the issue(s)as provided for
endar days may be approved by the cog- must be retained for audit in accordance pendltures for financial assistance,medical in Subpart E of45 CFR Part 95.
nizant agency for Indirect costs in excep- with the records retention requirements con- contractor payments,food stamps,and pay- 3.If a dispute arises in the negotiation of
tional cases. tamed in subpart D of this part. meats for services and goods provided di- a plan or from a disallowance Involving two
rectly to program recipients. or more Federal awarding agencies,the dis-
3.Carry-Forward Adjustments of Allocated 6.Appeals pate must be resolved in accordance with the
Central Service Costs If a dispute arises in the negotiation of a C.POLICY appeals procedures set out 1n 95 CFR Part 16.
Allocated central service costs are usually plan between the cognizant agency for indi- State public assistance agencies will de- Disputes involving only one Federal award-
negotiated and approved for a future fiscal rent costs and the governmental unit, the velop, document and implement, and the bag agency will be resolved In accordance
with the Federal awarding agency's appeal
year on a"fixed with carry-forward"basis. dispute must be resolved in accordance with Federal Government will review,negotiate,
Under this procedure,the fixed amounts for the appeals procedures of the cognizant and approve,public assistance cost alleca- process.
the future year covered by agreement are agency for indirect costs. tion plans In accordance with Subpart E of 45 9.To the extent that problems are e-
not subject to adjustment for that year. CFR Part 95.The plan will include all pro- tared among the Federal awarding agencies
However,when the actual costs of the year 7.OMB Assistance grams administered by the state or governmental units in connection with
involved become known,the differences be- s public as- the o Managementd
approval process,end Of-
involved the fixed amounts previously approved To the extent that problems are encoun. or disapproval
is p agency.Where a letter of approval tics of Management and Budget will lend as-
and the actual costs will be carried forward tared among the Federal agencies or govern- or daeelet one is transmitted to a state pub- Ice,as required,to resolve such prob-
and used as an adjustment to the fixed mental units in connection with the negotla- lit assistance Agency in accordance with lams In a timely manner.
amounts established for a later year.This lion and approval process,OMB will lend as- Subpart E,the letter will apply to all Fed-
,as required,to resolve such prob- era]agencies and programs.The remaining F.UNALLOWABLE COSTS
"carry-forward"procedure applies to all ten- lams Ina timely manner. sections of this Appendix(except for the re-
tral services whose costs were fixed the Claims developed under approved cost asits
approved plan.However,a carry-forward
d ad- [78 FR 78608,Dec.26,2013,as amended at 80 quirement for certification)summarize the cation plans will be based on allowable costs
justment is not permitted,for a central serv- FR 54410,Sept.30,2015;85 FR 99581,Aug.13, provisions of Subpart E of 45 CFR Part 95. as identified in this Part.Where unallowable
ice activity that was not included 1n the ap- 2020] costs have been claimed and reimbursed,
225 226
OMB Guidance Pt.200,App.VII Pt.200,App.VII 2 CFR Ch.II(1-1-22 Edition)
they will be refunded to the program that re- local-wide central service costs,general ad- of the costs to be incurred during the period. credits)by a equitable distribution base.
imbursed the unallowable cost using one of ministration of the non-Federal entity a Except under very unusual circumstances,a The result of this process is an indirect cost
the following methods:(a)a cash refund,(b) counting and personnel services performed predetermined rate is not subject to adjust- rate which Is used to distribute Indirect
offset to a subsequent claim,or(c)credits to within the non-Federal entity,depreciation meat. (Because of legal constraints, pre- costs to individual Federal awards.The rate
the amounts charged to individual Federal on buildings and equipment,the costs of op-
a determined rates are not permitted for Fed- should be expressed as the percentage which
wards. Cash refunds, offsets, and credits erasing and maintaining facilities. seal contracts;they may,however,be used the total amount of Allowable indirect costs
may include at the option of the cognizant 5.This Appendix does not apply to state for grants or cooperative agreements.)Pre- bears to the base selected. This method
agency for indirect cost,earned or imputed public assistance agencies. These agencies determined rates may not be used by govern- should also be used where a governmental
interest from the date of expenditure and de- should refer instead to Appendix VI to this mental units that have not submitted and unit's department or agency has only one
linquent debt interest,if applicable,charge- part. negotiated the rate with the cognizant ages- major function encompassing a number of in-
able In accordance with applicable cognizant cy for indirect costs.In view of the potential dividual projects or activities,and may be
agency for Indirect cost claims collection B.DEFmo'rroNS advantages offered by this procedure,nego- used where the level of Federal awards to
ttatioa of predetermined rates for indirect that department or agency is relatively regulations. 1.Base means the accumulated direct costs
[78 FR 78608,Dec.26,2013,as amended at 85 (normally either total direct salaries and costs for A period of two to four years should small.
wages or total direct costa exclusive of any be the norm in those situations where the b.Both the direct costa and the indirect
FR 99581,Aug.13,2020] extraordinary or distorting expenditures) cost experience and other pertinent facts costs must exclude capital expenditures and
APPENDIX VII TO PART 200-STATES AND used to distribute indirect casts to indi-
parties are deemed sufficient to enable the unallowable costs. However, unallowable
LOCAL GOVERNMENT AND INDIAN vidual Federal awards.The direct cost base parties Involved to reach an Informed costs must en included In the direct costs if
selected should result In each Federal award meat as to the probable level of indirect they represent activities to which indirect
TRIBE INDIRECT COST PROPOSALS costs during the ensuing accounting periods. costs are properly allocable.
bearing a fair share of the indirect costs 1n c 10.Provisional rate means a temporary indi- c.The distribution base may be(1)total di-
A.GENERAL reasonable relation to the benefits received rent cost rate applicable to a specified period rent costs (excluding capital expenditures
1.Indirect costs are those that have been from the costs. which is used for funding,interim reimburse- and other distorting items, such as pass-
incurred for common or joint 2.Base Period for the allocation of indirect
purposes. costs is the period in which such costs are in-
ment,and reporting indirect costs on Fed- through funds, subcontracts in excess of
eras awards pending the establishment of a 525,000, participant support costs,etc.), (2)
These costs benefit more than one cost ob- °tithed and accumulated for allocation to am
jective and cannot be readily identified with tivities performed in that period.The base "final"rate for that period. direct salaries and wages,or(3)another base
A particular[final cost objective without ef- period normally should coincide with the which results in an equitable distribution.
[art t final to the live thhleved. C.ALLOCATION OF INDIRECT COSTS AND
After direct coats have been determined and governmental unit's fiscal year,but 1n any DETERMINATION OF INDIRECT COST RATES 3.Mufin/a Allocation Base Method
ant, a be fro selected s to avoid Mogul-
assigned directly to Federal awardsthe and ties in the allocation of costs. 1.General a.Where a non-Federal entity's indirect
other activities as appropriate,indirect costs 3.Cognizant agency for indirect costs means costs benefit its major functions In varying
are those remaining to be allocated to bane- the Federal agency responsible for reviewing a. Where a governmental unit's depart- degrees, such costs must be accumulated
fitted cost objectives.A cost may not be al- and approving the governmental unit's indi-
or or agency has only one major function, into separate cost groupings.Each grouping
located to a Federal award a an Indirect rent cost rate(s)on the behalf of the Federal or where all its major functions benefit from must then be allocated individually to bane-
cost if any other cost incurredsfor the same Government.The cognizant agency for indi- the Indirect costs to approximately the same fitted functions by means of a base which
purpose,in like circumstances,has been as- rent costs assignment is described In Appea- degree,the allocation of indirect costs and best measures the relative benefits.
the computation of an indirect cost rate may b.The cost groupings should be established
signed to a Federal award as a direct cost. dix V,section F.
2.Indirect costs include(a)the indirect 4.Final rate means an indirect cost rate ap- be accomplished through simplified alloca- so as to permit the allocation of each group-
costs originating in each department o plicable to a specified past period which is tion procedures as described In subsection 2. lag on the basis of benefits provided to the
agency of the governmental unit carrying based on the actual allowable costs of the pa- b. Where a governmental unit's depart- major functions.Each grouping should con-
out Federal awards and(b)the costs of ten- clod.A final audited rate is not subject to meat or agency has severe]major functions statute a pool of expenses that are of like
which benefit from its indirect costs in vary- character in terms of the functions they ben-
tral governmental services distributed adjustment.
through the central service cost allocation 5. Fired rate means an Indirect cost rate fine degrees,the allocation of indirect costs efit and in terms of the allocation base
plan(as described in Appendix V to this part) which has the same characteristics as a pre- may require the accumulation of such costs which best measures the relative benefits
and not otherwise treated as direct costs. determined rate,except that the difference into separate cost groupings which then are provided to each function.The number of
3.Indirect costs are normally charged to between the estimated costs and the actual, allocated individually to benefitted fun°- separate groupings should be held within
Federal awards by the use of an indirect cost allowable costs of the period covered by the Ilona by means of a base which best m practical limits, taking Into consideration
rate.A separate indirect cost rate(s)is usu- rate Is carried forward as an adjustment to es the relative degree of benefit.The indi- the materiality of the amounts involved and
ally necessary for each department or agen- the rate computation of a subsequent period. rent costs allocated to each function are the degree of precision needed.
cy of the governmental unit claiming Judi- 6. Indirect cost pool is the accumulated then distributed to Individual Federal e,Actual conditions must be taken Into ac-
awards and other activities included In that count in selecting the base to be used in allo-
rect costs under Federal awards.Guidelines costs that jointly benefit two or more pro-
function by means of an indirect cost rate(s). eating the expenses in each grouping to ben-
and Illustrations of indirect cost proposals grams or other cost objectives
are provided in a brochure published by the 7. Indirect cost rate is a device for deter- c.Specific methods for allocating indirect efitted functions.When an allocation can be
Department of Health and Human Services mining in a reasonable manner the propor- costs and computing indirect cost rates made by assignment of a cost grouping di-
entitled"A Guide for States and Local Govern- tlon of indirect costs each program should along with the cbndisions under which each rattly to the function benefltted,the alloca-
ment Agencies:Cost Principles and Procedures bear.It is the ratio(expressed as a percent- method should be used are described In sub- tion must be made in that manner.When the
for Establishing Cost Allocation Plans and Ind)- age)of the indirect costs to a direct cost sections 2,3 and 4. expenses in a grouping are more general In
reel Cost Rates for Grants and Contracts with base. 2.Simplified Method nature, the allocation should be made
Math Federal Government."A copy of this bro- 8.Indirect cost rate proposal means the through the use of a selected base which pro-
chore may be obtained from HHS Cost Allo- umentation prepared by a governmental unit a. Where a non-Federal entity's major duces results that are equitable to both the
cation Services or at their website. or subdivision thereof to substantiate its re- functions benefit from its Indirect costs to Federal Government and the governmental
4. Because of the diverse characteristics quest for the establishment of an indirect approximately the same degree,the alloca- unit.In general,any cost element or related
and accounting practices of governmental cost rate. tion of indirect costs may be accomplished factor associated with the governmental
units,the types of costs which may be classi- c 9.Predetermined rate means an indirect cost by (1)classifying the non-Federal entity's unit's activities is potentially adaptable for
fled as indirect costs cannot be specified in rate,applicable to a specified current or fu- total costs for the base period as either di- use as an allocation base provided that:(1)It
all situations.However,typical examples of tore period,usually the governmental unit's rest or indirect,and(2)dividing the total al- can readily be expressed in terms of dollars
indirect costs may include certain state/ fiscal year.This rate is based on an estimate lowable indirect costs (net of applicable or other quantitative measures(total direct
227 228
OMB Guidance Pt.200,App.VII Pt.200,App.VII 2 CFR Ch.II(1-1-22 Edition)
costs,direct salaries and wages,staff hours elimination from the indirect cost pool those table is not required to be submitted with E.NEGOTIATION AND APPROVAL OF RATES
applied, square feet used, hours of usage, costs for which the law prohibits reimburse- the indirect cost proposal if the central serv-
number of documents processed,population meet. ice cost allocation plan for the same fiscal 1.Indirect cost rates will be reviewed,ne-
served,and the like),and(2)It is common to
the benefitted functions during the base pe- D.SUBMISSION AND DOCUMENTATION OF year has been approved by the cognizant agent gotiated, and approved by the cognizant
rlod. PROPOSALS agency for indirect costs and is available to agency on a timely basis.Once a rate has
d. Except where a special indirect cost the funding agency, been agreed upon, it will be accepted and
rates)is required in accordance with f.Submission of Indirect Cost Rate Proposals b.A copy of the financial data(financial used by all Federal agencies unless -
para- statements,comprehensive annual financial ited or limited by statute.Where a Federal
graph(C)(4)of this Appendix,the separate a.All departments or agencies of the gov- report, executive budgets, accounting re- awarding agency has reason to believe that
groupings of indirect costs allocated to each ernmental unit desiring to claim indirect ports,etc.)upon which the rate is based.Ad- special operating factors affecting its Fed-
major function must be aggregated and costs under Federal awards must prepare an ,lustments resulting from the use of eral awards necessitate special indirect cost
treated as a common pool for that function, indirect cost rate proposal and related docu- unaudited data will be recognized,where ap- rates,the funding agency will,prior to the
The costs in the common pool must then be mentation to support those costs.The pro- propriate,by the Federal cognizant agency time the rates are negotiated,notifythe cog-
distributed to individual Federal awards in- posal and related documentation must be re- for indirect costs in a subsequent proposal•
eluded in that function by use of a single in- tamed for audit in accordance with the aThe approximate amount of direct base °Rant agency for indirect coned.
al-
direct cost rate, records retention requirements contained in costs Incurred under Federal awards.These 2.The use of predetermined rates, if e.The distribution base used in computing §200.334. costs should be broken out between salaries lowed, is encouraged where the cognizant
the indirect cost rate for each function may b.A governmental department or agency and wages and other direct costs, agency for indirect costs has reasonable as-
be(1)total direct costs(excluding capital ex- unit that receives mom than$35 million in d. A chart showing the organizational euraace based on past experience and roll-
penditures and other distorting items such direct Federal funding must submit its tndi- structure of the agency during the period for able projection of the non-Federal entity's
as pass-through funds,subawards in excess of rest cost rate proposal to its cognizant ages- which the proposal applies, along with a costs,that the rate is not likely to exceed a
S25,000, participant support costs,etc.), (2) cy for indirect costs.Other governmental de- functional statement(s) noting the duties rate based on actual costs.Long-term agree-
direct salaries and wages,or(3)another base partment or agency must develop an indirect and/or responsibilities of all units that com- meats utilizing predetermined rates extend-
which results in an equitable distribution. cost proposal in accordance with the require- prise the agency. (Once this is submitted, leg over two or more years are encouraged,
An indirect cost rate should be developed for meets of this Part and maintain the proposal only revisions need be submitted with subse- where appropriate.
each separate indirect cost pool developed, and related supporting documentation for quent proposals.) 3.The results of each negotiation must be
The rate in each case should be stated as the audit. These governmental departments or
formalized in a written agreement between
percentage relationship between the par- agencies are not required to submit their 3.Required certification. the cognizant agency for indirect costs and
titular indirect cost pool and the distribu- proposals unless they are specifically re- Each indirect cost rate proposal must be the governmental unit.This agreement will
tion base identified with that pool, quested to do so by the cognizant agency for accompanied by a certification in the fol- be subject to re-opening if the agreement is
indirect b costs.Wheres non-Federal eral et, thy
4.Special Indirect Cost Rates only receives fundsas a recipie the lowing form: subsequently found to violate a statute,or
e.In some instances,a single indirect cost Pass-through entity will be responsible for CERTIFICATE OF INDIREer COSTS the Information upon which the plan was ae-
rate for all activities of a non-Federal entity negotiating and/or monitoring the subrecipf- gotlated is later found to be materially in-
or for each major function of the agency may anc's indirect costs, This is to certify that I have reviewed the complete or inaccurate. The agreed upon
not be appropriate.It may not take Into ac- c.Each Indian tribal government desiring Indirect cost rate proposal submitted here- rates must be made available to all Federal
count those different factors which may sub- reimbursement of Indirect costs must submit with and to the best of my knowledge and agencies for their use.
stanttally affect the indirect costs applicable its indirect cost proposal to the Department belief: - 4.Refunds must be made if proposals are
to a particular program or group of pro- of the Interior(its cognizant agency for halt- (1)All costs included in this proposal[idea- later found to have included coats that(a)
grams.The factors may Include the physical rect costs), tify date]to establish billing or final lndl- e.re unallowable(D as specified by law or reg-
location of the work,the level of admtnistra- d.Indirect cost proposals must be devel- rest costs rates for[identify period covered ulatlon,(ill as identified in§200.920,or(ill)
tive support required,the nature of the fa- oped(and,when required,submitted)within by rate]are allowable in accordance with the by the terms and conditions of Federal
cilities or other resources employed,the or- six months after the close of the govern- requirements of the Federal award(s) to
ganizational arrangements used,or any com- mental unit's fiscal year,unless an exception which they apply and the provisions of this awards,or(b)are unallowable because they
bta tion thereof.When a particular Federal Is approved by the cognizant agency for tali- dj Part.Unallowable costs have been adjusted are clearly not allocable to Federal awards.
award is carried out in an environment rect costs. If the proposed central service for in allocating costs as indicated ha the in- These adjustments or refunds will be made
which appears to generate a significantly cost allocation plan for the same period has direct cost proposal regardless of the type of rate negotiated
different level of indirect costs,provisions not been approved by that time,the indirect (2)An costa included in this proposal are (predetermined,final,fixed,or provisional).
should be made for a separate indirect cost cost proposal may be prepared including an properly allocable to Federal awards on the
pool applicable to that Federal award.The amount for central services that is based on basis of a beneficial or causal relationship F.OTHER POLICIES
separate Indirect cost pool should be level- the latest federally-approved central service between the expenses incurred and the agree- 1.Fringe Benefit Rates
oiled during the course of the regular alloca- cost allocation plan.The difference between meets to which they are allocated In accord-
tion process,and the separate indirect cost these central service amounts and the once with applicable requirements.Further, If overall fringe benefit rates are not ae-
rate resulting therefrom should be used,pro- amounts ultimately approved will be corn- the same costs that have been treated as In- proved for the governmental unit as part of
vtded that:(1)The rate differs significantly pensated for by an adjustment in a subse- direct costs have not been claimed as direct the central service cost allocation plan,
from the rate which would have been level- quest period. costs.Similar types of costs have been an- these rates will be reviewed,negotiated and
oiled under paragraphs(C)(2)and(C)(3)of counted for consistently and the Federal approved for individual recipient a e i
this Appendix,and(2)the Federal award to 2.Documentation of Proposals Government will be notified of any account- g ne es
leg changes that would affect the predeter-
which the rate would apply is material in The following must be included with each during the indirect cost negotiation process.
mined rate. In these cases,a proposed fringe benefit rate
amount, indirect cost proposal: computation should accompany the indirect
b.Where Federal statutes restrict the re- a.The rates proposed,including subsidiary I declare that the foregoing is true and tor- cost proposal.If fringe benefit rates are not
imbursement of certain indirect costs, it work sheets and other relevant data,cross rect, used at the recipient agency level(i.e.,the
may be necessary to develop a special rate referenced and reconciled to the financial Governmental Unit: agency specifically identifies fringe benefit
for the affected Federal award.Where a"re- data noted in subsection b.Allocated central Signature: costs to individual employees),
striated rate"is required,the same proce- service costs will be supported by the sum- Name of Official: p ea),the govern-
striated ant
mental unit should so advise
dare for developing a non-restricted rate will mary table Included in the approved central Title: se the cognizant
be used except for the additional step of the service cost allocation plan.This summary Date of Execution: agency for Indirect costs.
229 230
OMB Guidance Pt.200,App.VIII
2.Billed Services Provided by the Recipient APPENDIX VHI TO PART 200-NONPROFIT
Agency ORGANIZATIONS EXEMPTED FROM
In some Cases,governmental departments SUBPART E OF PART 200
or agencies (components of the oern- 1. Advance Technology Institute (ATI),
mental t)provide and bill for services Charleston,South Carolina
similar to those covered by central service 2 Aerospace Corporation,El Segundo,Call-
cost allocation plans (e.g., computer ten- fornia
tern).Where this occurs,the governmental 3. American Institutes of Research (AIR),
departments or agencies(components of the Washington,DC
. governmental unit)should be guided by the 4.Argonne National Laboratory,Chicago,II-
requirements In Appendix V relating to the itnois
development of billing rates and documenta- 5. Atomic Casualty Commission, Wash-
tion requirements, and should advise the tngton,DC
cognizant agency for indirect costs of any 6. Battelle Memorial Institute,
billed services. Reviews of these types of Headquartered in Columbus,Ohio
services(including reviews of costing/billing 7.Brookhaven National Laboratory,Upton,
methodology,profits or losses,etc.)will be New York
made on a case-by-case basis as warranted by 8.Charles Stark Draper Laboratory,Incor-
the circumstances involved, porated,Cambridge,Massachusetts
9.CNA Corporation(CNAC),Alexandria,Vir-
3.Indirect Cost Allocations Not Using Rates ginla
In certain situations, governmental de- 10. Environmental Institute of Michigan,
partments or agencies(components of the AGe Arbor,Michigan
governmental unit),because of the nature of 11.Georgia Institute of Technology/Georgia
their Federal awards,may be required to de- Tech Applied Research CorporatioN ante,
velop a cost allocation plan that distributes gia Tech Research Institute, Atlanta,
indirect(and,in some cases,direct)costs to ,Hanfordnfa
Founda-
the specific funding sources.In these cases,a 12.on,Richland,
aEnvironmental Washington
Health tloT Research
red,Waitute,Cn
narrative cost allocation methodology 13.HT Research Institute,Chicago,Illinois
should be developed, documented, main- 14.Institute of Gas Technology,Chicago,II-
tatned for audit, or submitted, as appro- knots
prints,to the cognizant agency for indirect 15.Institute for Defense Analysis,Alexan-
costs for review,negotiation,and approval. dria,Virginia -
4.Appeals 16.LMI,McLean,Virginia
17. Mitre Corporation, Bedford, Massachu-
If a dispute arises In a negotiation of an in- setts
direct cost rate(or other rate)between the 18.Noblis,Inc.,Falls Church,Virginia
cognizant agency for indirect costs and the 19.National Radiological Astronomy Observ-
governmental unit,the dispute must be re- atory,Green Bank,West Virginia
solved in accordance with the appeals proce- 20.National Renewable Energy Laboratory, ,
dares of the cognizant agency for indirect Golden,Colorado
costs. 21.Oak Ridge Associated Universities,Oak
Ridge,Tennessee
5.Collection of Unallowable Costs and 22.Rand Corporation,Santa Monica,Call-
Erroneous Payments Ernie.
Costs specifically identified as unallowable 23. Research Triangle Institute, Research
and charged to Federal awards either di- angle Park,North Carolina
redly or indirectly will he refunded(includ- 24.Riverside Research Institute,New York,
New York
ing interest chargeable In accordance with 25. South Carolina Research Authority
applicable Federal cognizant agency for tndt- (SCRA),Charleston,South Carolina
rect costs regulations). 26. Southern Research Institute, Bir-
6.OMB Assistance mingham,Alabama
27.Southwest Research Institute,San Anto-
To the extent that problems are encoun- nto,Texas
tered among the Federal agencies or govern- 28.SRI International,Menlo Park,California
mental units in connection with the negotia- 29. Syracuse Research Corporation, Syra-
tlon and approval process,OMB will lend as- case,New York
atstance,as required,to resolve such prob- 30,Universities Research Association,Incor-
]eme in a timely manner. porated(National Acceleration Lab),Ar-
gonne,Illinois
[78 FR 78608,Dec.26,2013,as amended at 79 31.Urban Institute,Washington DC
FR 75889,Dec.19,2014;85 FR 49581,Aug.13, 32.Nonprofit insurance companies,such as
2020] Blue Cross and Blue Shield Organizations
231
Exhibit C
Neighborhood Revitalization
Strategy Areas
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Exhibit G
Certification Regarding U.S.Department of.Housing
Debarment and Suspension and Urban Development
i Certification A: Certification Regarding Debarment,
I Suspension and Other Responsibility Matters Primary
Covered Transactions
1.The prospective primary participant certifies to the best of its knowledge 4. The prospective primary participant shall provide Immediate
and belief that its principals: written notice to the department or agency to whom this proposal is
submitted if at any time the prospective primary participant learns
a. Are not presently debarred, suspended, proposed for debarment, that its certification was erroneous when submitted or has become
declared ineligible, or voluntarily excluded from covered transactions by erroneous by reason of changed circumstances.
any Federal debarment or agency;
5. The terms covered transaction, debarred, suspended,
b. Have not within a three-year period preceding this proposal, been Ineligible, lower tier covered transaction, participant, person,
, convicted of or had a civil judgment rendered against them for commission primary covered transaction, principal, proposal, and
of fraud or a criminal offense in connection with obtaining,attempting to voluntarily excluded, as used in this clause,have the meanings
obtain, or performing a public (Federal, State, or local) transaction or set out in the Definitions and Coverage sections of the rules
contract under a public transaction; violation of Federal or State antitrust implementing Executive Order 12549. You may contact the
statutes or commission of embezzlement, theft, forgery, bribery, department or agency to which this proposal is being submitted for
I falsification,or destruction of records,making false statement,or receiving assistance in obtaining a copy of these regulations.
stolen property;
6. The prospective primary participant agrees by submitting this
c.Are not presently indicted for or otherwise criminally or civilly charged by proposal that,should the proposed covered transaction be entered
a governmental entity(Federal,State or local)with commission of any of into,it shall not knowingly enter any lower tier covered transaction
the offenses enumerated in paragraph(1)(b)of this certification;and with a person who is debarred,suspended,declared ineligible, or
1 voluntarily excluded from participation in this covered transaction,.
Ij d. Have not within a three-year period preceding this application/proposal unless authorized by the department or agency entering into this
o had one or more public transactions(Federal,State or local)terminated for transaction.
cause or default.
7.The prospective primary participant further agrees by submitting
1 2.Where the prospective primary participant is unable to certify to any of this proposal that it will include the clause titled "Certification
i the statement in this certification,such prospective participant shall attach Regarding Debarment, Suspension, Ineligibility and Voluntary
an explanation to this proposal. Exclusion Lower Tier Covered Transaction," provided by the
1 department or agency entering into this covered transaction,without
Instructions for Certification(A) modification, in all lower tier covered transactions and in all
solicitations for lower tier covered transactions.
1. By signing and submitting this proposal, the prospective primary
1 participant is providing the certification set out below. 8. A participant in a covered transaction may rely upon a
certification of a prospective participant in a lower tier covered
2. The inability of a person to provide the certification required below will transaction that it is not debarred, suspended, ineligible, or
not necessarily result in denial of participation in this covered transaction. voluntarily excluded form the covered transaction, unless it knows
The prospective participant shall submit an explanation of why it cannot that the certification is erroneous. A participant may decide the
provide the certification set out below. The certification or explanation will method and frequency by which it determines this eligibility of its
be considered in connection with the department or agency's principals. Each participant may, but is not required to,check the
determination whether to enter into this transaction. However, failure of Non-procurement list.
the prospective primary participant to furnish a certification of the
1 prospective primary participant to furnish a certification or an explanation 9. Nothing contained in the foregoing shall be construed to require
, shall disqualify such person from participation in this transaction. establishment of a system of records in order to render in good faith
the certification required by this clause. The knowledge and
3.The certification In this clause is a material representation of fact upon information of a participant is not required to exceed that which is
which reliance was in place when the department or agency determined to normally possessed by a prudent person in the ordinary course of
enter into this transaction. If it Is later determined that the prospective business dealings.
I primary participant knowingly rendered an erroneous certification, in
addition to other remedies available to the Federal Government, the 10.Except for transactions authorized under paragraph(6)of these
department or agency may terminate this transaction for cause or,default. instructions, if a participant in a covered transaction knowingly
enters into a lower tier covered transaction with a person who is
suspended, debarred, ineligible, or voluntarily excluded from
participation in this transaction, in addition to other remedies
available to the Federal Govemment, the department or agency
Imay terminate this transaction for cause of default.
I
i
Page 1 of 2 form HUD-2992(3/98)
Certification B: Certification Regarding Debarment, Suspension,
Ineligible and Voluntary Exclusion—Lower Tier Covered Transactions
1. The prospective lower tier participant certifies, by submission of this 5. The prospective lower tier participant agrees by submitting this
proposal,that neither it not its principals is presently debarred,suspended, proposal that,should the proposed covered transaction be entered
proposed for debarment, declared ineligible, or voluntarily excluded from into,it shall not knowingly enter into an lower tier transaction with a
participation in this transaction by any Federal department or agency. person who is debarred, suspended, declared ineligible, or
voluntarily excluded from participation in this covered transaction,
2.Where the prospective lower tier participant is unable to testify to any of unless authorized by the department or agency with which this
the statements in this certification,such prospective participant shall attach transaction originated,
an explanation to this proposal.
6. The prospective lower tier participant further agrees by
Instructions for Certification(B) submitting this proposal that it will Include this clause titled
'Certification Regarding Debarment, Suspension, Ineligibility and
1. By signing and submitting this proposal, the prospective lower tier Voluntary Exclusion — Lower Tier Covered Transaction,".without
participant is providing the certification set out below. modification, in all lower tier covered transactions and in all
2.The certification in this clause is a material representation of fact upon solicitations for lower tier covered transactions.
which reliance was placed when this transaction was entered into. If it is 7. A participant In a,covered transaction may rely upon a
later determined that the prospective lower tier participant knowingly certification of a prospective participant in a lower tier covered
rendered an erroneous certification,in addition to other remedies available transaction that it is not debarred, suspended, ineligible, or
to the Federal Government, the department or agency with which this voluntarily excluded from the covered transaction,unless it knows
transaction originated may pursue available remedies,including suspension that the certification Is erroneous. A participant may decide the
and/or debarment. method and frequency by which it determines the eligibility of its
princa . Each
3. The prospective lower tier participant shall provide immediate written Non-p ocurementlits articipant may,but is not required to,check the
notice to the person to which this proposal is submitted if at any time the
prospective lower tier participant learns that Its certification was erroneous 8.Nothing contained in the foregoing shall be construed to require
when submitted or has become by reason of changed circumstances. establishment of a system of records in order to render in good
faith the certification required by this clause. The knowledge and
4. The terms covered transaction, debarred, suspended, Ineligible, Information of a participant Is not required to exceed that which Is
lower tier covered transaction, participant, person, primary covered normally possessed by a prudent person In the ordinary course of
transaction, principal, proposal, and voluntarily excluded, as used In business dealings.
thls clause, have the meanings set out in the Definitions and Coverage
sections of rules Implementing Executive Order 12549. You may contact 9.Except for transactions authorized under paragraph(5)of these
the person to which this proposal is submitted for assistance in obtaining a instructions, if a participant in a lower covered transaction
copy of these regulations. knowingly enters into a lower tier covered transaction with a person
who is suspended,debarred,ineligible,or voluntarily excluded from
participation in this transaction, in addition to other remedies
available to the Federal Government,the department or agency
with which this transaction originated may pursue available
remedies Including suspension and/or debarment.
Applicant
Bate
Signature of Authorized Certifying Official
'Chia ._
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1 '
Page 2 of 2 form HUD-2992(3/98)
Exhibit H
Federal Financial Report OMB Number:4040-0014
(Follow form Instructions) Expiration Date;01/31/2019
1.Federal Agency and Organizational Element to Which Report is Submitted 2.Federal Grant or Other Identifying Number Assigned by Federal
Agency(To report multiple grants,use FFR Attachment)
3.Recipient Organization(Name and complete address including Zip code)
Recipient Organization Name.
Street1.
Street2;
City: County: 1!
State: Province:
Country: USA: UNITED STATES ZIP/Postal Code:
4a.DUNS Number 4b.EIN 5,Recipient Account Number or Identifying Number
I
_... (To report multiple grants,use FFR Attachment)
6.Report Type 7.Basis of Accounting 8.Project/Grant Period 9,Reporting Period End Date
Quarterly El Cash From: To:
Ei Semi-Annual II] Accrual
Annual
Final
10.Transactions Cumulative
(Use lines a-c for single or multiple grant reporting)
Federal Cash(To report multiple grants,also use FFR attachment):
a.Cash Receipts
b,Cash Disbursements 01.00
C.Cash on Hand(line a minus b)
-1-)0
(Use lines d-o for single grant reporting)
Federal Expenditures and Unobligated Balance:
d.Total Federal funds authorized Q.VO
e.Federal share of expenditures
f.Federal share of unliquidated obligations 0,011
g.Total Federal share(sum of lines e and f) ,
h.Unobligated balance of Federal Funds(line d minus g) 8,or'
Recipient Share:
i.Total recipient share required 0408
j.Recipient share of expenditures 0.08
k.Remaining recipient share to be provided(line i minus j) I),00
Program Income:
I.Total Federal program income earned 1.) 00
m.Program Income expended in accordance with the deduction alternative
n.Program Income expended in accordance with the addition alternative 0.00.
o.Unexpended program income(line I minus line m or line n) no
11.Indirect Expense
a.Type b.Rate c.Period From Period To d.Base e.Amount Charged f.Federal Share
----
g.Totals:
12.Remarks:Attach any explanations deemed necessary or information required by Federal sponsoring agency in compliance with governing legislation:
Add Attachment Delete Attachment View Attachment
13.Certification:By signing this report,I certify that it is true,complete,and accurate to the best of my knowledge. I am aware that any false,
fictitious,or fraudulent information may subject me to criminal,civil or administrative penalties.(U.S.Code,Title 18,section 1001)
a.Name and Title of Authorized Certifying Official
Prefix; First Name:(-Middle Name:
Last Name:
Suffix:
Title:
b.Signature of Authorised Certifying Official c.Telephone(Area code,number and extension)
d,Email Address e.Date Report Submitted `14.Agency use onty:
Standard Form 425
Federal Financial Report Instructions
Report Submissions
1) Recipients will be instructed by Federal agencies to submit the Federal Financial Report(FFR)to
a single location,except when an automated payment management reporting system is utilized. In
this case, a second submission location may be required by the agency.
2) If recipients need more space to support their FFRs, or FFR Attachments,they should provide
supplemental pages. These additional pages must indicate the following information at the top of
each page: Federal grant or other identifying number(if reporting on a single award), recipient
organization, Data Universal Numbering System (DUNS) number, Employer Identification Number
(EIN), and period covered by the report.
Reporting Requirements
I) The submission of interim FFRs will be on a quarterly, semi-annual, or annual basis,as directed by
the Federal agency.A final FFR shall be submitted at the completion of the award agreement. The
following reporting period end dates shall be used for interim reports: 3/31, 6/30, 9/30, or 12/31.
For final FFRs, the reporting period end date shall be the end date of the project or grant period.
2). Quarterly and semi-annual interim reports shall be submitted no later than 30 days after the end of
each reporting period.Annual reports shall be submitted no later than 90 days after the end of each
reporting period. Final reports shall be submitted no later than 90 days after the project or grant
period end date.
Note: For single award reporting:
1) Federal agencies may require both cash management information on lines 10(a) through 10(c)and
financial status information lines 10(d) through 10(o).
2) 10(b)and 10(e) may not be the same until the final report.
Line Item Instructions for the Federal Financial Report
FFR Reporting Item Instructions
Number
over
Information
I Federal Agency and Enter the name of the Federal agency and organizational element
Organizational Element to identified in the award document or as instructed by the agency.
Which Report is Submitted
Federal Grant or Other For a single award,enter the grant number assigned to the award by the
Identifying Number Federal agency. For multiple awards, report this information on the FFR
Assigned by Federal Attachment. Do not complete this box if reporting on multiple awards.
Agency
Recipient Organization Enter the name and complete address of the recipient organization
including zip code.
a DUNS Number Enter the recipient organization's Data Universal Numbering System
(DUNS) number or Central Contract Registry extended DUNS number.
EIN Enter the recipient organization's Employer Identification Number(EIN).
Reiipkilt Aecowtt Number Enter the account number or any other identifying nitniher assigned by the
or Identifying Number recipient to the award. This number is for the recipient's use only and is
not required by the Federal agency. For multiple awards,report this.
Revised 6/28/2010
FFR Reporting Item Instructions
Number
information on the FFR Attachment. Do not complete this box if
reporting on multiple awards.
6 Report Type Mark appropriate box.Do not complete this box if reporting on multiple
awards.
7 Basis of Accounting Specify whether a cash or accrual basis was used for recording
(Cash/Accrual) transactions related to the award(s)and for preparing this FFR. Accrual
basis of accounting refers to the accounting method in which expenses are
recorded when incurred. For cash basis accounting, expenses are
recorded when they are paid.
8 Project/Grant Period, Indicate the period established in the award document during which
From: (Month, Day, Year) Federal sponsorship begins and ends.
Note: Some agencies award multi-year grants for a project period that is
funded in increments or budget periods (typically annual increments).
Throughout the project period,agencies often require cumulative
reporting for consecutive budget periods. Under these circumstances,
enter the beginning and ending dates of the project period not the budget
period.
Do not complete this line if reporting on multiple awards.
Project/Grant Period,To: See the above instructions for"Project/Grant Period, From: (Month, Day,
(Month, Day, Year) Year)."
9 Reporting Period End Enter the ending date of the reporting period. For quarterly, semi-annual,
Date: (Month, Day, Year) and annual interim reports, use the following reporting period end dates:
3/31, 6/30, 9/30,or 12/31. For final FFRs, the reporting period end date
shall be the end date of the project or grant period.
i a Transactions
Enter cumulative amounts from date of the inception of the award through the end date of the
reporting period specified in line 9.
Use Lines l0a through l Oc, Lines 10d through 10o, or Lines 10a through 10o, as specified by the
IFederal agency, when reporting on single grants.
Use Line 12, Remarks,to provide any information deemed necessary to support or explain FFR data.
Federal Cash(To report multiple grants, also use FFR Attachment)
l0a Cash Receipts Enter the cumulative amount of actual cash received from the Federal
agency as of the reporting period end date.
l{fib Cash Disbursements Enter the cumulative amount of Federal fund disbursements (such as cash
or checks) as of the reporting period end date. Disbursements are the sum
of actual cash disbursements for direct charges for goods and services,the
amount of indirect expenses charged to the award, and the amount of cash,
advances and payments made to subrecipients and contractors.
For multiple grants, report each grant separately on the FFR Attachment.
The sum of the cumulative cash disbursements on the FFR Attachment
must equal the amount entered on Line 10b, PER.
I(lc. Cash On Hand (Line 10a Enter the amount of Line 10a minus Line 10b.This amount represents
Minus Line 10b) immediate cash needs. If more than three business days of cash are on
hand, the Federal agency may require an explanation
Revised 6/28/2010
FFR Reporting Item Instructions
Number
on Line 12, Remarks, explaining why the drawdown was made
_prematurely or other reasons for the excess cash.
Federal Expenditures and Unobligated Balance: Do not complete this section if reporting on multiple
awards.
I Od Total Federal Funds Enter the total Federal funds authorized as of the reporting period end
Authorized date.
10 Federal Share of Enter the amount of Federal fund expenditures. For reports prepared on a
Expenditures cash basis, expenditures are the sum of cash disbursements for direct
charges for property and services;the amount of indirect expense charged;
and the amount of cash advance payments and payments made to
subrecipients. For reports prepared on an accrual basis, expenditures are
the sum of cash disbursements for direct charges for property and services;
the amount of indirect expense incurred; and the net increase or decrease
in the amounts owed by the recipient for(1) goods and other property
received; (2) services performed by employees, contractors,subrecipients,
and other payees; and(3) programs for which no current services or
performance are required. Do not include program income expended in
accordance with the deduction alternative, rebates,refunds,or other
credits. (Program income expended in accordance with the deduction
alternative should be reported separately on Line 10o.)
f OF Federal Share of Unliquidated obligations on a cash basis are obligations incurred, but not
Unliquidated Obligations yet paid. On an accrual basis, they are obligations incurred, but for which
an expenditure has not yet been recorded. Enter the Federal portion of
unliquidated obligations. Those obligations include direct and indirect
expenses incurred but not yet paid or charged to the award, including
amounts due to subrecipients and contractors. On the final report, this line
should be zero unless the awarding agency has provided other
instructions.
Do not include any amount in Line 10f that has been reported in Line 10e.
Do not include any amount in Line 1Of for a future commitment of fluids
(such as a long-term contract)for which an obligation or expense has not
been incurred
lOg Total Federal Share (Sum Enter the sum of Lines 10e and 10f.
of Lines 10e and 100
10h Unobligated Balance of Enter the amount of Line 10d minus Line l Og.
Federal Funds(Line 10d
Minus Line 10g)
Recipient Share: Do not complete this section if reporting on multiple awards.
I Oi Total Recipient Share Enter the total required recipient share for reporting period specified in
Required line 9. The required recipient share should include all matching and cost
sharing provided by recipients and third-party providers to meet the level
required by the Federal agency. This amount should not include cost
sharing and match amounts in excess of the amount required by the
Federal agency (for example,cost overruns for which the recipient incurs
additional expenses and,therefore, contributes a greater level of cost
Revised 6/28/2010
FFR Reporting Item Instructions
Number
sharing or match than the level required by the Federal agency).
10jj Recipient Share of Enter the recipient share of actual cash disbursements or outlays(less any
Expenditures rebates, refunds, or other credits) including payments to subrecipients and
contractors. This amount may include the value of allowable third party
in-kind contributions and recipient share of program income used to
finance the non-Federal share of the project or program. Note: On the
final report this line should be equal to or greater than the amount of Line
10i.
10k Remaining Recipient Share Enter the amount of Line 10i minus Line 10j. If recipient share in Line
to be Provided(Line 10i l Oj is greater than the required match amount in Line 10i,enter zero.
Minus Line 10j)
Program Income: Do not complete this section if reporting on multiple awards.
101 Total Federal Program Enter the amount of Federal program income earned. Do not report any
Income Earned program income here that is being allocated as part of the recipient's cost
sharing amount included in LinelOj.
I flnm. Program Income Expended Enter the amount of program income that was used to reduce the Federal
in Accordance With the share of the total project costs.
Deduction Alternative
I`On Program Income Expended Enter the amount of program income that was added to funds committed
in Accordance With the to the total project costs and expended to further eligible project or
Addition Alternative program activities.
1 Oo Unexpended Program Enter the amount of Line 101 minus Line l Om or Line 1 On. This amount
Income (Line 101 Minus equals the program income that has been earned but not expended, as of
Line I Om or Line 10n) the reporting period end date.
1 1 Indirect Expense: Complete this information only if required by the awarding agency. Enter
cumulative amounts from date of the inception of the award through the end date of the reporting
period specified in line 9.
I a Type of Rate(s) State whether indirect cost rate(s) is Provisional,Predetermined,Final,or
Fixed.
11 b Rate Enter the indirect cost rate(s) in effect during the reporting period.
1 lc Period From; Period To Enter the beginning and ending effective dates for the rate(s).
1.Id. Base Enter the amount of the base a_ainst which the rate(s)was applied.
l 1 e Amount Charged Enter the amount of indirect costs charged during the time period
specified. (Multiply I 1 b. x 11 d.)
la f Federal Share Enter the Federal share of the amount in 1 le.
1 lg Totals Enter the totals for columns l ld, 1 le, and l lf.
Remarks, Certification,and Agency Use Only
12 Remarks Enter any explanations or additional information required by the Federal
sponsoring agency includin: excess cash as stated in line 10c.
13a Typed or Printed Name and Enter the name and title of the authorized certifying official.
Title of Authorized
Certifying Official
131, Signature of Authorized The authorized certifying official must sign here.
Certifying Official
13c Telephone(Area Code, Enter the telephone number(including area code and extension)of the
Number and Extension) individual listed in Line 13a.
13d E-mail Address Enter the e-mail address of the individual listed in Line 13a.
Revised 6/28/2010
FFR Reporting Item Instructions
Number
13e Date Report Submitted Enter the date the FFR is submitted to the Federal agency using the
(Month, Day, Year) month,day,year format.
I4 Agency Use Only This section is reserved for Federal agency use.
Revised 6/28/2010
2 CFR Part 200.338-340 Exhibit
TERMINATION AND ENFORCEMENT
(a) Remedies for non-compliance. If a grantee or sub-grantee materially fails to comply with any term of
an award,whether stated in a federal statute or regulation, an assurance, in a State plan or application,
a notice of award, or elsewhere, the awarding agency may take one or more of the following actions,
as appropriate in the circumstances:
(1) Temporarily withhold cash payments pending correction of the deficiency by the grantee or
sub-grantee or more severe enforcement action by the awarding agency,
(2) Disallow(that is, deny both use of funds and matching credit for) all or part of the cost of the
activity or action not in compliance,
(3) Wholly or partly suspend or terminate the current award for the grantee's or sub-grantee's
program,
(4) Withhold further awards for the program,or,
(5) Take other remedies that may be legally available.
(b) Hearings, appeals. In taking an enforcement action, the awarding agency will provide the grantee or
sub-grantee an opportunity for such hearing, appeal or other administrative proceeding to which the
grantee or sub-grantee is entitles under any statute or regulation applicable to the action involved.
(c) Effects of suspension and termination. Costs of grantee or sub-grantee resulting from obligations
incurred by the grantee or sub-grantee during a suspension or after termination of an award are not
allowable unless the awarding agency expressly authorizes them in the notice of suspension or
termination or subsequently. Other grantee or sub-grantee costs during suspension or after
termination which are necessary and not reasonably avoidable are allowable if:
(1) The costs result from obligations which were properly incurred by the grantee or sub-
grantee before the effective date of suspension or termination,are not in anticipation of it,
and, in the case of a termination,are non-cancelable,and,
(2) The costs would be allowable if the award were not suspended or expired normally at the
end of the funding period in which the termination takes effect.
(d) Relationship to Debarment and Suspension. The enforcement remedies identified in this section,
including suspension and termination, do not preclude grantee or sub-grantee from being subject to
"Debarment and Suspension"under EO 12549(2 CFR Part 200.213).
TERMINATION FOR CONVENIENCE
Except as provided in Appendix 11, 2 CFR, Part 200.338-340 awards may be terminated in whole or in
part only as follows:
(a) By the awarding agency with the consent of the grantee or sub-grantee in which case the two parties
shall agree upon the termination conditions, including the effective date and in the case of partial
termination,the portion to be terminated,or
(b) By the grantee or sub-grantee upon written notification to the awarding agency, setting forth the
reasons for such termination, the effective date, and in the case of partial termination, the portion to
be terminated. However, if, in the case of a partial termination, the awarding agency determines that
the remaining portion of the award will not accomplish the purposes for which the award was made,
the awarding agency may terminate the award in its entirety under either 2 CFR Part 200.339 or
Paragraph(a)of this section.
O
EQUAL HOUSING
OPPORTUNITY Rev. 09/30/19
Exhibit J
EQUAL EMPLOYMENT OPPORTUNITY CLAUSE
During the performance of this Contract, the Contractor agrees as follows:
(1) The Contractor and its subcontractors shall not discriminate against any employee
or applicant for employment because of race, religion, color, sex, age, sexual
orientation, gender identity, national origin, disability or familial status. As used
herein, the work "treated" shall mean and include, without limitation, the
following: Recruited, whether by advertising or by other means; compensated;
selected for training, including apprenticeship; promoted; upgraded; demoted;
downgraded; transferred; laid off; and terminated. The Contractor agrees to and
shall post in conspicuous places, available to employees and applicants for
employment, notices to be provided by the contracting officers setting forth the
provisions of this nondiscrimination clause.
(2) The Contractor and its subcontractors shall, in all solicitations or advertisements
for employees placed by or on behalf of the Contractor, state that all qualified
applicants will receive consideration for employment without regard to race,
religion, color, sexual orientation, gender identity, sex, national origin, age,
disability or familial status.
(3) The Contractor and its subcontractors shall send to each representative of workers
with which he has a collective bargaining agreement or other contract or
understanding a notice advising the labor union or worker's representative of the
Contractor's commitments under the equal employment opportunity clause of the
City and shall post copies of the notice in conspicuous places available to
employees and applicants for employment.
(4) The Contractor and its subcontractors shall furnish to the City's Human Rights
and Relations Contract Compliance Officer all federal forms containing the
information and reports required by the federal government for federal contracts
under federal rules and regulations, including the information required by Omaha
Municipal Code Sections 10-192 to 10-194, inclusive, and shall permit reasonable
access to his records. Records accessible to the Human Rights and Relations
Contract Compliance Officer shall be those which are related to Paragraphs (1)
through (7) of this Exhibit and only after reasonable notice is given to the
Contractor. The purpose for this provision is to provide for investigation to
ascertain compliance with the program provided for herein.
(5) The Contractor and its subcontractors shall take such actions with respect to any
subcontractor as the City may direct as a means of enforcing the provisions of
Paragraphs (1) through (7) herein, including penalties and sanctions for
noncompliance; however, in the event the Contractor becomes involved in or is
threatened with litigation as the result of such directions by the City, the City will
enter into such litigation as is necessary to protect the interests of the City and to
Revised and approved 5/23/2012
effectuate the provisions of this division; and in the case of contracts receiving
federal assistance, the Contractor or the City may request the United States to
enter into such litigation to protect the interests of the United States.
(6) The Contractor shall file and shall cause his subcontractors, if any, to file
compliance reports with the Contractor in the same form and to the same extent as
required by the federal government for federal contracts under federal rules and
regulations. Such compliance reports shall be filed with the Human Rights and
Relations Contract Compliance Officer. Compliance reports filed at such times as
directed shall contain information as to the employment practices, policies,
programs and statistics of the Contractor and his subcontractors.
(7) The Contractor shall include the provisions of Paragraphs (1) through (7) of this
Section, "Equal Employment Opportunity Clause", and Omaha Municipal Code
Section 10-193 in every contract, subcontract or purchase order so that such
provisions will be binding upon each subcontractor or vendor. (Code 1980,
Section 10-192; Ordinance No. 35344, Sections 1, 9-26-00)
Revised and approved 5/23/2012
Exhibit K
SECTION 3 CLAUSE
All Section 3 covered contracts shall include the following clause (referred to as the Section 3
clause):
A. The work to be performed under this contract is subject to the requirements of Section 3
of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u
(Section 3). The purpose of Section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects covered by Section
3 shall, to the greatest extent feasible, be directed to low- and very low-income persons,
particularly persons who are recipients of HUD assistance for housing.
B. The parties to this contract agree to comply with HUD's regulations in 24 CFR Part 75,
which implement Section 3. As evidenced by their execution of this contract, the parties
to this contract certify that they are under no contractual or other impediment that would
prevent them from complying with the Part 75 regulations.
C. The contractor agrees to send to each labor organization or representative of workers with
which the contractor has a collective bargaining agreement or other understanding, if any,
a notice advising the labor organization or workers' representative of the contractor's
commitments under this Section 3 clause, and will post copies of the notice in
conspicuous places at the work site where both employees and applicants for training and
employment positions can see the notice. The notice shall describe the Section 3
preference, shall set forth minimum number and job titles subject to hire, availability of
apprenticeship and training positions, the qualifications for each; and the name and
location of the person(s) taking applications for each of the positions; and the anticipated
date the work shall begin.
D. The contractor agrees to include this Section 3 clause in every subcontract subject to
compliance with regulations in 24 CFR Part 75, and agrees to take appropriate action, as
provided in an applicable provision of the subcontract or in this Section 3 clause, upon a
finding that the subcontractor is in violation of the regulations in 24 CFR Part 75. The
contractor will not subcontract with any subcontractor where the contractor has notice or
knowledge that the subcontractor has been found in violation of the regulations in 24
CFR Part 75.
E. The contractor will certify that any vacant employment positions, including training
positions, that are filled (1) after the contractor is selected but before the contract is
executed, and (2) with persons other than those to whom the regulations of 24 CFR Part
75 require employment opportunities to be directed were not filled to circumvent the
contractor's obligations under 24 CFR Part 75.
F. Noncompliance with HUD's regulations in 24 CFR Part 75 may result in sanctions,
termination of this contract for default, and debarment or suspension from future HUD-
assisted contracts.
G. With respect to work performed in connection with Section 3 covered Indian housing
assistance, Section 7(b) of the Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450e) also applies to the work to be performed under this contract. Section
7(b) requires that to the greatest extent feasible (i) preference and opportunities for
training and employment shall be given to Indians, and (ii) preference in the award of
contracts and subcontracts shall be given to Indian organizations and Indian-owned
Economic Enterprises. Parties to this contract that are subject to the provisions of
Section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in
derogation of compliance with Section 7 (b).
Providing Other Economic Opportunities.
(a) General. In accordance with the findings of the Congress, as stated in Section 3,
that other economic opportunities offer an effective means of empowering low-
income persons, a recipient is encouraged to undertake efforts to provide to low-
income persons economic opportunities other than training, employment and
contract awards, in connection with Section 3 covered assistance.
(b) Other training and employment-related opportunities. Other economic opportunities
to train and employ Section 3 residents include, but need not be limited to, use of
"upward mobility", "bridge" and trainee positions to fill vacancies; and hiring
Section 3 residents in part-time positions.
(c) Other business-related economic opportunities: (1) A recipient or contractor may
provide economic opportunities to establish, stabilize or expand Section 3 business
concerns, including micro-enterprises. Such opportunities include, but are not
limited to formation of Section 3 joint ventures, financial support for affiliating with
franchise development, use of labor only contracts for building trades, purchase of
supplies and materials from housing authority resident-owned businesses, purchase
of materials and supplies from PHA resident-owned businesses and use of
procedures under 24 CFR part 963 regarding HA contracts to HA resident-owned
businesses. A recipient or contractor may employ these methods directly or may
provide incentives to non-Section 3 businesses to utilize such methods to provide
other economic opportunities to low-income persons. (2) A Section 3 joint venture
means an association of business concerns, one of which qualifies as a Section 3
business concern, formed by written joint venture agreement to engage in and carry
out a specific business venture for which purpose the business concerns combine
their efforts, resources and skills for joint profit, but not necessarily on a continuing
or permanent basis for conducting business generally, and for which the Section 3
business concern:
(i) Is responsible for a clearly defined portion of the work to be performed and
holds management responsibilities in the joint venture; and
(ii) Performs at least 25 percent of the work and is contractually entitled to
compensation proportionate to its work.
Exhibit L
UNITED STATES CITIZENSHIP ATTESTATION FORM FOR PUBLIC BENEFIT
For the purposes of complying with Neb. Rev. Stat. §§ 4-108 through 4-114, I attest as follows:
❑ I am a citizen of the United States.
OR
❑ I am a qualified alien under the Federal Immigration and Nationality Act. My
immigration status and alien number as follows:
, and I agree to provide
a copy of my USCIS (United States Citizenship and Immigration Services)
documentation upon request.
I hereby attest that my response and the information provided on this form and any related
application for public benefits are true, complete and accurate and I understand that this
information may be used to verify my lawful presence in the United States.
PRINT NAME:
By:
SIGNATURE:
DATE:
A
oPP PPLY41r,Q:Library/HCD Forms/Citizenship-Attestation Form for Public Benefit 10/26/2009
Exhibit M
AFFIDAVIT FOR EMPLOYEE CLASSIFICATION ACT
STATE OF )
)§
COUNTY OF )
I, ,being first duly sworn under oath,state and
depose as follows:
1. I am competent to testify to,and have personal knowledge of,the matters stated in this affidavit.
2. I am(a contractor)(the authorized agent of the contractor ).
I attest to the following: (a) each individual performing services for such contractor is properly classified under the
Nebraska Employee Classification Act, 2010 LB 563 ("the Act"), (b) such contractor has completed a federal I-9
immigration form and has such form on file for each employee performing services, (c) such contractor has
complied with Neb. Rev. Stat. section 4-114 (federal immigration verification system), (d) such contractor has no
reasonable basis to believe that any individual performing services for such contractor is an undocumented worker,
and (e) as of the time of the contract, such contractor is not barred from contracting with the state or any political
subdivision pursuant to the Act.
FURTHER AFFIANT SAYETH NAUGHT.
Affiant
SUBSCRIBED AND SWORN TO before me this day of ,20
Notary Public
O
OPPORTUNITY Approved 6/1/10
Exhibit N
MINORITY BUSINESS & WOMEN BUSINESS
ENTERPRISE PLAN
June 2021
PLANNING DEPARTMENT
CITY OF OMAHA
,ot,iAHA,N omaha
9
7
,;1 /(:4‘;•P'AS, fiLL: U[ 11
�A ; . s;:.:1.,:‘,1,:;,:7-4-- liBeli
-'_ ry CITY PLANNING
91ED FEBRVP
David K.Fanslau
Jean Stothert, City of Omaha
Mayor Planning Department
City of Omaha Omaha/Douglas
Civic Center
1 Reviewed and approved 6/24/2021
MINORITY BUSINESS/WOMEN BUSINESS ENTERPRISE PLAN
INTRODUCTION
Minority and women business sectors play an important part in Omaha's overall plans for future growth,
progress, and prosperity. It is vital to the City's economic condition and well-being that minority and
women businesses expand, thrive and prosper, generating economic stability and increased job
opportunities. Towards the fulfillment and accomplishment of these important objectives, the City of
Omaha remains committed to minority and women business development.
The City of Omaha's approach to minority/women business development is embedded in its policy of non-
discrimination in the conduct of City business including the procurement of goods, materials and services,
construction and community and economic development projects. The City recognizes its obligations to
each segment of the various communities it serves. It is in recognition of these responsibilities that the City
established the City's Contract Compliance Ordinance.
The Ordinance commits the City to:
1. Require contractors and/or vendors to provide employment opportunities without regard to race,
color, sex, religion, or national origin;
2. Monitor contractor and vendor equal opportunity performance; and
3. Increase the total number and total dollar volume of City contracts awarded to minority-owned and
women-owned firms.
GOALS AND OBJECTIVES
The following represents a summary of the goals and objectives of the Planning Department as they relate
to minority and women-owned businesses:
1. Encourage, increase and promote business and procurement opportunities for women-owned
businesses;
2. Increase and expand the awareness and understanding regarding the concerns, obstacles, and
hindrances preventing increased MBE/WBE participation in Planning Department activities;
3. Assist MBE's/WBE's through the revitalization of business districts;
4. Assist minority and female entrepreneurs in the formation and growth of new small businesses; and
5. Provide technical assistance to neighborhood organizations, MBE's and WBE's to increase their
participation in the Planning Department programs and activities at all levels.
SCOPE OF WORK
In order to accomplish these objectives,the Planning Department will:
1. Require that recipients of grant awards,consulting contracts,or loans to adopt the City's MBE/WBE
Enterprise Plan. The Minority Business/Women Business Enterprise and Fair Housing plan must
be filled out by contractors, developers, corporations,partnerships and/or sole proprietors.
2. Ensure that Requests for Proposals have the MBE/WBE Enterprise Plan.
3. Ensure that the programs of the Planning Department are advertised in the appropriate new media
whose markets are targeted toward MBE/WBE.
2 Reviewed and approved 6/24/2021
4. Implement an outreach effort informing MBE and WBE firms and capture information on these
firms doing business with the Planning Department.
5. Implement a system to identify MBE and WBE firms and capture information on these firms doing
business with the Planning Department.
6. Require developers, corporations, partnerships and/or sole proprietors to register with the Human
Rights & Relations Department. In addition, require these entities to complete CC-1 (Human
Relations Department).
The following information has been developed to assist you in complying with the MBE/WBE requirements
in the agreement with the City of Omaha. If you have any questions, please contact Edward Dantzler at
(402)444-5150 Ext. 2009.
3 Reviewed and approved 6/24/2021
MBE/WBE FOR GOODS AND SERVICES
Your company must make vendors aware of equal opportunity utilization of minority,disabled and women-
owned businesses. To accomplish this goal, you must provide a copy of the approved MBE/WBE
Participation Plan to all businesses providing goods and/or services to the project.
Your company must provide the opportunity for Minority Business Enterprises and Women Business
Enterprises to provide goods and services through all phases of the project. A concerted effort must be
made to allow these businesses to actively compete for project contracts. This effort will include utilization
of the following resources and documentation of your actions to achieve these objectives.
City of Omaha
Housing and Community Development Division
1819 Farnam Street Room 1111
Omaha,NE 68183
Edward Dantzler, Construction Manager
hcdbidcompliancena,cityofomaha.org
(402) 444-5150 Ext. 2009 Fax: (402)444-5201
City of Omaha
Human Rights &Relations
1819 Farnam Street Room 502
Omaha,NE 68183
Christian Espinosa Torres, City of Omaha SEB Program Administrator
christian.espinosa@cityofomaha.org
(402)444-5052 Fax: (402)444-5058
REACH
Greater Omaha Chamber of Commerce
808 ConAgra Drive Suite 400
Omaha,NE 68102
Winsley Durand,Executive Director
wdurand@selectgreateromaha.com
(402) 346-5000 Fax: (402) 346-7050
4 Reviewed and approved 6/24/2021
MBE/WBE FOR GOODS AND SERVICES
Urban League of Nebraska, Inc.
3040 Lake Street
Omaha,NE 68110
Wayne Brown, Interim President/CEO
wayne.brown@urbanleagueneb.org
(402)453-9730
U.S. Small Business Administration
10675 Bedford Avenue Suite 100
Omaha,NE 68134
Melissa(Lisa)Tedesco, Deputy District Director
Melissa.tedesco@sba.gov
(402)221-7229
College of Business Administration
Mammel Hall Suite 200
67th and Pine Streets
Omaha,NE 68182
Veronica Doga, Director,Procurement Technical Assistance Program
vdoga@unomaha.edu
(402) 554-6253
Goodwill Industries, Inc.
4805 North 72nd Street
Omaha,NE 68134
Sarah Alba,Employment Solutions Coordinator
salba@goodwillomaha.org
(402) 951-2919
Paralyzed Veterans of America
Great Plains Chapter
7612 Maple Street
Omaha,NE 68134
Amanda Vazquez, Government Relations Director
vazquez@greatplainspva.org
(402) 398-1422
5 Reviewed and approved 6/24/2021
CITY OF OMAHA
CONTRACTOR INFORMATION FORM
Date:
Project Address:
Owner Information
Name:
Address:
City,St.,Zip:
Phone:
General Contractor Information
Name:
Address:
City,St.,Zip:
Phone:
Federal Tax ID or SSN
Contract Amount $
Woman Owned Business ❑Yes ❑No
BRE(Business Owned Race/Ethnic)Code:
(BRE Code: 1 White American; 2 Black American; 3 Native American; 4 Hispanic American 5 Asian/Pacific American; 6 Hasidic Jews
Subcontractor Information (Complete for each subcontractor for the project)
Name/Address Fed Tax Contract Woman Own BRE
ID/SSN Amt. Code
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
6
Reviewed and approved 6/24/2021
Date:
Project Address:
Owner Information
Name:
General Contractor Information
Name:
(BRE Code: 1 White American; 2 Black American; 3 Native American; 4 Hispanic American 5 Asian/Pacific American; 6 Hasidic Jews
Name/Address Fed Tax Contract Woman Own BRE
ID/SSN Amt.
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
Name: $ ❑Yes ❑No
Address:
City,St.,Zip:
Phone:
7
Reviewed and approved 6/24/2021
DEFINITIONS:
1. American Indian or Alaska Native. A person having origins in any of the original peoples of North
and South America (including Central America), and who maintains tribal affiliation or community
attachment.
2. Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the
Indian subcontinent including,for example, Cambodia, China,India,Japan,Korea,Malaysia,Pakistan,
the Philippine Islands, Thailand and Vietnam.
3. Black or African American. A person having origins in any of the black racial groups of Africa.
Terms such as "Haitian" or"Negro"can be used in addition to "Black" or"African American".
4. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples
of Hawaii, Guam, Samoa or other Pacific Islands.
5. White. A person having origins in any of the original peoples of Europe, the Middle East or North
Africa.
8 Reviewed and approved 06/24/2021
Exhibit 0
CITY OF OMAHA - DEFINITION OF INCOME
Annual Income Includes:
1. Wages, salaries,tips, commissions, etc.;
2. Self-employment income from owned non-farm business, including proprietorships and partnerships;
income from other self-employment sources;
3. Farm self-employment income;
4. Interest,dividends,net rental income,or income from estates or trusts, or regular recurring gifts;
5. Social security or railroad retirement;
6. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance
or public welfare programs;
7. Retirement, survivor or disability pensions;
8. Any other sources of income received regularly including Veterans' (VA) payments, unemployment
compensation, child support and alimony; and
9. Income from assets, as shown below:
a. amounts in savings certificates,money market funds and other investment accounts.
b. stocks,bonds, savings certificates,money market funds and other investment accounts.
c. equity in real property or other capital investments. Equity is the estimated current market value
of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such
as broker fees) that would be incurred in selling the asset. Do not include equity in principle
residence(home equity).
d. the cash value of trusts that are available to the household.
e. IRA, Keogh and similar retirement savings accounts, even though withdrawal would result in a
penalty.
f. contributions to company retirement/pension funds that can be withdrawn without retiring or
terminating employment.
g. assets which, although owned by more than one person, allow unrestricted access by the
applicant.
h. lump sum receipts such as inheritances,capital gains, lottery winnings, insurance settlements and
other claims.
i. personal property held as an investment such as gems,jewelry, coin collections,antique cars, etc.
j. cash value of life insurance policies.
k. assets disposed of for less than fair market value during two years preceding certification or re-
certification.
10. Actual income from assets if total assets are$5,000 or less.
Annual Income Does Not Include the Following Assets:
1. necessary personal property, except as noted in 9(i).
2. interest in Indian trust lands.
3. assets that are a part of an active business or farming operation. NOTE: Rental properties are
considered personal assets held as an investment rather than business assets unless real estate is the
applicant's/tenant's main occupation.
4. assets not accessible to the family and which provide no income for the family.
5. vehicles especially equipped for the handicapped.
6. equity in owner-occupied cooperatives and manufactured homes in which the family lives
7. equity in principle residence(home equity).
O
OPPORTUNITY Q:Library/HCD Forms/Affidavit Applicant—Definition of Income 1/4/2012
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Exhibit R
Federal Sub-award Reporting System(FSRS)
9 Digit DUNS Number:
Organization Name:
Address:
Address/City/State/Zip+4
Question 1: During your organization's preceding completed fiscal year,did the legal entity to which the
DUNS number belongs receive(1)80 percent or more of its annual gross revenues in U.S.federal
contracts,subcontracts, loans,grants, subgrants,and/or cooperative agreements; and (2) $25,000,000
or more in annual gross revenues from U.S.federal contracts,subcontracts, loans,grants,subgrants,
and/or cooperative agreements?
OYES ONO
If YES please answer Question 2
Question 2:Does the public have access to information about the compensation of the executives in
your organization (the legal entity to which the DUNS number provided belongs)through periodic
reports filed under section 13(a)or 15(d)of the Securities Exchange Act of 1934(15 U.S.C.78m(a),
78o(d))or section 6104 of the Internal Revenue Code of 1986?
OYES ONO
If NO please answer Question 3
Question 3:What are the Names and Total Compensation for the top 5 employees in your organization?
Name Compensation
1
2
3
4
5
Signature of Authorized Official Date
Requirements for Federal Funding
Accountability and Transparency Act
Implementation
In September 2010,the Office of Management and Budget issued Interim Final
Guidance in the Federal Register(Volume 75, No. 177, September 14, 2010, 2 CFR
Part 170)to establish reporting requirements necessary for the implementation of the
Federal Funding.Accountability and Transparency Act of 2006 (Pub. L. 109-282), as
amended by section 6202 of Public Law 110-252, This award term implements those
requirements and is located at 2 CFR Part 170. Learn more
Appendix A to Part 170—Award Term
Reporting Subawards and Executive Compensation.
a Reporting of first-tier subawards.
I, Applicability. Unless you are exempt as provided in paragraph d. of this award
term, you must report each action that obligates$25,000 or more in Federal
funds that does not include Recovery funds(as defined in section 1512(a)(2) of
the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5)for a
subaward to an entity (see definitions in paragraph e. of this award term).
2; Where and when to report.
i. You must report each obligating action described in paragraph a.1. of this
award term to the Federal Funding Accountability and Transparency Act
Subaward Reporting System (FSRS).
li. For subaward information, report no later than the end of the month
following the month in which the obligation was made. (For example, if
the obligation was made on November 7, 2010, the obligation must be
reported by no later than December 31, 2010.)
3. What to report. You must report the information about each obligating action that.
the submission instructions posted at,http:i/www.fsrs.gov specify.
b. Reporting Total Compensation of Recipient Executives.
1. Applicability and what to report. You must report total compensation for each of
your five most highly compensated executives for the preceding completed fiscal
year, if—
i, the total Federal funding authorized to date under this award is$25,000
or more;
IL in the preceding fiscal year, you received—
A. 80 percent or more of your annual gross revenues from Federal
procurement contracts (and subcontracts) and Federal financial
assistance subject to the Transparency Act, as defined at 2 CFR
170.320 (and subawards); and
B, $25,000,000 or more in annual gross revenues from Federal
procurement contracts (and subcontracts)and Federal financial
assistance subject to the Transparency Act, as defined at 2 CFR
170.320 (and subawards); and
lit. The public does not have access to information about the compensation
of the executives through periodic reports filed under section 13(a)or
15(d) of the Securities Exchange Act of 1934(15 U.S.C. 78m(a), 78o(d))
or section 6104 of the Internal Revenue Code of 1986. (To determine if
the public has access to the compensation information, see the U.S.
Security and Exchange Commission total compensation filings at the
Executive Compensation page of the SEC website.)
2. Where and when to report. You must report executive total compensation
described in paragraph 111. of this award term:
As part of your registration profile at the Central Contractor Registry.
ii. By the end of the month following the month in which this award is made,
and annually thereafter.
c,.Reporting of Total Compensation of Subrecipient Executives.
1, Applicability and what to report. Unless you are exempt as provided in paragraph
d. of this award term, for each first-tier subrecipient under this award,you shall
report the names and total compensation of each of the subrecipient's five most
highly compensated executives for the subrecipient's preceding completed fiscal
year, if
i. in the subrecipient's preceding fiscal year, the subrecipient received
A. 80 percent or more of its annual gross revenues from Federal
procurement contracts(and subcontracts)and Federal financial
assistance subject to the Transparency Act, as defined at 2 CFR
170.320 (and subawards); and
B. $25,000,000 or more in annual gross revenues from Federal
procurement contracts (and subcontracts), and Federal financial
assistance subject to the Transparency Act(and subawards); and
II. The public does not have access to information about the compensation
of the executives through periodic reports filed under section 13(a) or
15(d) of the.Securities Exchange Act of 1934 (15 U.S.C.78m(a), 78o(d))
or section 6104 of the Internal Revenue Code of 1986. (To determine if
the public has access to the compensation information, see the U.S,
Security and Exchange Commission total compensation filings at the
Executive Compensation page of the SEC website.)
2. Where and when to report. You must report subrecipient executive total
compensation described in paragraph c.1 of this award term:
i. To the recipient.
U . By the end of the month following the month during which you make the
subaward. For example, if a subaward is obligated on any date during the
month of October of a given year(i.e., between October 1 and 31),you
must report any required compensation information of the subrecipient by
November 30 of that year.
d. Exemptions
if, in the previous tax year, you had gross income, from all sources, under$300,000, you
are exempt from the requirements to report:
,i.
i, Subawards,and
ii.. The total compensation of the five most highly compensated executives
of any subrecipient.
e. Definitions.
For purposes of this award term:
1. "Entity" means all of the following, as defined in 2 CFR part 25:
p. A Governmental organization, which is a State, local government, or
Indian tribe;
ii. A foreign public entity;
A domestic or foreign nonprofit organization;
v,: A domestic or foreign for-profit organization;
v A Federal agency, but only as a subrecipient under an award or
subaward to a non-Federal entity.
2. "Executive"means officers, managing partners,or any other employees in
management positions.
3. "Subaward":
i. This term means a legal instrument to provide support for the
performance of any portion of the substantive project or program for
which you received this award and that you as the recipient award to an
eligible subrecipient.
The term does not include your procurement of property and services
needed to carry out the project or program(for further explanation, see
Sec. II .210 of the attachment to OMB Circular A-133, "Audits of States,
Local Governments, and Non-Profit Organizations").
Ili, A subaward may be provided through any legal agreement, including an
agreement that you or a subrecipient considers a contract.
4. "Subrecipient" means an entity that:
i; Receives a subaward from you (the recipient) under this award; and
II. Is accountable to you for the use of the Federal funds provided by the
subaward.:
5 "Total compensation" means the cash and noncash dollar value earned by the
executive during the recipient's or subrecipient's preceding fiscal year and
includes the following (for more information see 17 CFR 229.402(c)(2)):
i, Salary and bonus.
ii. Awards of stock, stock options, and stock appreciation rights. Use the
dollar amount recognized for financial statement reporting purposes with
respect to the fiscal year in accordance with the Statement of Financial
Accounting Standards No. 123 (Revised 2004) (FAS 123R), Shared
Based Payments.
Ilt. Earnings for services under non-equity incentive plans. This does not
include group life, health, hospitalization or medical reimbursement plans
that do not discriminate in favor of executives, and are available generally
to all salaried employees.
iv, Change in pension value. This is the change in present value of defined
benefit and actuarial pension plans.
v. Above-market earnings on deferred compensation which is not tax-
qualified.
vi. Other compensation, if the aggregate value of all such other
compensation (e.g. severance,termination payments, value of life
insurance paid on behalf of the employee,perquisites or property)for the
executive exceeds$10,000.
Exhibit S
omaha CITY OF OMAHA
AFFIRMATIVE MARKETING POLICY
7 i AND MONITORING PROCEDURES1211
•
Effective: October 1, 1999
EQUAL HOUSING
CITY PLANNING
Revised: August 1,2021 OPPORTUNITY
To further the commitment to nondiscrimination and equal opportunity in housing, and in accordance with the
regulations of the HOME Investments Partnerships Program (HOME) of the United States Department of
Housing and Urban Development,the Community Development Division of the City of Omaha's Urban Planning
Department has established procedures to affirmatively market housing assisted with federal, state, and city
funding. All recipients of City funding must comply with the City's affirmative marketing requirements, either
by crafting an individual plan(as in the case of projects with 5+HOME units), or contributing towards the City's
affirmative marketing plan.
Affirmative marketing consists of efforts to inform persons that are "least likely to apply" or under-represented
groups in a neighborhood or community about opportunities for housing. The affirmative marketing efforts target
individuals who—due to their race,color,national origin,sex,gender identity,sexual orientation,religion,familial
status, disability, and/or limited English proficiency-may not know about housing opportunities or feel welcome
to apply for housing. To encourage opportunities for all community members participate in housing-related
services and rent or purchase affordable housing units,Affirmative Marketing Plans identify community members
for targeted marketing strategies and special outreach through social service organizations. Additionally,
Affirmative Marketing Plans include training and professional development opportunities to increase awareness
and knowledge of fair housing and affirmative marketing strategies for potential tenants, staff, community
partners, and others. Plans also detail how entities carrying out affirmative marketing assess their efforts for
ongoing improvement.
The following policy fulfills the requirement established by the HOME final rule (24 CFR 92.351(a))to develop
written affirmative marketing procedures and requirements for all HOME-funded programs (homeowner
rehabilitation and homebuyer assistance). There are five elements for the City of Omaha's affirmative marketing
procedure:
1. Description of the City's plans to inform the public, subrecipients, owners, and potential applicants and
tenants about Federal, State, and Local fair housing and civil rights laws and the City's Affirmative
Marketing Plan and policy.
2. Requirements and practices that each subrecipient and owner of City-funded housing must adhere to in
order to carry out the City's affirmative marketing procedures and requirements.
3. Procedures used by subrecipients and owners to inform and solicit applications from persons in the
housing market area who are least likely to apply for the housing without special outreach.
4. List of records the City and owners must keep to document and assess efforts made to affirmative market
units.
5. Description of how the City will assess success of affirmative marketing actions and what corrective
actions will be taken when requirements are not met.
1. Description of the City's plans to inform the public,subrecipients,owners, and potential applicants and
tenants about Federal, State, and Local fair housing and civil rights laws and the City's Affirmative
Marketing Plan and policy.
The Community Development Division of the City of Omaha's Planning Department will:
• Include the Equal Housing Opportunity logo and/or slogan, and a logo and/or slogan indicating
accessibility to persons with disabilities, in all press releases, solicitations,and program information
materials.
• Work in partnership with the Mayor's Office of Human Rights and Relations and fund
community partners (e.g. Family Housing Advisory Services) to provide the public with
information, referral, case investigation services and counseling regarding fair housing laws and
policies.
• Post the Affirmative Marketing Policy and Affirmative Marketing Plan on the Department's website:
https://planninghcd.cityofomaha.org/ and include Fair Housing information on a scrolling digital
display in the Department's reception area.
• Provide and require all funded agencies to provide homeowners,tenants,and rental property owners
copies of Fair Housing brochures.
• Provide ongoing trainings to subrecipients about Fair Housing laws and affirmative marketing
requirements.
• Make housing and program information available in multiple languages and work with community
partners to provide oral and written translation services, as needed.
• Partner with groups to provide written translations and oral and signed interpretations for individuals
with visual and/or auditory impairments.
• Place public notices in the major distribution news media, such as Omaha World Herald, and in
media serving individuals and groups that are least likely to apply for housing opportunities.
Additionally,the City will provide a list of these diverse media outlets to subrecipients.
• Meet with property owners and assist them in preparing program applications as requested and
necessary.
2. Requirements and practices that each subrecipient and owner of City-funded housing must adhere to
in order to carry out the City's affirmative marketing procedures and requirements.
• Inform and solicit applications from persons in the housing market area who are least likely to
apply for housing without special outreach.
• Project owners with 5 or more HOME-funded units must submit an Affirmative Marketing Plan to
the City of Omaha for review 120 days prior to initiating sales or rental marketing activities and
revise the plan at least every five years throughout the affordability period. Alternatively,project
owners can elect to further the City of Omaha's Affirmative Marketing Plan. Under either option,
the owner will provide annual reports on affirmative marketing efforts to the City.
• Use the Equal Housing Opportunity logo and/or slogan on all correspondence and advertising(signs,
advertisements,brochures,direct mail solicitations,press releases,websites,etc.)relating to the sale
or rental of units or in promoting housing programs.
• Prominently display the HUD-approved Fair Housing poster and Equal Housing Opportunity logo
in all project sites and offices in which housing-related transactions (Exhibit 1).
• Advertise housing opportunities in a local citywide newspaper of general circulation, such as the
Omaha World Herald, and in minority and non-English language newspapers. Submit to the City
copies of such advertisements annually.
• Circulate flyers and advertisements (at least six weeks prior to the opening of any waiting lists) to
the City of Omaha Community partners list.
• All advertising depicting persons shall depict persons of majority and minority groups, including a
diversity of race, gender, sexual orientation,age,religion, family status or any other protected class.
• Submit and retain records documenting efforts to affirmatively market and assess the results of these
efforts, including copies of all letters notifying the outreach agencies of vacancies. Outreach
agencies may include, but are not limited to, the agencies in the Community Contacts list (Exhibit
2). The owner will submit a Demographics Form for Applicants (Exhibit 3), which includes the
name, racial/ethnic characteristics, income and family size for each person responding to the
advertisement.
• Maintain a nondiscriminatory hiring policy for staff engaged in the sale or rental of properties or
provision of housing-related services.
• Owners must comply with affirmative marketing requirements and take corrective actions when the
City determines the results of such actions do not satisfactorily achieve Fair Housing goals.
• Adopt antidiscrimination tenant selection policies and maintain waitlist protocols that encourage
participation for individuals least likely to apply.
• Owners selected for a rehabilitation program shall notify in-place tenants in writing of their
involvement in the program and provide them with the following options in accordance with
provisions of the Uniform Relocation Act, including options to: remain in the present unit during
rehabilitation; move temporarily to another unit within the project while his/her unit is being
rehabilitated;or permanently relocate or voluntarily abandon the unit during the rehabilitation. Each
in-place tenant in the project will receive a copy of the City of Omaha's written Tenant Assistance
Policy(TAP) and shall advise said tenant(s) of the impact of the project on him or her. The Owner
shall provide the TAP to the tenant immediately after submission of the Owner's application for
participation in the City's program.
3. Procedures used by subrecipients and owners to inform and solicit applications from persons in the
housing market area who are least likely to apply for the housing without special outreach.
• Identify populations least likely to apply based on census-tract level demographic data compared to
demographic information of current residents, applicants, and/or participants.
■ Develop an outreach strategy and advertising materials that include pertinent information to the
individual or group (e.g. accessibility features of the unit) in an effective tactic (e.g. non-English
language flyers)
• Outreach to Omaha Housing Authority and at least three community contacts that work with the
identified population about housing opportunities. See Community Contact List.
• Document advertisements and outreach activities and place in the project's Affirmative Marketing
file.
• Record the demographics of those responding to outreach efforts using the City's Demographics Form
for Applicants.
• Annually assess the current population served in the housing program or project relative to
surrounding demographics to determine changes in target populations.
• Submit annual assessment, copies of marketing materials, and demographic information to the City of
Omaha for review.
4. List of records the City and owners must keep to document and assess efforts made to affirmative market
units.
The City will retain the following records regarding efforts made to affirmatively market HOME-Assisted
Units for five years following the affordability period:
• Copies of Affirmative Marketing Plans and Policies written by the City and subrecipients
• Copies of advertisements and program materials promoting housing-related programs and services,
including those produced by the City and subrecipients.
• Trainings and technical assistance provided to staff, subrecipients, and the public related Federal,
State, and local civil rights laws and fair housing laws.
• Assessments of affirmative marketing efforts for City activities and housing-related services provided
by subrecipients.
• Correspondence related to corrective actions taken to resolve affirmative marketing issues and
evidence used to verify compliance.
Owners will retain the following records in an "Affirmative Fair Marketing" file to document efforts
furthering affirmative marketing for five years following the period of affordability:
• Advertisements for vacant units and housing-related services
• Contact dates and correspondence with outreach agencies and Omaha Housing Authority
• Annual assessments of affirmative marketing efforts
■ Race and other demographic data of occupants and persons inquiring about availability of units
through the City's Demographic Form for Applicants
• Dates and types of trainings provided to project management/staff on Federal, State, and local civil
rights laws and fair housing laws
• Written records of how all applicants and tenants can file complaints regarding fair marketing and/or
allege discriminatory practices, evidence of investigating all applicant or tenant complaints and
corrective actions taken, and correspondence notifying the City of complaints.
• Examples of documents that should be maintained include:
• Copies of newspaper advertisements and flyers or other printed material used
• Copies of mailing lists to organizations hat were sent flyers and other materials
• Photographs of site signs
• Racial, ethnic, and gender characteristics of tenants
• List the names and addresses of groups or organization identified as serving least likely to apply
populations and those serving special populations who may be served by the project, including
those with disabilities.
5. Description of how the City will assess success of affirmative marketing actions and what corrective
actions will be taken when requirements are not met.
Assessment responsibilities of the City:
• Annually review Owners' affirmative marketing records for compliance and progress towards
soliciting applications and participants from individuals who normally might not apply and/or who
represent target demographics.
• Annually review demographic data of housing-related programs and services administered by the
City to identify underrepresented populations in both applications and participation.
• Update the City's Affirmative Marketing Plan every five years,publish updated Plans,and provide
Plans to Owners utilizing the City's Plan in housing-related services, sales, and/or rental
transactions.
• Evaluate effectiveness of affirmative marketing and fair housing trainings.
• Assess the affirmative marketing procedures to determine whether the Owner has affirmatively
marketed the vacant units by monitoring the Owner's performance in carrying out the Duties and
Responsibilities of the Owner as outlined in Section 2.
• The City shall assess the affirmative marketing efforts of the Owner to determine whether a
sufficient number of racial and ethnic families have applied for vacant units. This determination
will be made by reviewing the information provided on the Demographics Form for Applicant and
Tenant Survey Forms to compare the proportions of protected class participation (e.g. disability,
family status, English language proficiency, race and/or ethnicity)versus overall participation.
Assessment responsibilities of owners:
• Review affirmative marketing plans at least every five years and update as needed to ensure
compliance.
• Annually assess the success of affirmative marketing actions for each project. If the demographic
data of the applicants and resident vary significantly from the jurisdiction's population data for the
target income group, advertising efforts and outreach should be targeted to underrepresented
groups in an attempt to balance the applicants and residents with the demographics of the
jurisdiction.
The City shall take the following corrective action if it is found that the Owner is not carrying out
established procedures of affirmatively marketing units:
• Notify the Owner in writing of any violations of the Owner's Duties and Responsibilities.
• The Owner will be given thirty(30) days upon receipt of written notification to provide evidence
of compliance. Upon the Owner's request, the City will provide technical assistance.
• If the Owner fails to comply with the Affirmative Marketing Policy and Monitoring Procedures,
the City may declare the loan/grant in default.
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AFFIRMATIVE MARKETING POLICY PLAN
The Undersigned does/do hereby agree to comply with all terms and conditions of and adopt the City of Omaha's
Affirmative Marketing Policy(attached hereto and incorporated herein by this reference as though fully set forth)
for the Project located at as approved by the City of Omaha on October 1, 1999 and revised
on August 1, 2021.
Date:
Name of Business or Corporation:
(f applicable)
By:
Signature
Printed Name:
Exhibit T
Certification for U.S.Department of Housing,
and Urban Development
a Drug-Free Workplace
Applicant Name
Program/A4tivity Receiving Federal Grant Funding,
Acting on behalf of the above named Applicant as its Authorized Official,I.make the following certifications and agreements to
the Department of Housing and Urban Development(HUD)regarding the sites listed below:
I certify that the above named Applicant will or will continue (1). Abide by the terms of the statement;and
to provide a drug-free workplace by: (2) Notify the employer in writing of his or her convic-
a. Publishing a statement notifying employees that the un- tion for a violation of a criminal drug statute occurring in the
lawful manufacture,distribution,dispensing,possession,or use workplace no later than five calendar days after such conviction;
of a controlled substance is prohibited in the Applicant's work- e. Notifying the agency in writing,within ten calendar days
place and specifying the actions that will be taken against after receiving notice under subparagraph d.(2) from an era-
! employees for violation of such prohibition, ployee or otherwise receiving actual notice of such conviction.
b. Establishing an on-going drug-free awareness program to Employers of convicted employees must provide notice,includ-
inform employees --- ing position title, to every grant officer or other designee on.
(1) The dangers of drug abuse in the workplace; whose grant activity the convicted employee, was working,
unless the Federalagency has designated central,point for the
(2) The Applicant's policy of maintaining a drug-free receipt of such notices. Notice shall include the identification
workplace; number(s) of each affected grant;
(3) Any available drug counseling, rehabilitation, and f. Taking one of the following actions, within 30 calendar
employee assistance programs; and days of receiving notice under subparagraph d.(2),with respect
(4) The penalties that may be imposed upon employees to any employee who is so convicted---
for drug abuse violations occurring in the workplace. (1) Taking appropriate personnel action against such an
c. Making it a requirement that each employee to be engaged employee,'up to and including termination, consistent with the
in the performance of the grant be given a copy of the statement requirements of the Rehabilitation Act of 1973,as amended;or
required by paragraph a.; (2) Requiring such employee to participate satisfacto-
rilyd.Notifying the employee in the statement required by pars- in a drug abuse assistance or rehabilitation program ap-
graph a.that,as a condition of employment under the grant,the proved for such purposes by a Federal,State,or local health,law
employee will--- enforcement, or other appropriate agency;
g. Making a good faith effort to continue to maintain a drug-
free workplace through implementation of paragraphs a.thru f.
2. Sites for Work Performance, The Applicant shall list(on separate pages)the site(s)for the performance of work done in connection with the
HUD funding of the program/activity shown above: Place of Performance shall include the street address, city, county,State,and zip code.
Identify each sheet with the Applicant name and address and the program/activity receiving grant funding.)
Check hereE if there are workplaces on file that are not identified on the attached sheets.
I hereby certify that all the information stated herein,as well as any information provided in the accompaniment herewith,is true and accurate.
Warnings HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties.
(18 U.S.C.1001,1010,1012; 31 U.S.C.3729,3802)
Name of Authorized Official ��ltila
Signature Date
form HUD-50070(3/98}
ref.Handbooks 7417.1,7475.13,7485.1&.3.