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RES 2016-0984 - Agmt for rehabilitation and lead reduction work to 3518 N 54th St o�014 HA,`��,, Planning Department �; s C_ 1 M/ '� Omaha/Douglas Civic Center «`�4iri '�' 1819 Farnam Street,Suite 1100 'WI;elfti k' Pl t m 2016 3 Omaha,Nebraska 68183 ��, .•!. ti AIL — 1 ", r,.� (402)444-5150 0p 4 , 1' j I Telefax(402)444-6140 4' 4'ED FEBR"r4 James R.Thele City of Omaha -'I 1 , C i?s Director Jean Stothert,Mayor ' 4 . y • i I`,, r June 28, 2016 Honorable President and Members of the City Council, The attached Resolution approves a Deferred Payment Loan and Grant Agreement between the City of Omaha (hereinafter referred to as "The City") and Brisco Investments, LLC, a Nebraska limited liability company, Brian Cloudt, Member Representative, 5339 North 60t" Street, Omaha, Nebraska 68104 (sometimes hereinafter referred to as the "Owner"), for the rehabilitation and lead hazard work of the property located at 3518 North 54'1' Street, Omaha, NE 68104 with funding from the Nebraska Affordable Housing Trust funds (NAHTF). The rehabilitation of this single-family home meets the requirements of the Nebraska Affordable Housing Trust Funds (hereinafter referred to as "NAHTF"), for the purpose of providing affordable housing opportunities benefiting low- and moderate-income residents, the City's Underwriting Guidelines, and is consistent with the FY 2014 Consolidated Submission for Community Planning and Development Program as amended and approved by the City Council on October 22,2014 by Resolution No. 1413,and as amended by Resolution No. 790 on July 15, 2014. The estimated project cost of the property located at 3518 North 54th Street, Omaha, NE 68104, to be $68,245.00 comprised of$33,500.00 2014 NAHTF funds and$34,745.00 in matching funds. The NAHTF funds are comprised of$20,000.00 Deferred Payment Loan and a $13,500.00 Grant($12,500.00 for lead and $1,000.00 for radon). This property will be occupied by a qualified low to moderate income family whose annual household income is below 80% of Median Income by Family Size. The Owner has on file a current Annual Contract Compliance Report Form (CC-1). As is City policy, the Human Rights and Relations Department will review the Owner to ensure compliance with the Contract Compliance Ordinance. Your favorable consideration of this Resolution is requested. Re-pectfully submitted, Referred to City Council for a/. -%- -/ 4..,4 G I'3/t L -1d—. CtO -%l,G�(. 11/��/ James R. Thele Date Mayor's Office Date Planning Director Appro d: . A „,,, 6 (2, ,,,,__ 6/zo ___ _ , .. .„,...A. '' ---- / teph B. Curtiss � Date Sp ncer K. Danner, Jr. Date Finance Director J/ Human Rights and Relati ns Director 2390 dlh TABLE OF CONTENTS SECTION 1 DEFINITIONS AND ABBREVIATIONS SECTION 2 RESPONSIBILITIES OF OWNER(S) 2.01 Overall Project Performance 2.02 Project Budget 2.03 Term of the Agreement SECTION 3 CONDITIONS FOR RECEIPT OF CITY FINANCING 3.01 Documents Required by City 3.01.1 Property Insurance 3.01.2 Contracts 3.01.3 Performance and Labor Material Payment Bond and/or an Irrevocable Letter of Credit 3.01.4 Plan Submissions 3.01.5 Minority/Women Owned Business Enterprise Plan 3.01.6 Eligible Contractors 3.01.7 Security for Deferred Payment Loan 3.01.8 Section 504 3.01.9 Contractor's Insurance and Workers' Compensation 3.01.10 Funding Compliance Deadline SECTION 4 PROJECT RESPONSIBILITIES OF THE OWNERS) 4.01 Eligible Use of Funds 4.02 Terms and Conditions 4.03 Breach of Agreement 4.04 Lien Waivers 4.05 Ineligible Costs 4.05.1 Eligible Costs 4.06 Lead-Based Paint Prohibition 4.07 Ongoing Property Restrictions 4.08 Davis-Bacon Labor Standards 4.09 Property Standards (24 CFR 92.251) 4.10 Affirmative Marketing Policy(2 CFR 92.351) 4.11 Maintenance of Property SECTION 5 GENERAL ADMINISTRATION REQUIREMENTS OF OWNER(S) 5.01 Financial Management 5.01.1 Accounting Standards 5.01.2 Cost Principles 5.01.3 Audits Q:Library/Forms/Rental Rehab over 20,000 1 10/23/2015 5.02 Documentation and Record-Keeping (24 CFR 92.508) 5.03 Reports 5.03.1 Construction Progress Reports 5.03.2 Occupancy Report 5.04 Financial Status Report 5.05 Record Retention 5.06 Personnel and Participant Conditions 5.06.1 Contract Compliance Clause 5.06.2 Workers' Compensation 5.06.3 Employment Insurance and Bonding 5.06.4 Section 3 —Employment of Low-Income Persons 5.06.5 Conflict of Interest 5.06.6 Attestation of Citizenship 5.07 Limited English Proficiency (LEP) SECTION 6 OWNER(S) COMPLIANCE WITH OTHER FEDERAL REGULATIONS 6.01 Environmental Review 6.02 Uniform Relocation Act 6.03 Soil Work Policy 6.04 Federal Funding Accountability and Transparency Act SECTION 7 RESPONSIBILITIES OF THE CITY 7.01 Performance Monitoring 7.02 Payments 7.02.1 Funds Allocated to the Owner 7.02.2 Obligation for Payment 7.03 Progress Payments 7.04 Inspections 7.05 Technical Assistance SECTION 8 MUTUAL AGREEMENTS BETWEEN CITY AND OWNER(S) 8.01 Release of Information Laws 8.02 Applicable Laws 8.03 Interest of the City 8.04 Independent Contractor 8.05 Project Roles 8.06 Captions 8.07 Merger 8.08 Modification 8.09 Assignment 8.10 Strict Compliance 8.11 Termination 8.12 Reversion of Assets Q:Library/Forms/Rental Rehab over 20,000 2 10/23/2015 8.13 Indemnification 8.14 Unenforceable Provisions 8.15 Disclosure of Lobbying 8.16 Notices 8.17 Applicability SECTION 9 DEFAULT PROVISIONS 9.01 Remedies SCHEDULE OF EXHIBITS AND ATTACHMENTS Q:Library/Forms/Rental Rehab over 20,000 3 10/23/2015 RENTAL REHABILITATION PROGRAM AGREEMENT HOME FUNDS THIS AGREEMENT is entered into between the City of Omaha (hereinafter referred to as "the City") and Brisco Investments, LLC, a Nebraska limited liability company, Brian Cloudt, Member Representative, 5339 North 60t' Street, Omaha, Nebraska 68104, (sometimes hereinafter referred to as "Owner"), based on terms, conditions and provisions as set forth below. RECITALS: WHEREAS, 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 constitutions, 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 has applied for and received Nebraska Affordable Trust Funds (hereinafter referred to as "NAHTF"), for the purpose of providing affordable housing opportunities benefiting low- and moderate-income residents; and, WHEREAS, the City's FY 2014 Consolidated Submission for Community Planning and Development Programs (hereinafter referred to as "Consolidated Plan"), outlining priorities, programs and funding allocations for the 2014 program year, that included the Rental Rehabilitation Program, was approved by City Council Resolution No. 1413 on November 19, 2013; and, WHEREAS, the City's NAHTF Rental Rehabilitation Program funds for a four- bedroom unit may not exceed $20,000.00 for rehabilitation work and include a grant up to $12,500.00 for the lead hazard work, and a grant up to $1,000.00 for radon services; and, Q:Library/Forms/Rental Rehab over 20,000 4 10/23/2015 WHEREAS, the Owner submitted a preliminary application which indicated the total estimated project cost of the four-bedroom property, located at 3518 North 54th Street, Omaha, Nebraska, 68104, to be $68,245.00 comprised of$33,500.00 from FY 2014 NAHTF Rental Rehabilitation Program funds, which are provided in the form of a Deferred Payment Loan of which $20,000.00 is for rehabilitation work and a grant for $13,500.00 for lead hazard work and radon services, and $34,745.00 in private matching funds for the rehabilitation of the vacant -bedroom property located at 3518 North 54th Street, Omaha,Nebraska, 68104, which is to be occupied by qualified low- and moderate-income families whose annual household income is 80% and below the Median Income by Family Size (hereinafter referred to as the "Project"); and, WHEREAS, the Consolidated Plan identified that the NAHTF Rental Rehabilitation Program Project provides or improves housing which is determined to benefit qualified low- and moderate-income persons and therefore this Project is consistent with the Consolidated Plan and is eligible for funding; and, WHEREAS, the City wishes to enter into an Agreement with the Owner to assist the City in utilizing such HOME funds; and, WHEREAS, the Project is eligible for funding under the FY 2014 NAHTF Rental Rehabilitation Program, and $33,500.00 as identified above was allocated to the Project; and, WHEREAS, it is in the best interest of the City and the residents thereof that the City enter into an Agreement with the Owner to provide partial funding for the Project. NOW, THEREFORE, IN CONSIDERATION OF THESE MUTUAL COVENANTS, the parties do hereby agree as follows: SECTION 1. DEFINITIONS AND ABBREVIATIONS. Q:Library/Forms/Rental Rehab over 20,000 5 10/23/2015 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 "Owner" shall mean — Brisco Investments, LLC, a Nebraska limited liability company, Brian Cloudt, Member Representative, (sometimes hereinafter referred to as the "Owner"), 5339 North 60th Street, Omaha, Nebraska 68104, as evidenced by the attached Warranty Deed. (Exhibit"A"). 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 HOME funds to undertake eligible activities. Not applicable for this project. 1.06 "HUD" shall mean—the U.S.Department of Housing and Urban Development. 1.07 "NAHTF Funds" shall mean— that portion of the Nebraska Affordable Housing Truest Fund awarded to the City, subject to and conditioned upon actual receipt of same by the City of Omaha, as may be available to loan during the program year for the use specified herein in an amount not to exceed $33,500.00, plus reasonable and eligible closing costs payable from the NAHTF Fund No. 14- TFHP-7072, 'Organization No. 128101, subject to the terms, conditions and requirements of said Loan Fund Agreement. 1.08 "Nebraska Affordable Housing Trust Funds (NAHTF) Rental Rehabilitation Program Deferred Payment Loan (DPL)" shall mean — a loan without interest in FY 2014 NAHTF funds to the Owner in an amount not to exceed $33,500.00, plus reasonable and eligible closing costs, for the rehabilitation of the four bedroom property located at 3518 North 54th Street, Omaha,Nebraska, 68104, legally described in Section 1.14, made subject to the terms, conditions and provisions of the loan agreement under which said loan is made, secured by no less than a'2nd mortgage/deed of trust subordinate to Deeds of Trust in amounts not to exceed the existing balance of any existing liens filed against the property and the owner's matching funds of $34,745.00 plus reasonable and eligible project-related closing costs, which shall provide, inter-alia, that same shall become due and payable without interest upon the sale or transfer of ownership of the property within ten (10) years from the date of the Project Close Out as describe herein in Section 1.12. 1.08.1 Owner shall execute an Acknowledgement of Covenant Running with Land on the property located at 3518 North 54th Street, Omaha, Nebraska, 68104 that requires that the present use of the property be Q:Library/Forms/Rental Rehab over 20,000 6 10/23/2015 maintained as a rental property throughout the term of the Affordability Period as outlined in Section 1.13. A copy of the covenant in substantial form is attached as Exhibit"B". 1.09 "Rehabilitation/Construction Financing" shall mean, but is not limited to — billings for construction/rehabilitation, closing costs, profit and overhead, predevelopment and public improvement costs, financing, legal accounting, architectural or project supervision costs, costs for materials, labor, utility hookups and site preparation associated with the Project. 1.09.1 The Owner subcontractor's profit and overhead shall not exceed 15% of hard cost. 1.10 "Rehabilitation/Construction Completion" shall mean — the date the Project has been certified by the City as meeting all State, Federal and Local laws, ordinances, regulations and codes, including, but not limited to, Property Standards for Existing Homes as established by HUD, the City of Omaha Property Rehabilitation Standards, the Nebraska Department of Economic Development Rehabilitation Standards and accessibility requirements, where applicable. 1.11 "Project Completion" shall mean—the date all leveraged funds have been paid by the Owner and allocated to the Project, Rehabilitation/Construction Completion has been certified and approved by the City, all NAHTF funds have been disbursed, all units have been rented by qualified low- and moderate-income families, and all Occupancy Report requirements, as stated in Section 5, Paragraph 5.03.2 are satisfied. 1.12 "Project Close Out" shall mean — the dates all project NAHTF funds have been disbursed and City has completed HUD close-out procedures (24 CFR 92.507 and 2 CFR, Part 215) (Exhibit "C"). The distinction between Project Close Out and Project Completion is that tenant occupancy requirements are required to be satisfied for Project Completion. As a result, Project Close Out shall typically occur after Project Completion. 1.13 "Affordability Period" (24 CFR 92.252(e)) shall mean— that time period ten (10) years after Project Close Out in which the Owner shall keep assisted properties affordable. During the Affordability Period,the Owner must ensure that NAHTF- assisted units continue to meet rent restrictions, occupancy requirements and property standards as described in Section 4.09 herein. For this Agreement, the Affordability Period shall commence at Project Close Out and continue for ten (10) years. In the event the term of the Agreement would be extended, the Affordability Period would be extended correspondingly. 1.14 "Property" or "Project" shall mean — Lot 8, Block 3, Military Addition, an addition to the City of Omaha, as surveyed, platted and recorded in Douglas Q:Library/Forms/Rental Rehab over 20,000 7 10/23/2015 County,Nebraska and which during the Affordability Period shall be occupied by qualified low- and moderate-income families whose annual household income is 80%and below the Median Income by Family Size. 1.15 "Low- and Moderate-Income Household" shall mean—a household whose annual household income does not exceed 80% of the median income for the Omaha NE- IA Metropolitan Statistical Area as determined by HUD (Exhibit"D"). 1.15.1 "Rents" (24 C.F.F. 92.252) shall mean — the maximum rents (including utilities) for the Omaha, NE-IA Metropolitan Statistical Area as established by HUD as of the effective date of the lease. These rents shall be HOME rents as established by HUD ("Exhibit "D"). In no event shall rents be required to be lower than the HOME rent limit in effect for Project at time of project commitment. The current High HOME Rent for a single-family four-bedroom unit is $1202. If the lease converts to a month-to-month lease after the initial 12-month lease, the rent limit and utility allowance in effect for each separate month apply. If the unit receives Federal or State project-based rental subsidy and the very low-income family pays a contribution toward rent not more than 30 percent of the family's adjusted income, then the maximum rent (i.e., tenant contribution plus project-based subsidy) is the rent allowable under the Federal or State project-based rental subsidy program(24 CFR 92.252(b)(2)). 1.16 "NAHTF shall mean—that portion of the FY 2014 Nebraska Affordable Housing Trust Fund entitlement awarded to the City, subject to and conditioned upon actual receipt of same by the City of Omaha, as may be available to loan during the program FY 2014 for the use specified herein in an amount not to exceed $33,500.00, plus reasonable and eligible closing costs subject to the terms, conditions and requirements of said Loan Fund Agreement. 1.17 "Client" shall mean—a qualified participant making application to the Owner. 1.18 "Program Income" shall mean—the gross income received by the Owner directly generated from the use of NAHTF Funds (24 CFR 92.503). When such income is generated by an activity that is only partially assisted with NAHTF Funds, the income shall be prorated to reflect the percentage of NAHTF Funds used (see Exhibit "E"), attached hereto and incorporated herein by this reference as though fully set forth. Any program income funds received during the term of this Agreement shall be returned to the City within thirty (30) days prior to any additional distribution of NAHTF Funds. SECTION 2. RESPONSIBILITIES OF OWNER(S) Q:Library/Forms/Rental Rehab over 20,000 8 10/23/2015 2.01 Overall Project Performance 2.01.1 The Owner shall use the $25,500.00 plus reasonable and eligible closing costs in NAHTF Rental Rehabilitation Program Funds as partial financing to complete the rehabilitation of the four-bedroom property located at 3518 North 54th Street, Omaha, Nebraska, 68104 to be occupied by qualified low- and moderate-income families whose annual household income is 80% or below the Median Family Income (MFI) (Exhibit"D"). 2.01.2 Total Project Total Assisted Total Fixed Total Low/Moderate Units Rental Units Rental Units Income Units 1 1 1 1 2.01.3 Number of Low/Moderate Maximum Percent of Area Households Median Income Permitted 1 80% 2.01.4 Number of Above Low/Moderate Maximum Percent of Area Households Median Income Permitted 0 80% 2.02 Project Budget The Owner asserts that the funding sources and amounts listed below are committed as of the date of loan closing. The Owner further asserts that upon approval by the City, the Owner's funds shall be paid first toward the rehabilitation of this project and any cost that exceeds the project cost of $68,245.00 shall be the Owner's responsibility. Total FY 2014 NAHTF RRP $33,500.00 49% Bank Loan/Owner's Cash $34,745.00 51% Total Estimated Project Cost $68,245.00 100% 2.03 Term of the Agreement This Agreement shall be in full force and effect and shall end on December 1, 2026. Services of the Owner will start effective the date of the proceed order issued by the City and Levels of Project Performance stated in Section 2.01 herein shall be completed as of December 1, 2016. Upon written request, date to complete the Levels of Project Performance may be extended by the Planning Director. In the event Project Close Out would change before or after December Q:Library/Forms/Rental Rehab over 20,000 9 10/23/2015 1, 2016, the Agreement and Affordability Periods will change correspondingly. After the Project Close Out, the City will notify the Owner of the begin date of the Affordability Period. SECTION 3. CONDITIONS FOR RECEIPT OF CITY FINANCING. 3.01 Documents Required by City. In no event shall the City assume any obligation to make any or all of the above-referenced funding available, nor shall the City incur any liability hereunder, unless and until the Owner has submitted for and received the prior approval of the Director of all of the documents listed below. 3.01.1 Property Insurance. Owner shall procure and maintain, at a minimum, fire and extended coverage insurance in an amount sufficient to protect the City's interest in the property during the term of the Agreement and financing security documents (2 CFR, Part 215) (Exhibit "C"). The insurance policy shall include the City of Omaha, Planning Department, 1819 Farnam Street, Suite 1100, Omaha, Nebraska 68183 as no less than a 2nd Mortgagee. Written evidence of such insurance shall be submitted to the Director for approval. In the event of damage of the property, any insurance proceeds are to be applied, at the discretion of the Director, to the reconstruction of the property or repayment, in full, of the funding. 3.01.2 Contracts. The Owner shall submit duly executed contracts for all Construction Work to the Director for approval prior to the start of construction. 3.01.3 Performance and Labor Material Payment Bond and/or an Irrevocable Letter of Credit. In the event the Contractor is not on the Planning Department's certified contractor's list, the Owner's General Contractor shall acquire and maintain performance bond and/or letter of credit in force for one year following the completion of the Construction Work from the General Contractor and all subcontractors in an aggregate amount of the contract bid. The Bonds and/or Letters of Credit shall be in favor of the City and shall be submitted to the Director for review and approval. The Director reserves the right to reject the Letters of Credit and Choice of Surety of the Bonds. 3.01.4 Plan Submissions. Owner shall submit all plans, working drawings and/or specifications necessary or incidental to this Project to the Director for review and approval prior to the commencement of any construction work. 3.01.5 Minority/Women Owned Business Enterprise Plan. Owner shall submit to the Director for his Review and approval a minority and women business participation plan, which discusses economic development and Q:Library/Forms/Rental Rehab over 20,000 10 10/23/2015 employment opportunities. These plans shall ensure that the Owner 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(Attachment 4). 3.01.6 Eligible Contractors. Owner shall obtain a certificate from each contractor or subcontractor to be used on this Project to the effect that each contractor or subcontractor has not been disbarred or disqualified by HUD (24 CFR Part 5). The Director shall approve all contractors and subcontractors prior to being hired by the Owner. 3.01.7 Security for Deferred Payment Loan. Owner shall execute for the benefit of the City an Acknowledgement of Covenant Running with Land, a Deed of Trust and a Deferred Payment Loan Promissory Note in an amount not to exceed $33,500 on the four-bedroom property plus reasonable and eligible project-related closing costs secured by no less than a 2nd mortgage/deed of trust subordinate to amounts not to exceed any existing liens filed against the property and the Owner's matching funds of$34,745.00 plus reasonable and eligible project-related closing costs. The covenant and note in substantial form are attached hereto as Exhibit "B" and incorporated herein by this reference as though fully set forth and are similar in content to the documents to be secured. 3.01.8 Section 504. Section 504 applies to alterations to dwelling units in multi-family housing projects. This Project is exempt as a single-family unit. 3.01.9 Contractor's Insurance and Workers' Compensation. The Developer or its contractors and subcontractors shall submit Certificates of Insurance in favor of the City for review and approval by the Director. The insurance coverage shall include pollutant liability for lead reduction work if applicable, Workers' Compensation and, at a minimum, the following amount of coverage: • Contractor's Personal Liability $1,000,000.00 • Combined Bodily Injury and Property Damage $2,000,000.00 ($1,000,000.00 each occurrence) • Product, including Completed Operations $1,000,000.00 3.01.10 Funding Compliance Deadline. In the event that all conditions of funding are not met on or before June 15, 2016, then this Agreement shall automatically become null and void and the City shall not be Q:Library/Forms/Rental Rehab over 20,000 11 10/23/2015 deemed to have assumed any obligation or liability hereunder. The Director may extend this date. SECTION 4. PROJECT RESPONSIBILITIES OF THE OWNER(S). 4.01 Eligible Use of Funds. The Owner hereby certifies, contracts and agrees that any and all funding obtained or made available hereunder shall be used solely and exclusively for the purposes described herein. 4.02 Terms and Conditions. The Owner shall abide by all terms and conditions of this Agreement and shall be responsible for the security and maintenance of the sites described in Section 1.14 herein. 4.03 Breach of Agreement. If through breach of this Agreement, the Owner fails to maintain the occupancy, affordability and use restrictions as described herein, all HOME funds previously provided to the Owner through fulfillment of this Agreement shall promptly be returned to the City. 4.04 Lien Waivers. Owner agrees to obtain and submit the appropriate lien waivers with each construction payment. 4.05 Ineligible Costs. The Owner shall be responsible for payment of any Project costs that exceed those specified in this Agreement. 4.05.1 Eligible Costs. The Owner shall not request disbursement of funds under this Agreement until the funds are needed for payment of eligible costs as described in Section 1.09 herein. 4.05.1.1 Luxury Items. Property amenities shall be those amenities reasonably anticipated in comparable properties. Any items determined by the City as luxury items shall not be considered an eligible cost for construction. 4.06 Lead-Based Paint Prohibition. Owner shall not use lead-based paint in the performance of this Agreement, including the performance of any subcontractor (42 USC 4821 et seq., 24 CFR 92.355 and 24 CFR art 35). "Lead-based Paint" means any paint containing more than six one-hundredths of one (1) per centum of lead by weight (calculated as lead metal) in the total nonvolatile content of the paint, or the equivalent measure of lead in the dried film of paint already applied. The Owner further agree(s)to abide by federal requirements regarding lead-based paint poison prevention. 4.07 Ongoing Property Restrictions. During the construction period of the term of this Agreement and that of any grant, deed of trust/mortgage, covenant documents, the Owner(s) shall: Q:Library/Forms/Rental Rehab over 20,000 12 10/23/2015 4.07.1 maintain the Property in a safe and sanitary condition at all times. 4.07.2 ensure that all real estate taxes and special assessments are paid and kept current. 4.07.3 maintain insurance against loss or damage to the Property in an aggregate amount sufficient to protect the City's interest in the Property. Such property insurance policy must be properly endorsed showing the City as an additional insured. In the event of loss or damage, the Owner shall provide immediate written notification to the City of any loss. Proceeds from any claim under this policy may, at the discretion of the Director, be either applied to restore or replace the improvements damaged or be paid to the City to satisfy the Owner's obligation to the City under the terms of this Agreement. 4.08 Davis-Bacon Labor Standards. Not required — see Exhibit "F", Exemption Checklist. 4.09 Property Standards (24 CFR 92.251). During the construction period, the Owner shall ensure that all work performed and the Construction Work meets all state, federal, and local laws, ordinances, regulations and codes, including but not limited to, Property Standards for Existing Homes as established by HUD, the City of Omaha Property Rehabilitation Standards, the Nebraska Department of Economic Development Rehabilitation Standards and accessibility requirements, where applicable. 4.09.1 After completion of Construction Work, the Property must comply with all appropriate City codes and ordinances, Federal Property Standards for Existing Homes as established by HUD and with fire safety codes (24 CFR 570.02), City of Omaha Property Rehabilitation Standards, the Nebraska Department of Economic Development Rehabilitation Standards and accessibility requirements, if applicable. 4.10 Affirmative Marketing Policy (24 CFR 92.351). The Owner agrees to comply with the City's Affirmative Marketing Policy, attached hereto as Exhibit "G" and incorporated herein by this reference as though fully set forth. These affirmative marketing procedures must be employed in the advertising and marketing of this Project for the Affordability Period and must be submitted on an annual basis in accordance with Section 5.03.2 herein. In marketing, the Owner shall also conform to the nondiscrimination provisions hereinafter set forth in Section 5.06.1.2. 4.11 Maintenance of Property. The Owner shall maintain the Property in a safe and sanitary condition to the extent possible during the construction phase of the Project. Q:Library/Forms/Rental Rehab over 20,000 13 10/23/2015 SECTION 5. GENERAL ADMINISTRATIVE REQUIREMENTS OF OWNER(S). Owner(s) agree(s)to comply with the following requirements: 5.01 Financial Management. 5.01.1 Accounting Standards. The Owner agrees to comply with OMB Circular A-110 and agrees to adhere to the accounting principles and procedures required therein, utilize adequate internal controls and maintain necessary source documentation for all costs incurred. (Exhibit "C", attached hereto and incorporated herein as though fully set forth). 5.01.2 Cost Principles. The Owner shall comply with the requirements and the standards of 2 CFR, Part 230, "Cost Principles for Nonprofit Organizations" (Exhibit "H"), and with the requirements of 2 CFR, Part 215 (Exhibit "C"). Both exhibits are attached hereto and incorporated herein as though fully set forth. 5.01.3 Audits. The Owner shall comply with all provisions and regulations of the Program and have an annual audit completed in compliance with 2 CFR, Part 200.5, attached hereto as Exhibit "I", and incorporated herein as though fully set forth. A copy of the audit shall be provided to the Director. The auditor shall determine the appropriate type of audit to be conducted; i.e., limited scope or full compliance. A single audit is not an allowable expense unless the Owner 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 Owner expends less than $750,000.00 in each fiscal year. 5.01.3.1 Any deficiencies noted in audit reports must be fully cleared by the Owner within 30 days after receipt of audit by the Owner. Failure of the Owner to comply with the above audit requirements will constitute a violation of this Agreement and may result in the withholding of future payments and may constitute a default subject to default remedies referenced herein in Section 9. 5.02 Documentation and Record-Keeping (24 CFR 92.508). All Owner's records with respect to any matters covered in this Agreement shall be made available to the City, its designees or the federal government at any time during normal business hours, as often as the City deems necessary, to audit, examine, and make excerpts or transcripts of all relevant data. Any contract entered into by the Owner with any contractor or subcontractors shall include this Section to ensure said access. Q:Library/Forms/Rental Rehab over 20,000 14 10/23/2015 5.03. Reports. The Owner shall submit to the City the following reports with the submission timelines as specified: 5.03.1 Construction Progress Reports. The Owner shall provide reports to the Director (AIA G702 Form or comparable document) describing the progress of construction and any significant problems and/or delays in construction on this project. Reports will be submitted at the time of each pay request, or by the 15th day of each month if no pay request is made before the 15th day of the month (or upon written request from the Director, but no more frequently than monthly). The progress reports are required until such time as all Construction Work is completed and the City issues the final payment of construction to the Owner. 5.03.2 Occupancy Report. The Owner shall provide the Director an initial tenant survey and utility allowance forms, a copy of the executed lease agreement between the occupant and the Owner,and an asset income computation form at the time of initial lease execution for each tenant occupying the property. The Owner shall also provide annual reports during the Affordability Period, identifying the occupants of the Property. Subsequent annual reports shall be due January 31 and shall include all information up to and including the end of the previous calendar year. Attached as Exhibit "J", and incorporated herein by this reference as though fully set forth, is a copy of requisite forms. For each household or individual occupying a unit/bedroom in the Property, the Owner shall retain the following records for five (5) years after the required Affordability Period as specified in Section 1.13 of this Agreement. In the event the Term of the Agreement would be extended, the timeframe for record retention would be extended correspondingly: 5.03.2.1 name of tenant 5.03.2.2 address of unit 5.03.2.3 household income as a percent of Median Family Income (MFI) as determined by HUD, income verification forms used in determining MFI including the City's Computing Annual Income Form(Exhibit"D") 5.03.2.4 household size 5.03.2.5 gender of head of household member 5.03.2.6 name and age of each household member 5.03.2.7 race/ethnicity of head of household(Exhibit "J") 5.03.2.8 disability status of any household member 5.03.2.9 annual lease agreement 5.03.2.10 evidence of affirmative marketing efforts 5.03.2.11 income determination of occupants (Exhibit "J") 5.03.2.12 tenant income (Exhibit"J") Q:Library/Forms/Rental Rehab over 20,000 15 10/23/2015 5.03.2.13 over-income tenants 5.03.2.14 tenant and participant protections (Exhibit"J") 5.04 Financial Status Reports. Owner shall submit financial status reports (2 CFR, Part 215) (Exhibit "C") along with pay requests. These reports shall accompany pay requests. In the event pay requests are not submitted for ninety (90) days, a financial status report shall be due, at a minimum, 15 calendar days from the end of the calendar year quarter. Attached as Exhibit"K" and incorporated herein by this reference as though fully set forth, is a sample financial status report. 5.05 Record Retention. The Owner, its contractors 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 Owner, Contractor, or subcontractors which are directly pertinent to this Project for the purpose of making audit, examination, excerpts and transcriptions. Such records and accounts shall be retained for five (5) years after expiration of the Affordability Period (2 CFR, Part 215) (Exhibit "C"). In the event the Term of the Agreement would be extended, the timeframe for record retention would be extended correspondingly. 5.06 Personnel and Participant Conditions. 5.06.1 Contract Compliance Clause. 5.06.1.1 Section 10-192 of the Omaha Municipal Code, Equal Employment Opportunity Clause (Attachment 2). The contractor and its sub-contractor shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, sexual orientation, gender identity, national origin, familial or handicap status. As used herein, the word "treated" shall mean and include, without limitation, the following: recruited, whether by advertising or by other means; compensated; selected for training, including apprenticeship; promoted; upgraded; demoted; downgraded; transferred; laid off; and terminated. The contractor and its sub-contractor agree to and shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officers setting forth the provisions of this nondiscrimination clause. 5.06.1.2 The contractors 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 Q:Library/Forms/Rental Rehab over 20,000 16 10/23/2015 consideration for employment without regard to race, religion, color, sex, age, sexual orientation, gender identity, national origin, familial or handicap status. 5.06.1.3 The contractors or 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. 5.06.1.4 The contractors or its subcontractors shall furnish to the Human Rights and Relations Department all federal forms containing the information and reports required by the federal government for federal contracts under federal rules and regulations, including the information required by Sections 10- 192 to 10-194, inclusive, of the Omaha Municipal Code and shall permit reasonable access to his/her/its records. Records accessible to the Human Rights and Relations Department shall be those which related to Paragraphs 5.06.1.1 through 5.06.1.7 of this subsection and only after reasonable notice is given to the contractor. The purpose of this provision is to provide for investigation to ascertain compliance with the program provided herein. 5.06.1.5 The contractors or 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 5.06.1.1 through 5.06.1.7 herein, including penalties and sanctions for noncompliance; however, in the event the contractor becomes involved in or is threatened with litigation as the result of such directions by the City, the City will enter into such litigation as is necessary to protect the interests of the City and to effectuate the provisions of this division, and, in the case of contracts receiving federal assistance, the contractor or the City may request the United States to enter into such litigation t protect the interests of the United States. 5.06.1.6 The contractors 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 Human Relations Department. Compliance reports filed at such times Q:Library/Forms/Rental Rehab over 20,000 17 10/23/2015 as directed shall contain information as to the employment practices, policies, programs and statistics of the contractor and his subcontractors. 5.06.1.7 The contractors or its subcontractors shall include the provisions of Paragraph 5.06.1.1 through 5.06.1.7 of this section, "Equal Employment Opportunity Clause", and Section 10-193 in every contract, subcontract or purchase order so that such provisions will be binding upon each subcontractor or vendor. (Code 1980, Section 10-192; Ord. No. 35344, Sections 1, 9-26-00) 5.06.2 Workers' Compensation. The Owner shall provide Workers' Compensation Insurance coverage in accordance with the requirements of the State of Nebraska for all employees involved in the performance of this Agreement. 5.06.3 Employment Insurance and Bonding. The Owner shall purchase a blanket fidelity bond covering all employees, at a minimum, in an amount equal to cash advances from the City. The Owner shall comply with bonding and insurance requirements of 2 CFR, Part 215 (Exhibit "C"), Bonding and Insurance. 5.06.4 Section 3 — Employment of Low-Income Persons (Section 3 of HUD Act of'68 as Amended, 1 U.S.C. 1701u). The Owner shall make its best efforts to comply with Section 3. The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing(Attachment 3). 5.06.5 Conflict of Interest. The Owner agrees to abide by the provisions of 24 CFR 92.356 with respect to conflict of interest, and covenants that it presently has financial interest and shall not acquire any fmancial interest, direct or indirect, which would conflict in any manner or degree with the performance of services required under this Agreement. The Owner further covenants that in the performance of this Agreement no person having such a fmancial interest shall be employed or retained by the Owner 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 Owner which are receiving funds under the entitlement program. Q:Library/Forms/Rental Rehab over 20,000 18 10/23/2015 5.06.6 Attestation of Citizenship. To comply with Neb. Rev. Stat. 4-108 through 4-114, the Developer/Owner/Subrecipient agrees to comply with the requirements of 5.06.6 and 5.06.7. The Developer/Owner/Subrecipient shall include the following language in all contracts and subcontracts for the physical performance of services: "The Contractor is required and hereby agrees to use a federal immigration verification system to determine the work eligibility status of new employees physically performing services within the State of Nebraska. A federal immigration verification system means the electronic verification of the work authorization program authorized by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, 8 U.S.0 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." The Developer/Owner/Subrecipient shall have each person/applicant signing the application for a benefit under this agreement execute a United States Citizenship Attestation Form for Public Benefit (Exhibit "M") verifying eligibility status for the purposes of receiving a public benefit. 5.06.7 Employee Classification Act. To comply with the Nebraska Employee Classification Act, all general contractors and subcontractors who perform construction or delivery service pursuant to this contract shall submit to the City an Affidavit for Employee Classification Act (Exhibit "N") attesting that (1) each individual performing services for such contractor is properly classified under the Nebraska Employee Q:Library/Forms/Rental Rehab over 20,000 19 10/23/2015 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. 5.07 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. SECTION 6. OWNER COMPLIANCE WITH OTHER FEDERAL REGULATIONS. 6.01. Environmental Review. The Owner 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 this Agreement. Q:Library/Forms/Rental Rehab over 20,000 20 10/23/2015 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 45 years old or older or that are included on a federal, state or local historic property list. 6.02 Uniform Relocation Act. The Owner 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 requires 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 Owner or its agent displaces any tenant-occupant of the property, it shall immediately notify the City in writing of the circumstances surrounding said displacement and comply with 24 CFR 92.353. 6.03 Soil Work Policy. The Owner will comply with the Soil Work Policy for Housing Development Program projects that may involve the removal of structures, installation of public infrastructure and site preparation work prior to the construction of new residential structures (Attachment 5). 6.04 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 RgSS663) (September 14, 2010) (to be codified at 2 CFR, Part 170). Developer shall complete and provide to the City (Exhibit"0"). SECTION 7. RESPONSIBILITIES OF THE CITY. 7.01 Performance Monitoring. The City will monitor the performance standards of the Owner 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 Owner 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 $33,500.00 in NAHTF RRP funds, plus reasonable and eligible closing costs. 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 Owner as soon as reasonably possible and the Agreement will be terminated. Q:Library/Forms/Rental Rehab over 20,000 21 10/23/2015 7.02.1 Funds Allocated to the Owner. Funds allocated to the Owner shall be in the form of a deferred payment loan for the purposes set forth in this Agreement. Payments will be contingent on Duties and Conditions specified herein. Draw-downs for the payment of eligible expenses shall not be made until the funds are needed based upon the value of the construction, administration, or professional service work completed at the time the payment request is made. 7.02.2 Obligation for Payment. In no event shall the City become obligated to make any payments for any work performed, materials furnished, expense incurred, or any other expenditure of any kind whatsoever, unless same is expressly included in this Agreement; nor shall the City incur any liability hereunder, unless and until the Owner has timely and fully complied with its duties and obligation hereunder. No payments shall be made for any work, labor, material or expenses incurred in which the Director deems it to be: 7.02.2.1 not in conformance with applicable state, federal and/or local laws, including but not limited to, the building, plumbing and/or electrical codes; or, 7.02.2.2 not in conformance with all plans, working drawings and/or specifications as approved; or, 7.02.2.3 unacceptable or substandard; or, 7.02.2.4 not in accordance with this Agreement or related contracts as approved for this Project. 7.03 Progress Payments. Progress payments and final payment, as may be authorized by the Director or his designated representative, are subject to: 7.03.1 Receipt, verification and approval of a lien waiver and an AIA Document G702 "Application and Certificate for Payment" or comparable document, such document being prepared by the Owner's architect or authorized person and approved by the Owner and the City Construction Specialist before being submitted to the Planning Department for payment. All documents for each pay request submission must be forwarded directly to the Planning Department Construction Specialist assigned to the Project. This shall include all Application and Certificate for Payment (AIA Document G702 or comparable document) for the entire Project. This also includes pay requests that do not require City funds. 7.03.2 Receipt of requisite financial status reports. Q:Library/Forms/Rental Rehab over 20,000 22 10/23/2015 7.03.3 The Owner is required to pay out the entire portion of the Owner cash according to Section 2, Paragraph 2.02 during construction before the City will disburse the NAHTF RRP funds. The Owner must comply with requirements referenced in Paragraph 7.03.1 above, submitting AIA Documents G702 "Application and Certificate for payment" or comparable document, as well as other supporting payment request documents. The City will review these documents to ensure that the Owner has paid its portion of the project costs as indicated in Section 2, Paragraph 2.02. Upon verification by the City that all of the Owner's funds have been paid, the City can disburse NAHTF RRP funds according to completion of construction work as evidenced by the payment request documents submitted by the Owner. 7.03.4 A 10% retainage of City NAHTF RRP funds will be held by the City until all punch list items have been corrected to the satisfaction of the Owner and the City Construction Specialist assigned to this project, and until the Project Completion requirements as stated in Section 1, Paragraph 1.11 are satisfied. 7.04 Inspections. The City may perform periodic inspections at any reasonable time to ensure compliance with this Agreement. The City shall perform final inspection to certify Project completion prior to final disbursement of NAHTF proceeds. In addition, the City shall perform on-site inspections of Property every three years for projects containing 1 to 4 units; every two years for projects containing 5 to 25 units; and every year for projects containing 26 or more units. Inspections must be based on a sufficient sample of units. 7.05 Technical Assistance. The Director shall assist the Owner in the same manner the Director provides technical assistance to other Owners during the construction phase to ensure compliance with such housing quality standards and property rehabilitation standards. SECTION 8. MUTUAL AGREEMENTS BETWEEN CITY AND OWNER(S). 8.01 Release of Information Laws. The Owner specifically hereby states, agrees and certifies that it is familiar with the limited purpose set forth in the Federal Laws, Rules and Regulations, and in the laws of the State of Nebraska, for which personal information requested may be used and that the information received will be used solely for those limited purposes and not to harass, degrade or humiliate any person. The information released shall be used for the limited purposes stated, and the Owner further agrees to indemnify and hold harmless the City of Omaha for any liability arising out of the improper use by the Owner of information provided. Q:Library/Forms/Rental Rehab over 20,000 23 10/23/2015 8.02 Applicable Laws. Parties to this Agreement shall conform with all existing and applicable City ordinances, resolutions, state laws, federal laws, and all existing and applicable rules and regulations. Nebraska law will govern the term and the performance under this Agreement. 8.03 Interest of the City. Pursuant to Section 8.05 of the Home Rule Charter, no elected official or any officer or employee of the City shall have a financial interest, direct or indirect, in any City agreement. Any violation of this section with the knowledge of the person or corporation contracting with the City shall render the Agreement voidable by the Mayor or Council. 8.04 Independent Contractor. Nothing contained in this Agreement is intended to, or shall be construed in any manner, as creating or establishing the relationship of employer/employee between the parties. The Owner 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 Owner is an Independent Contractor. 8.05 Project Roles. The Owner shall ensure that the Project meets the objectives stated herein. The City has selected the Owner to assist in the Project since it is consistent with the Consolidated Plans. With respect to this Project, the City is not acting as the Owner's architect or engineer. The City makes no warranties, express or implied, as to the Construction Work. The City owes no duty to the Owner or any other persons that shall arise because of any inspection of the premises by the City's agents or employees. 8.06 Captions. Captions used in this Agreement are for convenience and are not used in the construction of this Agreement. 8.07 Merger. This Agreement shall not be merged into any other oral or written agreement, lease or deed of any type. 8.08 Modification. This Agreement and any related documents securing the financing contain the entire agreement of the parties. No representations were made or relied upon by either party other than those that are expressly set forth herein. No agent, employee, or other representative of either party is empowered to alter any of the terms herein unless done in writing and signed by an authorized officer of the respective parties, pursuant to Section 10-142 of the Omaha Municipal Code. 8.09 Assignment. The Owner may not assign its rights or obligations under this Agreement without the express prior written consent of the City Department; except that the Mayor may, without City Council approval, approve, in writing, the assignment to a limited partnership so long as the Owner is and remains a general partner. Q:Library/Forms/Rental Rehab over 20,000 24 10/23/2015 8.10 Strict Compliance. All provisions of this Agreement and each and every document that shall be attached shall be strictly complied with as written, and no substitution or change shall be made without written direction from authorized representatives of the parties. 8.11 Termination. This Agreement may be suspended or terminated in accordance with 24 CFR 85.43, Enforcement or CFR 85.44, Termination for Convenience (Exhibit"L"), attached hereto and incorporated herein by this reference as though fully set forth). Upon termination of this Agreement, all funds and interest in any account hereunder shall become the property of the City and shall be returned to the City. 8.12 Reversion of Assets. Upon the expiration of this Agreement, the Owner shall transfer to the City of Omaha any NAHTF funds on hand at the time of expiration and any accounts receivable attributable to the use of NAHTF funds (24 CFR 92.504 (c)(2)(vii)). 8.13 Indemnification. The Owner shall indemnify and hold the City harmless from and against: 1) any and all claims arising from contracts between the Owner and third parties made to effectuate the purposes of this Agreement; and 2) any and all claims, liabilities or damages arising from the preparation or presentation of any of the work covered by this Agreement. 8.14 Unenforceable Provisions. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be in effect to the extent of such prohibition or enforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 8.15 Disclosure of Lobbying. The Owner shall certify and disclose, to the best of its knowledge and belief,that: 8.15.1 No federal appropriated funds have been paid or will be paid, by or on behalf of the Owner, to any person for influencing or attempting to influence an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan,the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment or modification of any federal contract, grant, loan or cooperative agreement. 8.15.2 If any funds other than federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this federal contract, grant, loan or cooperative Q:Library/Forms/Rental Rehab over 20,000 25 10/23/2015 agreement, the Owner shall complete and submit standard Form LLL, "Disclosure Form to Report Lobbying", in accordance with its instructions. 8.15.3 The language of this certification be included in the award documents for all subawards at all tiers, (including subcontracts, subgrants and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. 8.16 Notices. The City and the Owner hereby expressly agrees that for purposes of notice, including legal service or process, during the term of this Agreement, and for the period of any applicable statute of limitations thereafter, the following named individuals shall be authorized representatives of the parties: 1) City City of Omaha Planning Department 1819 Farnam Street, Suite 1100 Omaha,NE 68183 2) Owner: Brisco Investments,LLC,a Nebraska limited liability company, Brian Cloudt,Member Representative 5339 North 60th Street,Omaha,Nebraska 68104 In the event the authorized representative changes during the term of this Agreement, prior written notice will be given to the respective party at the address noted above. 8.17 Applicability. This Agreement shall be binding upon the parties hereto and shall run with the Property. SECTION 9. DEFAULT PROVISIONS. 9.01 Remedies. If, through any cause, the Owner shall fail to fulfill in a timely and proper manner any obligations under this Agreement, or violate any of the covenants, representations or agreements hereof, the City may upon written notice, terminate this Agreement or such parts thereof as to this Agreement, and may initiate foreclosure proceedings for any damages caused to the City by reason of such default and termination. Q:Library/Forms/Rental Rehab over 20,000 26 10/23/2015 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated below: WITNESS: By: Brisco Investments,LLC, a Nebraska Limited Liability Company J?i'téL4ti4 11P BY: L DATE Brian Cloudt,Member Representative Da e ATTEST: CITY OF OMAHA 0/40/. D E P U TPfATE �rty Clerk of the rty of Omaha DATE Mayor of the City of Omaha APPROVED AS TO FORM: (3 )VIv an( Assistant City Attorney Date Q:Library/Forms/Rental Rehab over 20,000 27 10/23/2015 SCHEDULE OF EXHIBITS Agreement Exhibit Location Description A 1.02 Warranty Deed to Property B 1.08.1, 3.01.7 NAHTF Deferred Payment Loan (DPL) Promissory Note and Acknowledgement of Covenant Running with the Land for NAHTF Rental Rehabilitation Program Loan Agreement C 1.12, 3.01.1, 5.01.1 2 CFR, Part 215 5.01.2, 5.04, 5.05, 5.06.3 D 1.15, 1.15.1, 2.01.1, Median Family Income Chart and 5.03.2.3 HOME Program Rents E 1.18 Definition—Program Income F 4.08 Davis-Bacon Exemption Checklist G 4.10 Affirmative Marketing Policy H 5.01.2 2 CFR, Part 230 I 5.01.3 2 CFR, Part 200.5 J 5.03.2 Occupancy Report (Tenant Survey, Utility Allowance, Computing Annual Income Form, Definitions for Race, Ethnicity, Income Determinations, and Tenant and Participant Protections) K 5.04 Financial Status Reports L 8.11 Termination—24 CFR 85.43 —85.44 M 5.06.6 United States Citizenship Attestation Form for Public Benefit N 5.06.7 Employee Certification Act Affidavit 0 6.04 Federal Funding Accountability and Transparency Act Q:Library/Forms/Rental Rehab over 20,000 28 10/23/2015 ATTACHMENTS: 1 City of Omaha Definition of Income 2 Equal Employment Opportunity Clause 3 Section 3 Clause 4 Minority/Women Owned Business Enterprise Plan 5 Soil Work Policy 6 Cost Certification 7 HOME Subsidy Layering Q:Library/Forms/Rental Rehab over 20,000 29 10/23/2015 ... 0 ( ) Nebr Doc DEED 2015085171 Stamp Tax Fee1 amount: 10.00 '•I i IINII��p�I 1111mINIHIP 10-07-2015 COMP:AH u� II_ I, I I Ui 1 S Date Received- Nster of Duds,�L.�BATTIATO OCT 07 2015 12:57 P 1 as County,NE By AH iIiIHH/01500 201 50851 71 WARRANTY DEED K OW THAT ALL MEN BY THESE PRESENTS THAT ]erry L.Dantzler and Shannel antzler,husband and wife,herein called the grantor whether one or more,In considers on of One Dollar and other valuable consideration received from grantees,do hereby ba gain,sell,convey,and confirm unto Brisco Investments,LLC,the following described al property In Douglas County,Nebraska: Lcct Eight(S),Block Three(3),Military Addition,an Addition to the City of Omaha,Douglas County,Nebraska T have and hold above described premises together with all tenements,hereditaments and appu nances thereto belonging unto the grantees and their assigns. A d the grantor does hereby covenant with the grantees and their assigns that grantor Is lawfully se zed of said premises;that they are free from any encumbrance except covenants, easemen and restrictions of record;all regular taxes and special assessments, except tii se levied or assessed subsequent to date hereof;that grantor has good right and lawful authority to convey the same;and that grantor warrants and will defend the title to said premi es against the lawful claims of all persons whomsoever, Executed EPrtvc$le 2.1 , u'S . �t antzler • AO; A. ... / hannel Dantzler / State of INPbere,VA County oiNL 31 Q g e fore oing Instrument was acknowledged before me thisc li St day of c)b 15 by Jerry L.Dantzler and Shannel Dantzler,husband and wif . Note r Public 0264947: M9ARY E6l.YJ.CHIPR Oi ItyCgrm.E1,J 10.2015 24921 RENTAL REHABILITATION PROGRAM DEFERRED LOAN PROMISSORY NOTE APPLICANT: Brisco Investments,LLC,a Nebraska limited liability company Brian Cloudt,Member Representative 5339 North 60th Street, Omaha,Nebraska 68104 PROPERTY ADDRESS: 3518 North 54th Street, Omaha,Nebraska,68104 LOAN NO. 24921 DATE: FOR VALUE RECEIVED,the Undersigned,jointly and severally,hereby promises to pay to the order of the CITY OF OMAHA(hereinafter referred to as,the"City"),acting by and through the Director of the Planning.Department (hereinafter referred to as "Director") or its successors, the principal sum of $68,245.00 comprised of $33,500.00 2014 NAHTF RRP funds and $34,745.00 Owner funds. The Principal on this Note is payable on the first day after the Undersigned conveys, grants, mortgages, assigns or otherwise transfers their interest or a portion thereof within ten(10)years from the date of Project Close Out, as defined in Section 1.12,except as provided in Section 8.09,of the Agreement approved by the City Council,on ,2016,by Resolution No. , in the property or improvements at 3518 North 54th Street and legally described as: Lot 8, Block 3, Military Addition, an addition to the City of Omaha,as surveyed, platted and recorded in Douglas County,Nebraska(commonly known as 3518 North 54th Street, Omaha,Nebraska 68104) The Undersigned reserve(s) the right to prepay at any time all or any part of the principal amount of this Note without the payment of penalties or premiums. If the Undersigned does not convey, grant, mortgage, assign or otherwise transfer said property for a period of ten (10) years from the date of Project Close Out, this Note shall be considered paid-in-full and will be released from said property. IN THE EVENT that the Undersigned shall fail to pay the principal amount of this Note on the due date,the Undersigned shall pay to the CITY a late charge of 9%per calendar month,or fraction thereof, on the amount past due and remaining unpaid. If this Note is reduced to A EOPPORTUNIITY Page 1 of 2 Revised and approved 12/28/2009 PROMISSORY NOTE 3518 North 54th Street PAGE 2 judgment, such judgment should bear the statutory interest rate on judgments, but not to exceed 9%per annum. IF suit is instituted by the CITY to recover this Note, the Undersigned agree(s) to pay all costs of such collection including reasonable attorneys' fees and court costs. THIS NOTE is secured by no less than a 2nd mortgage/deed of trust subordinate to Deed(s) of Trust in an aggregate amount not to exceed any existing liens filed against the property and the Undersigned's matching funds totaling$34,745.00 plus eligible reasonable closing costs,and duly filed for record in the Office of the Register of Deeds,Douglas County,Nebraska. DEMAND, protest and notice of demand and protest are hereby waived, and the Undersigned hereby waives, to the extent authorized by law, any and all homestead and other exemption rights which otherwise would apply to the debt evidenced by this Note. IN WITNESS WHEREOF,this Note has been duly executed by the Undersigned,as of the day and year above set forth. Brisco Investments,LLC,a Nebraska limited liability company By: Brian Cloudt, Member Representative Date • EQUAL HOUSING OPPORTUNITY Page 2 of 2 Revised and approved 12/28/2009 OPPORTUNITY ACKNOWLEDGEMENT OF COVENANT RUNNING WITH LAND WHEREAS, an Agreement dated , 2016 by City Council Resolution No. (hereafter referred to as "the Agreement") was entered into by and between the City of Omaha, a Municipal Corporation of the Metropolitan class in the State of Nebraska(hereafter referred to as "the City")and Brisco Investments,LLC,a Nebraska Limited Liability Company,Brian Cloudt,Member Representative, wherein the City would provide a deferred payment loan and a grant in an amount of$33,500.04 to assist in the rehabilitation of the property and improvements thereon, and legally described as: Lot 8, Block 3, Military Addition, an addition to the City of Omaha, as surveyed, platted and recorded in Douglas County,Nebraska(commonly known as 3518 North 54th Street, Omaha,Nebraska 68104) NOW, THEREFORE, Brisco Investments, LLC, a Nebraska Limited Liability Company, Brian Cloudt,Member Representative(hereinafter referred to as the"Owner"),for himself,successors and assigns, agrees that the restrictions and covenants in the Agreement shall be covenants running with the land, and that it, in any event and without regard to technical classification and designation, legal or otherwise, shall be binding,to the fullest extent permitted by law and equity, and enforceable by the City, its successors and assigns, against the Owner, their successors and assigns,to any part of the property that is the subject of the Agreement,or any interest therein and any party in the possession or occupancy of any part of said property. The Owner, for himself, successors and assigns, further covenants and agrees, that without regard to whether the City or the United States is an owner of any interest in the land to which the covenants relate,the covenants running with the land shall remain in effect for ten (10) years after the date of Project Close Out of the project, the period specified or referred to in Section 1.13 in the Agreement, or until such date thereafter to which it may be modified by proper amendment of the Agreement, on which date such covenants may terminate. The Owner, for himself, successors and assigns, further covenants and agrees that this property shall continue to be used as a rental property for qualified low- and moderate-income families, as described in Section 1.15 in the Agreement, for the term of this covenant. In the event of default, gross negligence or other substantial noncompliance,the outstanding amount Cl OPPORTUNITY Page 1 of 2 Revised and approved 12/2/2009 COVENANT 3518 North 54th Street PAGE 2 of the loan at the time of default shall be due and payable immediately from the Owner, his successors and assigns,to the City. By: Brisco Investments, LLC, a Nebraska Limited Liability Company • By: Brian Cloudt,Member Representative STATE OF NEBRASKA ) ) § COUNTY OF DOUGLAS ) On this day of , 2016, before me, the undersigned, a Notary Public duly commissioned and qualified in and for said county, personally came Brian Cloudt, Member Representative for Brisco Investments, LLC, a Nebraska limited liability company, to me known to be the person(s) named in and who executed the foregoing instrument, and acknowledged that they executed the same as their voluntary act and deed for the purposes therein stated. Witness my hand and notarial seal the day and year last above written. Notary Public My Commission expires EQ UAL Page 2 of 2 Revised and approved 12/2/2009 u!.COVEHNMVAIT INfrmM.5 N G PARTS 200-214 [RESERVED] 215.36 Intangible property. 215.37 Property trust relationship. PART 215 --UNIFORM ADMINISTRA- PROCUREMENT STANDARDS TIVE REQUIREMENTS FOR GRANTS 215.40 Purpose of procurement standards. AND AGREEMENTS WITH INSTITU- 215.41 Recipient responsibilities. 11ONS OF HIGHER EDUCATION, 215.42 Codes of conduct. HOSPITALS, AND OTHER NON- 215.43 Competition. 215.44 Procurement procedures. PROFIT ORGANIZATIONS (OMB 215.45 Cost and pride analysis. CIRCULAR A 110) 215.46 Procurement records. 215.47 Contract administration. Sec. 215.48 Contract provisions. 215.0 About this part. REPORTS AND RECORDS Subpart A-General 215.50 Purpose of reports and records. 215.51 Monitoring and reporting program 215.1 Purpose. performance. 215.2 Definitions. 215.52 Financial reporting. 215.3 Effect on other issuances, 215.53 Retention and access requirements 215.4 Deviations, for records. 215.5 Subawards. TERMINATION AND ENFORCEMENT Subpart B-Pre-Award Requirements 215.60 Purpose of termination and enforce- ment, 215.10 Purpose. 215.61 Termination. 215.11 Pre-award policies. 215.62 Enforcement. 215.12 Forms for applying for Federal assist- ance._ Subpart D-After-the-Award Requirements 215.13 Debarment and suspension. 215.14 Special award conditions. 215.70 Purpose. 215.15 Metric system of measurement. 215.71 Closeout procedures. 215.16 Resource Conservation and Recovery 216.72 Subsequent adjustments and con- Act. tinning responsibilities. 215.17 Certifications and representations. 215.73 Collection of amounts due, Subpart C-Post-Award Requirements APPENDIX A TO PART alb-CONTRACT PROVI- SIONS FINANCIAL AND PROGRAM MANAGEMENT AuTHORITY:31 U.S.C. 503; 31 U.S.C. 1111; 41 215.20 Purpose of financial and program U.S.C.405;Reorganization Plan No.2 of 1970; management. E.O. 11541, 35 FR 10737. 3 CFR. 1966-1970, p. 215.21 Standards for financial management 939' systems. SOURCE: 69 FR 26281, May 11, 2004, unless 215.22 Payment. otherwise noted. 215.23 Cost sharing or matching_ 215,24 Program income. 11215.0 About this part. 215.25 Revision of budget and. prograat plans. (a) Purpose. This part contains OMB 215.26 Non-Federal audits. guidance to Federal agencies on the ad- 215.27 Allowable costs. ministration of grants to and agree- 215.28 Period of availability of funds. ments with institutions of higher edu- 215.29 Conditional exemptions, cation, hospitals, and other non-profit PROPERTY STANDARDS organizations. The guidance sets forth standards for obtaining consistency 215.30 Purpose of property standards and uniformity in the agencies' admin- 215.31 Insurance coverage. istration of those grants and agree- 215.32 ReaLproperty, ments. 215.33 Federally-owned and exempt prop- erty. (b) Applicability. (1) Except as pro- 215.34 Equipment. vided herein, the standards set forth in 215.35 Supplies aid other expendable prop- this part are applicable to all Federal erty. agencies. If any statute specifically 77 §215.1 2 CFR Ch. 1I(1-1-12 Edition) prescribes policies or specific require- where adequate justification is pre- ments that differ from the standards sented. provided in this part, the provisions of (5) Conducting broad oversight of the statute shall govern. government-wide compliance with the (2) The provisions of subparts A guidance in this part. through D of this part shall be applied (d) Federal agency responsibilities. The by Federal agencies to recipients. Re- head of each Federal agency that cipients shall apply the provisions of awards and administers grants and those subparts to subrecipients per- agreements subject to the guidance in forming substantive work under grants this part is responsible for: and agreements that are passed (1) Implementing the guidance in through or awarded by the primary re- subparts A through D of this part by cipient, if such subrecipients are orga- adopting the language in those sub- nizations described in paragraph (a) of parts unless different provisions are re- this section. quired by Federal statute or are ap- (3)This part does not apply to grants, proved by OMB. contracts, or other agreements be- (2) Ensuring that the agency's corn- tween the Federal Government and ponents and subcomponents comply units of State or local governments with the agency's implementation of covered by OMB Circular A-102, the guidance in subparts A through D "Grants and Cooperative Agreements of this part. with State and Local Governments"1 (3) Requesting approval from OMB and the Federal agencies' grants man- for deviations from the guidance in agement common rule (see §215.5) subparts A. through I) of this part in which standardize the administrative situations where the guidance requires requirements Federal agencies impose that approval. on State and local grantees. In addi- (4) Performing other functions speci- tion, subawards and contracts to State fled in this part. or local governments are not covered (e) Relationship to previous issuance. by this part.However, this part applies The guidance in this part previously to subawards made by State and local was issued as OMB Circular A-110. Sub- governments to organizations covered parts A through D of this part contain by this part. the guidance that was in the attach- (4) Federal agencies may apply the ment to the OMB circular.Appendix A provisions of subparts A through D of to this part contains the guidance that this part to commercial organizations, was in the appendix to the attachment. foreign governments, organizations (f) Information Contact. Further infor- under the jurisdiction of foreign gov- mation concerning this part may be ob- ernments, and international organiza- tainsd by contacting the Office of Fed- tions. eral Financial Management, Office of (c) OMB responsibilities. OMB is re Management and Budget, Washington, sponsible for: DC 20503,telephone(202)395-3993. (1) Issuing and maintaining the guid- (g) Termination Review Date.This part ance in this part. will have a policy review three years (2) Interpreting the policy require from the date of issuance. ments in this part and providing assist- ance to ensure effective and efficient implementation. Subpart A- -General (3) Reviewing Federal agency regula- lions implementing the guidance in §215.1 Purpose. this part, as required by Executive This part establishes uniform admin- Order 12866. istrative requirements for Federal (4) Granting any deviations to Fed- grants and agreements awarded to in- erai agencies from the guidance in this stitutions of higher education, hos- part, as provided in §215.4. Exceptions pitals, and other non-profit organiza- will only be made in particular cases lions. Federal awarding agencies shall not impose additional or inconsistent L See 5 CFR 1310.9 for availability of OMB requirements, except as provided in circulars. §§215.4, and 215.14 or unless specifically 78 OMB Circulars and Guidance §215.2 required by Federal statute or execu- money; other assistance in the form of tive order. Non-profit organizations loans, loan guarantees, interest sub- that implement Federal programs for sidies, or insurance; direct payments of the States are also subject to State re- any kind to individuals; and, contracts quirements. which are required to be entered into §215.2 Definitions. and administered under procurement laws and regulations. (a) Accrued expenditures means the (f) Cash contributions means the re- charges incurred by the recipient dur- cipient's cash outlay, including the ing a given period requiring the provi- outlay of money contributed to the re- sion of funds for: cipient by third parties. (1)Goods and other tangible property (g) Closeout means the process by received; which a Federal awarding agency de- (2) Services performed by employees, termines that all applicable adminis- contractors, subrecipients, and other trative actions and all required work of payees; and, the award have been completed by the (3) Other amounts becoming owed recipient and Federal awarding agency. under programs for which no current services or performance is required. (h) Contract means a procurement (b) Accrued income means the sum of: contract under an award or subaward. (1) Earnings during a given period and a procurement subcontract under a from: recipient's or subrecipient's contract. (i) Services performed by the recipi- (i) Cost sharing or matching means ent,and that portion of project or program (ii) Goods and other tangible prop- costs not borne by the Federal Govern- erty delivered to purchasers,and ment. (2) Amounts becoming owed to the (j) Date of completion means the date recipient for which no current services on which all work under an award is or performance is required by the re, completed or the date on the award cipient. document, or any supplement or (c)Acquisition cost of equipment means amendment thereto, on which Federal the net invoice price of the equipment, sponsorship ends. including the cost of modifications, at- (k) Disallowed costs means those tachments, accessories, or auxiliary charges to an award that the Federal apparatus necessary to make the prop- awarding agency determines to be un- erty usable for the purpose for which it allowable, in accordance with the ap- was acquired. Other charges, such as plicable Federal cost principles or the cost of installation, transportation, other terms and conditions contained taxes, duty or protective in-transit in- in the award. surance, shall be included or excluded from the unit acquisition cost in ac- (1) Equipment means tangible non- cordance with the recipient's regular expendable personal property including accounting practices. exempt property charged directly to (d) Advance means a payment made the award having a useful life of more by Treasury check or other appropriate than one year and an acquisition cost payment mechanism to a recipient of $5,000 or more per unit. However, upon its request either before outlays consistent with recipient policy, lower are made by the recipient or through limits may be established, the use of predetermined payment (m) Excess property means property schedules. under the control of any Federal (e) Award means financial assistance awarding agency that, as determined that provides support or stimulation to by the head thereof, is no longer re- accomplish a public purpose. Awards Quired for its needs or the discharge of include grants and other agreements in its responsibilities. the form of money or property in lieu (n) Exempt property means tangible of money, by the Federal Government personal property acquired in whole or to an eligible recipient. The term does in part with Federal funds, where the not include: technical assistance, Federal awarding agency has statutory which provides services instead of authority to vest title in the recipient 79 §215.2 2 CFR Ch. II (1-1-12 Edition) without further obligation to the Fed- bursements for direct charges for goods eral Government. An example of ex- and services, the amount of indirect ex- empt property authority is contained pense incurred, the value of in-kind in the Federal Grant and Cooperative contributions applied, and the net in- Agreement Act (31 U.S.C. 6306), for crease (or decrease) in the amounts property acquired under an award to owed by the recipient for goods and conduct basic or applied research by a other property received, for services non-profit institution of higher edu- performed by employees, contractors, cation or non-profit organization subrecipients and other payees and whose principal purpose is conducting other amounts becoming owed under scientific research. programs for which no current services (o) Federal awarding agency means or performance are required. the Federal agency that provides an (v) Personal property means property award to the recipient. of any kind except real property. It (p)Federal funds authorized means the may be tangible, having physical exist- total amount of Federal funds obli- ence, or intangible, having no physical gated by the Federal Government for existence, such as copyrights, patents, use by the recipient. This amount may or securities, include any authorized carryover of un- (w) Prior approval means written ap- obligated funds from prior funding pe- proval by an authorized official evi- riods when permitted by agency regula- dencing prior consent. tions or agency implementing instruc- (x) Program income means gross in- tions. come earned by the recipient that is di- (q) Federal share of real property, rectly generated by a supported activ- equipment, or supplies means that per- ity or earned as a result of the award centage of the property's acquisition (see exclusions in §21b.24(e) and (h)). costs and any improvement expendi- Program income includes, but is not tures paid with Federal funds. limited to, income from fees for serv- (r)Funding period means the period of ices performed,the use or rental of real time when Federal funding is available or personal property acquired under for obligation by the recipient. federally-funded projects, the sale of (s) Intangible property and debt instru- commodities or items fabricated under ments means, but is not limited to, an award, license fees and royalties on trademarks, copyrights, patents and patents and copyrights,and interest on patent applications and such property loans made with award funds. Interest as loans, notes and other debt instru- earned on advances of Federal funds is ments, lease agreements, stock and not program income. Except as other- other instruments of property owner- wise provided in Federal awarding ship,whether considered tangible or in- agency regulations or the terms and tangible. conditions of the award, program in- (t) Obligations means the amounts of come does not include the receipt of orders placed, contracts and grants principal on loans,rebates, credits, dis- awarded, services received and similar counts, etc., or interest earned on any transactions during a given period that of them. require payment by the recipient dur- (y) Project costs means all allowable ing the same or a future period. costs, as set forth in the applicable (u) Outlays or expenditures means Federal cost principles, incurred by a charges made to the project or pro- recipient and the value of the contribu- gram. They may be reported on a cash tions made by third parties in accom- or accrual basis. For reports prepared plashing the objectives of the award on a cash basis, outlays are the sum of during the project period. cash disbursements for direct charges (z)Project period means the period es- for goods and services, the amount of tablished in the award document dur- indirect expense charged, the value of ing which Federal sponsorship begins third party in-kind contributions ap- and ends. plied and the amount of cash advances (aa)Property means, unless otherwise and payments made to subrecipients. stated, real property, equipment, in- For reports prepared on an accrual tangible property and debt instru- basis, outlays are the sum of cash dis- meats. 80 OMB Circulars and Guidance §215.2 (bb)Real property means land, includ- money, or property in lieu of money, ing land improvements, structures and made under an award by a recipient to appurtenances thereto, but excludes an eligible subrecipient or by a sub- movable machinery and equipment. recipient to a lower tier subrecipient. (cc) Recipient means an organization The term includes financial assistance receiving financial assistance directly when provided by any legal agreement, from Federal awarding agencies to even if the agreement is called a con- carry out a project or program. The tract, but does not include procure- term includes public and private_insti`- meat of goods and services nor does it tutions of higher education, public and include any form of assistance which is private hospitals, and other quasi-pub- excluded from the definition of lic and private non-profit organizations "award"in§215.2(e). such as,but not limited to,community (gg)Subrecipient means the legal enti- action agencies, research institutes, ty to which a subaward is made and educational associations, and health which is accountable to the recipient centers. The term may include corn- for the use of the funds provided. The mercial organizations,foreign or inter- term may include foreign or inter- national organizations (such as agen- national organizations (such as agen- cies of the United Nations) which are cies of the United Nations) at the dis- recipients, subrecipients, or contrac- cretion of the Federal awarding agen- tors or subcontractors of recipients or cy, subrecipients at the discretion of the (hh)Supplies means all personal prop- Federal awarding agency. The term erty excluding equipment, intangible does not include government-owned property, and debt instruments as de- contractor-operated facilities or re- fined in this section, and inventions of search centers providing continued a contractor conceived or first actually support for mission-oriented, large- reduced to practice in the performance scale programs that are government- of work under a funding agreement owned or controlled, or are designated ("subject inventions"), as defined in 37 as federally-funded research and devel- CFR part 401, "Rights to Inventions opment centers. Made by Nonprofit Organizations and • (dd) Research and development means Small Business Firms Under Govern- all research activities, both basic and merit Grants, Contracts, and Coopera- applied, and all development activities tive Agreements." that are supported at universities, col- (ii) Suspension means an action by a leges, and other non-profit institu- Federal awarding agency that tempo- tions. "Research" is defined as a sys- rarily withdraws Federal sponsorship tematic study directed toward fuller under an award, pending corrective ac- scientific knowledge or understanding tion by the recipient or pending a deci- of the subject studied. "Development" sion to terminate the award by the is the systematic use of knowledge and Federal awarding agency. Suspension understanding gained from research di- of an award is a separate action from rected toward the production of useful suspension under Federal agency regu- materials, devices, systems, or meth- lations implementing E.O. 12549 (51 FR ods, including design and development 6370,3 CFR,1986 Comp., p.189)and E.O. of prototypes and processes. The term 12689(54 FR 34131,3 Cr'N 1989 Comp.,p. research also includes activities in- 235), "Debarment and Suspension." volving the training of individuals in (jj) Termination means the cancella- research techniques where such activi- tion of Federal sponsorship,in whole or ties utilize the same facilities as other in part, under an agreement at any research and development activities time prior to the date of completion. and where such activities are not in- (kk) Third party in-kind contributions eluded in the instruction function. means the value of non-cash contribu- (ee) Small awards means a grant or tions provided by non-Federal third cooperative agreement not exceeding parties. Third party in-kind contribu- the small purchase threshold fixed at tions may be in the form of real prop- 41 U.S.C.403(11)(currently$25,000). erty, equipment, supplies and other ex- (ff) Subaward means an award of fi- pendable property, and the value of nancial assistance in the form of goods and services directly benefiting 81 §215.3 2 CFR Ch. 11 (1-1-12 Edition) and specifically identifiable to the utory. Exceptions on a case-by-case project or program. basis may also be made by Federal (11) Unliquidated obligations, for finan- awarding agencies. cial reports prepared on a cash basis, means the amount of obligations in- §215.5 Subawards. curred by the recipient that have not Unless sections of this part specifi- been paid. For reports prepared on an cally exclude subrecipients from cov- accrued expenditure basis, they rep- erage, the provisions of this part shall resent the amount of obligations in- be applied to subrecipients performing curred by the recipient for which an work under awards if such subrecipi- outlay has not been recorded. exits are institutions of higher edu- (mm) Unobligated balance means the cation,hospitals or other non-profit or- portion of the funds authorized by the ganizations. State and local govern- Federal awarding agency that has not ment subrecipients are subject to the been obligated by the recipient and is provisions of regulations implementing determined by deducting the eumu- the grants management common rule, lative obligations from the cumulative "Uniform Administrative Require- funds authorized. meats for Grants and Cooperative (nn) Unrecovered indirect cost means Agreements to State and Local Gov- the difference between the amount ernments," published at 7 CFR parts awarded and the amount which could 3015 and 3016, 10 CFR part 600, 13 CFR have been awarded under the recipi- part 143, 15 CFR part 24, 20 CFR part ent's approved negotiated indirect cost 437,22 CFR part 135,24 CFR parts 44, 85, rate. Ill, 511, 570, 571, 575, 590, 850, 882, 905, (oo) Working capital advance means a 941, 968, 970, and 990, 28 CFR part 66, 29 procedure whereby funds are advanced CF ,parts 97 and 1470, 32 CFR part 278, to the recipient to cover its estimated 34 CFR parts 74 and 80, 36 CFR part disbursement needs for a given initial 1207,38 CFR part 43,40 CFR parts 30, 31, period. and 33, 43 CFR part 12, 44 CFR part 13, §215.3 Effect on other issuances. 45 CFR parts 74, 92, 602, 1157, 1174, 1183, 1234,and 2015,and 49 CFR part 18, For awards subject to this part, all administrative requirements of codi- [69 FR.26281, May 11, 2004, as amended at 70 fled program regulations, program FR 51880,Aug.31,20051 manuals, handbooks and other non- Subpart B-Pre-Award regulatory materials which are incon- p sistent with the requirements of this Requirements part shall be superseded, except to the extent they are required by statute, or §215.10 Purpose. authorized in accordance with the devi- Sections 215.11 through 215.17 pre- ations provision in§215.4. scribe forms and instructions and other §215.4 Deviations. pre-award matters to be used in apply- ing for Federal awards. The Office of Management and Budg- et (OMB) may grant exceptions for §215.11 Pre-award policies. classes of grants or recipients subject (a) Use of Grants and Cooperative to the requirements of this part when Agreements, and Contracts. In each in- exceptions are not prohibited by stat- stance, the Federal awarding agency ute. However, in the interest of max- shall decide on the appropriate award imum uniformity, exceptions from the instrument (i.e., grant, cooperative requirements of this part shall be per- agreement, or contract). The Federal mitted only in unusual circumstances. Grant and Cooperative Agreement Act Federal awarding agencies may apply (31 U.S.G. 6301-08) governs the use of more restrictive requirements to a grants, cooperative agreements and class of recipients when approved by contracts. A grant or cooperative OMB. Federal awarding agencies may agreement shall be used only when the apply less restrictive requirements principal purpose of a transaction is to when awarding small awards, except accomplish a public purpose of support for those requirements which are stat- or stimulation authorized by Federal B2 OMB Circulars and Guidance §215.15 statute. The statutory criterion for agency regulations implementing E.O.s choosing between grants and coopera- 12549 and 12689, "Debarment and Sus- tive agreements is that for the latter, pension." Under those regulations, cer- "substantial involvement is expected tain parties who are debarred, sus- between the executive agency and the pended or otherwise excluded may not State, local government, or other re- be participants or principals in Federal cipient when carrying out the activity assistance awards and subawards, and contemplated in the agreement." Con- in certain contracts under those tracts shall be used when the principal awards and subawards. purpose is acquisition of property or [70 PR 51879,Aug.31,2005] services for the direct benefit or use of • the Federal Government. §215.14 Special award conditions. (b) Public Notice and Priority Set- If an applicant or recipient:has a his- ting. Federal awarding agencies shall tory of poor performance,is not finan- notify the public of its intended fund- cially stable, has a management sys- ing priorities for discretionary grant tern that does not meet the standards programs, unless funding priorities are prescribed in this part, has not eon- established by Federal statute. formed to the terms and conditions of §215.12 Forms for applying fur Fed- a previous award, or is not otherwise eral assistance. responsible, Federal awarding agencies (a) Federal awarding may impose additional requirements as g agencies shall needed,provided that such applicant or comply with the applicable report recipient-is notified in writing as to: clearance requirements of 5 CFR part the nature of the additional require- 1320, "Controlling Paperwork Burdens ments, the reason why the additional on the Public," with regard to all requirements are being imposed, the forms used by the Federal awarding nature of the corrective action needed. agency in place of or as a supplement the time allowed for completing the to the Standard Form 424 (SF-424) se- corrective actions, and the method for ries. requesting reconsideration of the addi- (b) Applicants shall use the SF-424 tional requirements imposed. Any spe- series or those forms and instructions dal conditions shall be promptly re- prescribed by the Federal awarding moved once the conditions that agency. prompted them have been corrected. (c) For Federal programs covered by E.O. 12372, "Intergovernmental Review §215.15 Metric system of measure- of Federal Programs," (47 FR 30959, 3 ment. CFR, 1982 Comp., p. 197) the applicant The Metric Conversion Act, as shall complete the appropriate sections amended by the Omnibus Trade and of the SF-424 (Application for Federal Competitiveness Act (15 U.S.C. 205) de- Assistance) indicating whether the ap- dares that the metric system is the plication was subject to review by the preferred measurement system for U.S. State Single Point of Contact (SPOC). trade and commerce. The Act requires The name and address of the SPOC for each Federal agency to establish a date a particular State can be obtained from or dates in. consultation with the See- the Federal awarding agency or the retary of Commerce, when. the metric Catalog of Federal. Domestic Assistance. system of measurement will be used in The SPOC shall advise the applicant the agency's procurements, grants, and whether the program for which applica- other business-related activities. Met- tion is made has been selected by that ric implementation may take longer State for review. where the use of the system is initially (d)Federal awarding agencies that do impractical or likely to cause signifi- not use the SF-424 form should indi- cant inefficiencies in the accomplish- cate whether the application is subject meat of federally-funded activities. to review by the State under E.O.12372. Federal awarding agencies shall follow §215.13 Debarment and suspension. the provisions of E.O. 12770, "Metric p Usage in Federal Government Pro- Federal awarding agencies and re- grams" (56 FR 35801, 3 CFR, 1991 Comp., cipients shall comply with Federal p.343). 83 §215.16 2 CFR Ch. II (1-1-12 Edition) §215.16 Resource Conservation and data to performance data and develop Recovery Act, unit cost information whenever prac- Under the Act, any State agency or tical. agency of a political subdivision of a (b)Recipients' financial management State which is using appropriated Fed- systems shall provide for the following. eral funds must comply with section (1) Accurate, current and complete 6002. Section 6002 requires that pref- disclosure of the financial results of erence be given in procurement pro- each federally-sponsored project or grams to the purchase of specific prod- Program in accordance with the report- ucts containing recycled materials ing requirements set forth in§215.52. If identified in guidelines developed by a Federal awarding agency requires re- the Environmental Protection Agency porting on an accrual basis from a re- (EPA) (40 CFR parts 247-254). Accord- cipient that maintains its records on ingly, State and local institutions of other than an accrual basis, the recipi- higher education, hospitals, and non- ent shall not be required to establish profit organizations that receive direct an accrual accounting system. These Federal awards or other Federal funds recipients may develop such accrual shall give preference in their procure- data for its reports on the basis of an Inept programs funded with Federal analysis of the documentation on hand. funds to the purchase of recycled prod- (2) Records that identify adequately acts pursuant to the EPA guidelines. the source and application of funds for federally-sponsored activities. These §215.17 Certifications and representa- records shall contain information per- tions. taming to Federal awards, authoriza- Unless prohibited by statute or codi- tions, obligations, unobligated bal- lied regulation, each Federal awarding antes, assets, outlays, income and in- agency is authorized and encouraged to terest. allow recipients to submit certifi- (3) Effective control over and ac- cations and representations required countability for all funds, property and by statute, executive order, or regula- other assets. Recipients shall ade- Lion on an annual basis, if the recipi- quately safeguard all such assets and ents have ongoing and continuing rela- assure they are used solely for author- tionships with the agency. Annual cer- ized purposes. tifications and representations shall be (4) Comparison of outlays with budg- signed by responsible officials with the et amounts for each award. Whenever authority to ensure recipients' oomph- appropriate, financial information ance with the pertinent requirements. should be related to performance and unit cost data. Subpart C—Post Award (5) Written procedures to minimize Requirements the time elapsing between the transfer of funds to the recipient from the U.S. FINANCIAL AND PROGRAM MANAGEMENT Treasury and the issuance or redemp- tion of checks, warrants or payments §21520 Purpose of financial and pro- by other means for program purposes gram management. by the recipient. To the extent that the Sections 215.21 through 215.28 pre- provisions of the Cash Management Im- scribe standards for financial manage- provement Act(CMIA)(Pub. L. 101-453) ment systems, methods for making govern, payment methods of State payments and rules for: satisfying cost agencies, instrumentalities, and fiscal sharing and matching requirements, agents shall be consistent with CMIA accounting for program income,budget Treasury-State Agreements or the revision approvals, making audits, de- CMIA default procedures codified at 31 termining allowability of cost, and es- CFR part 205, "Withdrawal of Cash tablishing fund availability, from the Treasury for Advances under §21521 Standards for financial man- Federal Grant and Other Programs." systems. (6) Written procedures for deter- agementmining the reasonableness, alloeability (a) Federal awarding agencies shall and allowability of costs in accordance require recipients to relate financial with the provisions of the applicable 84 OMB Circulars and Guidance §215.22 Federal cost principles and the terms the actual disbursements by the recipi- and conditions of the award. ent organization for direct program or (7)Accounting records including cost project costs and the proportionate accounting records that are supported share of any allowable indirect costs. by source documentation. (e) Whenever possible, advances shall (c) Where the Federal Government be consolidated to cover anticipated guarantees or insures the repayment of cash needs for all awards made by the money borrowed by the recipient, the Federal awarding agency to the recipi- Federal awarding agency, at its discre- ent. tion, may require adequate bonding (1) Advance payment mechanisms in- and insurance if the bonding and insur- dude, but are net limited to,Treasury ance requirements of the recipient are check and electronic funds transfer. not deemed adequate to protect the in- (2)Advance payment mechanisms are terest of the Federal Government. subject to 31 CFR part 205. (d)The Federal awarding agency may (3) Recipients shall be authorized to require adequate fidelity bond coverage submit requests for advances and reim- where the recipient lacks sufficient bursements at least monthly when coverage to protect the Federal Gov- electronic fund transfers are not used. ernment's interest. (d) Requests for Treasury cheek ad- (e) Where bonds are required in the vance payment shall be submitted on situations described above, the bonds SF-270, "Request for Advance or Reim- shall be obtained from companies hold- bursement," or other forms as may be ing certificates of authority as accept- authorized by OMB.This form is not to able sureties, as prescribed in 31 CFR be used when Treasury check advance part 223, "Surety Companies Doing payments are made to the recipient Business with the United States." automatically through the use of a.pre- determined payment schedule or if pre- eluded by special Federal awarding (a) Payment methods shall minimize agency instructions for electronic the time elapsing between the transfer funds transfer. of funds from the United States Treas- (e) Reimbursement is the preferred ury and the issuance or redemption of method when the requirements in checks, warrants, or payment by other §215.12(b) cannot be met. Federal means by the recipients. Payment awarding agencies may also use this methods of State agencies or instru- method on any construction agree- mentalities shall be consistent with ment, or if the major portion of the Treasury-State CMIA agreements or construction project is accomplished default procedures codified at 31 CFR through private market financing or part 205. Federal loans, and the Federal assist- (b) Recipients are to be paid in ad- ance constitutes a minor portion of the vance, provided they maintain or dem- project. onstrate the willingness to maintain: (1) When the reimbursement method (1)Written procedures that minimize is used, the Federal awarding agency the time elapsing between the transfer shall make payment within 30 days of funds and disbursement by the re- after receipt of the billing, unless the cipient,and billing is improper, (2) Financial management systems (2) Recipients shall be authorized to that meet the standards for fund con- submit request for reimbursement at trol and accountability as established least monthly when electronic funds in§215.21. Cash advances to a recipient transfers are not used. organization shall be limited to the (f) If a recipient cannot meet the cri- minimum amounts needed and be teria for advance payments and the timed to be in accordance with the ac- Federal awarding agency has deter- tual, immediate cash requirements of mined that reimbursement is not fea- the recipient organization in carrying sible because the recipient lacks suffi- out the purpose of the approved pro- dent working capital, the Federal gram or project.. The timing and awarding agency may provide cash on a amount of cash advances shall be as working capital advance basis. Under close as is administratively feasible to this procedure, the Federal awarding 85 §215.22 2 CFR Ch. II (1-1-12 Edition) agency shall advance cash to the re- (2)Advances of Federal funds shall be cipient to cover its estimated disburse- deposited and maintained in insured ment needs for an initial period gen- accounts whenever possible, erally geared to the awardee's dis- (j) Consistent with the national goal bursing cycle. Thereafter, the Federal of expanding the opportunities for awarding agency shall reimburse the women-owned and minority-owned recipient for its actual cash disburse- business enterprises, recipients shall be nients. The working capital advance encouraged to use women-owned and method of payment shall not be used minority-owned banks(a bank which is for recipients unwilling or unable to owned at least 50 percent by women or provide timely advances to their sub- minority group members). recipient to meet the subrecipient's ac- (k) Recipients shall maintain ad- tual cash disbursements_ vances of Federal funds in interest (g) To the extent available, recipi- bearing accounts, unless paragraphs eats shall disburse funds available from (k)(1), (2) or(3)of this section apply. repayments to and interest earned on a (1) The recipient receives less than revolving fund, program income, re- $120,000 in Federal awards per year. bates, refunds, contract settlements, (2) The best reasonably available in- audit recoveries and interest earned on terest bearing account would not be ex- such funds before requesting additional petted to earn interest in excess of$250 cash payments. per year on Federal cash balances. (h)Unless otherwise required by stat- (3) The depository would require an ute, Federal awarding agencies shall average or minimum balance so high not withhold payments for proper that it would not be feasible within the charges made by recipients at any time expected Federal and non-Federal cash during the project period unless para- resources. graphs (h)(1) or (2) of this section (1) For those entities where CMIA apply. and its implementing regulations at 31 (1) A recipient has failed to comply CFR part 205 do not apply, interest with the project objectives, the terms earned on Federal advances deposited and conditions of the award, or Federal in interest bearing accounts shall be reporting requirements. remitted annually to Department of (2) The recipient or subrecipient is Health and Human Services, Payment delinquent in a debt to the United Management System, Rockville, MD States as defined in OMB Circular A- 20852. Interest amounts up to $250 per 129, "Managing Federal Credit Pro- year may be retained by the recipient grams." Under such conditions, the for administrative expense. State uni- Federal awarding agency may, upon versities and hospitals shall comply reasonable notice, inform the recipient with CMIA,as it pertains to interest.If that payments shall not be made for an entity subject to CMIA uses its own obligations incurred after a specified funds to pay pre-award costs for discre- date until the conditions are corrected tionary awards without prior written or the indebtedness to the Federal Gov- approval from the Federal awarding ernment is liquidated. agency, it waives its right to recover (i) Standards governing the use of the interest under CMIA. banks and other institutions as deposi- (m)Except as noted elsewhere in this tortes of funds advanced under awards part, only the following forms shall be are as follows. authorized for the recipients in re- (1) Except for situations described in questing advances and reimburse- paragraph(i)(2) of this section, Federal meats. Federal agencies shall not re- awarding agencies shall not require quire more than an original and two separate depository accounts for funds copies of these forms. provided to a recipient or establish any (1) SF-270, Request for Advance or eligibility requirements for deposi- Reimbursement. Each Federal award- tories for funds provided to a recipient. ing agency shall adopt the SF-270 as a However,recipients must be able to ac- standard form for all nonconstruction count for the receipt, obligation and programs when electronic funds trans- expenditure of funds. fer or predetermined advance methods 86 OMB Circulars and Guidance §215.23 are not used. Federal awarding agen- (1) The certified value of the remain- cies, however, have the option of using ing life of the property recorded in the this form for construction programs in recipient's accounting records at the lieu of the SF-271, "Outlay Report and time of donation. Request for Reimbursement for Con- (2) The current fair market value. struction Programs." However, when there is sufficient jus- (2) SF-271, Outlay Report and Re- tification, the Federal awarding agen- quest for Reimbursement for Construe- cy may approve the use of the current tion Programs. Each Federal awarding fair market value of the donated prop- agency shall adopt the SF-271 as the erty, even if it exceeds the certified standard form to be used for requesting value at the time of donation to the reimbursement for construction pro- project. grams. However, a Federal awarding (d) Volunteer services furnished by agency may substitute the SF-270 professional and technical personnel, when the Federal awarding agency de- consultants, and other skilled and un- termines that it provides adequate in- skilled labor may be counted as cost formation to meet Federal needs. sharing or matching if the service is an §21b 23 Cost or integral and necessary part of an ap- S matching. proved project.or program. Rates for (a) All contributions, including cash volunteer services shall be consistent and third party in-kind, shall be ac- with those paid for similar work in the cepted as part of the recipient's cost recipient's organization. In those in- sharing or matching when such con- stances in which the required skills are tributions meet all of the following cri- not found in the recipient organization, terra. rates shall be consistent with those (1)Are verifiable from the recipient's paid for similar work in the labor mar- records. ket in which the recipient competes for (2) Are not included as contributions the kind of services involved. In either for any other federally-assisted project case, paid fringe benefits that are rea- or program. sonable, allowable, and allocable may (3) Are necessary and reasonable for be included in the valuation. proper and efficient accomplishment of (e)When an employer other than the project or program objectives. recipient furnishes the services of an (4) Are allowable under the applica- employee, these services shall be val- ble cost principles. ued at the employee's regular rate of (5) Are not paid by the Federal Gov- pay (plus an amount of fringe benefits ernment under another award, except that are reasonable, allowable, and al- where authorized by Federal statute to locable, but exclusive of overhead be used for cost sharing or matching. costs), provided these services are in (6) Are provided for in the approved the same skill for which the employee budget when required by the Federal is normally paid. awarding agency. (f) Donated supplies may include (7) Conform to other provisions of such items as expendable equipment, this part,as applicable. office supplies, laboratory supplies or (b)Unrecovered indirect costs may be workshop and classroom supplies. included as part of cost sharing or Value assessed to donated supplies in- matching only with the prior approval eluded in the cost sharing or matching of the Federal awarding agency. share shall be reasonable and shall not (c)Values for recipient contributions exceed the fair market value of the of services and property shall be estab- property at the time of the donation. lished in accordance with the applica- (g) The method used for determining ble cost principles. If a Federal award- cost sharing or matching for donated ing agency authorizes recipients to do- equipment, buildings and land for nate buildings or land for construction/ which title passes to the recipient may facilities acquisition projects or long- differ according to the purpose of the term use, the value of the donated award, if paragraphs(g)(1)or(2)of this property for cost sharing or matching section apply. shall be the lesser of paragraphs (c)(1) (1) If the purpose of the award is to or(2)of this section. assist the recipient in the acquisition 87 §215.24 2 CFR Ch. II (1-1-12 Edition) of equipment, buildings or land, the related to projects financed in whole or total value of the donated property in part with Federal funds. may be claimed as cost sharing or (b) Except as provided in paragraph matching. (h) of this section, program income (2) If the purpose of the award is to earned during the project period shall support activities that require the use be retained by the recipient and, in ac- of equipment, buildings or land, nor- cordance with Federal awarding agency mally only depreciation or nse charges regulations or the terms and condi- for equipment and buildings may be tions of the award,shall be used in one made. However, the full value of equip- or more of the ways listed in the fol- ment or other capital assets and fair lowing. rental charges for land may be allowed, (1) Added to funds committed to the provided that the Federal awarding project by the Federal awarding agency agency has approved the charges. and recipient and used to further eligi- (h) The value of donated property ble project or program objectives. shall be determined in accordance with (2) Used to finance the non-Federal the usual accounting policies of the re- share of the project or program. cipient, with the following qualifica- (3)Deducted from the total project or Lions. program allowable cost in determining (1) The value of donated land and the net allowable costs on which the buildings shall not exceed its fair mar- Federal share of costs is based. ket value at the time of donation to (c) When an agency authorizes the the recipient as established by an inde- disposition of program income as de- pendent appraiser (e.g., certified real scribed in paragraphs (b)(1) or (b)(2) of property appraiser or General Services this section, program income in excess Administration representative) and of any limits stipulated shall be used in certified by a responsible official of the accordance with paragraph (b)(3) of recipient. this section. (2) The value of donated equipment (d) In the event that the Federal shall not exceed the fair market value awarding agency does not specify in its of equipment of the same age and con- dition at the time of donation, regulations the terms and income Lions of the award (3) The value of donated space shall is how program inccome to not exceed the fair rental value of com- section be used, paragraph aut (b)(3)a ofll thiso parable space as established by an inde- allprojectsshall apply programs except re- pendent appraisal of comparable space all or programs supportxcept and facilities in a privately-owned search, araFor awards that thise re building - andsearch, paragraph (b)(1) of this section in the same locality. shall apply automatically unless the (4) The value of loaned equipment awarding agency indicates in the terms shall not exceed its fair rental value. and conditions another alternative on (5) The following requirements per- the award or the recipient is subject to tain to the recipient's supporting special award conditions, as indicated records for in-kind contributions from in§215.14. third parties. (e) Unless Federal awarding agency (i) Volunteer services shall be docu- regulations or the terms and condi- mented and, to the extent feasible, sup- tions of the award provide otherwise, ported by the same methods used by recipients shall have no obligation to the recipient for its own employees. the Federal Government regarding pro- (ii) The basis for determining the gram income earned after the end of valuation for personal service, mate- the project period. rial, equipment, buildings and land (f) If authorized by Federal awarding shall be documented. agency regulations or the terms and §21524 Program income. conditions of the award, costs incident to the generation of program income (a) Federal awarding agencies shall may be deducted from gross income to apply the standards set forth in this determine program income, provided section in requiring recipient organiza- these costs have not been charged to tions to account for program income the award. 88 OMB Circulars and Guidance §215.25 (g)Proceeds from the sale of property (6) The inclusion, unless waived by shall be handled in accordance with the the Federal awarding agency, of costs requirements of the Property Stand- that require prior approval in accord- ards(see§215.30 through§215.37). ance with any of the following, as ap- (h) Unless Federal awarding agency plicable: regulations or the terms and condition (i) 2 CFR part 220, "Cost Principles of the award provide otherwise, recipi- for Educational Institutions (OMB Cir- ents shall have no obligation to the cular A-21);" Federal Government with respect to (ii) 2 CFR part 230, "Cost Principles program income earned from license for Non-Profit Organizations(OMB Cir- fees and royalties for copyrighted ma- cular A 122);" terial, patents, patent applications, (iii) 45 CFR part 74, Appendix E, trademarks, and inventions produced "Principles for Determining Costs Ap- under an award. However, Patent and plicable to Research and Development Trademark Amendments (35 U.S.C. 18) under Grants and Contracts with Hos- apply to inventions made under an ex- pitals;" and perimental, developmental, or research (iv) 48 CFR part 31, "Contract Cost award. Principles and Procedures." 4215.25 Revision of budget pro (7) The transfer of funds allotted for gram plans. training allowances (direct payment to trainees) to other categories of ex- (a) The budget plan is the financial pense. expression of the project or program as (8) Unless described in the applica- approved during the award process. It tion and funded in the approved may include either the Federal and awards, the subaward, transfer or con- non-Federal share, or only the Federal tracting out of any work under an share, depending upon Federal award- award.This provision does not apply to ing agency requirements.It shall be re- the purchase of supplies, material, lated to performance for program eval- equipment or general support services. uation purposes whenever appropriate. (d) No other prior approval require- (b) Recipients are required to report ments for specific items may be im- deviations from budget and program posed unless a deviation has been ap- plans, and request prior approvals for proved by OMB. budget and program plan revisions, in (e) Except for requirements listed in accordance with this section. paragraphs (c)(1) and (c)(4) of this see- (c) For nonconstruction awards, re- tion, Federal awarding agencies are au- cipients shall request prior approvals thorized,at their option, to waive cost- from Federal awarding agencies for one related and administrative prior writ- or more of the following program or ten approvals required by 2 CFR parts budget related reasons. 220 and 230 (OMB Circulars A 21 and A— (1) Change in the scope or the objec- 122). Such waivers may include author- Live of the project or program (even if izing recipients to do any one or more there is no associated budget revision of the following. requiring prior written approval). (1) Incur pre-award costs 90 calendar (2) Change in a key person specified days prior to award or more than 90 in the application or award document. calendar days with the prior approval (3) The absence for more than three of the Federal awarding agency. All months, or a 25 percent reduction in pre-award costs are incurred at the re- time devoted to the project, by the ap- cipient's risk (i.e., the Federal award- proved project director or principal in- bag agency is under no obligation to re- vestigator. imburse such costs if for any reason (4) The need for additional Federal the recipient does not receive an award funding. or if the award is less than anticipated (5)The transfer of amounts budgeted and inadequate to cover such costs). for indirect costs to absorb increases in (2) Initiate a one-time extension of direct costs, or vice versa, if approval the expiration date of the award of up is required by the Federal awarding to 12 months unless one or more of the agency. following conditions apply. For one- 89 §215.26 2 CFR Ch. II (1-1-12 Edition) time extensions, the recipient must no- (3) A revision is desired which in- tify the Federal awarding agency in volves specific costs for which prior writing with the supporting reasons written approval requirements may be and revised expiration date at least 10 imposed consistent with applicable days before the expiration date sped.- OMB cost principles listed in§215.27. Pied in the award. This one-time exten- (1) No other prior approval require- sion may not be exercised merely for meats for specific items may be im- the purpose of using unobligated bal- posed unless a deviation has been ap- saxes. proved by OMB. (i)The terms and conditions of award (j) When a Federal awarding agency prohibit the extension. makes an award that provides support (ii)The extension requires additional for both construction and nonconstruc- Federal funds. tion work, the Federal awarding agen- (111) The extension involves any cy may require the recipient to request change in the approved objectives or Prior approval from the Federal award- scope of the project. ing agency before making any fund or (3) Carry forward unobligated bal- budget transfers between the two types ances to subsequent funding periods. of work supported, (4) For awards that support research, (k) For both construction and non- unless the Federal awarding agency construction awards, Federal awarding provides otherwise in the award or in agencies shall require recipients to no- the agency's regulations, the prior ap- tify the Federal awarding agency in proval requirements described in this writing promptly whenever the amount paragraph(e)are automatically waived of Federal authorized funds is expected (i.e., recipients need not obtain such to exceed the needs of the recipient for prior approvals) unless one of the con- the project period by more than $5000 ditions included in paragraph (e)(2) ap- or five percent of the Federal award, plies. whichever is greater. This notification (f) The Federal awarding agency shall not be required if an application may, at its option,restrict the transfer for additional funding is submitted for of funds among direct cost categories a continuation award. or programs, functions and activities (I) When requesting approval for for awards in which the Federal share budget revisions, recipients shall use of the project exceeds $100,000 and the the budget forms that were used in the cumulative amount of such transfers application unless the Federal award- exceeds or is expected to exceed 10 per- ing agency indicates a letter of request cent of the total budget as last ap- suffices, proved by the Federal awarding agen- (m) Within 30 calendar days from the cy. No Federal awarding agency shall date of receipt of the request for budg- permit a transfer that would cause any et revisions, Federal awarding agencies. Federal appropriation or part thereof shall review the request and notify the to be used for purposes other than recipient whether the budget revisions those consistent with the original in- have been approved. If the revision is tent of the appropriation. still .under consideration at the end of (g)All other changes to nonconstruc- 30 calendar days, the Federal awarding tion budgets,except for the changes de- agency shall inform the recipient in scribed in paragraph (j) of this section, writing of the date when the recipient do not require prior approval. may expect the decision. (h) For construction awards, recipi- [69 FR 26281,May 11, 2004, as amended at 70 eats shall request prior written ap- FR 51880,Aug.31,2005) proval promptly from Federal awarding agencies for budget revisions whenever §215.26 Non-Federal audits. paragraphs (h)(1), (2) or (3) of this sec- (a) Recipients and subrecipients that tion apply. are institutions of higher education or (1) The revision results from changes other non-profit organizations (includ- in the scope or the objective of the ing hospitals) shall be subject to the project or program. audit requirements contained in the (2) The need arises for additional Single Audit Act Amendments of 1996 Federal funds to complete the project. (31 U.S.C. 7501-7507) and revised OMB 90 OMB Circulars and Guidance §215.29 Circular A-133, "Audits of States, visions of the Federal Acquisition Reg- Local Governments,and Non-Profit Or- ulation(FAR)at 48 CFR part 31. ganizations." (b)State and local governments shall [10 PR 61880, Aug.31,20051 be subject to the audit requirements §215.28 Period of availability of funds. contained in the Single Audit Act Where a funding period is specified, a Amendments of 1996 (31 U.S.C. 7501- recipient may charge to the grant only 7507) and revised OMB Circular A-133, allowable costs resulting from obliga- Audits of States, Local Governments, tions incurred during the funding pe- and Non-Profit Organizations." (c) For profit hospitals not covered riod and any pre-award costs author- by the audit provisions of revised OMB wed by the Federal awarding agency. Circular A-133 shall be subject to the §215.28 Conditional exemptions. audit requirements of the Federal (a) OMB authorizes conditional ex- awarding agencies. (d) Commercial organizations shall emption from OMB arlminiatrative re- be subject to the audit requirements of quirements and cost principles circu- the Federal awarding agency or the lays for certain Federal programs with prime recipient as incorporated into statutorily-authorized consolidated the award document. planning and consolidated administra- tive funding, that are identified by a §215.27 Allowable costs. Federal agency and approved by the head of the Executive department or For each kind of recipient, there is a establishment. A Federal agency shall set of Federal principles for deter- consult with OMB during its consider- mining allowable costs. Allowability of ation of whether to grant such an ex- costs shall be determined in accord- emption. ance with the cost principles applicable (b) To promote efficiency in State to the entity incurring the costs. Thus, and local program administration, allowability of costs incurred by State, when Federal non-entitlement pro- local or federally-recognized Indian grams with common purposes have spe- tribal governments is determined in cific statutorily-authorized consoli- accordance with the provisions of 2 dated planning and consolidated ad- CFR part 225, "Cost Principles for niinistrative funding and where most of State, Local,and Indian Tribal Govern- the State agency's resources come ments(OMB Circular A-87." The allow- from non-Federal sources, Federal ability of costs incurred by non-profit agencies may exempt these covered organizations is determined in accord- State-administered, non-entitlement ance with the provisions of 2 CFR part grant programs from certain OMB 230, "Cost Principles for Non-Profit Or- grants management requirements. The ganizations(OMB Circular A-122)."The exemptions would be from: allowability of costs incurred by insti- (1) The requirements in 2 CFR part tutions of higher education is deter- 225, "Cost Principles for State, Local, mined in accordance with the provi- and Indian Tribal Governments (OMB sions of 2 CFR part 220, "Cost Prim- Circular A-87)" other than the ciples for Educational Institutions allocability of costs provisions that are (OMB Circular A-21)."The allowability contained in subsection C.3 of appendix of costs incurred by hospitals is deter- A to that part; mined in accordance with the provi- (2) The requirements in 2 CFR part sions of appendix E of 45 CFR part 74;. 220, "Cost Principles for Educational "Principles for Determining Costs Ap- Institutions (OMB Circular A-21)" plicable to Research and Development other than the allocability of costs pro- Under Grants and Contracts with Hos- visions that are contained in paragraph pitals." The allowability of costs. in- 0.4 in section C of the appendix to that curred by commercial organizations part; and those non-profit organizations list- (2) The requirements in 2 CFR part ed in Attachment C to Circular A-122 is 230, "Cost Principles for Non-Profit Or- determined in accordance with the pro- ganizations (OMB Circular A-122)" 91 §215.30 2 CFR Ch. II(1-1-12 Edition) other than the allocability of costs pro- §215.31 Insurance coverage. visions that are in paragraph A.4 in Recipients shall, at a minimum, pro- section A of appendix A to that part; vide the equivalent insurance coverage (4) The administrative requirements for real property and equipment ac- provisions of part 215(OMB Circular A- quired with Federal funds as provided 110, "Uniform Administrative Require- to property owned by the recipient. ments for Grants and Agreements with Federally-owned property need not be Institutions of Higher Education, Hos- insured unless required by the terms pitals, and Other Non-Profit Organiza- and conditions of the award. tions,");and (5) The agencies' grants management §215.32 Real property. common rule(see§215.5). Each Federal awarding agency shall (c) When a Federal agency provides prescribe requirements for recipients this flexibility, as a prerequisite to a concerning the use and disposition of State's exercising this option, a State real property acquired in whole or in must adopt its own written fiscal and part under awards. Unless otherwise administrative requirements for ex- provided by statute, such require- pending and accounting for all funds, ments, at a minimum, shall contain which are consistent with the provi- the following. sions of 2 CFR part 225, "Cost Prin- (a)Title to real property shall vest in ciples for State, Local, and Indian the recipient subject to the condition Tribal Governments (OMB Circular A- that the recipient shall use the real 87)"and extend such policies to all sub- property for the authorized purpose of recipients.These fiscal and administra- the project as long as it is needed and tive requirements must be sufficiently shall not encumber the property with- specific to ensure that: funds are used out approval of the Federal awarding in compliance with all applicable Fed- agency, eral statutory and regulatory provi- (b)The recipient shall obtain written sions, costs are reasonable and nee- approval by the Federal awarding agen- essary for operating these programs, cy for the use of real property in other and funds are not be used for general federally-sponsored projects when the expenses required to carry out other recipient determines that the property responsibilities of a State or its sub- is no longer needed for the purpose of recipients. the original project. Use in other [69 FR 26281, May 11, 2004, as amended at 70 projects shall be limited to those under FR 51881,Aug.31,2005] federally-sponsored projects (i.e., awards) or programs that have pur- PROPERTY STANDARDS poses eonsistent with those authorized for support by the Federal awarding §215.30 Purpose of property stand- agency. ards. (c) When the real property is no Sections 215.31 through 215.37 set longer needed as provided in pars forth uniform standards governing graphs (a) and (b) of this section, the management and disposition of prop- recipient shall request disposition in erty furnished by the Federal Govern- agency from the Federal awarding merit whose cost was charged to a agency or its successor Federal award- project supported by a Federal award. mg agency. The Federal awarding Federal awarding agencies shall re- agency shall observe one or more of the following disposition instructions. quire recipients to observe these stand- (1)The recipient may be permitted to ards under awards and shall not impose retain title without further obligation additional requirements, unless specifi- to the Federal Government after it cally required by Federal statute. The compensates the Federal Government recipient may use its own property for that percentage of the current fair management standards and procedures market value of the property attrib- provided it observes the provisions of utable to the Federal participation in §215.31 through§215.37. the project. 92 OMB Circulars and Guidance §215.34 (2) The recipient may be directed to (b) Exempt property. When statutory sell the property under guidelines pro- authority exists, the Federal awarding vided by the Federal awarding agency agency has the option to vest title to and pay the Federal Government for property acquired with Federal funds that percentage of the current fair in the recipient without further obliga- market value of the property attrib- tion to the Federal Government and utable to the Federal participation in under conditions the Federal awarding the project (after deducting actual and agency considers appropriate. Such reasonable selling and fix-up expenses, property is "exempt property." Should if any, from the sales proceeds). When a Federal awarding agency not estab- the recipient is authorized or required lish conditions, title to exempt prop- to sell the property,proper sales proee- erty upon acquisition shall vest in the dares shall be established that provide recipient without further obligation to for competition to the extent prac- the Federal Government. ticable and result in the highest pos- sible return. §215.34 Equipment. (3) The recipient may be directed to (a) Title to equipment acquired by a transfer title to the property to the recipient with Federal funds shall vest Federal Government or to an eligible in the recipient, subject to conditions third party provided that, in such of this section, cases, the recipient shall be entitled to (b)The recipient shall not use equip- compensation for its attributable per- ment acquired with Federal funds to centage of the current fair market provide services to non-Federal outside value of the property. organizations for.a fee that is less than private companies charge for equiva- §215.33 Federally-owned and exempt lent services, unless specifically au- property. thorized by Federal statute,for as long (a) Federally-owned property. (1) Title as the Federal Government retains an to federally-owned property remains in(c)Theest n the equipment. equip- vested in the Federal Government. Re- en recipient shall use the programfor olpients shall submit annually an in- went in the acquiredprojec or nase need- ventory listing of federally-owned which it ewrs oro as long o pro- property in their custody to the Fed- ed,rwhethercontinues notbes project byr Fed- eral awarding agency.Upon completion ral and hto ll not encumbertd e of the award or when the property is no eralp funds and shall approvalfthe the Fed- longer needed, the recipient shall re- eral aw withoutagency. Whenof l tiger port the property to the Federal award- needed fo theng no longer pro- ing agency for further Federal agency her ioriginal projectut or equip- utilization. gram,the recipient shall use the went in connection with its other fed- (2) If the Federal awarding agency erally-sponsored activities, in the fop- has no further need for the property,it lowing order of priority: shall be declared excess and reported to (1) Activities sponsored by the Fed- the General Services Administration, eral awarding agency which funded the unless the Federal awarding agency original project,then has statutory authority to dispose of (2)Activities sponsored by other Fed- the property by alternative methods eral awarding agencies. (e.g., the authority provided by the (d) During the time that equipment Federal Technology Transfer Act (15 is used on the project or program for U.S.C. 3710 (I)) to donate research which it was acquired, the recipient equipment to educational and non-prof- shall make it available for use on other it organizations in accordance with projects or programs if such other use E.O. 12821, "Improving Mathematics will not interfere with the work on the and Science Education in Support of project or program for which the equip- the National Education Goals" (57 FR ment was originally acquired. First 54285, 3 CFR, 1992 Comp., p. 323)). Ap- preference for such other use shall be propriate instructions shall be issued given to other projects or programs to the recipient by the Federal award- sponsored by the Federal awarding ing agency. agency that financed the equipment; 93 §215.34 2 CFR Ch. II (1-1-12 Edition) second preference shall be given to ferences between quantities deter- projects or programs sponsored by mined by the physical inspection and other Federal awarding agencies. If the those shown in the accounting records equipment is owned by the Federal shall be investigated to determine the Government, use on other activities causes of the difference. The recipient not sponsored by the Federal Govern- shall, in connection with the inven- ment shall be permissible if authorized tory, verify the existence, current uti- by the Federal awarding agency. User lization, and continued need for the charges shall be treated as program in- equipment. come. (4)A control system shall be in effect (e) When acquiring replacement to insure adequate safeguards to pre- equipment, the recipient may use the vent loss, daniage, or theft of the equipment to be replaced as trade-in or equipment. Any loss, damage, or theft sell the equipment and use the pro- of equipment shall be investigated and ceeds to offset the costs of the replace- fully documented; if the equipment was ment equipment subject to the ap- owned by the Federal Government, the proval of the Federal awarding agency. recipient shall promptly notify the (f) The recipient's property manage- Federal awarding agency. ment standards for equipment acquired (5)Adequate maintenance procedures with Federal funds and federally-owned shall be implemented to keep the equipment shall include all of the fol- lowing: equipment in good condition. (1) Equipment records shall be main- (6) Where the recipient is authorized tained accurately and shall include the or required to sell the equipment, prop- following information. er sales procedures shall be established (1)A description of the equipment, which provide for competition to the (ii) Manufacturer's serial number, extent practicable and result in the model number, Federal stock number, highest possible return, national stock number,or other identi- (g) When the recipient no longer fication number. needs the equipment, the equipment (iii) Source of the equipment, includ- may be used for other activities in ac- ing the award number, cordance with the following standards. (iv) Whether title vests in the recipi- For equipment with a current per unit ent or the Federal Government. fair market value of$5000 or more, the (v) Acquisition date (or date re- recipient may retain the equipment for ceived, if the equipment was furnished other uses provided that compensation by the Federal Government)and cost. is made to the original Federal award- (vi) Information from which one can ing agency or its successor. The calculate the percentage of Federal amount of compensation shall be corn- participation in the cost of the equip- puted by applying the percentage of ment (not applicable to equipment fur- Federal participation in the cost of the niched by the Federal Government). original project or program to the cur- (vii) Location and condition of the rent fair market value of the equip- equipment and the date the informa- ment. If the recipient has no need for tion was reported. the equipment, the recipient shall re- (viii)Unit acquisition cost. quest disposition instructions from the (ix) Ultimate disposition data, in- Federal awarding agency. The Federal eluding date of disposal and sales price awarding agency shall determine or the method used to determine cur- whether the equipment can be used to rent fair market value where a recipi- meet the agency's requirements. If no ent compensates the Federal awarding requirement exists within that agency, agency for its share. the availability of the equipment shall (2) Equipment owned by the Federal be reported to the General Services Ad- Government shall be identified to indi- ministration by the Federal awarding cate Federal ownership. agency to determine whether a require- (3)A physical inventory of equipment ment for the equipment exists in other shall be taken and the results rec- Federal agencies. The Federal award- mailed with the equipment records at ing agency shall issue instructions to least once every two years. Any dif- the recipient no later than 120 calendar 94 OMB Circulars and Guidance §215.36 days after the recipient's request and the equipment shall be subject to the the following procedures shall govern, provisions for federally-owned equip- (1) If so instructed or if disposition ment. instructions are not issued within 120 calendar days,after the recipient's re- §215.35 Supplies and other expend- quest, the recipient shall sell the able property. equipment and reimburse the Federal (a) Title to supplies and other ex- awarding agency an amount computed pendable property shall vest in the re- by applying to the sales proceeds the cipient upon acquisition. If there is a percentage of Federal participation in residual inventory of unused supplies the cost of the original project or pro- exceeding $5000 in total aggregate gram. However, the recipient shall be value upon termination or completion permitted to deduct and retain from of the project or program and the sup- the Federal share$500 or ten percent of plies are not needed for any other fed- the proceeds, whichever is less, for the recipient's selling and handling ex- erally-sponsored project or program, penses the recipient shall retain the supplies (2) If the recipient is instructed to for use on non-Federal sponsored ac- ship the equipment elsewhere, the re- tivities or sell them, but shall, in ei- cipient shall be reimbursed by the Fed- ther case,compensate the Federal Gov- eral Government by an amount which ernrnent for its share. The amount of is computed by applying the percent- compensation shall be computed in the age of the recipient's participation in same manner as for equipment. the cost of the original project or pro- (b) The recipient shall not use sup- gram to the current fair market value plies acquired with Federal funds to of the equipment, plus any reasonable provide services to non-Federal outside shipping or interim storage costs in- organizations for a fee that is less than curred. private companies charge for equiva- (3) If the recipient is instructed to lent services, unless specifically au- otherwise dispose of the equipment, the thorized by Federal statute as long as recipient shall be reimbursed by the the Federal Government retains an in- Federal awarding agency for such costs terest in the supplies. incurred in its disposition; (4)The Federal awarding agency may §215.36 Intangible property. reserve the right to transfer the title (a) The recipient may copyright any to the Federal Government or to a work that is subject to copyright and third party named by the Federal Gov- was developed, or for which ownership ernment when such third party is oth- was purchased, under an award. The erwise eligible under existing statutes. Federal awarding agenoy(ies) reserve a Such transfer shall be subject to the following standards. royalty-free, nonexclusive and irrev- (1) The equipment shall be appro- ocable right to reproduce, publish, or priately identified in the award or oth- otherwise use the work for Federal par- erwise made known to the recipient in poses, and to authorize others to do so. writing. (b) Recipients are subject to applica- (ii) The Federal awarding agency ble regulations governing patents and shall issue disposition instructions inventions, including government-wide within 120 calendar days after receipt regulations issued by the Department of a final inventory. The final inven- of Commerce at 37 CFR part 401, tory shall list all equipment acquired "Rights to Inventions Made by Non- with grant funds and federally-owned profit Organizations and Small Busi- equipment. If the Federal awarding ness Firms Under Government Grants, agency fails to issue disposition in- Contracts and Cooperative Agree- structions within the 120 calendar day merits." period, the recipient shall apply the (c) The Federal Government has the standards of this section, as appro- right to: priate. (1) Obtain, reproduce, publish or oth- (iii) When the Federal awarding erwise use the data first produced agency exercises its right to take title, under an award. 95 §215.37 2 CFR Ch. II (1-1-12 Edition) (2)Authorize others to receive, repro- (B)A Federal agency publicly and of- duce, publish, or otherwise use such ficially cites the research findings in data for Federal purposes, support of an agency action that has (d) (1) In addition, in response to a the force and effect of law. Freedom of Information Act (FOIA)re- (iii)Used by the Federal Government quest for research data relating to pub- in developing an agency action that lashed research findings produced under has the force and effect of law is de- an award that was used by the Federal fined as when an agency publicly and Government in developing an agency officially cites the research findings in action that has the force and effect of support of an agency action that has law, the Federal awarding agency shall the force and effect of law. request, and the recipient shall pro- (e) Title to intangible vide, within a reasonable time, the re- gi property and search data so that they can be made debt instruments acquired under an available to the public through the pro- award or subaward vests upon acquisi- cedures established under the FOIA. If tion in the recipient. The recipient the Federal awarding agency obtains shall use that property for the origi- the research data solely in response to pally-authorized purpose, and the re- a FOIA request,the agency may charge cipient shall not encumber the prop- the requester a reasonable fee equaling erty without approval of the Federal the full incremental cost of obtaining awarding agency. When no longer need- the research data. This fee should re- ed for the originally authorized pur- flect costs incurred by the agency, the pose,disposition of the intangible prop- recipient, and the applicable subrecipi- erty shall occur in accordance with the cuts. This fee is in addition to any fees provisions of§215.34(g). the agency may assess under the FOIA [69 FR 26281, May 11,2004, as amended at 70 (5 U.S.G.552(a)(4)(A)), FR 51881,Aug.31,2005] (2) The following definitions apply for purposes of paragraph (d) of this §215.37 Property trust relationship. section: Real property, equipment, intangible (i)Research data is defined as the re- property and debt instruments that are corded factual material commonly ac- acquired or improved with Federal cepted in the scientific communityfi as funds shall be held in trust by the re- necessary to validate research findings, cipient as trustee for the beneficiaries but not any of the following: Prelimtrek p i oft he project or program under which nary analyses, drafts of scientific a- pers, plans for future research, peer re the property was acquired or improved. views, or communications with col Agencies may require recipients to leagues. This "recorded" material ex- record liens or other appropriate no- eludes physical objects(e.g.,laboratory tioes of' record to indicate that per samples). Research data also do not in- sonal or real property has been ac- elude: quired or improved with Federal funds (A) Trade secrets, commercial infor- and that use and disposition conditions mation, materials necessary to be held apply to the property. confidential by a researcher until they are published, or similar information PROCUREMENT STANDARDS which is protected under law; and §215.40 Purpose of (B) Personnel and medical informa- . procurement standards. tion and similar information the dis- closure of which would constitute a Sections 215.41 through 215.48 set clearly unwarranted invasion of per- forth standards for use by recipients in sonal privacy, such as information that establishing procedures for the pro- could be used to identify a particular curement of supplies and other expend- person in a research study. able property,equipment, real property (ii) Published is defined as either and other services with Federal funds. when: These standards are furnished to en- (A) Research findings are published sure that such materials and services in a peer-reviewed scientific or tech- are obtained in an effective manner nical journal; or and in compliance with the provisions 96 OMB Circulars and Guidance §215.44 of applicable Federal statutes and ex- §215.43 Competition. ecutive orders. No additional procure- All procurement transactions shall meat standards or requirements shall be conducted in a manner to provide, be imposed by the Federal awarding to the maximum extent practical, open agencies upon recipients, unless spe- and free competition. The recipient cifioally required by Federal statute or shall be alert to organizational con- executive order or approved by OMB. filets of interest as well as noncompeti- §215.41 Recipient responsibilities. tive practices among contractors that The standards contained in this sec- may restrict or eliminate competition tion do not relieve the recipient of the or otherwise restrain trade. In order to ensure objective contractor perform- contractual responsibilities arising anoe and eliminate unfair competitive under its contract(s). The recipient is advantage, contractors that develop or the responsible authority, without re- draft specifications, requirements, course to the Federal awarding agency, statements of work, invitations for regarding the settlement and satisfac- bids and/or requests for proposals shall tion of all contractual and administra- be excluded frpm competing for such tive issues arising out of procurements procurements.Awards shall be made to entered into in support of an award or the bidder or offeror whose bid or offer other agreement. This includes dis- is responsive to the solicitation and is putes,claims,protests of award,source most advantageous to the recipient, evaluation or other matters of a con- price, quality and other factors consid- tractual nature. Matters concerning ered. Solicitations shall clearly set violation of statute are to be referred forth all requirements that the bidder to such Federal, State or local author- or offeror shall fr fill in order for the ity as may have proper jurisdiction. bid or offer to be evaluated by the re- cipient. Any and all bids or offers may be rejected when it is in the recipient's The recipient shall maintain written interest to do so. standards of conduct governing the performance of its employees engaged §215.44 Procurement procedures in the award and administration of (a)All recipients Flinn establish writ- contracts. No employee, officer, or ten procurement procedures. These agent shall participate in the selection, procedures shall provide for, at a min- award, or administration of a contract imum, that paragraphs (a)(1), (2) and supported by Federal funds if a real or (3)of this section apply. apparent conflict of interest would be (1) Recipients avoid purchasing an- involved. Such a conflict would arise necessary items. when the employee, officer, or agent, (2) Where appropriate, an analysis is any member of his or her immediate made of lease and purchase alter- faintly, his or her partner, or an orga- natives to determine which would be nization which employs or is about to the most economical and practical pro- employ any of the parties indicated cerement for the Federal Government. herein,has a financial or other interest (3) Solicitations for goods and serv- in the firm selected for an award. The ices provide for all of the following. officers, employees, and agents of the (i) A clear and accurate description recipient shall neither solicit nor ac- of the technical requirements for the cept gratuities, favors, or anything of material, product or service to be pro monetary value from contractors, or cured. In competitive procurements, parties to subagreements._However, re- such a description shall not contain cipients may set standards for situa- features which unduly restrict com- tions in which the financial interest is petition. not substantial or the gift is an unso- (ii) Requirements which the bidder/ licited item of nominal value. The offeror must fulfill and all other fac- standards of conduct shall provide for tors to be used in evaluating bids or disciplinary actions to be applied for proposals. violations of such standards by offi- (iii) A description, whenever prac- cers, employees, or agents of the re- ticable, of technical requirements in cipient. terms of functions to be performed or 97 §215.45 2 CFR Ch.II (1-1-12 Edition) performance required, including the propriate for the particular procure- range of acceptable characteristics or ment and for promoting the best inter- minimum acceptable standards. est of the program or project involved. (iv) The specific features of "brand The "cost-plus-a-percentage-of-cost" name or equal" descriptions that bid- or "percentage of construction cost" ders are required to meet when such methods of contracting shall not be items are included in the solicitation. used. (v) The acceptance, to the extent (d)Contracts shall be made only with practicable and economically feasible, responsible contractors who possess of products and services dimensioned in the potential ability to perform sue- the metric system of measurement. cessfully under the terms and condi- (v1) Preference, to the extent prac- tions of the proposed procurement, ticable and economically feasible, for Consideration shall be given to such products and services that conserve matters as ooditractor integrity, record natural resources and protect the envi- of past performance, financial and ronment and are energy efficient. technical resources or accessibility to (b) Positive efforts shall be made by other necessary resources. In certain recipients to utilize small businesses, circumstances, contracts with certain minority-owned firms, and women's parties are restricted by agencies' im- business enterprises, whenever pos- plementation of E.O.s 12549 and 12689, sible. Recipients of Federal awards "Debarment and Suspension." shall take all of the following steps to (e)Recipients shall,on request,make further this goal. available for the Federal awarding (1)Ensure that small businesses, mi- agency, pre-award review and procure- nority-owned firms, and women's busi- went documents, such as request for ness enterprises are used to the fullest proposals or invitations for bids, inde- extent practicable. pendent cost estimates, etc., when any (2)Make information on forthcoming of the following conditions apply. opportunities available and arrange (1) A recipient's procurement proce- time frames for purchases and con- dures or operation fails to comply with tracts to encourage and facilitate par- the procurement standards in the Fed- ticipation by small businesses, minor- eral awarding agency's implementation ity-owned firms, and women's business of this part. enterprises. (2) The (3) Consider in the contract process procurement is expected to whether firms competing for larger exceed the small purchase threshold contracts intend to subcontract with fixed$25,000)a $d U.S.C. 403 awarded(11 withoutntlt small businesses, minority-owned competitionand is to be firms, and women's business enter- or only one bid or offer is prises. received in response to a solicitation. (4) Encourage contracting with con- (3) The procurement, which is ex- sortiums of small businesses,minority- tpeeted hresh to exceed the small purchase owned firms and women's business en- threshold, specifies a "brand name" terprises when a contract is too large product. for one of these firms to handle individ- (4) The proposed award over the wally. small purchase threshold is to be (5)Use the services and assistance, as awarded to other than the apparent procure- appropriate, of such organizations as low bidder under a sealed bid the Small Business Administration and merit. the Department of Commerce's Minor- (5) A proposed contract modification ity Business Development Agency in changes the scope of a contract or in the solicitation and utilization of creases the contract amount by more small businesses,minority-owned firms than the amount of the small purchase and women's business enterprises. threshold. (c)The type of procuring instruments §215.45 Cost and price analysis. used(e.g.,fixed price contracts, cost re- imbursable contracts, purchase orders, Some form of cost or price analysis and incentive contracts)shall be deter- shall be made and documented in the mined by the recipient but shall be ap- procurement files in connection with 98 OMB Circulars and Guidance §2.15.48 every procurement action. Price anal- conditions where the contract may be ysis may be accomplished in various terminated because of circumstances ways, including the comparison of beyond the control of the contractor. price quotations submitted, market (c) Except as otherwise required by prices and similar indicia, together statute, an award that requires the with discounts. Cost analysis is the re- contracting (or subcontracting) for view and evaluation of each element of construction or facility improvements cost to determine reasonableness, shall provide for the recipient to follow allocability and allowability. its own requirements relating to bid §21b.46 Procurement records. guarantees, performance bonds, and payment bonds unless the construction Procurement records and files for contract or subcontract exceeds purchases in excess of the small pur- $100,000. For those contracts or sub- chase threshold shall include the Poi- contracts exceeding $100,000, the Fed lowing at a minimum: eral awarding agency may accept the (a)Basis for contractor selection; bonding policy and requirements of the (b) Justification for lack of competi- recipient, provided the Federal award- tion when competitive bids or offers ing agency has made a determination are not obtained;and that the Federal Government's interest (c)Basis for award cost or price. is adequately protected. If such a de- termination has not been made, the minimum requirements shall be as fol- A system for contract administration lows. shall be maintained to ensure con- (1) A bid guarantee from each bidder tractor conformance with the terms, equivalent to five percent of the bid conditions and specifications of the price. The "bid guarantee" shall con- contract and to ensure adequate and sist of a firm commitment such as a timely follow up of all purchases. Re- bid bond, certified check, or other.ne- cipients shall evaluate contractor per- gotiable instrument accompanying a formance and document, as appro- bid as assurance that the bidder shall, priate, whether contractors have met upon acceptance of his bid, execute the terms, conditions and specifica- such contractual documents as may be tions of the contract.. required within the time specified. §215.48 Contract provisions. (2)A performance bond on the part of P the contractor for 100 percent of the The recipient shall include, in addi- contract price. A "performance bond" tion to provisions to define a sound.and is one executed in connection with a complete agreement,the following pro- contract to secure fulfillment of all the visions in all contracts. The following contractor's obligations under such provisions shall also be applied to sub- contract. contracts. (3)A payment bond on the part of the (a) Contracts in excess of the small contractor for 100 percent of the con- purchase threshold shall contain con- tract price. A "payment bond" is one tractual provisions or conditions that executed in connection with a contract allow for administrative, contractual, to assure payment as required by stat- or legal remedies in instances in which ate of all persons supplying labor and a contractor violates or breaches the material in the execution of the work contract terms, and provide for such provided for in the contract. remedial actions as may be appro- (4) Where bonds are required in the priate. situations described herein, the bonds (b) All contracts in excess of the shall be obtained from companies hold- small purchase threshold shall contain ing certificates of authority as accept- suitable provisions for termination by able sureties pursuant to 31 CFR part the recipient, including the manner by 223, "Surety Companies Doing Business which termination shall be effected with the United States." and the basis for settlement. In addi- (d) All negotiated contracts (except tion, such contracts shall describe con- those for less than the small purchase ditions under which the contract may threshold) awarded by recipients shall be terminated for default as well as include a provision to the effect that 99 §215.50 2 CFR Ch. II(1-1-12 Edition) the recipient, the Federal awarding (d) When required, performance re- agency, the Comptroller General of the ports shall generally contain, for each United States, or any of their duly au- award, brief information on each of the thoriized representatives, shall have ac- following. cess to any books, documents, papers (1) A comparison of actual accom- and records of the contractor which are plishments with the goals and objec- directly pertinent to a specific pro- tives established for the period, the gram for the purpose of making audits, findings of the investigator, or both. examinations, excerpts and tran- Whenever appropriate and the output scriptions. of programs or projects can be readily (e) All contracts, including small quantified, such quantitative data purchases, awarded by recipients and should be related to cost data for com- their contractors shall contain the pro- putation of unit costs. curement provisions of appendix A to (2) Reasons why established goals this part, as applicable. were not met,if appropriate. (3) Other pertinent information in- REPORTS AND RECORDS eluding, when appropriate, analysis and explanation of cost overruns or §215.50 Purpose of reports and high unit costs. records. (e)Recipients shall not be required to Sections 2.15.51 through 215.53 set submit more than the original and two forth the procedures for monitoring copies of performance reports. and reporting on the recipient's finan- (f) Recipients shall immediately no- cial and program performance and the try the Federal awarding agency of de- necessary standard reporting forms. velopments that have a significant im They also set forth record retention re- pact on the award-supported activities. quirements. Also, notification shall be given in the case of problems, delays, or adverse §215.51 Monitoring and reporting pro- conditions which materially impair the gram performance. ability to meet the objectives of the (a) Recipients are responsible for award. This notification shall include a con- managing and monitoring each project, statement of the action taken or program, subaward, function or activ- to resolve the situation.d any assistance needed ity supported by the award. Recipients tog) Federal the shall monitor subawards to ensure sub- make awardingneeagencies may recipients have met the audit require- site visits, asr needed menu as delineated in§215.26. (h) Federal awarding agencies shall comply with clearance requirements of (b) The Federal awarding agency 5 CFR part 1320 when requesting per- shall prescribe the frequency with formance data from recipients. which the performance reports shall be submitted. Except as provided in §215.52 Financial reporting. §215.51(f), performance reports shall (a)The following forms or such other not be required more frequently than forms as may be approved by OMB are quarterly or, less frequently than an- authorized for obtaining financial in- nually. Annual reports shall be due 90 formation from recipients. calendar days after the grant year; (1) SF-269 or SF-269A, Financial Sta- quarterly or semi-annual reports shall tus Report. be due 30 days after the reporting pe- (i) Each Federal awarding agency riod.The Federal awarding agency may shall require recipients to use the SF- require annual reports before the anni- 269 or SF-269A to report the status of versary dates of multiple year awards funds for all nonconstruction projects in lieu of these requirements. The final or programs. A Federal awarding agen- performance reports are due 90 cal- cy may, however, have the option of endar days after the expiration or ter- not requiring the SF-269 or SF-269A mination of the award. when the SF-270, Request for Advance (c)If inappropriate, a final technical or Reimbursement, or SF-272, Report or performance report shall not be re- of Federal Cash Transactions, is deter- quired after completion of the project. mined to provide adequate information OMB Circulars and Guidance §215.52 to meet its needs, except that a final days. Recipients shall provide short SF-269 or SF-269A shall be required at narrative explanations of actions taken the completion of the project when the to reduce the excess balances. SF-270 is used only for advances. (iv) Recipients shall be required to (ii) The Federal awarding agency submit not more than the original and shall prescribe whether the report shall two copies of the SF-272 15 calendar be on a cash or accrual basis. If the clays following the end of each quarter. Federal awarding agency requires ac- The Federal awarding agencies may re- cruel information and the recipient's quire a monthly report from those re- accounting records are not normally cipients receiving advances totaling $1 kept on the accrual basis,the recipient million or more per year. shall not be required to convert its ae- (v) Federal awarding agencies may counting system, but shall develop waive the requirement for submission such accrual information through best of the SF-272 for any one of the fol- estimates based on an analysis of the lowing reasons: documentation on hand (A) When monthly advances do not (iii) The Federal awarding agency exceed $25,000 per recipient, provided shall determine the frequency of the that such advances are monitored Financial Status Report for each through other forms contained in this project or program, considering the section; size and complexity of the particular agen- project or program. However, the re- (B) If, in the Federal awarding nti port shall not be required more fre- con opinion,the recipient's accounting ex- quently than controls are adequate to minimize quarterly or less fre- eessive Federal advances;or, quently than annually. A final report shall be required at the completion of (C) When the electronic payment the-agreement. mechanisms provide adequate data., (iv) The Federal awarding agency (b) When the Federal awarding agen- shall require recipients to submit the cy needs additional information or SF-269 or SF-269A (an original and no more frequent reports, the following more than two copies) no later than 30 shall be observed. days after the end of each specified re- (1) When additional information is porting period for quarterly and semi- needed to comply with legislative re- annual reports, and 90 calendar days quirements, Federal awarding agencies for annual and final reports. Exten- shall issue instructions to require re- sions of reporting due dates may be ap- cipients to submit such information proved by the Federal awarding agency under the "Remarks"section of the re- upon request of the recipient. ports. (2) SF-272, Report of Federal Cash (2) When a Federal awarding agency Transactions. determines that a recipient's account- (i) When funds are advanced to re- ing system does not meet the.standards cipients the Federal awarding agency in §215.21, additional pertinent infor- shall require each recipient to submit mation to further monitor awards may the SF 272 and, when necessary, its be obtained upon written notice to the continuation sheet, SF-272a. The Fed- recipient until such time as the system eral awarding agency shall use this re- is brought up to standard. The Federal port to monitor cash advanced to re- awarding agency, in obtaining this in- cipients and to obtain disbursement in- formation, shall comply with report formation for each agreement with the clearance requirements of 5 CFR part recipients. 1320. (ii) Federal awarding agencies may (3) Federal awarding agencies are en- require forecasts of Federal cash re- couraged to shade out any line item on quirements in the "Remarks" section any report if not necessary. of the report. (4) Federal awarding agencies may (iii) When practical and deemed nee- accept the identical information from essary, Federal awarding agencies may the recipients in machine readable for- require recipients to report in the mat or computer printouts or elec- "Remarks" section the amount of cash tronic outputs in lieu of prescribed for- advances received in excess of three mats. 101 §215.53 2 CFR Ch. II (1-1-12 Edition) (5) Federal awarding agencies may (e)The Federal awarding agency, the provide computer or electronic outputs Inspector General, Comptroller Gen- to recipients when such expedites or eral of the United States, or any of contributes to the accuracy of report- their duly authorized representatives. ing• have the right of timely and unre- stricted access to any books, docu- §215.53 Retention and access require- ments, papers, or other records of re- ments for records. cipients that are pertinent to the (a) This section sets forth require- awards, in order to make audits, ex- ments for record retention and access aminations, excerpts, transcripts and to records for awards to recipients. copies of such documents. This right Federal awarding agencies shall not also includes timely and reasonable ac- impose any other record retention or cess to a recipient's personnel for the access requirements upon recipients. purpose of interview and discussion re- (b)Financial records, supporting doc- lated to such documents.The rights of urnents, statistical records, and all access in this paragraph are not Inn- other records pertinent to an award ited to the required retention period, shall be retained for a period of three but shall last as long as records are re- years from the date of submission of tained. the final expenditure report or, for (f) Unless required by statute, no awards that are renewed quarterly or- Federal awarding agency shall place annually, from the date of the submis- restrictions on recipients that limit sion of the quarterly or annual finan- public access to the records of recipi- cial report, as authorized by the Fed- ents that are pertinent to an award, ex- eral awarding agency. The only excep- cept when the Federal awarding agency tions are the following. can demonstrate that such records (1)If any litigation, claim, or audit is shall be kept confidential and would started before the expiration of the 3- have been exempted from disclosure year period, the records shall be re- pursuant to the Freedom of Informa- tained until all litigation, claims or tion Act (5 U.S.G. 552) if the records audit findings involving the records had belonged to the Federal awarding have been resolved and final action agency. taken. (g) Indirect cost rate proposals, cost al- (2) Records for real property and locations plans, etc. Paragraphs (g)(1) equipment acquired with Federal funds and (g)(2) of this section apply to the shall be retained for 3 years after final following types of documents, and their disposition. supporting records: indirect cost rate (3)When records are transferred to or computations or proposals, cost alloea- maintained by the Federal awarding tion plans, and any similar accounting agency, the 3-year retention require- computations of the rate at which a ment is not applicable to the recipient. particular group of costs is chargeable (4) Indirect cost rate proposals, cost (such as computer usage chargeback allocations plans, etc. as specified in rates or composite fringe benefit §215.53(g). rates). (c) Copies of original records may be (1) If submitted for negotiation. If the substituted for the original records if recipient submits to the Federal authorized by the Federal awarding awarding agency or the subrecipient agency. submits to the recipient the proposal, (d) The Federal awarding agency plan, or other computation to form the shall request transfer of certain basis for negotiation of the rate, then records to its custody from recipients the 3-year retention period for its sup- when it determines that the records porting records starts on the date of possess long term retention value. such submission. However, in order to avoid duplicate (2) If not submitted for negotiation. If recordkeeping, a Federal awarding the recipient is not required to submit agency may make arrangements for re- to the Federal awarding agency or the cipients to retain any records that are subrecipient is not required to submit continuously needed for joint use, to the recipient the proposal, plan, or 102 OMB Circulars and Guidance §215.62 other computation for negotiation pur- the terms and conditions of an award, poses, then the 3-yea.r retention period whether stated in a Federal statute, for the proposal, plan, or other corn- regulation, assurance, application, or pi tation and its supporting records notice of award, the Federal awarding starts at the end of the fiscal year (or agency may, in addition to imposing other accounting period) covered by any of the special conditions outlined the proposal, plan, or other compute- in §215.14, take one or more of the fol- tion. lowing actions, as appropriate in the circumstances. TERMINATION AND ENFORCEMENTENFORCEMENTea (11)) Temporarily withhold cash pay- ments pending correction of the deli- enforcement. ciency by the recipient or more severe enforcement action by the Federal Sections 215.61 and 215.62 set forth awarding agency. uniform suspension, termination and (2)Disallow(that is, deny both use of enforcement procedures. funds and any applicable matching §215.61 Termination, credit for) all or part of the cost of the activity or action not in compliance. (a) Awards may be terminated in (3) Wholly or partly suspend or ter- whole or in part only if paragraphs minate the current award. (a)(1),(2)or(3)of this section apply. (4) Withhold further awards for the (1) By the Federal awarding agency, project or program. if a recipient materially fails to corn- (5) Take other remedies that may be ply with the terms and conditions of an legally available. award. (b)Hearings and appeals. In taking an (2) By the Federal awarding agency enforcement action, the awarding with the consent of the recipient, in agency shall provide the recipient an which case the two parties shall agree opportunity for hearing, appeal, or upon the termination conditions, in- other administrative proceeding to eluding the effective date and, in the which the recipient is entitled under case of partial termination,the portion any statute or regulation applicable to to be terminated. the action.involved. (3) By the recipient upon sending to (c) Effects of suspension and termi- the Federal awarding agency written nation. Costs of a recipient resulting notification setting forth the reasons from obligations incurred by the re- for such termination, the effective cipient during a suspension or after date, and, in the case of partial termi- termination of an award are not allow- nation, the portion to be terminated. able unless the awarding agency ex- However, if the Federal awarding agen- pressly authorizes them in the notice cy determines in the case of partial of suspension or termination or subse- termination that the reduced or modi- quently. Other recipient costs during fled portion of the grant will not ac- suspension or after termination which complish the purposes for which the are necessary and not reasonably grant was made, it may terminate the avoidable are allowable if paragraphs grant in its entirety under either para- (c)(1)and(2)of this section apply. graphs(a)(1)or(2) of this section. (1) The costs result from obligations (b) If costs are allowed under an which were properly incurred by the re- award, the responsibilities of the re- cipient before the effective date of sus- cipient referred to in§215.71(a),includ- pension or termination, are not in an- ing those for property management as ticipation of it,and in the case of a ter- applicable, shall be considered in the mination, are noncancellable. termination of the award, and provi- (2) The costs would be allowable if sion shall be made for continuing re- the award were not suspended or ex- sponsibilities of the recipient after ter- pired normally at the end of the fund- mination,as appropriate. ing period in which the termination takes effect. *215.62 Enforcement. (d) Relationship to debarment and sus- (a)Remedies for noncompliance.If a re- pension. The enforcement remedies cipient materially fails to comply with identified in this section, including 1 §215.70 2 CFR Ch. U (1-1-12 Edition) suspension and termination, do not an award, the Federal awarding agency preclude a recipient from being subject shall retain the right to recover an ap- to debarment and suspension under propriate amount after fully consid- E.O.s 12549 and 12689 and the Federal ering the recommendations on die- awarding agency implementing regula- allowed costs resulting from the final tions (see§215.13). audit. Subpart D—After-the-Award §215.72 Subsequent ad,Ustrjb nts and Requirements continuing respons1bdities.. (a)The closeout of an award does not §215.70 Purpose. affect any of the following: Sections 215.71 through 215.73 contain (1) The right of the Federal awarding closeout procedures and other prose agency to disallow costs and recover dures for subsequent disallowances and funds on the basis of a later audit or adjustments. other review. (2) The obligation of the recipient to §215.71 Closeout procedures. return any funds due as a result of (a)Recipients shall submit, within 90 later refunds, corrections, or other calendar days after the date of comple- tion transactions. tion of the award, all financial, per- (3)Audit requirements in§215.26. for/nance, and other reports as required (4) Property management require by the terms and conditions of the m(5) Re o§ds5 retention through215.37.q award. The Federal awarding agency (5) Records as required in may approve extensions when re- § 5' ' quested by the recipient. (b)After closeout of an award, a rela- (b) Unless the Federal awarding agen tionship created under an award may cy authorizes an extension, a recipient be modified the or ended in whole d in w shall liquidate all obligations incurred part with consent of the Federal under the award not later than 90 cal awarding agency and the recipient, endar days after the funding period or provided the responsibilities of the re- the date of completion as specified in cipient referred to in paragraph (a) of terms and conditions of the award this section, including those for prop- the or in agency implementing instruc erty management as applicable, are tions. considered and provisions made for (c) The Federal awarding agency continuing responsibilities of the re- shall make prompt payments to a re- cipient,as appropriate. cipient for allowable reimbursable (69 FR 26281, May 11, 2004, as amended at 70 costs under the award being closed out. FR 51881,Aug.31,2005) (d) The recipient shall promptly re- fund any balances of unobligated cash §215.73 Collection of amounts due. that the Federal awarding agency has (a) Any funds paid to a recipient in advanced or paid and that is not au- excess of the amount to which the re- thorized to be retained by the recipient cipient is finally determined to be enti- for use in other projects. OMB Circular tied under the terms and conditions of A-129 governs unreturned amounts that the award constitute a debt to the Fed- become delinquent debts, eral Government. If not paid within a (e)When authorized by the terms and reasonable period after the demand for conditions of the award, the Federal payment, the Federal awarding agency awarding agency shall make a settle- may reduce the debt by paragraphs ment for any upward or downward ad- (a)(1),(2)or(3)of this section. justments to the Federal share of costs (1) Making an administrative offset after closeout reports are received. against other requests for reimburse- (f) The recipient shall account for meats. any real and personal property ac- (2) Withholding advance payments quired with Federal funds or received otherwise due to the recipient. from the Federal Government in ac- (3) Taking other action permitted by cordance with§215.31 through§215.37. statute. (g) In the event a final audit has not (b) Except as otherwise provided by been performed prior to the closeout of law, the Federal awarding agency shall 104 OMB Circulars and Guidance Pt. 215,App.A charge interest on an overdue debt in port all suspected or reported violations to accordance with 4 CFR Chapter II, the Federal awarding agency. "Federal Claims Collection Stand- 4.Contract Work Hours and Safety Standards ards." Act(40 U.S.C. 327-333)—Where applicable, all contracts awarded by recipients in excess of A TO PART 215—CONTRACT $2000 for construction contracts and in ex- APPENDIXcess of$2500 for other contracts that involve PROVISIONS the employment of mechanics or laborers shall include a provision for compliance with All contracts, awarded by a recipient in- sections 102 and 1(17 of the Contract Work eluding small purchases, shall contain the Hours and Safety Standards Act (40 U.S.C. following provisions as applicable: 327-333), as supplemented by Department of 1. Equal.Employment Opportunity—All con- Labor regulations(29 CFR part 5).Under sec- tracts shall contain a provision requiring tion 102 of the Act, each contractor shall be compliance with E.O. 11246, "Equal Employ- required to compute the wages of every me- went Opportunity" (30 FR 12319, 12935, 3 chanic and laborer on the basis of a standard CFR,1964-1965 Comp.,p.339), as amended by work week of 40 hours.Work in excess of the E.O. 11375, "Amending-Executive Order 11246 standard work week is permissible provided Relating to Equal Employment Oppor- that the worker is compensated at a rate of tunity," and as supplemented by regulations not less than 1h times the basic rate of pay at 41 CFR part 60, "Office of Federal Con- for all hours worked in excess of 40 hours in tract Compliance Programs. Equal Employ- the work week.Section 107 of the Act is ap- ment Opportunity,Department of Labor." picable to construction work and provides 2. Copeland "Anti-Kickback" Act (18 U.S,C, that no laborer or mechanic shall be required 874 and 40 U.S.C.276c)—All contracts and sub- to work in surroundings or under working grants in excess of$2000 for construction or conditions which are unsanitary, hazardous repair awarded by recipients and subrecipi- or dangerous. These requirements do not ents shall include a provision for compliance apply to the purchases of supplies or mate- with the Copeland "Anti-Kickback" Act (18 rials or articles ordinarily available on the U.S.C. 874), as supplemented by Department open market,or contracts for transportation of Labor regulations (29 CFR part 3, "Con- or transmission of intelligence, tractors and Subcontractors.on Public Build- 5. Rights to Inventions Made Under a Con- ing or Public Work Financed in Whole or in tract or Agreement—Contracts or agreements Part by Loans or Grants from the United for the performance of experimental, devel- Pa tes"). The Acto provides o each tedn- opmental,or research work shall provide for tractor or subrecipient shall be prohibited the tights of the Federal Government in from inducing, by any means, any person acthe recipient withn7 any CFRparesulting invention to accordance 37 part 901, "Rights to employed in the construction,completion,or Inventions Made by_Nonprofit Organizations repair of public work, to give up any part of and Small Business Firms Under Govern- the compensation to which he is otherwise mint Grants, Contracts and Cooperative entitled_ The recipient shall report all sus- Agreements,"and any implementing regula- pected or reported violations to the Federal tions issued by the awarding agency._ awarding agency. 6. Clean Air Act (42 U.S.C. 7401 et seq.) and 3. Davis-Bacon Act, as amended (40 U.S.C. the Federal Water Pollution Control Act (33 276a to a-7)—When required by Federal pro- U.S.C. 1251 et seq.), as amended—Contracts gram legislation, all construction contracts and subgrants of amounts in excess of awarded by the recipients and subrecipients $100,000 shall contain a provision that re- of more than$2000 shall include a provision quires the recipient to agree to comply with for compliance with the Davis-Bacon Act(40 all applicable standards, orders or regula- U:S.C. 276a to a-?) and as supplemented by tions issued pursuant to the Clean Air Act Department of Labor regulations (29 CFR (42 U.S.C. 7401 et seq.)and the Federal Water part 5,"Labor Standards Provisions Applica- Pollution Control Act as amended(33 U.S.C. ble to Contracts Governing Federally Fi- 1251 et seq.). Violations shall be reported to nanced and Assisted Construction"). Under the Federal awarding agency and the Re- this Act,contractors shall be required to pay gional Office of the Environmental Protec- wages to laborers and mechanics at a rate tion Agency(EPA). not less than the minimum wages specified 7. Byrd Anti-Lobbying Amendment(31 U.S.C. in a wage determination made by the Sec- 1352)—Contractors who apply or bid for an retary of Labor. In addition, contractors award of $100,000 or more shall file the re- shall be required to pay wages not less than quired certification. Each tier certifies to once a week.The recipient shall place a copy the tier above that it will not and has not of the current prevailing wage determination used Federal appropriated funds to pay any issued by the Department of Labor in each person or organization for influencing or at- solicitation and the award of a contract shall tempting to influence an officer or employee be conditioned upon the acceptance of the of any agency,a member of Congress, officer wage determination. The recipient shall re- or employee of Congress,or an employee of a 105 Pt.220 2:CFR Ch. 11 (1-1-12 Edition) member of Congress in connection with ob- §220.10 Scope. taining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each The principles in this part deal with tier shall also disclose any lobbying with the subject of cost determination, and non-Federal funds that takes place in con- make no attempt to identify the cir- nection with obtaining any- Federal award. cumstances or dictate the extent of Such disclosures are forwarded from tier to agency and institutional participation tier up to the recipient. in the financing of a particular project. 8. Debarment and Suspension (E.O.s 12549 Provision for profit or other increment and 12689)--A contract award with an above cost is outside the scope of this amount expected to equal or exceed $25,000 part. and certain other contract awards(see 2 CFR 180.220)shall not be made to parties listed on §220.15 Policy. the government-wide Excluded Parties List System, in accordance with the OMB guide- The principles in this part are de- lines at 2 CFR part 180 that implement E.O.s signed to provide that the Federal Gov- 12549(3 CFR, 1986 Comp., p. 189)and 12689(3 ernment bear its fair share of total CFR, 1989 Comp., p. 235). "Debarment and costs, determined in accordance with Suspension."The Excluded Parties List Sys- generally accepted accounting prin- tem contains the names of parties debarred, ciples, except where restricted or pro- suspended, or otherwise excluded by agen- hibited by law. Agencies are not ex- cies, as well as parties declared ineligible pected to place additional restrictions under statutory or regulatory authority on individual items of cost. The suc- other than E.O.12549. cessful application of cost accounting [69 FR 26281, May 11, 2004, as amended at 70 principles requires development of mu- FR 51879.Aug.31,2005] tual understanding between represent- atives of educational institutions and PARTS 216-219 [RESERVED] of the Federal Government as to their scope, implementation, and interpreta- PART 220—COST PRINCIPLES FOR tion. EDUCATIONAL INSTITUTIONS *220.20 Applicability. (OMB CIRCULAR A 21) (a)All Federal agencies that sponsor Sec. research and development, training, 220.5 Sec. Purpose. and other work at educational inatitu- 220.10 Scope, tions shall apply the provisions of Ap- 220.15 Policy. pendix A to this part in determining 220.20 Applicability, the costs incurred for such work. The 220.25 OMB responsibilities. principles shall also be used as a guide 220.30 Federal agency responsibilities. in the pricing of fixed price or lump 220.35 Effective date of changes. sum agreements. 220.40 Relationship to previous issuance. (b) Each federal agency that awards 220.45 Information contact. defense-related contracts to a Feder- APPENDIX A To PART 220—PRnrciPLEs FOR DE- ally Funded Research and Development Center (FFRDC) associated with an TFIRMIN1NG COSTS APPLICABLE TO GRANTS, CONTRACTS,AND OTHER AGREEMENTS WITH educational institution shall require EDUCATIONAL INSTrrUTIONS the FFRDC to comply with the Cost Accounting Standards and with the AUTHORrrr: 31 U.S.C, 503: 31 U.S.G. 1111: 41 rules and regulations issued by the U.S.C.405;Reorganization Plan No.2 of 1970; Cost Accounting Standards Board and 939. 11541, 35 FR 10737, 3 CFR, 1966-1970, p, set forth in 47 CFR part 99. SOURCE: 70 FR 51881, Aug. 31, 2005, unless *220.25 OMB responsibilities. otherwise noted. OMB is responsible for: §220.6 Purpose. (a)Issuing and maintaining the guid- ance in this part. This part establishes principles for (b) Interpreting the policy require- determining costs applicable to grants, ments in this part and providing assist- contracts, and other agreements with ance to ensure effective and efficient educational institutions. implementation. 106 Median Family Income Chart 6/2/2016 MFI Year Fam size 100% MFI Amount Start Date End Date 2016 1 $50,500.00 4/13/2016 12/31/2017 2016 2 $57,700.00 4/13/2016 12/31/2017 2016 3 . $64,900.00 4/13/2016 12/31/2017 2016 4 $72,100.00 4/13/2016 12/31/2017 2016 5 $77,900.00 4/13/2016 12/31/2017 2016 6 $83,700.00 4/13/2016 12/31/2017 2016 7 $89,500.00 4/13/2016 12/31/2017 2016 8 $95,200.00 4/13/2016 12/31/2017 6/2/2016 HOME Rents Bedroom Effective Effective Size Start Date End Date Low HOME High HOME 0 4/1/2016 5/31/2017 $516.00 $516.00 1 4/1/2016 5/31/2017 $666.00 $666.00 2 4/1/2016 5/31/2017 $821.00 $836.00 3 4/1/2016 5/31/2017 $949.00 $1,127.00 4 4/1/2016 5/31/2017 $1,058.00 $1,233.00 5 4/1/2016 5/31/2017 $1,168.00 $1,418.00 6 4/1/2016 5/31/2017 $1,277.00 $1,603.00 hAH11311 DEFINITION OF PROGRAM INCOME "Program income" means gross income received by the Recipient or a Subrecipient directly generated from the uses of CDBG/HOME/NSP and other federal funds. When such income is generated by an activity that is only partially assisted with CDBG/HOME/NSP and other federal funds, the income shall be prorated to reflect the percentage of CDBG/HOME/NSP and other federal funds used. (1) Program income includes,but is not limited to the following: (i) Proceeds from the disposition by sale or long term lease of real property purchased or improved with CDBG/HOME/NSP and other federal funds; (ii) Proceeds from the disposition of equipment purchased with CDBG/HOME/NSP and other federal funds; (iii) Gross income from the use or rental of real or personal property acquired by the Recipient or a Subrecipient with CDBG/HOME/NSP and other federal funds, less the costs incidental to the generation of such income; (iv) Gross income from the use or rental of real property owned by the Recipient or a Subrecipient that was constructed or improved with CDBG/HOME/NSP and other federal funds, less the costs incidental to the generation of such income; (v) Payments of principal and interest on loans made using CDBG/HOME/NSP and other federal funds; (vi) Proceeds from the sale of loans made with CDBG/HOME/NSP and other federal funds; (vii) Proceeds from the sale of obligations secured by loans made with CDBG/HOME/NSP and other federal funds; (viii) Interest earned on funds held in a revolving fund account; (ix) Interest earned on program income pending disposition of such income;and (x) Funds collected through special assessments made against properties owned and occupied by households not of low- and moderate-income, where such assessments are used to recover all or part of the CDBG/HOME/NSP and other federal portion of a public improvement. (2) Program income does not include interest earned (except for interest described in §570.513) on cash advances from the US Treasury. Such interest shall be remitted to HUD for transmittal to the US Treasury and will not be reallocated under Section 106(c) or (d) of the Act. Examples of other receipts that are not considered program income are proceeds from fundraising activities carried out by Subrecipients receiving CDBG/HOME/NSP and other federal assistance;funds collected through special assessments used to recover the non-CDBG/HOME/NSP and other federal portion of a public improvement, and proceeds from the disposition of real property acquired or improved with CDBG/HOME/NSP and other federal funds when such disposition occurs after the applicable time period specified in §570.503(bX8) for Subrecipient-controlled property or §570.505 for Recipient-controlled property for CDBG program funds and§92.503 for HOME/NSP program funds. (3) Any program income generated by NSP funds through March 31, 2013 shall be used to construct housing units east of 72nd Street affordable to low-,moderate-, and middle-income(LMMI)households. After March 31, 2013, all program income generated by NSP funds will be limited to eligible CDBG activities, including the benefit to low- and moderate-income (LMI) (not LMMI) households during the term of this Agreement, the program income shall be returned to the City within thirty(30)days. SMIa ,I9 Revised and approved 12/3/2009 EXHIBIT DAVIS BACON EXEMPTION CHECKLIST Project Name:Brisco Investments LLC,Brian Cloudt,Member Representative Project Address:3518 North 54th Street,Omaha NE 681104 Project No.24921 It is determined that the above project is exempt from Davis-Bacon Prevailing Wage Rate Provisions because: Residential rehabilitation or new construction project is funded in whole or in part with CDBG funds and such residential property contains less than 8 units. Residential rehabilitation or new construction contract, including construction and non- construction costs, is funded with HOME funds and such residential property contains less than 12 assisted units. Proceeds of award of federal funds are solely for the acquisition of real property(land, pre-existing buildings and improvements). The entire project consists of demolitions and no construction is imminent on site. Funding solely for demolition to be completed by City or its contractor before transfer of land to developer. Funding for on-site improvements only. On-site improvements are completed on land owned by the City and improvements are completed before transfer of land to developer. Funding for off-site improvements that are separately owned. Off-site and on-site construction are provided for in separate construction contracts. Project funding is for infrastructure improvements owned and operated by utility company. • The prime construction contract financed in whole or part with CDBG or HOME funds is incidental and the amount is less than$2,000. Funding for professional services only (legalacct/architecturalengineering). These services are funded under a separate contract from any construction contract. Funding source is Emergency Shelter Grant (ESG) or Supportive Housing Grant (SHP), which are exempt from Davis/Bacon. The project will be done through a force account. There is no federal money in the construction contract. Other—Explain: Date: Signature of Responsible Administrator A description of the scope of the project is attached. Revised and approved 7/12/2011 CITY OF OMAHA AFFIRMATIVE MARKETING POLICY AND MONITORING PROCEDURES Effective: October 1, 1999 Revised: April 1, 2015 Affirmative Marketing Policy In furtherance of the City of Omaha's commitment to non-discrimination and equal opportunity in housing, the City of Omaha establishes procedures to affirmatively market units constructed or rehabilitated under any City- assisted program or project. These procedures are intended to further the objectives of Title VIII of the Civil Rights Act of 1968 and Executive Order 11063. It is the affirmative marketing goal of the City of Omaha to assure that individuals who normally might not apply for vacant rehabilitated or constructed units because of their race or ethnicity: • know about the vacancies • feel welcome to apply • have the opportunity to rent or purchase the units This policy will be carried out through the following procedures: 1. Informing the public, potential tenants and owners about federal fair housing laws and affirmative marketing policies • The City of Omaha will inform the public, potential tenants, purchasers and owners about its affirmative marketing policy, Title VIII and Executive Order 11063. • The City will place public notices in the Omaha World Herald and the community media serving minority groups to inform owners of the program. • City representatives will meet with property owners and assist them in preparing program applications as requested and necessary. • Owners selected for a rehabilitation program shall notify in-place tenants in writing of their involvement in the program and provide them with the following options in accordance with provisions of the Uniform Relocation Act; 1. Remain in the present unit during rehabilitation. 2. Move temporarily to another unit within the project while his/her unit is being rehabilitated. 3. Permanently relocate or voluntarily abandon the unit during the rehabilitation. • Owners shall post the HUD Equal Housing Opportunity Logo in the project building and display the Fair Housing Poster in their rental office and on all application and documents/forms. • Owners shall use media accessible to minorities when advertising the availability of units. • Owners shall use the Equal Housing Opportunity logo, slogan or statement in all advertising. • • Owners shall maintain a non-discriminatory hiring policy. 1 Reviewed and revised 4/1/2015 • Owners shall adopt a fair housing policy. 2. Informing low-and moderate-income persons about available units If the property is not listed with OHA when rehabilitated or constructed units are available for initial occupancy, the owner shall inform the following outreach agencies and/or other agencies of this fact in writing and submit a copy of the letters to the City of Omaha, Planning Department, Housing and Community Development Division, Loan Section, 1819 Farnam Street, Room 1111, Omaha, Nebraska, 68183. Chicano Awareness Center, Inc. Urban League of Nebraska 4821 South 24th Street 3022 North 24th Street Omaha,NE 68107 Omaha,NE 68111 Family Housing Advisory Services Community Alliance 2401 Lake Street 4001 Leavenworth Street Omaha,NE 68111 Omaha,NE 68105 Eastern Nebraska Human Services Heartland Family Service 900 South 74th Plaza, Suite 200 2101 South 42nd Street Omaha,NE 68114 Omaha,NE 68105 Greater Omaha Community Action Heartland Family Service 2406 Fowler Avenue 6720 North 30th Street Omaha,NE 68111 Omaha,NE 68112 Greater Omaha Community Action Heartland Family Service 5002 South 24th Street, Suite 203 2580 South 90th Street Omaha,NE 68111 Omaha,NE 68124 League of Human Dignity Heartland Family Service 5513 Center Street 11212 Davenport Street Omaha,NE 68106 Omaha, NE 68154 Heartland Family Service Nebraska Commission for the Deaf 116 E. Mission Avenue 1313 Farnam on the Mall Bellevue,NE 68005 Omaha,NE 68102 Heartland Family Service Omaha Association for the Blind 302 American Parkway 1024 South 32nd Street Papillion,NE 68046 Omaha,NE 68105 Holy Name Housing Corporation Great Plains Chapter 3014 North 45th Street Paralyzed Veterans of America Omaha,NE 68104 7612 Maple Street Omaha, NE 68134 Mayor's Commission for Citizens with Disabilities 1819 Farnam Street, Room 304 Omaha,NE 68183 3. Record Keeping The Owner shall keep records of the following: • Local media advertisements of the vacant unit • Contact dates with outreach agencies and Omaha Housing Authority 2 Reviewed and revised 4/1/2015 • Correspondence informing outreach agencies of vacancies • Race and other demographic data of occupants and persons inquiring about availability of units • Tenant Survey, utility allowance and income determination forms signed and dated by Owner • Name and age of all household members • Verified income for each household • Copy of lease • U.S. Citizenship Attestation Form for Public Benefit 4. Assessment of Actions The Owner's affirmative marketing efforts will be assessed by the City to: • determine whether Owners have affirmatively marketed vacant units to individuals who normally might not apply; and, • determine whether a sufficient number of racial and ethnic families have applied for vacant units The City will take corrective action if it is found that property owners are not carrying out established procedures of the City's Affirmative Marketing Policy and Monitoring Procedures. Affirmative Marketing Policy Monitoring Procedures l. Duties and Responsibilities of the Owner a) The Owner shall post the HUD Equal Housing Opportunity Logo in the project building and in the rental or sales office. b) The Owner shall submit to the City a copy of all letters notifying the outreach agencies of vacancies. Outreach agencies may include, but are not limited to, the agencies listed in Item 2, Page 2. c) The Owner shall submit to the City a copy of all advertisements placed in the local newspapers. All advertisements must include the Equal Housing Opportunity Logo, Slogan or Statement. d) The Owner shall submit to the City a Demographics Form for Applicants, attached as Exhibit 1, which includes the name, racial/ethnic characteristics, income and family size for each person responding to the advertisement. e) Prior to the start of the project, the Owner shall meet with each in-place tenants of the occupied units and complete a Tenant Survey, utility allowance, City of Omaha Definition of Income Affidavit, computing annual income form, and U.S. Citizenship Attestation for Public Benefit form. Owner shall submit these properly completed forms to the City, as well as a copy of the dated and signed lease agreement, and retain the original lease for proper record keeping. Forms must be updated on lease anniversary date and submitted to the City during the period of affordability. A copy of each form is attached and marked Exhibit 2. f) The Owner shall provide each in-place tenant in the project with a copy of the City of Omaha's written Tenant Assistance Policy (TAP) and shall advise said tenant(s) of the impact of the project on him or her. The Owner shall provide the TAP to the tenant immediately after submission of the Owner's application for participation in the City's program. 3 Reviewed and revised 4/1/2015 g) After completion of the project, the Owner shall submit a Tenant Survey Form, utility allowance, Computing Annual Income Form, U.S. Attestation of Citizenship for Public Benefit, and other reporting forms as required by the terms of the Agreement, for each occupied unit, as well as a copy of the lease agreement. All documents must be properly executed and dated. h) Owner shall insure that the rents, including utilities and Median Family Income, are consistent with the terms and conditions in the approved Agreement between the Owner and the City of Omaha 2. Duties and Responsibilities of the City a) The City shall assess the affirmative marketing procedures to determine whether the Owner has affirmatively marketed the vacant units by monitoring the Owner's performance in carrying out the Duties and Responsibilities of the Owner as outlined in Section 1. b) The City shall assess the affirmative marketing efforts of the Owner to determine whether a sufficient number of racial and ethnic families have applied for vacant units. This determination will be made by reviewing the information provided on the Demographics Form for Applicant and Tenant Survey Form to determine the proportion of racial/gender participation versus overall participation. c) The City shall take the following corrective action if it is found that the Owner is not carrying out established procedures of affirmatively marketing units: • Notify the Owner in writing of any violations of the Owner's Duties and Responsibilities. • The Owner will be given thirty(30) days upon receipt of written notification to provide evidence of compliance. Upon the Owner's request, the City will provide technical assistance. • If the Owner fails to comply with the Affirmative Marketing Policy and Monitoring Procedures,the City may declare the loan/grant in default. 4 Reviewed and revised 4/1/2015 EXHIBIT 1 CITY OF OMAHA DEMOGRAPHICS FORM FOR APPLICANTS Loan No. Date No. of Vacant Units Owner Project Address Person Completing Person's Phone No. This Report Home: Work Race/Ethnicity Family Monthly Of Head of Applicant Size Income Household NOTE: This form is a list of everyone who inquired about renting or purchasing the unit(s). 5 Reviewed and revised 4/1/2015 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 3518 North 54th Street as approved by City Council on by Resolution No. • Date: Name of Business or Corporation: Brisco Investments LLC, a Nebraska limited liability company (f applicable) By: Signature Printed Name: Brian Cloudt, Member Representative 6 Reviewed and revised 4/1/2015 Pt. 230 2 CFR Ch. 1I (1-1-12 Edition) 3.Indirect cost allocations not using rates. §230,5 purpose, In certain situations, a governmental unit, because of the nature of its awards, may be This part establishes principles for required to develop a cost allocation plan determining costs of grants, contracts that distributes indirect(and,in some cases, and other agreements with non-profit direct) costs to the specific funding sources. organizations. In these cases, a narrative cost allocation methodology should be developed, docu- §230,10 Scope. meated, maintained for audit, or submitted, as appropriate, to the cognizant agency for (a) This part does not apply to col- review,negotiation,and approval. leges and universities which are cov- 4.Appeals. if a dispute arises in a negotia- ered by 2 CFR part 220 Cost Principles tion of an indirect cost rate (or other rate) for Educational Institutions (OMB Cir- between the cognizant agency and the gov- bular A-21); State, local, and federally- ernmental unit,the dispute shall be resolved recognized Indian tribal governments in accordance with the appeals procedures of which are covered by 2 CFR part 225 the cognizant agency. Cost Principles for State, Local, and 5.Collection of unallowable costs and erro-• Indian'Tribal Governments (OMB Cir- aeons payments.Costs specifically identified as unallowable and charged to Federal cular A-87);or hospitals. awards either directly or indirectly will be (b) The principles deal with the sub- refunded (including interest chargeable in jest of cost determination, and make accordance with applicable Federal agency no attempt to identify the air- regulations). oumstances or dictate the extent of 6.OMB assistance.To the extent that prob- agency and non-profit organization lems are encountered among the Federal participation in the financing of a par- agencies and/or governmental units in con- titular project. Provision for profit or notion with the negotiation and approval • process, OMB will lend assistance, as re- other increment above cost is outside quired, to resolve such problems in a timely the scope of this part. manner. §230.15 Policy. PARTS 226-229[RESERVED] The principles are designed to pro- vide that the Federal Government bear PART 230—COST PRINCIPLES FOR its fair share of costs except where re- NON-PROFIT ORGANIZATIONS striated or prohibited by law.The prin- (OMB CIRCULAR A-122) ciples do not attempt to prescribe the extent of cost sharing or maturing on Sec. grants, contracts, or other agreements. 230..5 Purpose. However, such cost sharing or match-. 230.50 Scope. ing shall not be accomplished through arbitrary limitations on individual 230.15 Policy. cost elements by Federal agencies. 230.20 Applicability. 230.25 Definitions §23020 Applicability. 230.30 OMB responsibilities. 230.35 Federal agency responsibilities. (a) These principles shall be used by 230.40 Effective date of changes. all Federal agencies in determining the 230.45 Relationship to previous issuance. costs of work performed,by non-profit 230.50 Information Contact. organizations under grants, coopera- APPENDIg A TO PART 230—GENERAL Pxua- tive agreements, cost reimbursement CIPLES contracts,and other contracts in which APPENDIX B TO PART 230—SELEC•i'EU ITEMS OF costs are used in pricing, administra- COST tion, or settlement.'All of these instru- APPENDIX C TO PART 230—NON-PROFIT ORGA- ments are hereafter referred to as NIZATIONS NOT SUBJECT TO THIS PART awards. The principles do not apply to AUTSORrrY: 31 U.S.C. 503; 31 U.S.C. 1111; 41 awards under which an organization is U.S.C.405;Reorganization Plan No.2 of 1970; not required to account to the Federal E.O.11541,35 FR 10737,3 CFR,1966-1970,p.939 Government for actual costs incurred. SOURCE: 70 FR 51927, Aug. 31, 2005, unless (b) All cost reimbursement sub- otherwise noted. awards (subgrants, subcontracts, etc.) 182 OMB Circulars and Guidance §230.50 are subject to those Federal cost prin- §230.30 OMB responsibilities. ciples applicable to the particular or- ga.nization concerned. Thus, if a OMB may grant exceptions to the re- subaward is to a non-profit organniza- quirements of this part when permis- sion, this part -1 apply; a sible under existing law. However, in subaward is to a commercial organiza- uniformity,the interest exceptions of achieving maximum will be e per- tion, the cost principles applicable to cir- commercial concerns shall apply; if misted only in highly unusual pp y' a cumstances. subaward is to a college or university, 2 CFR part 220 shall apply; if a §230,35 Federal agency responsibil- subaward is to a State, local, or feder- ities. ally-recognized Indian tribal govern- The head of each Federal agency that went,2 CFR part 225 shall apply. awards and administers grants and (c) Exclusion of some non-profit or- agreements subject to this part is re- ganizations. Some non-profit organiza- sponsible for requesting approval from tions, because of their size and nature and/or consulting.with OMB (as appli- of operations, can be considered to be cable) for deviations from the guidance similar to commercial concerns for in the appendices to this part and per- purpose of applicability of cost grin- forming the applicable functions speci- ciples. Such non-profit organizations fled in the appendices to this part. shall operate under Federal cost prin- ciples applicable to commercial con- §230.40 Effective date of changes. terns. A listing of these organizations The provisions of this part are effec- is contained in appendix C to this part. tive August 31, 2005. Implementation Other organizations may be added from shall be phased in by incorporating the time to time. provisions into new awards made after §23025 Definitions. the start of the organization's next fis- cal year. For existing awards, the new (a) Non-profit organization means principles may be applied if an organi- any corporation, trust, association, co- nation and the cognizant Federal agen- operative, or other organization which: cy agree. Earlier implementation, or a (1) Is operated primarily for sci- delay in implementation of individual entific, educational, service, chari- provisions, is also permitted by mutual table, or similar purposes in the public agreement between an organization interest; and the cognizant Federal agency. (2) Is not organized primarily for profit;and §230.45 Relationship to previous (3)Uses its net proceeds to maintain, issuance. improve, and/or expand its operations. (a) The guidance in this part pre- For this purpose, the term "non-profit viously was issued as OMB Circular A— organization" excludes colleges and 122. Appendix A to this part contains universities; hospitals; State, local, the guidance that was in Attachment A and federally-recognized Indian tribal (general principles) to the OMB cir- governments; and those non-profit or- cular; Appendix B contains the guid- ganizations which are excluded from ance that was in Attachment B (se- coverage of this part in accordance lected items of cost) to the OMB cir- with§230.20(c). cular; and Appendix C contains the in- (b)Prior approval means securing the formation that was in Attachment C awarding agency's permission in ad- (non-profit organizations not subject to vance to incur cost for those items the Circular)to the OMB circular. that are designated as requiring prior (b) Historically, OMB Circular A-7 22 approval by the part and its appen- superseded cost principles issued by in- dices.Generally this permission will be dividual agencies for non-profit organi- in writing. Where an item of cost re- zations. quiring prior approval is specified in §230.50 Information contact. the budget of an award, approval of the budget constitutes approval of that Further information concerning this cost, part may be obtained by contacting the 183 Pt. 230,App.A 2 CFR Ch. II (1-1-12 Edition) Office of Federal Financial Manage- costs.The question of the reasonableness of merit, OMB, Washington, DC 20503, specific costs must be scrutinized with par- telephone(202)395-3993. tioular care in connection with organizations or separate divisions thereof which receive APPENDIX A TO PART 230—GENER.ar. the preponderance of their support from PRINCIPLES awards made by Federal agencies. In deter- mining the reasonableness of a given cost, GENERAL PRINCIPLES consideration shall be given to: a. Whether the cost is of a type generally TABLE OF CONTENTS recognized as'ordinary and necessary for the A.Basic Considerations operation of the organization or the perform- 1.Composition of total costs ante of the award. 2.Factors affecting allowability of costs b. The restraints or requirements imposed 3.Reasonable costs by such factors as generally accepted sound 4.Allocable costs business practices, arms length bargaining, 5.Applicable credits Federal and State laws and regulations,and 6.Advance understandings . terms and conditions of the award. 7.Conditional exemptions c.Whether the individuals concerned acted B.Direct Costs with prudence in the circumstances, consid- C.Indirect Costs eying their responsibilities to the organza- D. Allocation of Indirect Costs and Deter- tion, its members, employees, and clients, mination of Indirect Cost Rates the public at large,and the Federal Govern- 1.General ment. 2.Simplified allocation method d. Significant deviations from the estab- 3.Multiple allocation base method lished practices of the organization which 4.Direct allocation method may un justifiably increase the award costs. 5.Special indirect cost rates 4.Allocable costs.a:A cost is allocable to E.Negotiation and Approval of Indirect Cost a Particular cost objective, such as a grant, Rates contract, project, service, or other activity, 1.Definitions in accordance with the relative benefits re- 2.Negotiation and approval of rates ceived.A cost is allocable to a Federal award if it is treated consistently with other costs GENERAL PRINCIPLES incurred for the same purpose in cir- cumstanceslike A.Basic Considerations and if it: (1)Is incurred specifically for the award. 1. Composition of total costs. The total (2)Benefits both the award and other work cost of an award is the sum of the allowable and can be distributed in reasonable propor- direct and allocable indirect costs less any tion to the benefits received,or applicable credits. (3)Is necessary to the overall operation of 2. Factors affecting allowability of costs. the organization,although a direct relation- To be allowable under an award, costs must ship to any particular cost objective cannot meet the following general criteria: be shown. a.Be reasonable for the performance of the b.Any cost allocable to a particular award award and be allocable thereto under these or other cost objective under these principles principles. may not be shifted to other Federal awards b. Conform to any limitations or exolu- to overcome funding deficiencies,or to avoid lions set forth in these principles or in the restrictions imposed by law or by the terms award as to types or amount of cost items. of the award. c. Be consistent with policies and prone- 5.Applicable credits. a. The term applica- dures that apply uniformly to both federally- ble credits refers to those receipts, or reduc- financed and other activities of the organize- tion of expenditures which operate to offset tion• or reduce expense items that are allocable to d.Be accorded consistent treatment. awards as direct or indirect costs. Typical e. Be determined in accordance with gen- examples of such transactions are: Purchase orally accepted accounting principles discounts, rebates or allowances, recoveries (GAAP)• or indemnities on losses, insurance refunds, f.Not be included as a cost or used to meet and adjustments of overpayments or erro- cost sharing or matnhing requirements of peons charges.To the extent that such cred- any other federally-financed program in ei- its accruing or received by the organization ther the current or a prior period. relate to allowable cost, they shall be cred- g.Be adequately documented. ited to the Federal Government either as a 3.Reasonable costs.A cost is reasonable if, cost reduction or cash refund, as appro- in its nature or amount, it does not exceed priate. that which would be incurred by a prudent b,In some instances, the amounts received person under the circumstances prevailing at from the Federal Government.to finance or- the time the decision was made to incur the ganizational activities or service operations 184 OMB Circulars and Guidance Pt. 230, App.A should be treated as applicable credits. Spe- own written fiscal and administrative re- cifically, the concept of netting such credit quirements for expending and accounting for items against related expenditures should be all funds,which are consistent with the pro- applied by the organization in determining visions of 2 CFR part 225 (OMB Circular A the rates or amounts to be charged to Fed- 87),and extend such policies to all subrecipi- eral awards for services rendered whenever ents. These fiscal and administrative re- the facilities or other resources used in pro- quirements must be sufficiently specific to viding such services have been financed di- ensure that: Funds are used in compliance rectly,in whole or in part,by Federal funds. with all applicable Federal statutory and c. For rules covering program income(i.e., regulatory provisions, costs are reasonable gross income earned from federally-sup- and necessary for operating these programs, ported activities).see §215.24 of 2 CFR part and funds are not to be used for general ex- 215 Uniform Administrative Requirements penes required to carry out other respon- for Grants and Agreements with Institutions sibilities of a State or its subrecipients. of Higher Education, Hospitals, and Other Non-Profit Organizations (OMB Circular A- B.Direct Costs 110). 6. Advance understandings. Under any 1. final costs are those that be identi- given award, the reasonableness and fired specifically with a particular cost allocability of certain items of costs may be objective, i.e., a particular award, project, difficult to determine. This is particularly service,or other direct activity of an organi- true in connection with organizations that nation. However, a cost may not be assigned receive a preponderance of their support to an award as a direct cost if any other cost from Federal agencies.In order to avoid sub- incurred for the same purpose, is like cir- sequent disallowance or dispute based on cumstance, has been allocated to an award unreasonableness or nonallocability, it is as an indirect cost. Costs identified speoifi- often desirable to seek a written agreement cally with awards are direct costs of the with the cognizant or awarding agency in ad- awards and are to be assigned directly there- vance of the incurrence of special or unusual to. Costs identified specifically with other costs. The absence of an advance agreement final cost objectives of the organization are on any element of cost will not,in itself,af- direct costs of those cost objectives and are feet the reasonableness or allocability of not to be assigned to other awards directly that element. or indirectly. 7. Conditional exemptions. a. OMB author- 2. Any direct cost of a minor amount may izes conditional exemption from OMB admin- be treated as an indirect cost for reasons of istrative requirements and cost principles practicality where the accounting treatment for certain Federal programs with statu- for such cost is consistently applied to all torily-authorized consolidated planning and final cost objectives. consolidated administrative funding, that 3.The cost of certain activities are not al- are identified by a Federal agency and ap- lowable as charges to Federal awards (see, proved by the head of the Executive depart- for example, fundraising costs in paragraph ment or establishment. A Federal agency 17 of Appendix B to this part).However,even shall consult with OMB during its consider- though these costs are unallowable for pur- ation of whether to grant such an exemption. poses of computing charges to Federal b.To promote efficiency in State and local awards, they nonetheless must be treated as program administration, when Federal non- direct costs for purposes of determining indi- entitlement programs with common pur- rect cost rates and be allocated their share poses have specific statutorily-authorized of the organization's indirect costs if they consolidated planning and consolidated ad- represent activities which include the sala- ministrative funding and where most of the ries of personnel, occupy space, and benefit State agency's resources come from non- from the organization's indirect costs. Federal sources, Federal agencies may ex- 4. The costs of activities performed pri- empt these covered State-administered,non- manly as a service to members, clients, or entitlement grant programs from certain the general public when significant and nee- OMB grants management requirements. The essary to the organization's mission must be exemptions would be from all but the treated as direct costs whether or not allow- . allocability of costs provisions of Appendix able and be allocated an equitable share of A, subsection C.e. of 2 CFR part 225 (OMB indirect costs.Some examples of these types Circular A-87);Appendix A, Section C.4. of 2 of activities include: CFR part 220 (OMB Circular A-21); Section a. Maintenance of membership rolls, sub- A.4. of this appendix;and from all of the ad- scriptions, publications, and related func- ministrative requirements provisions of 2 tion. CFR part 215 (OMB Circular A-ll0) and the b. Providing services and information to agencies'grants management common rule. members, legislative or administrative bod- e. When a Federal agency provides this ies,or the public. flexibility, as a prerequisite to a State's ex- c.Promotion,lobbying,and other forms of ercising this option, a State must adopt its public relations. 185 Pt.230,App.A 2 CFR Ch.II (1-1-12 Edition) d. Meetings and conferences except those putation of an indirect cost rate may be ac- held to conduct the general administration complished through simplified allocation of the organisation. procedures,as described in subparagraph D.2 e. Maintenance, protection, and invest- of this appendix. ment of special funds not used in operation b.Where an organization has several major of the organization. functions which benefit from its indirect f. Administration of group benefits on be- costs in varying degrees, allocation of indi- }half of members or clients,including life and rest costs may require the accumulation of hospital insurance, annuity or retirement such costs into separate cost groupings plans,financial aid,etc. which then are allocated individually to ben- efiting functions by means of a base which C.Indirect Costs best measures the relative degree of benefit. 1. Indirect costs are those that have been The indirect costs allocated to each function incurred for common or joint objectives and are then distributed to individual awards and cannot be readily identified with a par- other activities included in that function by ticnlar final cost objective. Direct cost of means of an indirect cost rate(s). c. The determination of what constitutes minor amounts may be treated as indirect an organization's major functions will de- costs under the conditions described in sub- nand on its purpose in being; the types of paragraph B.2 of this appendix. After direct services it renders to the public, its clients, costs have been determined and assigned di- and its members;and the amount of effort it rattly to awards or other work as appro- devotes to such activities as fundraising, priate,indirect costs are those remaining'to public information and membership activi- be allocated to benefiting cost objectives. A ties. cost may not be allocated to an award as an d. Specific methods for allocating indirect indirect cost if any other cost incurred for costs and computing indirect.cost rates the same purpose,in like circumstances,has along with the conditions under which each been assigned to an.award as a direct cost. method should be used are described in sub- 2. Because of the diverse characteristics paragraphs D.2 through 5 of this appendix. and accounting practices of non-profit orga- e.The base period for the allocation of in- nizations, it is not possible to specify the direct costs is the period in which such costs types of cost which may be classified as indi- are incurred and accumulated for allocation rect cost in all situations. However, typical to work performed in that period. The base examples of indirect cost for many non-prof- period normally should coincide with the or- it organizations may include depreciation or ganization's fiscal year but, in any event, use allowances on buildings and equipment, shall be so selected as to avoid inequities in the costa of operating and maintaining fa- the allocation of the costs. oilities,and general administration and gen- 2. Simplified allocation method. a. Where eral expenses, such as the salaries and ex- an organization's major functions benefit penses of executive officers, personnel ad- from its indirect costs to approximately the ministration,and accounting. same degree,the allocation of indirect costs 3. Indirect costs shall be classified within may be accomplished by separating the orga- two broad categories: "Facilities" and"Ad- nize.tion's total costs for the base period as ministration." "Facilities" is defined as de- either direct.or indirect, and dividing the predation and•use allowances on buildings, total allowable indirect costs(net of applica- equipment and capital improvement, inter- ble credits) by an equitable distribution eat on debt associated with certain buildings, base.The result of this process is an indirect equipment and capital improvements, and cost rate which is used to distribute indirect operations and maintenance expenses. "Ad- costs to individual awards. The rate should ministration"is defined as general adminis- be expressed as the percentage which the tration and general expenses such as the di- total amount of allowable indirect costs rector's office,accounting,personnel,library bears to the.. base selected. This method expenses and all other types of expenditures should also be used where an organization not listed specifically under one of the sub- has only one major function encompassing a categories of"Facilities"(including cross al- number of individual projects or activities, locations from other pools, where applica- and may be used where the level of Federal ble).See indirect cost rate reporting require- awards to an organization is relatively ments in subparagraphs D.2.e and D.3.g of smart. this appendix. b. Both the direct costs and the indirect D.Allocation of Indirect Costs and . costs shall exclude capital expenditures and Determination of Indirect Cost Rates unallowable costs. However, unallowable costs which represent activities must be in- 1. General. a.Where a non-profit organize- chided in the direct costs under the condi- tion has only one major function, or where tions described in subparagraph B.3 of this all its major functions benefit from its indi- appendix. rect costs to approximately the same degree, o. The distribution base may be total di- the allocation of indirect costs and the com- rent costs (excluding capital expenditures 186 OMB Circulars and Guidance Pt. 230,App.A and other distorting items, such as major that have been incurred for the administra- subcontracts or subgrants), direct salaries tion, operation, maintenance, preservation, and wages, or other base which results in an and protection of the organization's physical equitable distribution. The distribution base plant. They include expenses normally in- shall generally exclude participant support curred for such items as:Janitorial and util- costs as defined in paragraph 32 of Appendix ity services; repairs and ordinary or normal B. d. Except where a special rate(s) is re- ment;alterations of buildings, furniture and equip- quired in accordance with subparagraph 5 of eration of buildings grounds,maintenance and op- this appendix, the indirect cost rate devel- ties; security; earthquake and t plant disaster pe- oped under the above principles is applicable paredness; environmental safety; hazardous to all awards at the organization.If a special waste disposal; property, liability and other rate(s)is required,appropriate modifications insurance relating to property; space and Shall be made in order to develop the special capital leasing; facility planning and man- rate(s). agement; and, central receiving. The oper- e. For an organization that receives more ation and maintenance expenses category than$10 million in Federal funding of direct shall also include its allocable share of costs in a fiscal year,a breakout of the indi- fringe benefit costs,depreciation and use al- rect cost component into two broad cat- lowances,and interest costs. egories,Facilities and Administration as de- (4)General administration and general ex- fined in subparagraph C.3 of this appendix,is penses. (a) The expenses under this heading required.The rate in each case shall be stat- are those that have been incurred for the ed as the percentage which the amount of overall general executive and administrative the particular indirect cost category (i.e., offices of the organization and other ex- Facilities or Administration) is of the dis- penses of a general nature which do not re- tribution base identified with that category. late solely to any major function of the orga- 3.Multiple allocation base method. nization.This category shaft ts a. General. Where an organization's indi- allocable share of fringe r9 also coats, oper- rect costs benefit its major functions in ation and maintenance e expense, depreciation varying degrees,indirect costs shall be accu- and use allowances, and inintere interest Ex- mulated into separate cost groupings, as de- amples of this category include central of- scribed in subparagraph D.3.b of this appen- fives, such as the director's office, the office dix. Each grouping shall then be.allocated of finance, business services, budget and individually to benefiting ftmations by planning,personnel,safety and risk manage- means of a base which best measures the rel- ment, general counsel, management infor- ative benefits. The default allocation bases mation systems,and library costs. Dby cost pool are described in subparagraph (b) In developing this cost pool, special .3.c of this appendix. care should be exercised to ensure that costs b. Identification of indirect costs. Cost incurred for the same purpose in like cir- groupings shall be established so as to per- cumstances are treated consistently as ei- mit the allooatnon of each grouping on the ther direct or indirect costs. For example, basis of benefits provided to the major funs- salaries of technical staff, project supplies, tions. Each grouping shall constitute a pool project publication, telephone toll charges, of expenses that are of like character in computer costs, travel costs,and specialized terms of functions they benefit and in terms services costs shall be treated as direct costs of the allocation base which best measures wherever identifiable to a particular pro_the relative benefits provided to each func- gram. The salaries and wages.of administra- tion. The groupings are classified within the tive and pooled clerical staff should nor- two broad categories: "Facilities" and"Ad- mally be treated as indirect costs. Direct ministration," as described in subparagraph charging of these costs may be appropriate C.3 of this appendix. The indirect cost pools where a major project or activity explicitly are defined as follows: requires and budgets for administrative or (1) Depreciation and use allowances. The clerical services and other individuals in- expenses under this heading are the portion volved can be identified with the program or of the costs of the organization's buildings, activity. Items such as office supplies,post- capital improvements to land and buildings, age, local telephone costs, periodicals and and equipment which are computed in ac- memberships should normally be treated as cordance with paragraph 11 of Appendix B to indirect costs. this part ("Depreciation and use allow- c.Allocation bases.Actual conditions shall ances"). be taken into account in selecting the base (2) Interest. Interest on debt associated to be used in allocating the expenses in each with certain buildings, equipment and cap- grouping to benefiting functions. The essen- ital improvements are computed in accord- tial consideration in selecting a method or a • ance with paragraph 23 of Appendix B to this base is that it is the one best suited for as- part("Interest"). signing the pool of costs to cost objectives in (3) Operation and maintenance expenses. accordance with benefits derived;a traceable The expenses under this heading are those cause and effect relationship; or logic and 187 Pt.230,App.A 2 CFR Ch.1I (1-1-12 Edition) reason, where neither the cause nor the ef- allocated in the same manner as the depre- fect of the relationship is determinable. ciation and use allowances. When an allocation can be made by assign- (4)General administration and general ex- ment of a cost grouping directly to the funs- penses. General administration and general tion benefited, the allocation shall be made expenses shall be allocated to benefiting in that manner.When the expenses in a cost functions based on modified total direct grouping are more general in nature, the al- costs (MTDC), as described in subparagraph location shall be made through the use of a D.3.f of this appendix.The expenses included selected base which produces results that are i11 this category could be grouped first ae- equitable to both the Federal Government cording to major functions of the organize- and the organization. The distribution shall tion to which they render services or provide be made in accordance with the bases de- benefits. The aggregate expenses of each scribed herein unless it oan be demonstrated group chill then be allocated to benefiting that the use of a different base would result functions based on MTDC. in a more equitable allocation of the costs, or that a more readily available base would d. Order of distribution. (1) Indirect cost not increase the costs charged to sponsored categories consisting of depreciation and use awards. The results of special cost studies allowances, interest, operation and mainte- (such as an engineering utility study) shall nance, and general administration and gen- not be used.to determine and allocate the in- eral expenses shall be allocated in that order direct costs to sponsored awards. to the remaining indirect cost categories as (1)Depreciation and use allowances.Depre- well as to the major functions of the organi- elation and use allowances expenses shall be nation. Other cost categories could be allo- allocated in the following manner: (sated in the order determined to be most ap- (a) Depreciation or use allowances on propriate by the organization.When cross al- buildings used exclusively in the conduct of location of costs is made as provided in sub- a single function, and on capital improve- paragraph D.3.d.(2) of this appendix, this ments and equipment used in such-buildings, order of allocation does not apply. shall be assigned to that function. (2)Normally,an indirect cost category will (b) Depreciation or use allowances on be considered closed once it has been allo- buildings used for more than one function, cited to other cost objectives, and costs and on capital improvements and equipment shall not be subsequentlyallocated to.it. used in such buildings, shall be allocated to However,a cross allocation of costs between the individual functions performed in each two or more indirect costs categories could building on the basis of usable square feet of be used if such allocation will result in a space,excluding common areas,such as hall- more equitable allocation of costs. If a cross ways,stairwells,and restrooms. allocation is used, an appropriate modifica- (c) Depreciation or use allowances on tion to the composition of the indirect cost buildings, capital improvements and equip- categories is required. ment related space (e.g., individual rooms, e. Application of indirect cost rate or and laboratories) used jointly by more than rates. Except where a special indirect cost one function(as determined by.the users of rate(s) is required in accordance with sub- the space) shall be treated as follows. The cost of each jointly used unit of space chap paragraph D.5 of this appendix,the separate be allocated to the benefiting functions on groupings of indirect costs allocated to each the basis of either the employees and other major function 4101 be aggregated and users on a full-time equivalent (FTE) basis treated as a common pool for that function. or salaries and wages of those individual The costs in the oommon pool shall then be functions benefiting from the use of that distributed to individual awards included in space; or organization-wide employee FTEs that function by use of a single indirect cost or salaries and wages applicable to the bene- rate. filing functions of the organization. f.Distribution basis.Indirect costs shall be (d) Depreciation or use allowances on cer- distributed to applicable sponsored awards tain capital improvements to land, such as and other benefiting activities within each paved parking areas, fences, sidewalks, and major function on the basis of MTDC.MTDC the like, not included in the cost of build- consists of all salaries and wages,fringe ben- ings, shall be allocated to user categories on efits,materials and supplies,services,travel, a FTE basis and distributed to Tvijor func- and subgrants and subcontracts up to the lions in proportion to the salaries and wages first $25,000 of each subgrant or subcontract of all employees applicable to the functions. (regardless of the period covered by the (2) Interest. Interest costs shall be allo- subgrant or subcontract).Equipment,capital cated in the same manner as the deprecia- expenditures,charges for patient care,rental tion or use allowances on the buildings, costs and the portion in excess of $2.5,000 equipment and capital equipments to which shall be excluded from MTDC. Participant the interest relates. support costs shall generally be excluded (3) Operation and maintenance expenses. from MTDC. Other items may only be ex- Operation and maintenance expenses shall be eluded when the Federal cost cognizant 188 OMB Circulars and Guidance Pt. 230,App.A agency determines that an.exclusion is nec- resources employed,the scientific disciplines essary to avoid a serious inequity in the dis- or technical skins involved, the organize- tribution of indirect costs. tional arrangements used, or any g. Individual Rate Components. An indi- tion thereof. When a articular egmentnof of rect cost rate shall be determined for each work is performed in an environment which separate indirect cost pool developed. The appears to generate a significantly different rate in each case shall be stated as the per- level of indirect costs, provision§ should be centage which the amount of the particular made for a separate indirect cost pool appli- indirect cost pool is of the distribution base cable to such work. The separate indirect identified with that pool. Each indirect cost cost pool should be developed during the rate negotiation or determination agreement course of the regular allocation process, and shall include development of the rate for the separate indirect cost rate resulting each indirect cost pool as well as the overall therefrom should be used, provided it is de- indirect cost rate. The indirect cost pools termined that the rate differs signifina.ntly shall be classified within two broad cat- from that which would have been obtained egories: "Facilities" and "Administration," es described in subparagraph C.3 of this ap- under,and subparagraphs volumeD of2, 3, and 4 of this ap- es pendia. pendix,and the work to which the 4. Direct allocation method. a. Some non- rate would apply is material. profit organizations treat all costs as direct E.Negotiation and Approval of Indirect Cost costs except general administration and gen- Rates eral expenses. These organizations generally s separate their costs into three basic cat- following Definitions. As used in this section, the egories: General administration and general following terms have the meanings set forth expenses, fundraising, and other direct func- below: tions (including projects performed under a. Cognizant agency means the Federal Federal awards). Joint costs, such as depre- agency responsible for negotiating and ap- elation, rental costs, operation and m inte- proving indirect cost rates for a non-profit nance of facilities, telephone expenses, and organization on behalf of all Federal agen- the like are prorated individually as direct cies. costs to each category and to each award or b. Predetermined rate means an indirect other activity using a base most appropriate cost rate,applicable to a specified current or to the particular cost being prorated. future period, usually the organization's fis- b.This method is acceptable,provided each cal year.The rate is based on an estimate of joint cost is prorated using a base which ac- the costs to be incurred during the period.A curately measures the benefits provided to predetermined rate is not subject to adjust- each award or other activity.The bases must ment. be established in accordance with reasonable c. Fixed rate means an indirect cost rate criteria, and be supported by current data. which has the same characteristics as a pre- This method is compatible with the Stand- determined rate, except that the difference. ards of Accounting and Financial Reporting between the estimated costs and the actual for Voluntary Health and Welfare Organize- costs of the.period covered by the rate is car- tions issued jointly by the National Health Tied forward as an adjustment to the rate Council,Inc., the National Assembly of Vol- computation of a subsequent period. untary Health and Social Welfare Organize- d. Final rate means an indirect cost rate tions,and the United Way of America. applicable to a specified past period which is c. Under this method, indirect costs con- based on the actual costs of the period. A sist exclusively of general administration final rate is not subject to adjustment. and general expenses. In all other respects, e.Provisional rate or billing rate means a the organization's indirect cost rates shall temporary indirect cost rate applicable to a be computed in the same manner as that de- specified period which is used for funding,in- scribed in subparagraph D.2 of this appendix. terim reimbursement,and reporting indirect 5. Special indirect cost rates. In some in- costs on awards pending the establishment of stances,a single indirect cost rate for all ac- a final rate for the period. tivities of an organization or for each major f. Indirect cost proposal means the docu- function of the organization may not be ap- mentation prepared by an organization to propriate, since it would not take into ac- substantiate its claim for the reimbursement count those different factors which may sub- of indirect costs. This proposal provides the stantially affect the indirect costs applicable basis for the review and negotiation leading to a particular segment of work. For this to the establishment of an organization's in- purpose, a particular segment of work may direct cost rate. be that performed under a single award or it g.Cost objective means a function,organi- may consist of work under a group of awards zationai subdivision, contract, grant, or performed in a common environment. These other work unit for which cost data are de- factors may include the physical location of sired and for which provision is made to ac- the work,the level of administrative support cumulate and measure the cost of processes, required,the nature of the facilities or other projects,jobs and capitalized projects. 189 Pt. 230,App. B 2 CFR Ch. II (1-1-12 Edition) 2.Negotiation and approval of rates.a.Un- dispute shall be resolved in accordance with less different arrangements are agreed to by the appeals procedures of the cognizant the agencies concerned, the Federal agency agency. with the largest dollar value of awards with i.To the extent that problems are encoun- an organization will be designated as the tered among the Federal agencies in connec- cognizant agency for the negotiation and ap- tion with the negotiation and approval proc- proval of the indirect cost rates and, where ess, OMB will lend assistance as required to necessary, other rates such as fringe benefit resolve such problems in a timely manner. and computer charge-out rates. Once an agency is assigned cognizance for a par- APPENDIX B TO PART 230-Su.FCTED ticular non-profit organization, the assign- ITEMS OF COST ment will not be changed unless there is a major long-term shift in the dollar volume of SELECTED ITEMS OF COST the Federal awards to the organization. All concerned Federal agencies shall be given .TABLE OF CONTENTS the opportunity to participate in the nego- 1.Advertising and public relations costs tiation process but, after a rate has been 2.Advisory councils agreed upon, it will be accepted by all Fed- 3.Alcoholic beverages eral agencies. When a Federal agency has 4.Audit costs and related services reason to believe that special operating fox- 5.Bad debts tors affecting its awards necessitate special 6.Bowling costs indirect cost rates in accordance with sub- 7.Communication costs paragraph D.5 of this appendix, it will,prior 8.Compensation for personal services to the time the rates are negotiated, notify 9.Contingency provisions the cognizant agency. 10.Defense and prosecution of criminal and b. A non-profit organization which has not civil proceedings, claims, appeals and previously established an indirect cost rate patent infringement with a Federal agency shall submit its ini- 11.Depreciation and use allowances tial indirect cost proposal immediately after 12.Donations and contributions the organization is.advised that an award 13. Employee morale, health, and welfare will be made and, in no event, later than costs three months after the effective date of the 14.Entertainment costs award. 15. Equipment and other capital expendi- c. Organizations that have previously es- tures tablished indirect cost rates must submit a 16.Fines and penalties new indirect cost proposal to the cognizant 17. Fund raising and investment manage- agency within six months after the close of ment costs each fiscal year. 18.Gains and losses on depreciable assets d.A predetermined rate may be negotiated 19.Goods or services for personal use for use on awards where there is reasonable 20.Honsing and personal living expenses assurance,based on past experience and reli- 21.Idle facilities and idle capacity able projection of the organization's costs, 22.Insurance and indemnification that the rate is not likely to exceed a rate 23.Interest based on the organization's actual costs. 24.Labor relations costs e. Fixed rates may be negotiated where 25.Lobbying predetermined rates are not considered ap- 26. Losses on other sponsored agreements propriate.A fixed rate,however,shall not be or contracts negotiated if all or a substantial portion of 27.Maintenance and repair costs the organization's awards are expected to ex- 28.Materials and supplies costs pire before the carry-forward adjustment can 29.Meetings and conferences be made;the mix of Federal and non-Federal 30.Memberships,subscriptions, and profes- work at the organization is too erratic to sional activity costs permit an equitable carry-forward adjust- 31.Organization costs ment; or the organization's operations flue- 32.Page charges in professional journals tuate significantly from year to year. 33.Participant support costs f.Provisional and final rates shall be nego- 34.Patent costs tiated where neither predetermined nor fixed 35.Plant and homeland security costs rates are appropriate. 36.Pre-agreement costs g.The results of each negotiation shall be 37.Professional services costs formalized in a written agreement between 38.Publication and printing costs the cognizant agency and the non-profit or- 39.Rearrangement and alteration costs ganization. The cognizant agency shall dis- 40.Reconversion costs tribute copies of the agreement to all con- 41.Recruiting costs earned Federal agencies. 42.Relocation costs h.If a dispute arises in a negotiation of an 43.Rental costs of buildings and equipment indirect cost rate between the cognizant 44.Royalties and other costs for use of pat- agency and the non-profit organization, the ents and copyrights 190 OMB Circulars and Guidance Pt. 230,App. B 45.Selling and marketing are limited to communication and liaison 46.Specialized service facilities necessary keep the public informed on mat 48. Termination costs applicable to s on- ters of public concern, such as notices of Bored agreements P Federal contract/grant awards, financial 49.Training costs matters,etc. 50.Transportation costs e.Costs identified in subparagraphs o and d 51.Travel costs if incurred for more than one Federal award 52.Trusteesor for both sponsored work and other work of the non-profit organization,are allowable to APPENDIX B To PART 230—SELEI TLD ITEMS OF the extent that the principles in Appendix A COST to this part, paragraphs B. ("Direct Costs") Paragraphs 1 through 52 of this a endix and C.("indirect Costs")are observed. PP f. Unallowable advertising and public rela- provide principles to be applied in estab- tions costs include the following: Fishing the allowability of certain items of (1) All advertising and public relations cost.These principles apply whether a cost is costs other than as specified in subpara- treated as direct or indirect.Failure to men- tion a particular item of cost is not intended graphs o,d,and e; to imply that it is unallowable; rather, de- (2) Costs of meetings, conventions, con- other termination as to allowabili vocations,ies,of other events related z toi other in- should be based on the treatment orhprin activities: the non-profit organization,ciples provided for similar or related items eluding: of cost. (a) Costs of displays, demonstrations, and 1.Advertising and public relations costs.a. exhibits; The term advertising costs means the costs (t) Costs tf r special rooms, hospitalitysedn of advertising media and corollary adminiw suites,conjunctionand other w and facilities used al trative costs. Advertising media include ents;and with shows other special magazines,newspapers,radio and television, events; direct mail, exhibits,electronic or computer (c) Salaries and wages employeeseh- tranamittals,and the like. gaged in setting up and displaying eexx hibits, b.The term public relations includes tom- making demonstrations,and providing brief- munity relations and means those activities jugs; dedicated to maintaining the image of the ) Costs of promotional items and memo- non-profit organization or maintaining or rabilia, including models, gifts, and sou- promoting understanding and favorable rela- venirs; tions with the community or public at large (4)Costs of advertising and public relations or any segment of the public. designed solely to promote the non-profit or- e.The only allowable advertising costs are ganization. those which are solely for: 2.Advisory Councils.Costs incurred by ad- (1) The recruitment of personnel required visory councils or committees are allowable for the performance by the non-profit organ- as a direct cost where authorized by the Fed- zation of obligations arising under a Federal eral awarding agency or as an indirect cost award (See also paragraph 41, Recruiting where allocable to Federal awards. costs,and paragraph 42,Relocation costs, of 3. Alcoholic beverages. Costs of alcoholic this appendix); beverages are unallowable. (2) The procurement of goods and services 4. Audit costs and related services, a. The for the performance of a Federal award; costs of audits required by,and performed in (3) The disposal of scrap or surplus mate- accordance with, the Single Audit Act, as rials acquired in the performance of a Fed- implemented by Circular A-133, "Audits of eral award except when non-profit organize- States, Local Governments, and Non-Profit tions are reimbursed for disposal costs at a Organizations" are allowable. Also see 31 predetermined amount;or U.S.C.7505(b)and section 230("Audit Costs") (4) Other specific purposes necessary to of Circular A-133. meet the requirements of the Federal award. b. Other audit costs are allowable if in-d.The only allowable public relations costs eluded in an indirect cost rate proposal,or if are: specifically approved by the awarding agen- (1) Costs specifically required by the Fed- cy as a direct cost to an award. eral award; c. The cost of agreed-upon (2)Costs of communicating it Pon proceduresientswho are andpress lug'with the public gagements to monitor subrecipienta are pertaining to specific activities or exempted from A-133 under section 200(d)are accomplishments which result from perform- allowable,subject to the conditions listed in ante of Federal awards(these costs are con- A-133,section 230(b)(2). sidered necessary as part of the outreach ef- 5. Bad debts. Bad debts, including losses fort for the Federal award);or (whether actual or estimated) arising(3)Costs of conducting general liaison with uncolleetible accounts and other claims, re- news media and government public relations lated collection costs, and related legal officers, to the extent that such activities costs,are unallowable. 191 Pt.230,App. B 2 CFR Ch. II (1-1-12 Edition) 6. Bonding costs. a. Bonding costs arise d. Special considerations in determining when the Federal Government requires as- allowability. Certain conditions require spe- surance against financial loss to itself or cial consideration and possible limitations in others by reason of the act or default of the determining costs under Federal awards non-profit organization. They arise also in where amounts or types of compensation ap- instances where the non-profit organization pear unreasonable. Among such conditions requires similar assurance.Included are such are the following: bonds as bid,performance,payment,advance (1)Compensation to members of non-profit payment,infringement,and fidelity bonds, organizations,trustees,directors,associates, b. Costs of bonding required pursuant to officers, or the immediate families thereof. the terms of the award are allowable. Determination should be made that such c. Costs of bonding required by the non- compensation is reasonable for the actual profit organization in the general conduct of personal services rendered rather than a dis- its operations are allowable to the extent tribution of earnings in excess of costs. that such bonding is in accordance with (2) Any change in an organization's corn- sound business practice_ and the rates and pensation policy resulting in a substantial premiums are reasonable under the cir- increase in the organization's level of com- cumstances. pensation, particularly when it was concur- 7.Communication costs.Costs incurred for rent with an increase in the ratio of Federal telephone services, local and long distance awards to other activities of the organza- telephone calls, telegrams, postage, roes- tion or any change in the treatment of al-senger, electronic or computer transmittal lowability of specific types of compensation services and the like are allowable. due to changes in Federal policy. 8. Compensation for personal services. a. e.Unallowable costs.Costs which are unal- Definition. Compensation for personal serv- lowable under other paragraphs of this ap- ices includes all compensation paid cur- pandit shall not be allowable under this rently or accrued by the organization for paragraph solely on the basis that they con- services of employees rendered during the stitute personal compensation. period of the award(except as otherwise pro- f. Overtime, extra-pay shift, and multi- vided in subparagraph 8.h of this appendix). shift premiums. Premiums for overtime, It includes,but is not limited to, salaries, extra-pay shifts,and multi-shift work are al- wages, director's and executive committee lowable only with the prior approval of the member's fees,incentive awards,fringe bene- awarding agency except: fits, pension plan costs, allowances for off-. (1) When necessary to cope with emer- site pay,incentive pay, location allowances, genies, such as those resulting from acci- hardship pay,and cost of living differentials, dents, natural disasters, breakdowns of b. Allowability. Except as otherwise ape- equipment, or occasional operational bottle- cifically provided in this paragraph, the necks of a sporadic nature. costs of such compensation are allowable to (2) When employees are performing indi- the extent that: rest functions,such as pominiatration,main- (1) Total compensation to individual) em- tenance,or accounting. ployees is reasonable for the services ran- (3)In the performance of tests,laboratory dared and conforms to the established policy procedures, or other similar operations of the organization consistently applied to which are continuous in nature and cannot both Federal and non-Federal activities; and reasonably be interrupted or otherwise corn- (2) Charges to awards whether treated as pleted. direct or indirect costs are determined and (4)When lower overall cost to the Federal supported as required in this paragraph. Government will result. c. Reasonableness, (1) When the organize, g. Fringe benefits. (1) Fringe benefits in tion is predominantly engaged in activities the form of regular compensation paid to other than those sponsored by the Federal employees during periods of authorized ab- Government,compensation for employees on sences from the job, such as vacation leave, federally-sponsored work will be considered sick leave, military leave, and the like, are reasonable to the extent that it is consistent allowable, provided such costs are absorbed with that paid for similar work in the orga- by all organization activities in proportion nization's other activities, to the relative amount of time or effort actu- (2)When the organization is predominantly ally devoted to each. engaged in federally-sponsored activities and (2)Fringe benefits in the form of employer in cases where the kind of employees re- contributions or expenses for social security, quired for the Federal activities are not employee insurance, workmen's oompensa- found in the organization's other activities, ton insurance, pension plan costs (see sub- compensation for employees on-federally- paragraph 8.h of this appendix), and the like, sponsored work will be considered reasonable are allowable, provided such benefits are to the extent that it is comparable to that granted in accordance with established writ- paid for similar work in the labor markets in ten organization policies. Such benefits which the organization competes for the whether treated as indirect costs or as direct kind of employees involved. costs, shall be distributed to particular 192 OMB Circulars and Guidance Pt. 230,App. B awards and other activities in a manner con- each quarter of the year to which such costs sistent with the pattern of benefits accruing to the individuals. or are assignable are unallowable.group of employees (2) Pension plan termination insurance whose salaries and wages are rhargeaable to premiums paid pursuant to the Employee such awards and other activities. Retirement Income Security Act(ERISA) of (3)(a)Provisions for a reserve under a self- 1974(Pub.L. 93-406)are allowable. Late pay- insurance program for unemployment corn- ment charges on such premiums are unallow- pensation or workers' compensation are al- able. lowable to the extent that the provisions (3) Excise taxes on accumulated funding represent reasonable estimates of the liabil- deficiencies and other penalties imposed ities for such compensation,and the types of under ERISA are unallowable. coverage, extant of coverage, and rates and j. Incentive compensation. Incentive corn- premiums would have been allowable had in- pensation to employees based on cost reduc- surance been purchased to cover the risks. tion, or efficient performance, suggestion However, provisions for self-insured liabil- awards, safety awards, etc., are allowable to ities which do not become payable for more the extent that the overall compensation is than one year after the provision is made determined to be reasonable and such costs shall not exceed the present value of the li- are paid or accrued pursuant to an agree- ability. meat entered into in good faith between the (b) Where an organization follows a con- organization and the employees before the sistent policy of expensing actual payments services were rendered,or pursuant to an es- to, or on behalf of, employees or former em- tablished plan followed by the organization ployees for unemployment compensation or so consistently as to imply, in.effect, an workers' compensation, such payments are agreement to make such payment. allowable in the year of payment with the k. Severance pay. (1) Severance pay, also prior approval of the awarding agency, pro- commonly referred to as dismissal vided they are allocated to all activities of a payment in addition to regularwages, isd the organization. wages, by workers and g .organizations to whose- (4)Costs of insurance on the lives of trust- employment is being terminated. Costs of ees, officers, or other employees holding po- severance pay are allowable only to the.ex- sitions of similar responsibility are allow- tent that in each case,it is required by: able only to the extent that the insurance (a)Law represents additional compensation. The (b)Employer-employee agreement costs of such insurance when the organiza- (c)Established policy that constitutes,in ef- tion is named as beneficiary are unallowable. feet, an implied agreement on the organi- h. Organization-furnished automobiles. zation's part,or That portion of the cost of organization-fur- (d) Circumstances of the particular employ- nished automobiles that relates to personal ment. use by employees (including transportation (2)Costs of severance payments are divided to and from work) is unallowable as fringe into two categories as follows: benefit or indirect coats regardless of wheth- (a)Actual normal turnover severance pay- er the cost is reported as taxable income to ments shall be allocated to all activities; or, the employees. These costs are allowable as where the organization provides for a reserve direct costs to sponsored award when nec- for normal severances, such method will be essary for the performance of the sponsored acceptable if the charge to current oper- award and approved by awarding agencies. i.Pension plan costs.(1) Costs of the orga- thous is made reasonablernormalin light severances pa o a nization's pension.plan which are incurred in tually for over a accordance with the established policies of representativee past period, and if amounts the organization are allowable,provided: charged are allocated.to all activities of the (a) Such policies meet the test of reason- organization. Abnormal ableness; (b) Abnormal or mass severance pay is of (b)The methods of cost allocation are not such a Conjectural nature that measurement discriminatory of costs by means of an accrual will not ac The cost assigned to each fiscal year is air forethi this are no both tallowable es. Thus, accru- (c) How- determined in accordance with generally ac- ever, the Federal Government recognizes its cepted accounting principles(GAAP),as pre- obligation to participate,to the extent of its scribed in Accounting Principles Board Opin- fair share,'in any specific payment.Thus,al- ion No.8 issued by the American Institute of lowability will be considered on a case-by- Certified Public Accountants;and case basis in the event or occurrence. (d)The costs assigned to a given fiscal year (c)Costs incurred in certain severance pay are funded for all plan participants within packages (commonly known as "a golden six months after the end of that year. How- parachute" payment) which are in an ever, increases to normal and past service amount in excess of the normal severance pension costs caused by a delay in funding pay paid by the organization to an employee the actuarial liability beyond 30 days after upon termination of employment and are 193 Pt.230,App. B 2 CFR Ch. II (1-1-12 Edition) paid to the employee contingent upon a of the activities performed by the employee, change in management control over,or own- that the distribution of activity represents a ership of, the organization's assets are unal- reasonable estimate of the actual work per- lowable. formed by the employee during the periods (d) Severance payments to foreign nation- covered by the reports. als employed by the organization outside the (d) The reports must be prepared at least United States,to the extent that the amount monthly and must coincide with one or more exceeds the customary or prevailing prac- pay periods. tices for the organization in the United (3) Charges for the salaries and wages of States are unallowable,unless they are nec- nonprofessional employees, in addition to essary for the performance of Federal pro- the supporting documentation described in grams and approved by awarding agencies. subparagraphs (1) and (2), must also be sup- (e) Severance payments to foreign nation- ported by records indicating the total num- ala employed by the organization outside the ber of hours worked each day maintained in United States due to the termination of the conformance with Department of Labor reg- foreign national as a result of the closing of, ulations implementing the Fair Labor or curtailment of activities by,the organza- Standards Act(FLSA)(29 CFR part 516). For tion in that country,are unallowable,unless this purpose, the term"nonprofessional em- they are necessary for the performance of ployee" shall have the same meaning as Federal programs and approved by awarding "nonexempt employee,"under FLSA. agencies. (4)Salaries and wages of employees used in 1. Training costs. See paragraph 49 of this meeting cost sharing or matching require- appendix. ments on awards must be supported in the m.Support of salaries and wages. same manner as salaries and wages claimed (1) Charges to awards for salaries and for reimbursement from awarding agencies. wages,whether treated as direct costs or in- 9. Contingency provisions. Contributions direct costs, will be based on documented to a contingency reserve or any similar pro- payrolls approved by a responsible official(s) vision made for events the occurrence of of the organization.The distribution of sale- which cannot be foretold with certainty as ries and wages to awards must be supported to time, intensity, or with an assurance of . by personnel activity reports, as prescribed their happening, are unallowable. The term in subparagraph 8.m.(2) of this appendix,ex- "contingency reserve" excludes self-insur- cept when a substitute system has been ap- ance reserves (see Appendix B to this part, proved in writing by the cognizant agency. paragraphs 8.g.(3) and 22.a(2)(d)); pension (See subparagraph E.2 of Appendix A to this 'funds (see paragraph 8.i): and reserves for part.) normal severance pay(see paragraph 8.k.) (2) Reports reflecting the distribution of 10.Defense and prosecution of criminal and activity of each employee must be main- civil proceedings, claims,appeals and patent tailed for all staff members (professionals infringement. and nonprofessionals)whose compensation is a.Definitions.(1)Conviction,as used here- charged, in whole or in part, directly to in; means a judgment or a conviction of a awards. In addition, in order to support the criminal offense by any court of competent allocation of indirect costs, such reports jurisdiction, whether entered upon as a ver- must also be maintained for other employees dict or a plea,including a conviction due to whose work involves two or more functions a plea of nolo contendere. or activities if a distribution of their corn- (2) Costs include, but axe not limited to, pensation between such functions or activi- administrative and clerical expenses; the ties is needed in the determination of the or- cost of legal services, whether performed by ganization's indirect cost rate(s)(e.g.,an em- in-house or private counsel; and the costs of ployee engaged part-time in indirect cost ac- the services of accountants, consultants, or tivities and part-time in a direct function). others retained by the organization to assist Reports maintained by non-profit organiza- it; costs of employees, officers and trustees, tions to satisfy these requirements must and any simi1a' costs incurred before, dur- meet the following standards: ing,and after commencement of a judicial or (a) The reports must reflect an after-the- administrative proceeding that bears a di- fact determination of the actual activity of rest relationship to the proceedings. each employee. Budget estimates (i.e., esti- (3) Fraud, as used herein, means acts of mates determined before the services are fraud corruption or attempts to defraud the performed) do not qualify as support for Federal Government or to corrupt its agents, charges to awards. acts that constitute a cause for debarment (b)Each report must account for the total or suspension(as specified in agency regula- activity for which employees are com- tions), and acts which violate the False pensated and which is required in fulfillment Claims Act, 31 U.S.C., sections 3729-3731, or of their obligations to the organization. the Anti-Kickback Act,41 U.S.C.,sections 51 (c)The reports must be signed by the indi- and 54. vidual employee, or by a responsible super- (4)Penalty does not include restitution,re- visory official having first hand knowledge imbursement,or compensatory damages. 194 OMB Circulars and Guidance Pt. 230,App. B (5)Proceeding includes an investigation. (1) The costs are reasonable in relation to b. (1)Except as otherwise described herein, the activities required to deal with the pro- costs incurred in connection with any crimi- ceeding and the underlying cause of action; nal, civil or administrative proceeding (in- (2)Payment of the costs incurred,as allow- cluding filing of a false certification) corn- able and allocable costs,is not prohibited by menced by the Federal Government, or a any other provisions) of the sponsored State, local or foreign government, are not award; allowable if the proceeding:Relates to a vio- (3) The costs are not otherwise recovered lation of, or failure to comply with, a Fed- from the Federal Government or a third oral, State, local or foreign statute or regu- party, either directly as a result of the pro- lation by the. organization (including its ceeding or otherwise;and, agents and employees),and results in any of (4) The percentage o'f costs allowed does the following dispositions: not exceed the percentage determined by an (a)In a criminal proceeding, a conviction. authorized Federal official to be appropriate, (b) In a civil or administrative proceeding considering the complexity of the litigation, involving an allegation of fraud or similar generally accepted principles governing the misconduct, a determination of organize- award of legal fees in civil actions involving tional liability. the United States as a party, and such other (c) In the case of any civil or administra- factors as may be appropriate. Such percent- tive proceeding, the imposition of a mono- age shall not exceed 80 percent. However, if tary penalty. an agreement reached under subparagraph (d)A final decision by an appropriate Fed- 10.c of this appendix has explicitly consid- eral official to debar or suspend the organi- ered this 80 percent limitation and permitted nation,to rescind or void an award.,or to ter- a higher percentage, then the fall amount of minate an award for default by reason of a all resulting from that agreement shall be violation or failure to comply with a Iaw or allowable. regulation. f. Costs incurred by the organization in (e) A disposition consent or corn- connection with the defense of suits brought. promise, if the action byyuld have resulted in by its employees or ex-employees under sec- any of the dispositions described in subpara- 100100-2 of includingthe Major Fraud Act all l relief(Pub.nL. ee- graphs 10.b.(1)(a),(b),(c)or(d)of this appen- essary- the solo a , he e dix. esaary to make such employee whole, where (2) If more than one proceeding involves the organization was found liable or settled, the same alleged misconduct,the costs of all are unallowable. such proceedings shall be unallowable if any g. COS of legal,relatedaccounting,costs,and consult- such one of them results in one of theant services, and incurred in shown in subparagraph dispositions connection with defense against Federal p agraph 10.b.(1)of this appen- Government claims or appeals, antitrust suits,or the prosecution of claims or appeals c. If a proceeding referred to in subpara- engraph 10.b of this appendix is commenced byagainst the Federal Government, are anal_ the Federal Government and is resolved by Towable. h. Costs of legal, accounting, and consult- consent or compromise pursuant to an agree- ant services, and related costs, incurred in meat entered into by the organization and connection with patent the Federal Government, then the costs in- infringementotherwise pro- curredlitio- bythe orvide, are unallowable unlessa otherwise organization in connection vided for in the sponsored awards. with such proceedings that are otherwise not i. Costs which may be unallowable under allowable under subparagraph 10.b of this ap- this paragraph,including directly associated pendix may be allowed to the extent specifi- costs, shall be.segregated and accounted for cally provided in such agreement. by the o d. If a proceeding referred to in subpara- rgf any pr separately.covered ing the sub- graph 10.b of this appendix is commenced bypendency of any proceeding soare by a State,local or foreign government,the au-. Federparal pGovernment hs 10.b and f shall appendix,f this the with- thorized Federal official may allow the costs hold paymentgenerally incurred by the organization for such tinterests of suchf costs.h FederalHe if in the best of the Govern- ceedings, if such authorized official deter- ment, the Federal Government may provide mines that the costs were incurred as a re- for conditional payment upon provision of suit of a specific term or condition of a fed- adequate security, or other adequate assur- orally-sponsored award, or specific written ante,and agreements by the organization to direction of an authorized official of the repay all unallowable costs, plus interest, if sponsoring agency. the costs are subsequently determined to be e. Costs incurred in connection with pro- unallowable. ceedings described in subparagraph 10.b of 11. Depreciation and use allowances. a. this appendix, but which are not made Tina 1- Compensation for the use of buildings, other lowable by that subparagraph, may be al- capital improvements, and equipment on lowed by the Federal Government, but only hand may be made through use allowance or to the extent that: depreciation.However,except as provided in 195 • Pt.230,App.B 2 CFR Ch. 1I (1-1-12 Edition) paragraph 111 of this appendix, a combina- under subparagraph 11.d of this appendix, tion of the two methods may not be used in would be viewed as fully depreciated. How- connection with.a single class of fixed assets ever, a reasonable use allowance may be ne- (e.g., buildings, office equipment, computer gotiated for such assets if warranted after equipment,etc.). taking into consideration the amount of de- b. The computation of use allowances or predation previously charged to the Federal depreciation shall be based on the acquisi- Government, the estimated useful life re- tion post of the assets involved.The aoquisi- maining at time of negotiation,the effect of tion cost of an asset donated to the non-prof- any increased maintenance charges or de- it organization by a third party shall be its creased efficiency due to age,and any other fair market value at the time of the dona- factors pertinent to the utilization of the tion. asset for the purpose contemplated. c. The computation of use allowances or g.Criteria.where the use allowance method depreciation will exclude: is followed: (1)The cost of land; (1)The use allowance for buildings and im- (2)Any portion of the cost of buildings and provement (including land improvements, equipment borne by or donated by the Fed- such as paved parking areas, fences, and eral Government irrespective of where title sidewalks) will be computed at an annual was originally vested or where it presently rate not exceeding two percent of acquisition resides;and cost. (3)Any portion of the cost of buildings and (2)The use allowance for equipment will be equipment contributed.by or for the non- computed at an annual rate not exceeding profit organization in satisfaction of a statu- six and two-thirds percent of acquisition tory matching requirement. cost.When the use allowance method is used d. General criteria where depreciation for buildings, the entire building must be method is followed: treated as a single asset; the building's com- a.)The period of'useful service(useful life) ponents (e.g., plumbing system, heating and established in each case for usable capital air conditioning, etc.) cannot be segregated assets must take into consideration such fac- from the building's shell. tors as type of construction, nature of the (3) The two percent limitation, however, equipment used, technological developments need not be applied to equipment which is in the particular program area, and the re- . merely attached or fastened to the building newal and replacement policies followed for but not permanently fixed to it and which is the individual items or classes of assets,in- used as furnishings or decorations or for ape- volved. The method of depreciation used to cialized purposes (e.g., dentist chairs and assign the cost of an asset.(or group of as- dental treatment units,counters,laboratory sets)to accounting periods shall reflect the benches•bolted to the floor, dishwashers, pattern of consumption of the asset during modular furniture, carpeting, etc.). Such its useful life. equipment will be considered as not being • (2) In the absence of clear evidence indi- permanently fixed to the building if it can be eating that the expected consumption of the removed without the need for costly or ex- asset will be significantly greater or lesser in tensive alterations or repairs to the building the early portions of its useful life than in or the equipment. Equipment that meets the later portions, the straight-line method these criteria will be subject to the S%per- shall be presumed to be the appropriate cent equipment use allowance limitation. method. h. Charges for use allowances or deprecia- (3) Depreciation methods once used shall tion must be supported by adequate property not be changed unless approved in advance records and physical inventories must be by the cognizant Federal agency When the taken at least once every two years(a statis- depreciation method is introduced for appli- tical sampling basis is acceptable)to ensure cation to assets previously subject to a use that assets exist and are usable and needed. allowance, the combination of use allow- When the depreciation method is followed, antes and'depreciation applicable to such as- adequate depreciation records indicating the sets must not exceed the total acquisition amount of depreciation taken each period .cost of the assets. must also be maintained. e. When the depreciation method is used 12.Donations and contributions. for buildings, a building's shell may be seg- a. Contributions or donations rendered. regated from each building component (e.g., Contributions or donations, including cash, plumbing system, heating, and air condi- property, and services, made by the organi- tioning system, etc.) and each item depre- zation, regardless of the recipient, are unal- dated over its estimated useful life; or the lowable. entire building(i.e.,the shell and all compo- b.Donated services received: vents)may be treated as a single asset and (1) Donated or volunteer services may be depreciated over a single useful life. furnished to an organization by professional f.When the depredation method is used for and technical personnel,.consultants, and a particular class of assets, no depreciation other skilled and unskilled labor. The value may be allowed on any such assets that, of these services is not reimbursable either 196 OMB Circulars and Guidance Pt.230,App. B r as a direct or indirect cost. However, the b. Such costs will be equitably apportioned valve of donated services may be used to to all activities of the non-profit organiza- meet cost sharing or matching requirements tion.Income generated from any of these ac- in accordance with the Common Rule. tivities will be credited to the cost thereof (2)The value of donated services utilized in unless such income has been irrevocably set the performance of a direct cost activity over to employee welfare organisations. shall, when material in amount, be consid- 14. Entertainment costs. Costs of enter- ered in the determination of the non-profit organization's indirect costs or rate(s) and, tam mesa including amusement,o diversion,directly accordingly, shall be allocated a and social activities and any costs kt tionate share of applicable indirectrc costs associatedto with rush costs (such as tickets when the following exist: rentals,shows or sports events, gratuities)a lodging, (a) The aggregate value of the services is transportation, and are material; unallowable. (b)The services are supported by a signifi- 15. Equipment and other capital expendi- cant amount of the indirect costs incurred tures. by the non-profit organization;and a. For purposes of this subparagraph, the (c)The direct cost activity is not pursued following definitions apply: primarily for the benefit of the Federal Gov- (1) "Capital Expenditures" means expendi- ernment. tures for the acquisition cost of capital as- (3) In those instances where there is no sets(equipment,buildings,land),or expendi- basis for determining the fair market value tures to make improvements to capital as- of the services rendered, the recipient and sets that materially increase their value or the cognizant agency shall negotiate an ap- useful life. Acquisition cost means the cost propitiate allocation of indirect cost to the of the asset including the cost to put it in services. place.Acquisition cost for equipment,for ex- (4)Where donated services directly benefit ample, means the net invoice price of the a project supported by an award,the indirect equipment, including the cost of any modi- costs allocated to the services will be eonsid- fixations,attachments,accessories,or auxil- ered as a part of the total costs of the iary apparatus necessary to make it usable project. Such indirect costs may be reim- for the purpose for which it is acquired.An- bursed under the award or used to meet cost civarr charges, such as taxes, duty, protec- sharing or matching requirements. tive in transit insurance,freight,and instal- (5) The value of the donated services may lation may be included in, or excluded from be used to meet cost sharing or matching re- the acquisition cost in accordance with the quirements ender conditions described in non-profit organization's 215.23 of 2 CFR part 215 (OMB Cir- p regular accounting practices. cular A-110). Where donated services are non- treated as indirect costs, indirect cost rates (2)pe "Equipment" means an article of will separate the value of the donations so expendable, tangible personal property hav- that reimbursement will not be made. a useful life of more than one year and c. Donated goods or space. (1) Donated an acquisition cost which equals or exceeds goods;i.e.,expendable personal property/sup- the lesser of the capitalization level estab- plies, and donated use of_space may be fur- lished by the non-profit organization for fi- nished to a non-profit organization. The nancial statement purposes,or$5000. value of the goods and space is not reimburs- (3) "Special purpose equipment" means able either as a direct or indirect cost. equipment which is used only for research, (2)The value of the donations may be used medical,scientific,or other technical activi- to meet cost sharing or matching share re- ties. Examples of special purpose equipment quirements under the conditions described is include microscopes, x-ray machines, sur- 2 CFR part 215 (OMB Circular A-110). Where gical instruments,and spectrometers. donations are treated as indirect costs, indi- (4) "General purpose equipment" means rect cost rates will separate the value of the equipment, which is not limited to research, donations so,that reimbursement will not be medical, scientific or other technical activi- made. ties. Examples include office equipment and 13. Employee morale, health, and welfare furnishings,.modular offices, telephone net- costs. works, information technology equipment a. The costs of employee information pub- and systems,air conditioning equipment,re- lications, health or first-aid clinics and/or Production and printing equipment, and infirmaries, recreational activities, em- motor vehicles. ployee counseling services,and any other ex- b.The following rules of allowability shall penses incurred in accordance with the non- apply to equipment and other capital ex- profit organisation's established practice or Penditures: custom for the improvement of working con- (1) Capital expenditures for general pur- ditions, employer-employee relations, em- pose equipment,buildings,and land are until- ployee morale, and employee performance lowable as direct charges, except where ap- are allowable. proved in advance by the awarding agency. 197 Pt.230,App.B 2 CFR Ch. I1(1-1-12 Edition) (2)Capital expenditures for special purpose shall be the difference between the amount equipment are allowable as direct costs,pro- realized on the property and the vided that items with a unit cost of$5000 or. undepreciated basis of the property. more have the prior approval of the awarding (2) Gains and losses on the disposition of agency. depreciable property,shall not be recognized (3) Capital expenditures for improvements as a separate credit or fol- to land,buildings,or equipment which mate- Io charge under the rially increase their value or useful life are (a)The gain or unallowable as a direct cost except with the depreciation loss isis processedefethrough a prior approval of the awarding agency. preciation account and is reflected d is the (4)When approved as a direct depreciation allowable under paragraph 11 of ant to. charge pursu- this appendix. Paragraph 15.b.(1), (2), and (3) above, (b) The property is given in exchange as capital expenditures will be charged in the part of the purchase price of a similar item period in which the expenditure is incurred, and the gain or Ioss is taken into.account in or as otherwise determined appropriate by determining the depreciation cost basis of and negotiated with the awa rding agency. the new item. (5) Equipment.and other capital expendi- (c)A loss results from the failure to main- tures are unallowable as indirect costs.How- taro permissible insurance, except as other- ever,see paragraph 11.,Depreciation and use wise provided in paragraph 22 of this appen- allowance, of this appendix for rules on the dix. allowability of use allowances or deprecia- (d) Compensation for the use of the prop- tion on buildings,capital improvements,and erty was provided through use allowances in equipment. Also,.see paragraph 43., Rental lieu of depreciation in accordance with Tiara- costs of buildings and equipment, of this ap- graph 9 of this appendix. pendia for rules on the allowability of rental (e) Gains and losses arising from mass or costs for land,buildings,and equipment. extraordinary (6)The nnamortized portion o sales, retirements,ndn or other equip- dispositions shall be considered on a case-by- ment written off as a result of a change in case basis. capitalization levels may be recovered by b. Gains or losses of any nature arising continuing to claim the otherwise allowable from the sale or exchange of property other use allowances or depreciation on the equip- than the property covered in subparagraph a ment, or by amortizing the amount to be shall be excluded in computing award costs. written off over a period of years negotiated 19. Goods or services for personal use. with the cognizant agency. Costs of goods or services for personal use of 16. Fines and penalties. Costs of fines and the organization's employees are mallow- penalties resulting from violations of, or able regardless of whether the cost is re- failure of the organization to comply with ported as taxable income to the employees. Federal, State, and local laws and regula- 20.Housing and personal living expenses.a. tions are unallowable except when incurred Costs of housing (e.g., depreciation, mainte- ' as a result of compliance with specific provi- nance, utilities, furnishir sions of an award or instructions in writing housinggs, living etc.),the awarding agency. allowances and personal are 17. Fund raising and investment unallowablepens es forlef the fringe b organization's officers ect ment costs. a. Costs of organized fund regardless as ofwhether benefit or cost Is re- .e- ing, including financial campaigns, endow-- costs as taxab income to the m is es. ment drives, solicitation of giftsported taxable to the employees. quests, and similaroi expensesgifts and_ be- These costs are allowable as direct costs to to raise capital or obtain contributions ed fare sponsored nce of thew sponsored hen aaward and pap- unallowable. b. Costs of investment counsel and staff proved by awarding agencies. and similar expensesb.The term"officers"includes current and incurred solely to en- past officers and employees. hance income from investments are unallow- 21. Idle facilities and idle capacity. a. As able. used in this section the following c. Fund raising and investment activities the meanings terms have shall be allocated as appropriate share of in- set forthinans below: direct costs under the conditions described o (1)any portion thereof, landi and indi i - in subparagraph B.3 of Appendix A to this Pcollec vely, any equipment tangible part, capital asset, wherever , and ually or collectively, or any other tangible 18. Gains and losses on depreciable assets. owned or leased by thelocated non-profit org eanwhiza- a.(1)Gains and losses on sale,retirement,or other dispositiontion. of depreciable "Idle(2) facilities" means completely un- shall be included in the year in which they used facilities that are excess to the non- occur as credits or charges to cost group- profit organization's current ing(s)in which the depreciation applicable to (3) "Idle capacity" means the unused ca- such property was included. The amount of pacify of partially used facilities. it is the the gain or loss to be included as a credit or . difference between: That which a facility charge to the appropriate cost grouping(s) could achieve under 100 percent operating 198 OMB Circulars and Guidance time on a one shift Pt. 230,App. B rruptions hbasis less operating the rates and premiums shall be reasonable interruptions setups,resultingsti fromom time lost for re- under the circumstances. other normal delays;and the extent to whicch (b) Costa allowed for business interruption the facility was actually r other similar insurance o limited to mauls during the accounting used to meet de- exclude coverage of management fees. mandsshduringis he ac o used if t cod. A (c) Costs of insurance or of multi-shift that thiss amount of for a reserve coveringany provisions many be usage would nor- damage to Federal propertythe riskr of loss or volved. expected for the type of facility,in- only to the extent that tt owe allowable (4) "Cost of idle facilities or idle capacity" liable for such loss or damage.organization is costs such as P ty� (d)Provisions for a reserve under a self-in- meansmaintenance, repair, surance program are allowable to the extent housing, rent, andt'other related costs, e.g., that types of coverage, extent of coverage, insurance,." property taxes and de- preciation or use allowances. rates, and premiums would have been al- b. The costs of idle facilities are lowed had insurance been purchased to cover unallow- the risks. However, provision for known or able except to the extent that: (1)They are necessary to meet fluctuations whichoreasonable t y estimated self-insured ay bleufor more thean in workload;or (2) Although not necessaryone year after the provision is made, shall tu Al o workload, they were necessary not esceed'the present value of the liability. acquired and are (e)Costs of insurance on the lives of trust- whenchangea in programnow idle because of ees, officers, or other employees holding po- achieve more economicalrequirements, reorga- able only o sitions of similar extent that the insurance responsibilities are allow- nization, termination, or other causes which represents additional compensation(see sub- could not have been reasonably foreseen. paragraph 8.g(4) of.this appendix) The cost Under the exception stated in this subpara- of such insurance when the organization is graph, costs of idle facilities are-allowable identified as the beneficiary is unallowable. for a reasonable period of time, ordinarily (f) Insurance against defects. Costs of in- not to exceed one year,depending on the ini- surance with respect to any costs incurred to tiative taken to use,lease, or dispose of such correct defects in the organization's mate- facilities. c. The costs of idle capacity are normal rials or workmans/aip are unallowable. insur- costs doing of es and care a factor in (g) Medical liability (malpractice)the normal fluctuations of usage or indirect able costf ce. Federal research programs cost rates fromliability insurance is an allow- the to period. Such costs to the extent that the Federa rearch only are allowable, provided that the capacity is grams involve human subjects or training of reasonably anticipated to be necessary or participants in research techniques. Medical was originally reasonable and is not subject liability insurance costs shall be treated as a to reduction or elimination by use on other direct cost and shall be assigned to indi- Federal awards, subletting, renting, or sale, vidual projects based on the manner in which in accordance with sound business, eco- nomic,or security practices.Widespreadthe insurerc allocates the risk to the popu- eapacity throughout. idle lation covered by the insurance. group of assets havinsubstantially facilir (3) Actual losses which could have been amonga same function may be considered idle fa- covered by permissible insurance (through thees. the purchase of insurance or,self-insurance cil22.Insurance and indemnif cation.a.Insur_ program) are unallowable unless expressly ance includes insurance which the organize- provided for in the award,except: (a) Costs incurred because of losses not tion is required to carry, or which is ap-under the terms of the award and covered under nominal dednctible insurance any other insurance which the o any provided a keeping- with sound rganization business ness practice are allowable: maintains in connection with the general conduct of its operations. This paragraph ro) Minor losses not covered byi does not apply to insurance which represents such as spoilage, breakage, insurance, fringe benefits for employees (see sub arts- and disappear_ i ance of supplies,which occuranoin ordinary graphs 8.g 8.i(2)of this a P course of operations,are allowable. (1)Costs and insurance required or appendix). approved, b. Indemnification includes securing the a and maintained pursuant to the award are organization against liabilities to third per- g allowable. sons and any other loss or damage,not com- f Costs of other insurance maintained bypensated by insurance or otherwise.The Fed- (2)the organization in connection with the gen- thelo organization is obligated to indemnify I eras conduct of its operations are allowableprovideddnnation only to the extent expressly subject to the following limitations: in the award. I (a)Types and extent of coverage shall be in 23. Interest. a. Costs incurred for interen- accordance with sound business practice and dowment funds,or the n borrowed cpal, t use of emporthe non-profit 199 1 I E i P i Pt. 230,App.B 2 CFR Ch.I1 (1-1-12 Edition) organization's own funds, however rep- bargain purchase option, operating and resented, are unallowable..However,interest maintenance costs,and taxes not included in on debt incurred after September 29, 1995 to the capital leasing arrangement,less any es- acquire or replace capital assets (including timated credits due under the lease at the renovations, alterations, equipment, land, end of the period defined above. Projected and capital assets acquired through capital operating lease costs shall be based on the leases),acquired after September 29,1995 and anticipated cost of leasing comparable facili- used in support of Federal awards is allow- ties at fair market rates under rental agree- able,provided that: ments that would be renewed •or reestab- (1) For facilities acquisitions (excluding fished over the period defined above,and any renovations and alterations)costing over$10 expected maintenance costs and allowable million where the Federal Government's re- property taxes to be borne by the non-profit imbursement is expected to equal or.exceed organization directly or as part of the lease 40 percent of an asset's cost, the non-profit arrangement. organization prepares, prior to the aoquisi- (3) The actual interest cost claimed is tion or replacement of the capital asset(s),a predicated upon interest rates that are no justification that demonstrates the need for higher than the fair market rate available to the facility in the conduct of federally-apon- the non-profit organization from an unre- sored activities.Upon request,the needs jus- lated("arm's length")third party. tification must be provided to the Federal (4)Investment earnings,including interest agency with cost cognizance authority as a income, on bond or loan principal, pending prerequisite to the continued allowability of payment of the construction or acquisition interest on debt and depreciation related to costs, are used to offset allowable interest the facility. The needs justification for the cost..Arbitrage earnings reportable to the In- acquisition of a facility should include, at a ternal Revenue Service are not required to minimum,the following: be offset against allowable interest costs. (a) A statement of purpose and justifica- (5) Reimbursements are limited to the tion for facility acquisition or replacement. least costly alternative based on the total (b) A statement as to why current facili- cost analysis required under subparagraph ties are not adequate. 23.b.of this appendix.For example, if an op- (c) A statement of planned future use of erating lease is determined to be less costly the facility. than purchasing through debt financing, (d) A description of the financing agree- then" reimbursement is limited to the ment to be arranged for the facility. amount determined if leasing had been used. (e) A summary of the building contract In all cases where a lease/purchase analysis with estimated cost information and state- is performed, Federal reimbursement shall ment of source and use of funds. be based upon the least expensive alter- (f)A schedule of planned occupancy dates. native. (2) For facilities costing over$500,000, the (6) Non-profit organizations are also sub- non-profit organization prepares,prior to the ject to the following conditions: acquisition or replacement of the facility, a (a)Interest on debt incurred to finance or lease/purchase analysis in accordance with refinance assets acquired before or reac- the provisions of§§215.30 through 215.37 of 2 quired after September 29,1995,is not allow- CFR 215 (OMB Circular A-110), which shows able. that a financed purchase or capital lease is (b) Interest attributable to fully depre- less costly to the organization than other dated assets is unallowable. leasing alternatives, on a net present value (c)For debt arrangements over$1 million, basis.Discount rates used should be equal to unless the non-profit organization makes an the non-profit organization's anticipated in- initial equity contribution to the asset par- terest rates and should be no higher than the chase of 25 percent or more,non-profit orga- fair market rate available to the non-profit nizations shall reduce claims for interest ex- organization from an unrelated ("arm's pense by an amount equal to imputed inter- length") third-party. The lease/purchase est earnings on excess cash flow,which is to analysis shall include a comparison of the be calculated as follows.Annually,non-prof7 net present value of the projected total cost it organizations shall prepare a cumulative comparisons of both alternatives over the pe- (from the inception of the project)report of riod the asset is expected to be used by the monthly cash flows that includes inflows and non-profit organization. The cost compari- outflows, regardless of the funding source. sons associated with purchasing the facility Inflows consist of depreciation expense, am- shall include the estimated purchase price, ortization of capitalized construction inter- anticipated operating and maintenance costs est, and annual interest expense. For cash (including property taxes, if applicable) not flow calculations, the annual inflow figures included in the debt financing,less any esti- shall be divided by the number of months in mated asset salvage value at the end of the the year (usually 12) that the building is in period defined above. The cost comparison service for monthly amounts. Outflows con- for a capital lease shall include the esti- sist. of initial equity contributions, debt mated total lease payments, any estimated principal payments(less the pro rata share 200 OMB Circulars and Guidance Pt. 230,App. B attributable to the unallowable costs of (1) Attempts to influence the outcomes of land) and interest payments. Where cumu- any Federal, State, or local election, ref- lative inflows exceed cumulative outflows, erendum, initiative, or similar procedure, interest shall be calculated on the excess through in kind or cash contributions, en- inflows for that period and be treated as a re- dorsements,publicity,or similar activity; duction to allowable interest expense. The (2) Establishing, administering, contrib- rate of interest to be used to compute earn- using to, or paying the expenses of a polit- ings on excess cash flows shall be the three ical party, campaign, political action corn- month Treasury Bill closing rate as of the mittee, or other organization established for last business day of that month. the purpose of influencing the outcomes of (d) Substantial relocation of federally- elections; sponsored activities from a facility financed (3)Any attempt to influence:The introduc- by indebtedness, the cost of which was fund- tion of Federal or State legislation; or the ed in whole or part through Federal reim- enactment or modification of any pending bursements, to another facility prior to the Federal or State legislation through commu- expiration of a period of 20 years requires no- nication with any member or employee of tice to the Federal cognizant agency.The ex- the Congress or State legislature (including tent of the relocation, the amount of the efforts to influence State or local officials to Federal participation in the financing, and engage in similar lobbying activity),or with the depreciation and interest charged to date any Government official or employee in con- may require negotiation and/or downward nection with a decision to sign or veto.eh- adjustments of replacement space charged to rolled legislation; Federal programs in the future. (4)Any attempt to influence:The introduc- (e)The allowable costs to acquire facilities tion of Federal or State legislation; or the and equipment are limited to a fair market enactment or modification of any pending value available to the non-profit organiza- Federal or State legislation by preparing, tion from an unrelated ("arm's length") distributing or using publicity or propa- third party, ganda, or by urging members of the general b. For non-profit organizations subject to public or any segment thereof to contribute "full coverage" under the Cost Accounting to or participate in any mass demonstration, Standards (CAS) as defined at 48 Oramarch, rally, fundraising drive, lobbying 9903.201, the interest allowability provisions ampaign or letter writing or telephone cam- of subparagraph a do not apply. Instead, paign;or these organizations' sponsored agreements (5)Legislative liaison activities, including are subject to CAS 414(48 CFR 9903.414),agree cost attendance at legislative sessions or core- money as an.element of the cost of f cili- mittee hearings, gathering information re- ofties capital, and CAS 417 (48 CFR 9903.417), oaming legislation,tionand analyzing the car- costeffect tiesof money as an element of the cost of of legislation, when such activities are capital assets under construction. tied foron i an support tofo engage in knowing lovable c. The following definitions are to be used tion effort to in unallowable lobbying. for purposes of this paragraph: (1)Re-acquired assets means assets held by b. The following activities are excepted the non-profit organization this the coverage of subparagraph 25.a of P rg' prior to Sep- this appendix; tember 29, 1995 that have again come to be (1)Providing a technical and factual Ares- held by the organization, whether through entation of information on a topic directly repurchase or refinancing. It does not in- related to the performance of a grant, con- clude assets acquired to replace older assets_ tract or other agreement through hearing (2) Initial equity contribution means the testimony,statements or letters to the Con- • amount or value of contributions made by gress or a State legislature, or subdivision, non-profit organizations for the acquisition member, or cognizant staff member thereof, of the asset or prior to occupancy of facili- in response to a documented request(includ- ties. ing a.Congressional Record notice requesting (3) Asset costs means the capitalizable testimony or statements for the record at a costs of an asset, including construction regularly scheduled hearing)made by the re- costs,acquisition costs,and other such costs cipient member, legislative body or subdivi- capitalized in accordance with GAAP. sion, or a cognizant staff member thereof; 24.Labor relations costs.Costs incurred in provided such information is readily obtain- maintaining satisfactory relations between able and can be readily put in deliverable the organization and its employees, includ- form; and further provided that costs under ing costs of labor management committees, this section for travel, lodging or meals are employee publications,and other related ac- unallowable unless incurred to offer testi- tivities are allowable. mony at a regularly scheduled Congressional 25. Lobbying. a. Notwithstanding other hearing pursuant to a written request for provisions of this appendix, costs associated such presentation made by the Chairman or with the following activities are unallow- Ranking Minority Member of the Committee able: or Subcommittee conducting such hearing. 201 Pt.230,App.8 2 CFR Ch. II(1-1-12 Edition) (2)Any lobbying made unallowable by sub- of the Executive Branch of the Federal Gov- paragraph 25.a.(3) of this appendix to influ- ernment to give consideration or to act re- ence State legislation in order to directly re- garding a sponsored agreement or a regu- duce the cost, or to avoid material impair- latory matter are unallowable.Improper in- meat of the organization's authority to per- finance means any influence that induces or form the grant, contract, or other agree- tends to induce a Federal employee or officer meat. to give consideration or to act regarding a (3)Any activity specifically authorized by federally-sponsored agreement or regulatory statute to be undertaken with funds from matter on any basis other than the merits of the grant,contract,or other agreement. the matter. c. (1) When an organization seeks ream- 28. Losses on other sponsored agreements bursement for indirect costs, total lobbying or contracts. Any excess of costs over in- costs shall be separately identified in the in- Dome on any award is unallowable as a cost direct cost rate proposal,•and thereafter of any other award.This includes,but is not treated as other unallowable activity costs limited to, the organization's contributed in accordance with the procedures of sub- paragraph B.3 of Appendix A to this part. portion by reason of cost sharing agreements (2) Organizations shall submit, as part of or any under-recoveries through negotiation the annual indirect cost rate proposal,a cer- of lump sums for, or ceilings on, indirect tification that the requirements and stand- costs. ards of this paragraph have been complied 27.Maintenance and repair costs. Costs,in- with. curred for necessary maintenance,repair, or (3) Organizations ehatl maintain adequate upkeep of buildings and equipment (includ- records to demonstrate that the determina- ing Federal property unless otherwise pro- tion of costs as being allowable or unallow- vided for) which neither'add to the perma- able pursuant to paragraph 25 complies with vent value of the property nor appreciably the requirements of this Appendix. prolong its intended life,bat keep it in an ef- (4)Time logs,calendars,or similar records 'ficient operating condition, are allowable. shall not be required to be created for par- Costs incurred for improvements which add poses of complying with this paragraph dur- to the permanent value of the buildings and ing any particular calendar month when:the equipment or appreciably prolong their in- employee engages in lobbying(as defined in tended life shall be treated as capital ex- subparagraphs 25.a. and b. of this appendix) penditures (see paragraph 15 of this appen- 25 percent or less of the employee's com- dix). pensated hours of employment during that 28. Materials and supplies costs. a. Costs calendar month, and within the preceding incurred for materials, supplies, and fab- five-year period, the organization has not ricated parts necessary to carry out a Fed- . materially misstated allowable or unallow- eral award are allowable. able costs of any nature, including legisla- b. Purchased materials and supplies shall tive lobbying costs.When the conditions de- be nhe.rged at their actual prices, net of ap- scribed in this subparagraph are met,organ- plicable credits. Withdrawals from general nations are not required to establish records stores or stockrooms should be oho*red at to support the allowability of claimed costs their actual net cost under any recognized in addition to records already required or maintained. Also, when the conditions de- method of pricing inventory withdrawals, scribed in this subparagraph are met,the ab- consistently applied. Incoming transpor- sence of time logs, calendars, or similar tation charges are a proper part of materials records will not serve as a basis for dis- and supplies costs. allowing costs by contesting estimates of c. Only materials and supplies actually lobbying time spent by employees during a used for the performance of a Federal award calendar month. may be charged as direct costs. (5) Agencies 'hall establish procedures for d. Where federally-donated or furnished resolving in advance, in consultation with materials are used in performing the Federal OMB, any significant questions or disagree- award, such materials will be used without ments concerning the interpretation or ap- charge. plication of paragraph 25.Any such advance 29. Meetings and conferences. Costs of resolution shall be binding in any subsequent meetings and conferences, the primary pur- settlements, audits or investigations with pose of which is the dissemination of tech- respect to that grant or contract for par- nical information, are allowable. This in- poses of interpretation of this Appendix;pro- cludes costs of meals, transportation, rental vided, however, that this she not be con- of facilities, speakers' fees, and other items strued to prevent a contractor or grantee incidental to such meetings or conferences. from contesting the lawfulness of such a de- But see paragraphs 14.,Entertainment costs, termination, and 33.,Participant support costs of this ap- d.Executive lobbying costs.Costs incurred pemB{Y in attempting to improperly influence either 30.Memberships,subscriptions,and profes- directly or indirectly,an employee or officer sional activity costs. a. Costs of the non- 202 OMB Circulars and Guidance Pt. 230,App. B profit organization's membership in busi- or any United States patent application, ness, technical, and professional organiza- where the Federal award does not require tions are allowable. conveying title or a royalty-free license to b. Costs of the non-profit organization's the Federal Government (but see paragraph subscriptions to business, professional, and 45.,Royalties and other costs for use of pat- technical periodicals are allowable. ents and copyrights,of this appendix). c. Costs of membership in any civic or 35. Plant and homeland security costs. community organization are allowable with Necessary and reasonable expenses incurred prior approval by Federal cognizant agency. for routine and homeland security to protect d.Costs of membership in any country club facilities, personnel, and work products are or social or dining club or organization are allowable. Such costs include, but are not unallowable. limited to, wages and uniforms of personnel 31. Organization costs. Expenditures, such engaged in security activities; equipment; as incorporation fees, brokers' fees, fees to barriers; contractual security services; con- promoters, organizers or management con- sultants;etc. Capital expenditures for home- sultants, attorneys, accountants, or invest- land and plant security purposes are subject ment counselors, whether or not employees to paragraph 15., Equipment and other cap- of the organization, in connection with es- ital expenditures,of this appendix. tablishment or reorganization of an organ- 36. Pre-agreement costs. Pre-award costs zation,are unallowable except with prior ap- are those incurred prior to the effective date proval of the awarding agency. of the award directly pursuant to the nego- 32. Page charges in professional journals. tiation and in anticipation of the award Page charges for professional journal publi- where such costs are necessary to comply cations are allowable as a necessary part of with the proposed delivery schedule or period research costs,where: of performance. Such costs are allowable a. The research papers report work sup- only to the extent that they would have been ported by the Federal Government;and allowable if incurred after the date of the b.The charges are levied impartially on all award and only with the written approval of research papers published by the journal, the awarding agency. whether or not by federally-sponsored an- 37. Professional services costs. a. Costs of thors. professional and consultant services ren- 33. Participant support costs. Participant dered by persons who are members of a par- support costs are direct costs for items such ticular profession or possess a special skill, as stipends or,subsistence allowances,travel and who are not officers or employees of the allowances, and registration fees paid to or non-profit organization, are allowable, sub- on behalf of participants or trainees(but not ject to subparagraphs b and c when reason- employees) in connection with meetings, able in relation to the services rendered and conferences, symposia, or training projects, when not contingent upon recovery of the These costs are allowable with the prior ap- costs from the Federal Government.In addi- proval of the awarding agency. tion, legal and related services are limited 34. Patent costs. a.The following costs re- under paragraph 10 of this appendix. lating.to patent and copyright matters are b.In determining the allowability of costs allowable: cost of preparing disclosures, re- in a particular case,no single factor or any ports, and other documents required by the special combination of factors is necessarily Federal award and of searching the art to determinative. However, the following fac- the extent necessary to make such disclo- tors are relevant: sures; cost of preparing documents and any (1)The nature and scope of the service ren- other patent costs in connection with the Ell- dered in relation to the service required. ing and prosecution of a United States pat- (2) The necessity of contracting for the ent application where title or royalty-free li- service, considering the non-profit organiza- cense is required by the Federal Government tion's capability in the particular area. to be conveyed to the Federal Government; (3)The past pattern of such costs,particu- and general counseling services relating to larly in the years prior to Federal awards. patent and copyright matters,such as advice (4) The impact of Federal awards on the on patent and copyright laws, regulations, non-profit organization's business (i.e., what clauses, and employee agreements (but see new problems have arisen). paragraphs 37., Professional services costs, (5)Whether the proportion of Federal work and 44., Royalties and other costs for use of to the non-profit organization's total busi- patents and copyrights,of this appendix). Hess is such as to influence the non-profit or- b. The following costs related to patent ganization in favor of incurring the cost, and copyright matter are unallowable: particularly where the services rendered are (1) Cost of preparing disclosures, reports, not of a continuing nature and have little re- and other documents and of searching the lationship to work under Federal grants and art to the extent necessary to make disclo- contracts. sures not required by the award. (6) Whether the service can be performed (2) Costs in connection with filing and more economically by direct employment prosecuting any foreign patent application, rather than contracting. 203 • Pt. 230,App.B 2 CFR Ch. 1I (1-1-12 Edition) (7) The qualifications of the individual or b.In publications, costs of help wanted ad- concern rendering the service and the cus- vertising that includes color,includes adver- tomary fees charged, especially on non-Fed- tising material for other than recruitment eral awards. purposes, or is excessive in size (taking into (8)Adequacy of the contractual agreement consideration recruitment purposes for for the service (e.g., description of the serv- which intended and normal organizational ice, estimate of time required, rate of corn- practices in this respect),are unallowable. pensation,and termination provisions). c.Costs of help wanted advertising,special c. In addition to the factors in subpara- emoluments, fringe benefits, and salary al- graph 37.b of this appendix, retainer fees to lowances incurred to attract professional be allowable must be supported by evidence personnel from other organizations that do of bona fide services available or rendered not meet the test of reasonableness or do not 38.Publication and printing costs.a.Publi- conform with the established practices of the cation costs include the costs of printing(in- organization,are unallowable. eluding the processes of composition, plate- d.Where relocation costs incurred incident making, press work, binding, and the end to recruitment of a new employee have been products produced by such processes), dis- allowed either as an allocable direct.or indi- tribution, promotion, mailing, and general rect cost, and the newly hired employee re- handling.Publication costs also include page signs for reasons within his control within charges in professional publications. twelve months after being hired,the organi- b.If these costs are not identifiable with.a zation will be required to refund or credit particular cost objective;they should be al- such relocation costs to the Federal Govern- located as indirect costs to all benefiting ac- ment. tivities of the non-profit organization. 42. Relocation costs. a. Relocation costs c. Page charges for professional journal are costs incident to the permanent change publications are allowable as a necessary of duty assignment (for an indefinite period part of research costs where: or for a stated period of not less than 12 (1) The research papers report work sup- months)of an existing employee or upon re- ported by the Federal Government:and cruitment of a hew employee. Relocation (2) The charges are levied impartially on costs are allowable,subject to the limitation all research papers published by,the journal, described in subparagraphs 42.b, c, and d of whether or not by federally-sponsored au- this appendix,provided that: thors. (1)The move is for the benefit of the em- 39. Rearrangement and alteration costs. ployer. Costs incurred for ordinary or normal rear- (2) Reimbursement to the employee is in rangement and alteration of facilities are al- accordance with an established written pol- Towable. Special arrangement and alteration icy consistently followed by the employer. costs incurred specifically for the project are (3)The reimbursement does not exceed the allowable with the prior approval of the employee's actual(or reasonably estimated) awarding agency. expenses. 40. Reconversion costs. Costs incurred in b. Allowable relocation costs for current the restoration or rehabilitation of the non- employees are limited to the following: profit organization's facilities to approxi- (1) The costs of transportation of the em- mately the same condition existing imme- ployee, members of his immediate family diately prior to commencement of Federal and his household, and personal effects to awards, less costs related to normal wear the new location. and tear,are allowable. (2) The costs of finding a new home, such 41.Recruiting costs.a.Subject to subpara- as advance trips by employees and spouses to graphs 41.b, c, and d of this appendix, and locate living quarters and temporary lodging provided that the size of the staff recruited during the transition period,up to maximum and maintained is in keeping with workload period of 30 days, including advance trip requirements, costs of"help wanted".adver- time. tising,operating costs of an employment of- (3)Closing costs,such as brokerage, legal, lice necessary to secure and maintain an and appraisal fees, incident to the disposi- adequate staff,costs of operating an aptitude tion of the employee's former home. These and educational testing program, travel costs, together with those described in sub- costs of employees while engaged in recruit- paragraph 42.b.(4) of this appendix, are lim- ing personnel, travel costs of applicants for ited to 8 percent of the sales.price of the em- interviews for prospective employment, and ployee's former home. relocation costs incurred incident to recruit- (4) The continuing costs of ownership of ment of new employees,are allowable to the the vacant former home after the settlement extent that such costs are incurred pursuant or lease date of the employee's new perma- to a well-managed recruitment program. nent home,such as maintenance of buildings Where the organization uses employment and grounds(exclusive of fixing up expenses), agencies, costs that are not in excess of utilities,taxes,and property insurance. standard commercial rates for such.services (5) Other necessary and reasonable ex- are allowable. penses normally incident to relocation,such 204 Pt. 230,App. B 2 CFR Ch. 1I (1-1-12 Edition) However, these costs are allowable as direct below. They are to be used in conjunction costs,with prior approval by awarding agen- with the other provisions of this appendix in ties, when they are necessary -for the per- termination situations. formance of Federal programs. a. The cost of items reasonably usable on 46. Specialised service facilities. a. The the non-profit organization's other work costs of services provided by highly complex shall not be allowable unless the non-profit or specialized facilities operated by the non- organization submits evidence that it would profit organization,such as computers,wind not retain such items at cost without sus- tunnels,and reactors are allowable,provided taming a loss. In deciding whether such the charges for the services meet the condi- items are reasonably usable on other work of tions of either paragraph 46 b. or c. of this the non-profit organization, the awarding appendix and, in addition,take into account agency should consider the non-profit orga- any items of income or Federal financing nization's plans and orders for current and that qualify as applicable credits under sub- scheduled activity. Contemporaneous pur- paragraph A.5.of Appendix A to this part. chases of common items by the non-profit b. The costs of such services, when mate- organization shall be regarded as evidence rial, must be charged directly to applicable that such items are reasonably usable on the awards based on actual usage of the services non-profit organization's other work. Any on the basis of a schedule of rates or estab- acceptance of common items as allocable to lished methodology that does not discrimi- the terminated portion of the Federal award nate against federally-supported activities of shall be limited to the extent that the quan- the non-profit organization, including usage tities of such items on hand, in transit, and by the non-profit organization for internal on order are in excess of the reasonable purposes,and is designed to recover only the quantitative requirements of other work. aggregate costs of the services. The costs of b. If in a particular case, despite all rea- each service shall.consist normally of both sonable efforts by the non-profit organiza- its direct costs and its allocable share of all tion, certain costs cannot be discontinued indirect costs. Rates shall be adjusted at immediately after the effective date of ter- least biennially, and shall take into consid- urination,such costs are generally allowable eration over/under applied costs of the pre- within the limitations set forth in this ap- vious period(s). pendia, except that any such costs con- c. Where the costs incurred for a service tinning after termination due to the neg- are not material, they may be allocated as ligent or willful failure of the non-profit or- indirect costs. ganization to discontinue such costs shall be d. Under some extraordinary cir- unallowable. cnmstances, where it is in the best interest .c. Loss of useful value of special tooling, of the Federal Government and the institu- machinery,and is generally allowable if: tion to establish alternative costing arrange- (1)Such special tooling,special machinery, ments, such arrangements may be worked or equipment is not reasonably capable of out with the cognizant Federal agency. use in the other work of the non-profit orga- 47.Taxes.a.In general,taxes which the or- nization, ganization is required to pay and which are (2)The interest of the Federal Government paid or accrued in accordance with GAAP, is protected by transfer of title or by other and payments made to local governments in means deemed appropriate by the awarding lieu of taxes which are commensurate with agency,and the local government services received are (3)The loss of useful value for any one ter- allowable, except for taxes from which ex- niinated Federal award is limited to that emptions are available to the organization portion of the acquisition cost which bears directly or which are available to the organ- the same ratio to the total acquisition cost zation based on an exemption afforded the as the terminated portion of the Federal Federal Government and in the latter case award bears to the entire terminated Federal when the awarding agency makes available award and other Federal awards for which the necessary exemption certificates,special the special tooling, special machinery, or assessments on land which represent capital equipment was acquired: improvements,and Federal income taxes. d. Rental costs under unexpired leases are b.Any refund of takes,and any payment to generally allowable where clearly shown to the organization of interest thereon, which have been reasonably necessary for the per- were allowed as award costs,will be credited formance of the terminated Federal award either as a cost reduction or cash refund, as less the residual value of such leases,if: appropriate,to the Federal Government. (1)The amount of such rental claimed does 48. Termination costs applicable to spon- not exceed the reasonable use value of the sored agreements. Termination of awards property leased for the period of the Federal generally gives rise to the incurrence of award and such further period as may be rea- costs, or the need for special treatment of sonable,and costs, which would not have arisen had the (2) The non-profit organization makes all Federal award not been terminated. Cost reasonable efforts to terminate, assign, set- principles covering these items are set forth tle, or otherwise reduce the cost of such 206 OMB Circulars and Guidance Pt.230,App. B lease.There also may be included the cost of field in which the employee is now working alterations of such leased property,provided or may reasonably be expected to work, and such alterations were necessary for the per- are limited to: formance of the Federal award, and of ma- (1)Training materials. sonable restoration required by the provi- (2)Textbooks. sions of the lease. (3)Fees charges by the educational institu- e. Settlement expenses including the fol- tion. lowing are generally allowable: (4)Tuition charged by the educational in- (1) Accounting, legal, clerical, and similar stitution or, in lieu of tuition, instructors' costs reasonably necessary for: salaries and the related share of indirect (a) The preparation and presentation to costs of 'the educational institution to the the awarding agency of settlement claims extent that the sum thereof is not in excess and supporting data with respect to the ter- of the tuition which would have been paid to minated portion of the Federal award,unless the participating educational institution. the termination is for default(see§215.61 of (5)Salaries and related costs of instructors 2 CFR part 215(OMB Circular A-110));and who are employees of the organization. (b)The termination and settlement of sub- (6) Straight-time compensation of each awards, employee for time spent attending classes (2)Reasonable costs for the storage,trans- during working hours not in excess of 156 portation, protection, and disposition of hours per year and only to the extent that property provided by the Federal Govern- circumstances do not permit the operation of ment or acquired or produced for the Federal classes or attendance at classes after regular award, except when grantees or contractors working hours; otherwise, such compensa- are reimbursed for disposals at a predeter- tion is unallowable. mined amount in accordance with §215.32 c.Costs of tuition,fees,training materials, through 215.37 of 2 CFR part 215 (OMB Cir- and textbooks (but not subsistence, salary, miler A-110). or any other .emoluments) in connection (3) Indirect costs related to salaries and with full-time education,including that pro- wages incurred as settlement expenses in vided at the organization's own facilities,at subparagraphs 46.e.(1) and (2) of this appen- a post-graduate(but not undergraduate)col- dix. Normally, such indirect costs shall be lege level, are allowable only when the limited to fringe benefits, occupancy cost, course or degree pursued is related to the and immediate supervision. field in which the employee is now working f. Claims under sub awards, including the or may reasonably be expected to work,and allocable portion of claims which are corn- only where the costs receive the prior ap- mon to the Federal award,and to other work proval of the awarding agency. Such costs of the non-profit organization are generally are limited to the costs attributable to a allowable. total period not to exceed one school year for An appropriate share of the non-profit or- each employee so trained. In unusual cases ganization's indirect expense may be alto- the period may be extended. cated to the amount of settlements with sub- d.Costs of attendance of up to 16 weeks per contractors_ and/or subgrantees, provided employee per year at specialized programs that the amount allocated is otherwise con- specifically designed to enhance the effec- sistent with the basic guidelines contained tiveness of executives or managers or to pre- in Appendix A.The indirect expense so allo- pare employees for such positions are allow- cated shall exclude the same and similar able. Such costs include enrollment fees, costs claimed directly or indirectly as settle- training materials, textbooks and related ment expenses. charges, employees' salaries, subsistence, 49. Training costs. a. Costs of preparation and travel. Costs allowable under this para- and maintenance of a program of instruction graph do.not include those for courses that including but not limited to on-the-job, are part of a degree-oriented curriculum, classroom, and apprenticeship training, de- which are allowable only to the extent set signed to increase the vocational effective- forth in subparagraphs b and c. ness of employees, including training mate- e.Maintenance expense,and normal depre- rials,textbooks,salaries or wages of trainees ciation or fair rental, on facilities owned or (excluding overtime compensation which leased by the organization for training pur- might arise therefrom),and(i)salaries of the poses are allowable to the extent set forth in director of training and staff when the train- paragraphs 11,27,and 50 of this appendix. ing program is conducted by the organiza- f. Contributions or donations to edu- tion; or(ii)tuition and fees when the train- cational or training institutions, including ing is in an institution not operated by the the donation.of facilities or other properties, organization,are allowable. and scholarships or fellowships,are unallow- b. Costs of part-time education, at an un- able. dergraduate or post-graduate college level, g. Training and education costs in excess including that provided at the organization's of those otherwise allowable under subpara- own facilities, are allowable only when the graphs 49.b and c of this appendix may be al- course or degree pursued is relative to the lowed with prior approval of the awarding 207 • • Pt. 230,App.C 2 CFR Ch.II(1-1-12 Edition) agency. To be considered for approval, the transportation savings; or offer accommoda organization must demonstrate that such tions not reasonably adequate for the tray- costs are consistently incurred pursuant to eler's medical needs. The non-profit organi- an established training and education pro- zation must justify and document these con- gram, and that the course or degree pursued ditions on a case-by-case basis in order for is relative to the field in which the employee the use of first-class airfare to be allowable is now working or may reasonably be ex- in such cases. petted to work. (2) Unless a pattern of avoidance is de- 50. Transportation costs. Transportation tected, the Federal Government will gen- costs include freight, express, cartage, and erally not question a non-profit organiza_ postage charges relating either to goods pur- tion's determinations that customary stand- chased, in process, or delivered. These costa are allowable. When such costs can ard airesf or other ditscount if the non-profit is an- be identified with the items involved,readily available onfor cancc demonstrate fte may be directly charged as transportation organization. suchairfare wassther of the costs or added to the cost of such items (see following: that airfare that not is the paragraph 28 of this appendix).Where identi- able in the specific case; or it the fication with the materials received cannot non-profit neor use of such overalla practice to readily be made, make routine use such airfare. transportation costs may be d. Air travel by charged to the appropriate indirect cost ac- r other thann commercial orgy i- counts if the organization follows a con- carrier.zation-owned,Cn of-1 travel or non-profit aircraft sistent,equitable procedure in this respect. inuethcosteof lease,-chartered aircraft 51.Travel costs. include the of charter, operation a. General. Travel costs are the expenses (including personnel costs),maintenance,de- for transportation, lodging,subsistence, and pos insurance,portionof and other relatedd related items incurred by employees who are costs.h The allowable such costs that exceeds in travel status on official business of the the cost of commercial air travel, non-profit organization. Such costs may be as provided for in subparagraph] c., is unal- charged on an actual cost basis, on a per Towable. diem or mileage basis in lien of actual costs e. Foreign travel. Direct charges for for- sign travel costs are allowable only when the incurred, or on a combination of the two, provided the method used is applied to an en- travel has received prior approval of the tire trip and not to selected days of the trip, awarding agency.Each separate foreign trip and results in charges consistent with those must receive such approval. For purposes of normally allowed in like circumstances in this provision, "foreign travel"includes any the non-profit organization's non-federally- travel outside Canada, Mexico, the United sponsored activities. States,and any United States territories and b. Lodging and subsistence. Costs incurred possessions. However, the term "foreign by employees and officers for travel, includ- travel"for a non-profit organization located in .a foreign country means travel outside ing costs of lodging, other subsistence, and incidental expenses, shall be considered rea- that country. sonable and allowable only to the extent 52. Trustees. Travel and subsistence costs such costs do not exceed charges normally of trustees (or directors)are allowable. The allowed by the non-profit organization in its costs are subject to restrictions regarding regular operations as the result of the non- lodging,subsistence and air travel costs pro- profit organization's written travel policy. vided in paragraph 51 of this appendix. In the absence of an acceptable,written non- profit organization policy regarding travel APPENDIX C TO PART 230—NON-PROFIT costs, the rates and amounts established ORGANIZATIONS NOT SUBJECT TO under subchapter I of Chapter 57, Title 5, THIS PART United States Code("Travel and Subsistence Expenses; Mileage Allowances"), or by the 1. Advance Technology Institute (ATI), Administrator of'General Services,or by the Charleston,South Carolina President (or his or her designee) pursuant 2. Aerospace Corporation, El Segundo, Cali- to any provisions of such subchapter shall forma apply to travel under Federal awards(48 CFR 3. American Institutes of Research (AIR), 31.205-46(a)). Washington DC c. Commercial air travel. (1) Airfare costs 4. Argonne National Laboratory, Chicago, Il- in excess of the customary standard commer- linois cial airfare (coach or equivalent), Federal 5. Atomic Casualty Commission, Wash- Government contract airfare (where author- ington,DC ized and available),or the lowest commercial 6. Battelle Memorial Institute, discount airfare are unallowable except when Headquartered in Columbus,Ohio such accommodations would: require circni- 7. Brookhaven National Laboratory, Upton, tons routing;require travel during unreason- New York able hours;excessively prolong travel;result 8. Charles Stark Draper Laboratory, Incor- in additional costs that would offset the porated,Cambridge,Massachusetts 208 OMB Circulars and Guidance Pt. 230,App.C 9.CNA Corporation(CNAC),Alexandria,Vir- 22. Rand Corporation, Santa Monica, Cali- ginia fornia 10. Environmental Institute of Michigan, 23. Research Triangle Institute, Research Ann Arbor,Michigan Triangle Park,North Carolina 11. Georgia Institute of Technology/Georgia 24. Riverside Research Institute, New York, Tech Applied Research Corporation/Geor- New York gia Tech Research Institute, Atlanta, 25. South Carolina Research Authority Georgia (SCRA.),Charleston,South Carolina 12. Hanford Environmental Health Founda- 26. Southern Research Institute, Bir- tion,Richland,Washington mingham,Alabama 13.IIT Research Institute,Chicago,Illinois 27. Southwest Research Institute, San Anto- 14. Institute of Gas Technology, Chicago, Il- nio,Texas linois 28.SRI International,Menlo Park,California 15. Institute for Defense Analysis, Alexan- 29. Syracuse Research Corporation, Syra- dria,Virginia cuse,New York 16.LMI,McLean,Virginia 30. Universities Research Association,Incor- 17. Mitre Corporation, Bedford, Massachu- setts porated (National Acceleration Lab), Ar- • 16. Mitretek Systems, Inc., Falls Church, gonna,Illinois Virginia 31.Urban Institute,Washington DC 19.National Radiological Astronomy Observ- 32. Non-profit insurance companies, such as story,Green Bank,West Virginia Blue Cross and Blue Shield Organisations 20. National Renewable Energy Laboratory, 33. Other non-profit organizations as nego- Golden,Colorado fisted with awarding agencies 21Ridge,Ridge Tennessee Associated Universities, Oak PARTS 231 299 [RESERVED] • 209 OMB Guidance §200.501 5701-11, ("Travel and Subsistence Es- Subpart F—Audit Requirements penes; Mileage Allowances"), or by the Administrator of General Services, 030452A1, or by the President(or his or her des- ignee) pursuant to any provisions of §200.500 Purpose. such subchapter must apply to travel This part sets forth standards for ob- under Federal awards (48 CFR 31.206- tamping consistency and uniformity 46(a)). among Federal agencies for the audit (d) Commercial air travel. (1) Airfare of non-Federal entities expending Fed- coats in excess of the basic least aspen- eral awards. sive unrestricted accommodations claim offered by commercial airlines A tmere are unallowable except when snob so- §200.501 Audit requirements. commodations would: (i)Require oirouitone routing; (a)Audit required.A non-Federal anti- (if) Require travel during unreason- ty that expends$750,000 or more during able hours; the non-Federal entity's fiscal year in (iii)Excessively prolong travel; Federal awards must have a single or (iv) Result in additional costa that program-specific audit conducted for would offset the transportation say- that year is accordance with the provi- sions of this part. ings;or (v)Offer accommodations not reason- (b)Single auk.A non-Federal entity that expends $760,000 or more during ably adequate for the traveler's mad- n foal needs. The non-Federal entity the non-Federal entity's havefiscal year le must justify and document these oondi- Federalitawardsduc must a single tions on a case-by-case basis in order audit conducted in accordance with for the use of first-class or business- elects to4 Scope of ogra except when it class airfare to be allowable in such elects have a crogda ce with audit conducted in accordance with para- oases. graph(c)of this section. (2) Unless a pattern of avoidance is (o) Program specific audit election. detected, the Federal government will 'When an auditee expends Federal generally not question a non-Federal awards under only one Federal pro- entity's determinations that pus- gram(excluding R&D)and the Federal tomary standard airfare or other die- program's statutes,regulations,or the count airfare is unavailable for specific terms and conditions of the Federal tripe if the non-Federal entity can award do not require a financial state- demonstrate that snob airfare was not meat audit of the auditee, the auditee available in the specific'case. may elect to have a program-specific (e)Air travel by other than commercial audit conducted in accordance with carrier. Costs of travel by non-Federal §200.507 Program-specific audits.A pro- entity-owned, -leased, or -chartered gram-specific audit may not be elected aircraft include the cost of lease,char- for R&D unless all of the Federal ter, operation (including personnel awards expended were received from costs), maintenance, depreciation, in- the same Federal agency,or the same suranoe, and other related costs. The Federal agency and the same pass- portion of such costs that exceeds the through entity,and that Federal agen- coet of airfare as provided for in pars ay, or pass-through entity in the case graph (d) of this section, is unallow- of a subreoiplent, approves in advance able. a program-specific audit, (d)Exemption when Federal awards es- §200.475 Trustees. vended are less than$750,000.A non-Fed- eral entity that expends lees than Travel and subsistence costs of trust- 3750,000 during the non-Federal entity's see(or directors)at IREs and nonprofit fiscal year in Federal awards is exempt organizations are allowable. See also from Federal audit requirements for 1200.474 Travel costs. that year, except as noted in 1200.503 Relation to other audit requirements, §200.502 2 CFR Ch.II(1-1-14 Erman) but records must be available for re- sponsibility.Methods to ensure oomph- view or audit by appropriate officials once for Federal awards made to for- of the Federal agency,pass-through ea- profit subrecipients may include pre- tity, and Government Accountability award audits, monitoring during the Office(GAO). agreement,and post-award 'audits. See (e)Federally Funded Research and De- also 1200.331 Requirements for pass- velopment Centers (FFRDC). Manage- through entities. meat of an auditee that owns or oper- ates a FFRDC may elect to treat the §200.1102 Basis iigr dateradnihog red- FFRDC as a separate entity for par- seal awards emended poses of this part. (a) Determining Federal awards er- (f) Subrecipients and Contractors. An pended. The determination of when a auditee may simultaneously be a re- Federal award is expended should be cipient, a subrecipient, and a con- based on when the activity related to tractor. Federal awards expended as a the Federal award occurs. Generally, recipient or a subreoipient are subject the activity pertains to events that re- to audit under this part.The payments quire the non-Federal entity to comply received for goods or services provided with Federal statutes,regulations, and as a contractor are not Federal awards. the terms and conditions of Federal Section§200.330 Subreeipient and oon- awards, such as: expenditure/expense tractor determinations should be con- transactions associated with awards in- sidered in determining whether pay- eluding grants, cost-reimbursement merits constitute a Federal award or a contracts under the FAR, compacts payment for goods or services provided with Indian Tribes, cooperative agree- as a contractor. merits, and direct appropriations; the (g) Compliance responsibility for con- disbursement of fends to subrecipients; tractors. In most oases, the auditee's the use of loan proceeds under lout and compliance responsibility for cunt ree- loan guarantee programs;the receipt of tors is only to ensure that the procure- property; the receipt of surplus prop- ment, receipt, and payment for goods erty; the receipt or use of program in- and services comply with Federal stet- come; the distribution or use of food utes, regulations, and the terms and commodities; the disbursement of conditions of Federal awards. Federal amounts entitling the non-Federal en- award compliance requirements nor- tity to an interest subsidy;and the pe- wally do not pass through to contras- riod when insurance is in forge. tore. However, the auditee is reopen- (b) Loan and loan guarantees (loans). Bible for ensuring compliance for pro- Since the Federal government is at ourement transactions which are stru.c- risk for loans until the debt is repaid, tared such that the oontraotor is re- the following guidelines must be used eponsible for program compliance or to oaloulate the value of Federal the contractor's records must be re- awards expended under loan programs, viewed to determine program oomph- except as noted in paragraphs (o) and once. Also, when these procurement (d)of this section: transactions relate to a major pro- (1) Value of new loans made or re- gram, the scope of the audit must in- oeived during the audit period;plus elude determining whether these trans- (2)Beginning of the audit period bal- actions are in compliance with Federal once of loans from previous years for statutes, regulations, and the terms which the Federal government imposes and conditions of Federal awards. continuing compliance requirements; (h) For-profit subredptent. Since this plus part does not apply to for-profit sub- (3)Any interest subsidy, cash, or ad- recipients, the pass-through entity is ministrative cost allowance received. responsible for establishing require- (a)Loan and loan guarantees(loans)at ments, as necessary, to ensure compii- IBM.When loans are made to students ance by for-profit subrecipients. The of an IHE but the 1HE does not make agreement with the for-profit sub- the loans, then only the value of loans recipient should describe applicable made during the audit period must be compliance requirements and the for- considered Federal awards expended in profit subrecipient's compliance re- that audit period. The balance of loans 172 OMB Guidance 5200.503 for previous audit periods is not in- §200,50$ Relation to other audit re. eluded as Federal awards expended be- quirements. cause the lender accounts for the prior (a)An audit conducted in accordance balances. with this part must be in lieu of any fi- (d) Prior loan and loan guarantees nanoial audit of Federal awards which (loans). Loans, the proceeds of which anon-Federal entity is required to un- were received and expended in prior dm'go under any other Federal statute years, are not considered Federal or regulation. To the extent that each awards expended under this part when audit provides a Federal agency with the Federal statutes, regulations, and the information it requires to carry the terms and conditions of Federal out its responsibilities under Federal awards pertaining to such loans impose statute or regulation,a Federal agency no continuing compliance oe require- must rely upon and use that informa- meats other than to repay the lows. tion. (e)Endowment funds.The cumulativebalan (b)Notwithstanding subsection(a), a mont nof Federal awards for lydo e- Federal agency,Inspectors General, or strut futre that are federally r awards GAO may conduct or arrange for addi- expendeded in consideredachudi Federali ich tional audits which are necessary to expended in each audit period in which the funds are still restricted. carry out its responsibilities under (f) Free rent. Free rent received by Federal statute or regulation.The pro- itself is not oonsidered a Federal award visions of this part do not authorize expended under this pert.However,free any non:Federal entity to constrain,in rent received as part of a Federal silt'manner,such Federal agency from award to carry out a Federal program carrying out or arranging:for such ad- must be included in determining Fed- ditional audits,except that the Federal eral awards expended and subject to agency must plan such audits to not be audit under this part, duplicative of other audits of Federal (g) Valuing non-cash assistance. Fed- awards.Prior to oommenoing suoh an eras non-cash assistance, such as free audit, the Federal agency or pass- rent, food commodities, donated prop- through entity.must review the PAC erty,or donated surplus property,must for recent audits submitted by the non- be valued at fair market value at the Federal entity,and to the extent such time of receipt or the assessed value audits meet a Federal agency or pass provided by the Federal agency. through entity's needs, the Federal (h)Medicare.Medicare payments to a agency or pass-through entity must non-Federal entity for providing pa- rely upon and use such audits.Any ad- tient care services to Medicare-eligible ditional audits must be planned and individuals are not considered Federal peed in snob-a way as to build awards expended under this part. upon work performed, including the (I)Medicaid. Medicaid payments to a audit documentation, sampling, and subrecipient for providing patient care testing already performed, by other services to Medicaid-eligible individ- auditors. cats are not considered Federal awards (c)The provisions of this part do not expended under this part unless a state limit the authority of Federal agencies requires the funds to be treated as Fed- to conduct, or arrange for the conduct oral awards expended because reim- of, audits and evaluations of Federal inurement is on a cost-reimbursement awards,nor limit the authority of any basis. Federal agency Inspector General or (j) Certain loans provided by the Na- other Federal official.For example,re- tional Credit Union Administration. For quirements that may be applicable purposes of this part,loans made from under the FAR or CAS and the terms the National Credit Union Share basin.- and conditions of a cost-reimbursement ance Fund and the Central Liquidity contract may include additional appli- Facility that are fended by contribu- cable audits to be conducted or ar- tions from insured non-Federal entities ranged for by Federal agencies. are not considered Federal awards ex- (d) Federal agency to pay for addi- pended. tional audits. A Federal agency that 173 544 § 2 CFR Ch.II(1-1-14 Eaton) conducts or arranges for additional an- go its audits pursuant to this part bi dits must, consistent with other appli- ennially. cable Federal statutes and regulations, arrange for funding the full cost of §200.505 Sanctions. such additional audits. In oases of continued inability or on- e) Request for a program to be au- dited as a major program. A Federal willingness cte have thisaupit conducted awarding agency may request that an agencies accordance and with ught. Federal auditee have a partioniar Federal pro- p pass-through entities audited as amust take appropriate dies for on- lien of the Federal awarding major inggreae y compliance, Remedies non- conducting or err Waroing agency eomplienee. addi- tional audits. To forng for the such requests should be made atplanning, ¢ t cote' t 180 calendar days prior to the end of See 1200.425 Audit services. the fiscal year to be audited. The auditee, after consultation with its §200.�7 Program-specific audits. auditor, should promptly respond to (a) Program-specific audit guide avatl- snoh a request by informing the Fed able.In many cases,a program-specs eras awarding agency whether the pro- audit grade will be available to provide gram would otherwise be audited as a specific guidance to the auditor with major program using the risk-based respect to internal controls, oomph- audit approach described in §200.518 ante requirements, suggested audit Major program determination and, if procedures, and audit reporting re- not, the estimated incremental cost. quirements. A listing of current pro- The Federal awarding agency mind gram-specific audit guides can be found then promptly oonfirm to the auditee in the compliance supplement begin- whether it wants the program audited nine with the 2014 supplement includ- es a major program. If the program is lug Federal awarding agency contact to be audited as a major program based information and a Web site where a upon this Federal awarding agency re- copy of the guide can be obtained. quest, and the Federal awarding arm- When a ourrent program-specific audit cy agrees to pay the full incremental guide is available, the auditor must costs, then the anditee must have the follow GAGAS and the guide when per- program audited as a major program.A forming a program-specific audit. pass-through entity may use the provi- (b) Program-specific audit guide not sions of this paragraph for a sub- available. (1) When a program-specific recipient. audit guide is not available, the §200 SO4 Frequency of audits. auditee and auditor must have basi- cally the same responsibilities for the Except for the provisions for biennial Federal program as they would have audits provided in paragraphs (a) and for an audit of a major program in a (b) of this section, audits required bs single audit. this part must be performed annually. (2) The auditee must prepare the fi- Any biennial audit must cover both nanoial statement(s) for the Federal years within the biennial period. program that includes, at a minimum, (a)A state, local government, or In- a schedule of expenditures of Federal Wan tribe that is required by constitu- awards for the program and notes that tion or statute,in effect on January 1, describe the signitWant accounting 1987, to undergo its audits less fre- policies used in preparing the schedule, quently than annually, is permitted to a summary schedule of prior audit find- undergo its audits pursuant to this ings consistent with the requirements part biennially.This requirement must of §200.511 Audit findings follow-up, still be in effect for the biennial period, paragraph (b), and a corrective action (b) Any nonprofit organization that plan consistent with the requirements had biennial audits for all biennial pe- of §200.511 Audit findings follow-up, nods ending between July 1, 1992, and paragraph(o). January 1, 1995, is permitted to under- (3)The auditor must: 174 OMB Guidance §200.507 (i)Perform an audit of the financial material effect on the Federal pro- statement(s) for the Federal program grant;and in accordance with GALAS; (iv)A schedule of findings and goes- (ill Obtain an understanding of inter- tioned costs for the Federal program nal controls and perform tests of inter- that includes a summary of the audi- nal controls over the Federal program tor's results relative to the Federal consistent with the requirements of program in a format consistent with 1200.514 Scope of audit, paragraph (c) §200.512 Audit reporting, paragraph fora major program; (d)(1)and findings and questioned costs (iii)Perform procedures to determine oonsisten_t with the requirements of whether the auditee has complied with §200.512 Audit reporting, Paragraph Federal statutes, regulations, and the (d)(S). terms and conditions of Federal awards (a) Report submission for program-spe- that could have a direot and material ciflc audits. (1)The audit must be corn- effect on the Federal program con- pleted and the reporting required by sistant with the requirements of paragraph(c)(2)or(on of this section 1200.514 Scope of audit, paragraph (d) submitted within the earlier of 30 cal- for a major program;. ender days after receipt of the audi- (iv)Follow up oa prior audit findings, tor's report(s), or nine months after perform procedures to assess the rea- the end of the audit period., unless a sonableness of the summary schedule different period is specified in a pro- of prior audit findings prepared by the gram-specific audit guide. Unless re- auditee in accordance with the require- striated by Federal law or regulation, meats of§200.511 Audit findings follow- the auditee must make report copies up,and report,as a current year audit available for public inspection. finding, when the auditor concludes Auditees and auditors must ensure that the summary schedule of prior that their respective parts of the re- audit findings materially misrepre- porting package do not include pro- seats the status of any prior audit find- tooted personally identifiable inform- ing;and tion. (v) Report any audit findings con- (2) When a program-specific audit sistant with. the requirements of guide is available, the auditee must §200.516 Audit findings. electronically submit to the FAO the (4)The anditor'e report(s)may be in data collection form prepared in ac- the form of either combined or sepa- oordenoe with §200.612 Report submis- rate reports and may be organised dif- sion, paragraph (b), as applicable to a ferently from the manner presented in program-specific audit,and the report- this section. The auditor's report(s) ing required by the program-specific must state that the audit was con- audit guide. ducted in accordance with this part (8) When a program-specific audit and include the following: guide is not available, the reporting (i)An,opinion(or disclaimer of opin- package for program-specific audit ion)as to whether the financial state- must consist of the fiinancial state- ment(s)of the Federal program is pre- ment(s)of the Federal program,a sum- sented fairly in all material respects in mary schedule of prior audit findings, accordance with the stated accounting and a oorrective action plan as de- policies; scribed in paragraph(b)(2) of this sec- (ii) A report on internal control re- tion, and the auditor's report(s)`de- leted to the Federal program, which scribed in paragraph(b)(4) of this sec- . must describe the scope of testing of tion.The data collection form prepared internal control and the results of the in accordance with§200.512 Report sub- tests; mission,paragraph(b),as applicable to (ill)A report on compliance which in- a program-specific audit, and one copy eludes an opinion (or disclaimer of of this reporting package mast be else- opinion) as to whether the auditee tronically submitted to the FAO. complied with laws, regulations, and (d) Other sections of this part may the terms and conditions of Feederal apply.Program-specific audits are sub- awards which could have a direct and ject to: 175 §200.508 2 CFR Ch.R(1-1-14 Edition) (I)200.500 Purpose through 200.503 Re- Subpart D- Post Federal Award Re- lation to other audit requirements, quirements of this part or the FAR(48 Paragraph(d); CFR part 42), as applicable. When pro- (2) 200.504 Frequency of audits curing audit services, the objective is through 200.506 Audit costs; to obtain high-quality audits. In re- (3) 200.808 Auditee• responsibilities questing proposals for audit services, through 200.509 Auditor selection; the objectives and scope of the audit (4)200.511 Audit findings follow-up; must be made clear and the non-Fed- (5) 200.512 Report submission, pare- eral entity must request a copy of the graphs(e)through(h); audit organisation's peer review report (6)200.513 Responsibilities; which the auditor is required to pro- (7) 200.516 Audit findings through vide under GGA,GAS. Factors to be con- 200.517 Audit documentation; sidered in evaluating each proposal for (8)200.521 Management decision,and audit services include the responsive- (9)Other referenced provisions of this mess to the request for proposal, rel- part unless contrary to the provisions evant experience, availability of staff of this section, a program-specific with professional qualifications and audit guide, or program statutes and technical abilities, the results of peer regulations. and external quality control reviews, and price. Whenever possible, the auditee must make positive efforts to §$Op,gpg Ateerespahilit3er. utilize small businesses, minority- The auditeeumust: owned firmer and women's business en- terprises,in procuring audit services as (a) Procure or otherwise arrange for stated in 1200.321 Contracting with the audit required by this part in ac- small and minority businesses, wom- oordatoe with 1200.509 Auditor selee- en's business enterprises, and labor tion, and ensure it is properly per- surplus area firms, or the FAR(48 CFR formed and submitted when due in ac- part 42),as applicable. eordance with 1200.512 Report submis- (b)Restriction on auditor preparing In- direct cost proposals. An auditor who (b) Prepare appropriate financial prepares the indirect post proposal or statements, including the schedule of oost allocation plan may not also be se- expenditures of Federal awards in ac- lected to perform the audit required by oordanoe with§200.510 Financial state- this part when the indirect costs recov- meats. eyed by the auditee during the prior (a)Promptly follow up and take cor- year exceeded Si million. This restrio- reotive action on audit findings, in- tion applies to the base year used in eluding preparation of a summary the preparation of the indirect oost schedule of prior audit findings and a proposal or oost allocation plan and corrective action plan in accordance any subsequent years in which the re- with §200.511 Audit findings follow-up, suiting indirect cost agreement dr cost paragraph (b) and §200.511 Audit find- allocation plan is used to recover costs. lugs follow-ap, paragraph (c), respea- (a) Use of Federal auditors. Federal tively. auditors may perform all or part of the (d)Provide the auditor with access to work required under this part if they personnel, accounts, books, records, comply fully with the requirements of supporting documentation, and other this part. information as needed for the auditor to perform the audit required by this §200.510 Financial statements. part. (a) Financial statements. The auditee $�00.609 Auditor selection. reflect prepare financial statements that (a) Auditor reflect its financial position, results of procurement. In procuring operations or changes in net assets, audit services, the anditee must follow and, where appropriate, cash flows for the procurement standards prescribed the fiscal year audited. The financial by the Procurement Standards in statements must be for the same orga- §§200.317 Procurement by states nisational unit and fiscal year that is through 20.328 Contract provisions of chosen to meet the requirements of 176 OMB Guidance B200.511 this part.However,non-Federal entity- the sohedule the balances outstanding wide financial statements may also in- at the end of the audit period. This is dude departments,agencies,and other in addition to including the total Fed- organisational units that have separate oral awards expended for loan or loan audits in accordance with §200.514 guarantee program in the schedule. Scope of audit,paragraph(a) and pre- (6) Include notes that describe that pare separate financial statements. significant accounting policies used in (b)Schedule of expenditures of Federal preparing the schedule, and note awards. The auditee must also prepare whether or not the non-Federal entity a schedule of expenditures of Federal elected to use the 10%de minimis cost awards for the period covered by the rate as covered in 1200.419 Indirect auditee's financial statements which (F&A)posts. must include the total Federal awards expended as determined in accordance 1200.511 Audit findings follow-up. with 1200.502 Basis 'for determining (a)General.The auditee is responsible Federal awards expended.While not re- for follow-up and corrective action on quired, the auditee may choose to pro- all audit findings. As part of this re- vide information requested by Federal sponsibility, the auditee must prepare awarding agencies and pass-through a summary schedule of prior audit find- entities to make the schedule easier to Inge:The auditee must also prepare a use.For example, when a Federal pro- corrective action plan for current year gram has multiple Federal award audit findings. The summary schedule years,the auditee may list the amount of prior audit findings and the correc- of Federal awards expended for each tive action plan must include the ref- Federal award year separately. At a erence numbers the auditor assigns to minimum,the schedule must: audit findings under §200.516 Audit (1) List individual Federal programs finding's,paragraph(o). Since the sera- by Federal agency.For a cluster of pro- mary schedule may include audit find- grams, provide the cluster name, list Inge from multiple years, it must in- individual Federal`programs within the elude the fiscal year in which the find- cluster of programs, and provide the ing initially occurred. The corrective applicable Federal agency name. For action plan and summary schedule of R&D, total Federal awards expended prior audit findings must include find- must be shown either by individual Inge relating to the financial state- Federal award or by Federal agency meats which are required to be re- and major subdivision within the Fed- ported in accordance with GAGAS. era!agency.For example,the National (b) Summary schedule of prior audit Institutes of Health is a major snbdivi- findings. The summary schedule of sion in the Department of Health and prior audit findings must report the Human Services. status of all audit findings included in (2) For Federal awards received as a the prior audit's schedule of findings subrecipient, the name of the pass- and questioned costs. The summary through entity and identifying number schedule must also include audit find- assigned by the pass-through entity Inge reported in the prior audit's sum- must be included. mary schedule of prior audit findings (3) Provide total Federal awards ex- except audit findings listed as oor- pended for each individual Federal pro- rented in accordance with paragraph grain and the CFDA number or other (b)(1)of this section,or no longer valid identifying number when the°FDA in- or not warranting further action in ao- formation is not available. For a clue- oordange with paragraph (b)(8) of this ter of programs also provide the total section. for the cluster. (1) When audit findings were fully (4)Include the total amount provided corrected, the summary schedule need to subrecipients from each Federal pro- only list the audit findings and state gram. that corrective action was taken. (5) For loan or loan guarantee pro- (2)When audit findings were not cor- grams described in §200.502 Basis for rented or were only partially corrected, determining Federal awards expended, the summary schedule must describe paragraph (b), identify in the notes to the reasons for the finding's recurrence 177 §200.512 2 CFR Ch.H(1-1-14 Edition) and planned corrective action,and any make copies available for public in- partial corrective action taken. When spection. Auditees and auditors must corrective action taken is significantly ensure that their respective parts of different from corrective action pre- the reporting package do not include viously reported in a corrective action protected personally identifiable infer- plan or in the Federal agency's or pass- matron. through entity's management decision, (b)Data Collection.The FAC is the re- the summary schedule must provide an pository of record for Subpart F—Audit explanation. Requirements of this part reporting (3) When the auditee believes the packages and the data collection form. audit findings are no longer valid or do All Federal agencies, pass-through en- not warrant further action,the reasons titles and others interested in a report- for this position must be described in ing package and data collection form the summary schedule.A valid reason must obtain it by accessing the FAC. for considering an audit finding as not (1)The auditee must submit required warranting thither action is that all of data elements desoribed in Appendix X the following have occurred: to Part 200—Data Collection Form (i) Two years have passed since the (Form SF-SAC), which state whether audit report in Which the finding on- the audit was completed in accordance curred was submitted to the FAC; with this part and provides informa- (fi) The Federal agency or pass- tion about the auditee,its Federal pro- through entity is not currently fol- grams, and the results of the audit. lowing up with the auditee on the audit The data must include information fleeing;and available from the audit required by (iii)A management decision was not this part that is necessary for Federal issued. agenoies to use the audit to ensure in- (c)Corrective action plan.At the con- tegrity for Federal programs.The data pletion of the audit, the auditee must elements and format must be approved prepare, in a document separate from by OMB, available from the FAC, and the auditor's findings described in include collections of information from §200.516 Audit findings,a corrective an- the .reporting package described in ton plan to address each audit finding paragraph (c) of this section. A senior included in the current year auditor's level representative of the auditee reports. The corrective action plan (e.g., state controller, director of fl- must provide the name(s) of the con- nanoe,chief exeoutive officer, or of ief tact persons) responsible for correc- financial officer) must sign a state- tive action, the corrective action ment to be included as part of the data planned, and the anticipated comple- collection that says that the auditee tion date.If the auditee does not agree complied with the requirements of this with the audit findings or believes cor- part,the data were prepared in accord- reotive notion is not required,then the anee with this part (and the instrae- corrective action plan must include an Lions accompanying the form), the re- explanation and specific reasons. porting package does not include§200,ii12 Report pro- tectedsubmission. tion, personally identifiable informa- tion, the information included in its (a) General. (1) The audit must be entirety is accurate and complete, and completed and the data collection form that the FAC is authorized to make the described in paragraph (b) of this.sec- reporting package and the form pub- tion and reporting package desoribed in Daly available on a Web sits. paragraph (o) of this section must be (2) Fxception for Indian Tribes. An submitted within the earlier of 30 cal- auditee that is an Indian tribe may opt ender days after receipt of the audi- not to authorize the FAC to make the tor's report(s), or nine months after reporting package publicly available the end of the audit period.If the due on a Web site,by excluding the author- date falls on a Saturday, Sunday. or 'ration for the FAC publication in the Federal holiday, the reporting package statement described in paragraph(b)(1) is due the next business day. of this section. If this option is exer- (2)Unless restricted by Federal stat- cised, the auditee becomes responsible cites or regulations, the auditee must for submitting the reporting package 178 OMB Guidance §200.513 directly to any pass-through entities graph(b)of this section and one copy through which it has received a Fed- of the reporting package described in oral award and to pass-through entities paragraph(c)of this section on file for for which the summary schedule of three years from the date of salmis- - prior audit findings reported the status sign to the FAC. of any findings related to Federal (g)FAC responsibilities.The FAC must awards that the pass-through entity make available the reporting packages provided. Unless restricted by Federal received in a000rdauoe with paragraph statute or regulation, if the auditee (c) of this section and §200.507 Pro- opts not to authorize publication, it gram-specific audits, paragraph (o) to must make copies of the reporting the public,except for Indian tribes ea- package available for public inspec- Braising the option in(b)(2)of this sec- tion. Lion,and maintain a data base of rem- (3)Using the information included in plated audits, provide appropriate in- the reporting package described in formation to Federal agencies,and fol- paragraph(o)of this section, the audi- low up with known auditees that have for must complete the applicable data not submitted the required data collect elements of the data collection form. tion forms and reporting packages. Tlie ainlitor must sign a statement to (h) Electronic filing. Nothing in this be included as part of the data collar- part must preclude electronic submie- tion form that indicates, at a min- lions to the FAO in each manner as imum, the source of the information may be approved by OMB. inoluded in the form, the auditor's re- sponsibility for the information, that FEDERAL Aaancros the form is not a substitute for the re- §ZOOb13 � . porting package described in paragraph (o)of this section,and that the content (a)p:) Cognizant agency for audit ro- of the form is limited to the collection sponsibilities.A non-Federal entity ex- of information..prescribed by OMB. pending more than$50 million a year in (o) Reporting package. The reporting Federal awards must have a cognizant package must include the:• agency for audit. The designated cog- (1) Financial statements and oohed- nizant agency for audit must be the tile of expenditures of Federal awards Federal awarding agency that provides discussed In §200.510 Financial state- the predominant amount of direct manta, paragraphs (a)and (b), respeo- funding to a non-Federal entity unless tively; OMB designates a specific cognizant (2) Summary schedule of prior audit agency for audit. findings discussed in §200.511 Audit (2) To provide for continuity of cog- findings follow-up,paragraph(b); nizanoe,the determination of the pre- (3) Auditor's report(s) discussed in dominant amount of direct funding §200.515 Audit reporting;and must be based upon direct Federal (4) Corrective action plan discussed awards expended in the non-Federal en- in 1200.511 Audit findings follow-up, tity's fiscal years ending in 2009, 2014, paragraph(e). 2019 and every fifth year thereafter. (d) Submission to FAC. The auditee For example,audit cognizance for pert- must electronically submit to the FAC ods ending in 2011 through 2015 will be the data collection form described in determined based on Federal awards paragraph (b) of this section and the expended in 2009. reporting package described in para- (3) Notwithstanding the manner in graph(c)of this section. which audit cognizance is determined, (e) Requests for management letters a Federal awarding agency with cog- issued by the auditor.In response to re- nizance for an auditee may reassign quests by a Federal agency or pass- cognizance to another Federal award- through entity,auditees must submit a ing agency that provides substantial copy of any management letters issued funding and agrees to be the cognizant by the auditor. agency for audit. Within 30 calendar (f) Report retention requirements. days after any reassignment, both the Auditees must keep one cow of the old and the new cognizant agency for data collection form described in pare- audit must provide notice of the 179 §200.513 2 CFR Ch.11(1-1-14 Edition) change to the FAC,the auditee,and,if standard performanoe by auditors must known, the auditor. The ooggizant be referred to appropriate state lioens- agency for audit must: ing agencies and professional bodies for (i)Provide technical audit advice and disciplinary action. liaison assistance to auditees and audi- (vi) Coordinate, to the extent prae- tors. tidal, audits or reviews made by or for (ii)Obtain or conduct quality control Federal agencies that are in addition reviews on selected audits made by to the audits made pursuant to this non-Federal auditors, and provide the part, so that the additional audits or results to other interested organizer reviews build upon rather than dupli- tions.Cooperate and provide support to cate audits performed in accordance the Federal agency designated by Ole with this part to lead a governmentwide project to (vii) Coordinate a management deal- determine the quality of single audits sion for crass-cutting audit findings(as by providing a statistically reliable es- defined in mom Cross-cutting audit timate of the extent that single audits finding) that affect the Federal pro- conform to applicable reqtuwements, standards,and procedures;and to make requested of more than one agency when recommendations to address noted aegnested by any Federale awarding audit quality issues, including rec- thency �o� gwards are included in ommendations for any changes to ap- the audit ordfna of the auditee. plicable requirements, standards and (viii) Coordinate the audit work and procedures indicated by the results of reporting responsibilities among audi- the project.This governmentwide audit tors to achieve the most cost-effective quality project must be performed once audit' every 8 years beginning in 2018 or at (ix)Provide advice to auditees as to such other interval as determined by how to handle changes in fiscal years. OMB,and the results must be public. (b) Oversight agency for audit re- (111) Promptly inform other affected sponsibilities.An auditee who does not Federal agencies and appropriate Fed- have a designated cognizant agency for eral law enforcement officials of any audit will be under the general over- direct reporting by the auditee or its sight of the Federal agency determined auditor required by GAGAS or statutes in accordance with 8200.73 Oversight and regulations. agency for audit. A Federal agency (iv) Advise the community of rode- with oversight for an auditee may real- pendent auditors of any noteworthy or sign oversight to another Federal agen- important factual trends related to the cy that agrees to be the oversight quality of audits stemming from goal_ agency for audit. Within 30 calendar ity control reviews. Significant prob- days after any reassignment, both the lens or quality issues consistently old and the new oversight agency for identified through quality control re- audit must provide notice of the views of audit reports must be referred change to the FAC, the auditee,and,if to appropriate state licensing agencies known, the auditor. The oversight and professional bodies. agency for audit: (v) Advise the auditor, Federal (1) Must provide technical advice to awarding agencies, and, where appro- auditees and auditors as requested. priate, the auditee of any defioieneies (2)May assume all or some of the re- found in the audits when the deft- sponsibilities normally performed by a cienoies require corrective action by cognizant agency for audit. the auditor. When advised of deft- (a) Federal awarding agency respon- ciencies, the auditee must work with eibilities.The Federal awarding agency the auditor to take corrective action, must perform the following for the If corrective action is not taken, the Federal awards it makes (See also the cognizant agency for audit must notify requirements of §200.210 Information the auditor,the auditee,and applicable contained in a Federal award): Federal awarding agencies and pass- (1)Ensure that audits are completed through entitles of the facts and make and reports are received in a timely recommendations for follow-up action. manner and in accordance with the re- Major inadequacies or repetitive sub- quirenients of this part. 180 OMB Guidance $200..514 (2) Provide technical advice and for the single audit process both within counsel to auditees and auditors as re- and outside the Federal government. quested. (ii) Promote interagency coordina- (8)Follow-up on audit findings to en- tion,consistency, and sharing in areas sure that the reoipient takes appro- such as-coordinating audit follow-up; priate and timely corrective action.As identifying higher-risk non-Federal en- part of audit follow-up, the Federal titles; providing input on single audit awarding agency must: and follow-up policy; enhancing the (i) Issue a management decision as utility of the FAO; and studying ways prescribed in 4200.521 Management de- to use single audit results to improve oision; Federal award accountability and best (ii) Monitor the recipient taking ap- practices. propriate and timely corrective action; (iii) Oversee training for the Federal (hi)Use cooperative audit resolution awarding agency's program manage- mechanisms (see 1200.25 Cooperative meat personnel related to the single audit resolution) to improve Federal audit process. program outcomes through better (iv) Promote the Federal awarding audit resolution,follow-up,and correo- agency's use of cooperative audit reso- tive motion;and lotion meollabisms. (iv) Develop a baseline, metrics, and (v) Coordinate the Federal awarding targets to track, over time, the effeo- agency's activities to ensure appro- tiveness of the Federal agency's pros- prints and timely follow-up and correc- en to follow-up on audit findings and tive action on audit findings. on the effectiveness of Single Audits in (vi) Organize the Federal cognizant improving non-Federal entity account- agency for audit's follow-up on cross- ability and their use by Federal award- cutting audit findings that affect the ing agencies in making award deoi- Federal programs' of more than one lions. Federal awarding agency. (4) Provide OMB annual updates to (vii) Lnsure the Federal awarding the Compliance supplement and work agency provides annual updates of the with OMB to ensure that the oomph- compliance supplement to OMB. anee supplement focuses the auditor to (viii) Support the Federal awarding test the compliance requirements moat agency's single audit accountable offii- likely to cause improper payments, vial's mission. fraud, waste, abuse or generate audit finding for which the Federal awarding AUDITORS agency will take sanctions. (5)Provide OMB with the name of a 4290.514 Scope of audit. single audit accountable official from (a) General. The audit must be con- among the senior policy officials of the ducted in accordance with GAGAS.The Federal awarding agency who must be: audit must cover the entire operations (i)Responsible_for ensuring that the of the auditee,or, at the option of the agency fulfills all the requirement of auditee,such audit must include a se- §200.519 Responsibilities and effectively ries of audits that cover departments, uses the single audit process to reduce agencies, and other organizational improper payments and improve Fed- units that expended or otherwise ad- eral program outcomes. ministered Federal awards during such (ii)Held accountable to improve the audit period, provided that each such effectiveness of the single audit process audit must encompass the financial based upon metrics as described in statements and schedule of eapendi- paragraph(0)(8)(iv)of this section. tures of Federal awards for each such (hi) Responsible for designating the department, agency,and other organi- Federal agency's key management sin- rational unit, which must be Donaid- gle audit liaison. ered to be a non-Federal entity.The fi- (B)Provide OMB with the name of a nancial statements and schedule of ea- key management single audit liaison Penditures of Federal awards must be who must: for the same audit period. (I) Serve as the Federal awarding (b) Financial statements. The auditor agency's management point of contact must determine whether the financial 181 §200515 2 CFR Ch.II(1-1-14 Edition) 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 mordance with generally accepted ao- its major programs. counting principles. The auditor must (2)The principal compliance require- also determine whether the schedule of ments applicable to most Federal pro- expenditures of Federal awards is stet- grams and the compliance require- ed fairly in all material respects in re- ments of the largest Federal programs lation to the auditee's financial state- are included in the compliance supple- ments as a whole. ment. (c) Internal control. (1) The oomph- (3) For the compliance requirements anoe supplement provides guidance on related to Federal programs contained internal controls over Federal pro- in the compliance supplement,an audit grams ironed upon the guidance in of these compliance requirements will Standards for Internal Control in the meet the requirements-of this part. Federal Government issued by the Where there have been changes to the Comptroller General of the United compliance States and the Internal Control--Into- agesrequirements are not reflected in the mom- grated Framework,issued by the Com- mittee of Sponsoring Organizations of detonable nce supplement, the auditor must the Treadway Commission(005O)• determine the current t compliance re- (2)In addition to the requirements of daresquire cconts and modify the audit proce- GAGAS,the auditor must perform pro- dares accordingly, For those Federal programs not covered in the oompli- cedures to obtain an understanding of internal control over Federal programs sane supplement, the auditor should follow the compliance supplement's sufficient to plan the audit to support guidance for programs not included in a low assessed level of control risk of noncompliance for major programs, the supplement. (§) Except as provided in paragraph (4) The aompliance testing must In- (c)(4)of this section, the auditor must: dude tests of transactions and such (i) Plan the testing of internal con- other auditing procedures necessary to trol over compliance for major pro- pro�� the auditor sufficient appro- grams to support a low assessed level Pilate audit evidence to support an of control risk for the assertions rel- opinion on oompiianoe, avant to the compliance requirements (e)Audit follow-up. The auditor must for each major program;and follow-up on prior audit findings, per- (11) Perform testing of Internal con- form procedures to assess the reason- trol as planned in paragraph(aX3)(1)of ableness of the summary schedule of this section. prior audit findings prepared by the (4) When internal control over some auditee in accordance with §200.511 or all of the complianoe requirements Audit findings follow-up paragraph(b), for a major program are likely to be in- and report, a current year audit effective in preventing or detecting finding, when the auditor concludes noncompliance, the planning and per- that the summary schedule of prior forming of testing described in pare- audit findings materially misrepre- graph (cX3) of this section are not re- Beata the status of any prior audit find- .for those compliance require- mg The auditor must perform audit ments. However, the auditor must re- follow-up procedures regardless of port a significant deficiency or mate- whether a prior audit finding relates to rial weakness in accordance with a major program in the current year. §200.518 Audit findings, assess the re- (f) Data Collection Form. As required lated control risk at the maximum, in 4200.512 Report submission pars- and consider whether additional corn- graph(b)(3),the auditor must complete pliance tests are required because of and sign specified sections of the data ineffective internal control. collection form. (d) Compliance. (1)In addition to the requirements of GAGAS, the auditor 4200.515 Audit reporti . must determine whether the auditee The auditor's report(s)may be in the has complied with Federal statutes, form of either combined or separate re- regulations, and the terms and condi- ports and may be organized differently 1112 OMB Guidance §200.515 from the manger presented in this sea (iii) A statement as to whether the tion.The auditor's report(s)must state audit disclosed any nonoomplianoe that the audit was conducted in an- that is material to the financial state- oordance with this part and include the meats of the auditee; following: (iv) Where applicable, a statement (a)An opinion(or disclaimer of opin- about whether significant deficiencies ion) as to whether the financial state- or material weaknesses in internal con meats are presented fairly in all mate- trol over major programs were die- vial respects in accordance with gen- olosed by the audit; orally accepted accounting principles (v) The type of report the auditor and an opinion(or disclaimer of opin- issued on compliance for major pro- ion) as to whether the schedule of en- grams(i.e., unmodified opinion, quail penditures of Federal awards is fairly fled opinion, adverse opinion, or dis- stated in all material respects in rela- claimer of opinion); tion to the financial statements as a (Nri) A statement as to whether the whole. audit disclosed any audit findings that (b)A report on internal control over the auditor is required to report under financial reporting and compliance $200.518Audit findings paragraph(a); with Federal statutes,regulations,and the terms and conditions of the Federal (vii) identification of major pro award, noncompliance with which grams by listing each individual major could have a materiel effect on the S- Megrim'however in the case of a aim- could statements. This report must ter of progt'amg only the cluster name describe the scope of testing of internal as shown on the Schedule of Ezpendi- control and compliance and the results taros Federal Awards is required; of the tests, and, where applicable, it (TM) The dollar threshold used to will refer to the separate schedule off between Type A and Type B findings and questioned costs described programs, as described in $200.518 in paragraph(d)of this section. Major program determination parer (a) A report on compliance for each graph OM,.or(bx3)when a reaalanla major program and report and internal tion of the Type A threshold is re- control over compliance. This report (Mired for large loan or loan gnaran- must describe the scope of testing of tees;and internal control over oomplianoe, in (ix) A statement as to whether the elude an opinion or modified opinion as anditee qualified as a low-risk auditee to whether the auditee complied with under §200.520 Criteria, for a low-risk Federal statutes, regulations, and the auditee. terms and oonditions of Federal awards (2)Findings relating to the financial which could have a direct and material statements which are required to be re- effect on each major program and refer ported in accordance with GAGAS. to the separate schedule-of findings and (3)Findings and questioned costs for questioned costs described in pare.- Federal awards which must include graph(d)of this section. audit findings as defined in $206.516 (d) A schedule of findings and ques- Audit findings,paragraph(a). tinned costs which must include the (1)Audit findings (e.g.,internal con- following three components: trol findings, compliance findings, (1) A summary of the auditor's re- questioned costs, or fraud) that relate sults,which must include: to the same issue should be presented (1) The type of report the auditor as a single audit finding. Where prec- issued on whether the financial state- tidal, audit findings should be orga- ments audited were prepared in accord- nized by Federal agency or pass- awe with GAAP(i.e.,unmodified opin through entity. ion,qualified opinion, adverse opinion, (ii)Audit findings that relate to both or disclaimer of opinion); the financial statements and Federal (ii) Where applicable, a statement awards, as reported under paragraphs about whether significant deficiencies (d)(2) and(d)(3) of this section, respeo- or material weaknesses in internal con- tively, should be reported in both sec- trol were disclosed by the audit of the tions of the schedule.However,the re- finanoial statements; porting in one section of the schedule §200.516 2 CFR Ch.0(1-1-14 EditiOn) may be in sammery rtaTh With 4 ref- the auditor must include information mum to a date:fled repeating in the to provide Proper perspective for Judg- other motion of the iftleedefle. big the prevalence and consequences of (e) Nothing in We pert proelefies the questioned oosts. oembining of the audit reTertieg re- (4)Roans queationell acme that ere Waited hF this section !nth the rePert- greaten than Ulna far a Federal prv- Ent reTars4-hit igekal-Reffiert*bells' grans Witt*Is not oviditod AS:a majorMan. Paragrepb Wilieto Delioatiee wow Re** fpr -sou fences.nb, whIll ails IV 04Gilk:„,,_ ...14 attd 41tteeix,___ the AA:liter-is.'not retplired ender this (Irertt.rAtet2ir), Illz `'mulr".614MI "I'm part to Perform oudi t pteetalume for Wilke Fad ekii lik'ogrant:**rehire, the 4200.516 Audit finding& ate:liter ski) nOnielly eat find qua- (a) 4t4tYYtirfed. The audi- t4MMd.- P6411, for a I'll'eberaii-tiM4 iS no 0-n , audited-as a=km Interim- er. tor muot revert the folknat audit uft sw If the maw deet-beam- e aware of 4inira_ 111 a sohadtda of findings Mut , oyeetioned ousts: queskeeed ealtialor a Federal MP= (I)Signifinit Asexiiiikeles and mate- 4114-t 11/444'4403111 4t 4 nte4ar PrIgttrals rig inajneseee lit Iiitinal 6031001 0444110.1164a14141it follic-'fff-lav ortettot deer leader Stemma Oa Atratifban& mid*ilrOeeditroti)tini the aeon elms. igleteineel Of aline ratittitig ta Maw _deem thew are reeler *at 40.030, erupains.The iniditort.deteden the4 titsOeghter met leFert Olio en el whether o dela/stay In litterutelecm- eefitt,HeetflF- trig In a tIgniticaFit dortatenoF or iija* (5) The e_irernsinnesei comerriga Yealinkinfer the plitrose-et report- why the told4orltzeticgi on 4atipliRtie tOr hil-Wildit Mid*Is it**on to a ter each melee Program le Other than type or templiesse. multivalent Air a Air ph:maned li01000‘laiieis such tdr- ittAiii ontalii AuntMA In the di1131.. eintylliaiKte aro otherwise report as plionee 114101011144t• PAM ilishefle in tite-5thedulte Of and- Cji tehterial umieemrdisnee with the ince and questioned costs for Federal Frontlet*ef Pedant gestates, regular awards. .Lines, or the Mane and ilohylitiiniff.lir 0 or i or Ittat.y.fssed sireetigh s NderefeWareeAliteed tO. .., _&major Oro- Folettg mean& ufflass such freed is invol. 21ie akziliOrrE detprquompon of etbeiteks Ispetted-as at,spot nsdisw **her a eoneerMinsteee'witth.the D ' la the,*a bedule of Oil-image And aueS- whkrole a Pedal's' white* ;e5.ellk- sioaed oasis-fer-Fistrala 1 /*Yid& This tiOnik or the terlin oid_emsditioarr of philevaph dsee BA ragiairs the inch tor Federal awn ile hen tiltterial for per- to report plain* initinitatten which ppse iw itelpartiuff.att amIttsltitititt,it in 03014. ogimusrandsu imssuicative oe tOlobotk to a tFFIX Of 11101114106' re" laget prateediahn ar ta.:delta an addi- ilitareeekst Tar a elatar trogron,identi- tionat.mortis—, re when ate auditor con_ fled hi ths oothelinunesupPintoont. . Oren thee tee fraud wes telpYriacTunt- (81 kiacon viestimied ohne that ern , . . - ortiatur that,.412540*fior tt_toe ot aori: ode„..gle*Mons reports bid,'00 di- ourrithe nuitoreinfoot tor ti, major pro. reet reportkur-req iiiromenin of GAC-AS SWIM Kemp iineatieiteli nests sis (7) Toottalow where- Ike tesSits Mose sliedfletdb identified by the audit Ibilavmyil procotturos disaleeed auditor. to onlooker- the off or that the summary sohodule of infer Yeastickeel enem On the Opinion on audit Memnon Nelared by the SAIU4E0 aekeisthhes the =dam ambildom ,ge. in enceselklat villik#5151,511_Amdit find- butt estimate at total coots ilhestioned tattS fhlhwt. AV, PalitigrapIl (6) =UM- (noir que.stioned Wets), mit Not the eaV atimegineante the status of any questioned costs arsoinew14 iihautified Prier audit finding(koven Muytioned costa). `Me macilkor (b) Ate Itufhtg detail ami rend* mast also import known quainioned Audio findiers mast he presented in ousts when likair onestioned-motto-are sufficient dotal" mid admirer for the greater tlunit$6,000 tor a tape or Man- Witt* to*ewe a mere-chive action silence reqrrirement for a major pro- phut end take coma-lye action, mid gran_ iti reporting gentian:Si boat& for Federal in Cies and psas-through. 1114 OMB Guidance §200.517 entities to arrive at a management de- resent an isolated instance or a sye- olsion. The following specific informa- temic problem. Where appropriate, in- tion must be included,as applicable,in stances identified must be related to audit findings: the universe and the number of cases (1)Federal program and specific Fed- examined and be quantified in terms of oral award identification including the dollar value.The auditor should report CFDA title and number,Federal award whether the sampling was a static- identification number and year, name *dewily valid sample. of Federal agency,and name of the ap- (8) Identification of whether the plicable pass-through entity. When in- audit finding was a repeat of a finding formation,such as the CFDA title and in the immediately prior audit and if number or Federal award identification so any applicable prior year audit find- number, is not available, the auditor ing numbers. must provide the best information (9) Recommendations to prevent fu- available to describe the Federal tare ocourrences of the deficiency iden- award. tiled in the audit finding. (2) The criteria or specific require- (10) Views of responsible officials of meat upon which the audit finding is the auditee. based, including the Federal statutes, (0) Reference numbers. Each audit regulations, or the terms and oondi- finding in the schedule of findings and dons of the Federal awards. Criteria questioned costs must include a ref- generally identify-the required or de- erence number in the format meeting sired state or expectation with respect the requirements of the data_collection to the program or operation. Criteria form submission required by 200.512 provide a context for evaluating evi- Report submission, paragraph (b) to deuce and understanding findings, allow for easy referenoing of the audit (9) The condition found, including findings during follow-up. facts that support the deficiency iden- tified.in the audit finding. f 200.617 Audit documentation. (4) A statement of cause that identi- (a) Retention of audit documentation. flee the reason or explanation for the The auditor must retain audit docu- condition or the factors responsible for mentation and reports for a minimum the difference between the situation of three years after the date of that exists(condition)and the required issuance of the auditor's report(s) to or desired state (criteria), which may the auditee,unless the auditor is noti- also serve as a basis for recommends- fled in writing by the cognizant agency tions for,corrective action. for audit, oversight agency for audit. (5) The possible asserted effect to cognizant agency for indirect costs, or provide sufficient information to the pass-through entity to extend the re- auditee and Federal agency, or pass- tention period. When the auditor is through entity in the case of a sub- aware that the Federal agency, pass- recipient, to permit them to determine through entity, or auditee is con- the cause and effect to facilitate testing an audit finding, the auditor prompt and proper corrective action.A must contact the parties contesting statement of the effect or potential ef- the audit finning for guidance prior to fact should provide a clear,logical link destruction of the audit documentation to establish the impact or potential and reports. impact of the difference between the (b) Access to audit documentation. condition and the criteria. Audit documentation must be made (8) Identification of questioned costs available upon request to the cognizant and how they were computed. %gown or oversight agency for audit or its des- questioned costs must be identified by ignee, cognizant agency for indirect applicable CFDA number(s) and appli- cost, a Federal agency, or GAO at the cable Federal award identification completion of the audit, as part of a number(s), quality review, to resolve audit find- (7)Information to provide proper per- fags, or to carry out oversight respon- spective for judging the prevalence and sibilities consistent with the purposes consequences of the audit findings, of this part. Access to audit doom- such as whether the audit findings rep- mentation includes the right of Federal 186 9200.518 2 CFR Ch.II 0-1-14 Edon) agencies to obtain copies of audit docu- loans if the value of Federal awards ex- mentation, as is reasonable and nee- pended for loans within the program essary. comprises fifty-percent or more of the g200.6I8 total Federal awards expended for the t- t program A cluster of programs is (a) General. The auditor must use a of Feedderaal aw as one ardsand the value expendede under a risk-based approach to determine loan de- which Federal program Is determined asPrograme are major pro- scribed in §200.602 Basis for deter- grams. This risk-based approach must mining Federal awards expended. include consideration of: current and (4) For biennial audits permitted prior audit experience, oversight by under§200.504 Frequency of audits, the Federal agencies and pass-through en- determination of Type A and Type B titles,and the inherent risk of the Fed- programs must be based noon the Fed- eral program. The pros in pars- eral awards expended during the two- graphs (b) through (I) of this section year period. must be followed. (o) Step two. (1) The auditor must (b) Step one.(1) The auditor must identify Type A programs which are identify the larger Federal programs, low-risk. In making this determine- which must be labeled Type A pro- tion, the auditor must consider wheth- grams.Type A programs are defined as or the requirements in§200.519 Criteria Federal programs with Federal awards for Federal program risk paragraph(c), expended during the audit period ex- the results of audit follow-up, or any reeding the levels outlined in the table changes in personnel or systems affect- in this paragraph(b)(1): ing the program indicate significantly increased risk and Tons Federal awards ex- preclude the pro- pended Type Ala t4rea4oltl gram from being low risk. For a Type A program to be considered low-risk,it Saud to S750,000 but less S730,e00, emorequal to million.. must have been audited as a major pro- Exceed see Milton but teas Total Feral awerde ex_ gram in at least one of the two most than or mot to$too ne- mated tunes.03. recent audit periods (in the most re- am cent audit period in the case of a bien- Exceed 16100 man n but lees $3 million. Iliad Man or mad to wglon. audit), and, in the most recent Exceed$snon.md Mu Total Federal retards ex- audit period, the program must have tenor a to$10 billion. panted Mass.003. not had: Exceed$10 bltaom but teat, $30 realm. manor equal to$20 billion (i) Internal control deficiencies Exceed$20 Rion Toter Federal swards ex- which were identified as material Minded times.co15. weaknesses in the auditor's report on internal for ograms s (2) Federal programs not labeled required anderl§200.6 6oAr udi rt-- Type A under paragraph (b)(1) of this ing,paragraph(c); section must be labeled Type B pro- (ii) A modified opinion on the pro- grams. gram in the auditor's report on major (3) The inclusion of large loan and programs as required under 4200.515 loan guarantees (loans) should not re- Audit reporting,paragraph(c);or stilt in the exclusion of other programs (iii)Known or likely questioned costs as Type A. programs. When a. Federal that exceed five percent of the total program providing loans exceeds four Federal awards expended for the pro- times the largest non-loan program it grain. is considered a large loan program,and (2) Notwithstanding paragraph (c)(1) the auditor must consider this Federal of this section, OMB may approve a program as a Type A program and ex- Federal awarding agency's request that elude its values in determining other a Type A program may not be consid- Type A programs.This recalculation of eyed low risk for a certain recipient. the Type A program is performed after For example,it may be necessary for a removing the total of all large loan large Type A program to be audited as programs. For the purposes of this a major program each year at a par- paragraph a program is only considered tioulay recipient to allow the Federal to be a Federal program providing awarding agency to comply with 31 156 4MB Guidance §200.519 U.S.C. 3515. The Federal awarding additional Federal programs with Fed- agency must notify the recipient and, eral awards expended that, in aggro- if known, the auditor of OMB's ap- gate,all major programs encompass at proval at least 180 calendar days prior least 20 percent (0.20) of total Federal to the end of the fiscal year to be an- awards expended. Otherwise, the audi- tor must audit the major programs (d) Step three. (1) The auditor must identified In Step 4 (paragraphs (e)(1) identify Type B programs which are and(2)of this section)and suoh addi- high-risk using professional judgment tional Federal programs with Federal and the criteria in a200.519 Criteria for awards expended that,in aggregate,all Federal program risk. However, the major programs encompass at least 40 auditor is not required to identify more percent (0.40) of total Federal awards high-risk Type 13 programs than at expended. least one fourth the number of low-risk (g)Documentation of risk.The auditor Type A programs identified as low=risk must include in the audit documenta- under Step 2(paragraph(c)of this see- tion the risk analysis process used in tion).Except for known material weak- determining major programs. nese in internal control or compliance (h) Auditor's judgment. When the problems as discussed. in §200.51.9 Cri- major program determination was per- tarts for Federal program risk parer formed and documented in accordance graphs (b)(1),(bx2), and (0)(1), a single with this Subpart, the auditor's judg- criteria in risk would seldom cause a meat in applying the risk-based an- Type B program to be considered high- to determine major programs risk. When identifying which TYPe B must be presumed correct. Challenges programs to risk assess, the auditor is by Federal agencies and pass-through encouraged to use an approach whit entities must only be for clearly im- provides an opportunity for different proper use of the requirements in this high-risk Type B programs to be an- part However, Federal agencies and dited as major over a period of time. pass-throes entities may provide (2)The auditor is not expected to per- auditors guidanoe about the risk of a form risk assessments on relatively particular Federal program and the small Federal programs.Therefore,the auditor must consider this guidance in auditor is only required to perform risk determining major programs in audits assessments on Type B programs that not yet completed. exceed twenty-five percent(0.25)of the Type A threshold determined in Step 1 $260419 Criteria for Federal program (paragraph(b)of this section).. risk. (e) Step four. At a minimum, the auditor must audit all of the following (a) Genera/.The auditor's determine- as major programs: tion should be based on an overall eval- (1) All Type A programs not identi- nation of the risk of noncompliance oc- fled as low risk under step two (pars- curling that could be material to the graph(cx1)of this section). Federal program. The auditor must (2)All Type B programs identified as oonsider criteria,such as described in high-risk under step three (paragraph paragraphs (b), (c), and(d) of this seer (d)of this section). tion, to identify risk in Federal pro- (3) Suoh additional programs as may grams. Also, as part of the risk anal- be necessary to comply with the per- ysis, the auditor may wish to discuss a centage of coverage rule discussed in particular Federal program with paragraph(f) of this section. This may auditee management and the Federal require the auditor to audit more pro- agency or Pass-through entity. grams as major programs than the (b) Current and prior audit experience. number of Type A programs. (1)Weaknesses in internal control over (f) Percentage of coverage rule. If the Federal programs would indicate high- auditee meets the criteria in 11200.520 er risk. Consideration should be given Criteria for a low-risk auditee, the to the control environment over Fed- auditor need only audit the major pro- oral programs and each factors as the grams identified in Step 4 (paragraph expectation of management's adher- (e)(1) and (2) of this section) and such once to Federal statutes, regulations, 1B7 §200.520 2 CFR Ch.II(1-I-14 Edition) and the terms and conditions of Fed- personal services, but otherwise be at oral awards and the competence and low risk. experience of personnel who administer (44 The mew of a edesai hrogram in the Federal programs. (I) A decal proven* administered its life eyak at. a Federal cy undermultiple.internal oadmin may indic risk:Far example,a new e mul irava strati- Federal llrami with now or M Fai Sher risk.When-as- regulations may have higher riela than auditor sik in a large }s.audit.the an astad�li od pronoun with -test, eider Wliatherr wed ed mesas NV *scuffed in a Single miler- ieaslatd a Also, t atlngTuait(et..on.coI�ge. Federal Via, ntl- p�vaaive, pe. a)co r ra, Sr rai tesid (it}When Significantof t of 1®i9° syieida May Increase end parts of a �� rlaki program are (3}The Phase of a sniente,a item for Ile Ogttle at�program in e Weald fndtr_aae a ,i .For_ m� Mai- Wring higher Vie.during Ohs first 0nd la (2) Prier audit gin st Yes that an audited Pa tici.- oate higher audit risk, dings would indi- paten in a preg . tu Per'tionlarly when the May risk situations identified in the audit find- tweet h use or f, ings could have a significant impact on diem with s Fad- s Federal program or have not been gj $umg** .he of ig - corrected. s'd®untended d. high- corrected.Federal programs not reoentIy an- tiefig or k than pro w$Ut ra = dited as major programs d Igr Federal awards es- higher risk than Federal be of re- cently audited as major pr programs swith- I+200.320 Criteria far out audit findings. aaditee. a ioae.ria$ (ol Oversight e bp- i Wit- An auditee that meets all of the foi- e/es pre- sight tad Po 'tha tm (f) Ovum- lowing conditions for each of the a+ tiged by Feddrnl wed or ceding two audit periods must qualify Paisi-throUgle ent€ties:;eolthi:h m8d to as a low-risk auditee and be eligible for meea9 ism > pr e,revolt maw reduced audit coverage in accordance Ong or other revrevkgra.p,Opinnod 11y with §200.518 Major Program deter- sersJ ht mnritar Est diWosed no minstion. siguiffeent prohlornit the Q indicate (a.)wee audits wee+ permed on dieciednin rim that an annual basis In iteastasetie ndleaegscaa problems Would Pis Of ads % banding e 1a Federal stibmaitting the data .callentie form agencies,with the concur- and the report. figelmpa the FAO rence of OMB, may identify Federal wit the afrt programs that are higher risk. OMB SiggtaltRiport subrrtm er A xwn.p - will provide this identification in the end Shim' that has blermia axons compliance supplement. dOes hatg ifr ea a Ic -t'idh auditec. (dl frtlierent rtat of tie Admit pro- (i)Theaa'tddtor'a iminien on whether trma; (1)M;nature of s: rural pro- the flideatal Statements prepared risk Consideration in with t l tr basis ofshoals! be given to the, mp�efit�Si � tisg requited statelaw, adthe program and the went to wbieb the 'aaredR gram may to the Federal program cam rot the mileage of experditunia tef Federal Oral programs and serevioem. Per example, Fad- swards sore ntelledli'leit qu gra that diehurso lands (o).Moos were no defieiianraies in In- h third party by xis or have barnat:Matra which were identified se eligibility °Marfa may be of hither material Weaknesses under the require- risk.. Federal Zama priniurily in- manta©tGAGA$ erclvipg staff payroll ewes may have (d)The auditor did not report a sub- high _risk Sur noneeimpaisatca With re- stantial doubt about the auditee'a abil- ouiraments of ileitt,436.Compensation— ity to continue as a going concern. 188 OMB Guidance Pt.200,App.I (e)None of the Federal programs had vision for findings that relate to Fed- audit findings from any of the fol- eral awards it makes to non-Federal lowing in either of the preceding two entities. audit periods in which they were clonal- (o)Pass-through entity.As provided in fled as Type A programs: §200.331 Requirements for pass-through (1) Internal control deficiencies that entities, paragraph (d), the peso- were identified as material weaknesses through entity must be responsible for in the auditor's report on internal con- issuing a management decision for trol for major programs as required audit findings that relate to Federal under §200.515 Audit reporting, pars- awards it makes to snbrecipients. grapit(o); (d) Time requirements. The Federal (2) A modified opinion on a major awarding agency or pass-through anti- program in the auditor's repor t on t.4 responsible for issuing a manage- major prograacis as required under went decision must do so within six §200.515 Audit reporting,paragraph(o); months of acceptance of the audit re- ar port by the FAQ.The auditee must ini- (3)Known or likely questioned costs tiate and proceed with corrective ma- that exceeded five percent of the total tion as rapidly as possible and oorrec- Federal awards expended for a Type A tive action should begin no later than program during the audit period. upon receipt of the audit report. (e) Reference numbers. Management MANAOEaWNT DECISIONS decision must include the reference numbers the auditor assigned to each §200.521 Management decision, audit finding in accordance with (a) General. The management deoi- §200•616 Audit findings paragraph(o). Rion must clearly state whether or not A.PPLnciDix I TO PST 200—Fvr,I,marr OF the audit+indi4g is sustained,the rear NcTIOE OF FUNDING OrrORTCNIPY eons for the decision, and the expected anditee action to repay disallowed The fall text of the notice of forming op- oasts, make financial adjustments, or Portunity is organized in aeotions. The re- take other action. If the anditee has aairad format outlined in this appendix not completed corrective action, a value immediately following the title of each timetable for follow-up should be section whether teat section is required in et or is a Federal award- given. Prior to issuing the manage- every announceme ing agency option.The format Is designed so meat decision, the Federal agency or that similar types of information will appear pass-through entity may request adds- in the same motions in announcements of tional information or documentation different Federal fandingg opportunities.To- from the anditee, including a request ward that ,Bend s tor ie text in the ty of the pes of in- formation for auditor assurance,asa..w related to the followinformation that a Federal awarding ency documentation,as a way of mitigating would include in that section of an actual disallowed costs. The management de-. am�oaneement. vision should describe any appeal proc- A Federal awarding agency that wishes to ass available to the auditee. While not include information that the format does not required, the Federal agency or pass- specifically discuss may address that subject through entity may also issue a man- In whatever section(e) is most appropriate. agement decision on findings relating For example, If a Federal awarding agency to the financial statements which are chooses to address performance goals In the required to be reported in accordance announcement,it might do so In the funding with QAflAB. opportunity description,the application con- (b) Federal agency.n Asprovided in tent,or the reportingrequlrements. Slmiiariy, when this format calls for a §200.513 Responsibilities, paragraph type of information to be in a particular sec- (a)(7), the cognizant agency for audit Non,a Federal awarding agency wishing to must be responsible for coordinating a address that subject in other sections may management decision for audit find- elect to repeat the information In those sw- ings that affect the programs of more bona or use cross references between the sec- than one Federal agency. As provided tions(there should be hyperlinke for cross- in §2 one Federal R eponsihilities, reference in any electaonio veretone of the paragraph announcement). For example, a Federal (c)(3),a Federal awarding agency is re- awarding agency may want to include in sponsible for issuing a management de- Section I information about the types of 189 Pt.200,App.I 2 CFR Ch.1I(1-1-14 Edition) non-Federal entities who are eligible to mitred or Federal award administration in- apply.The format specifies a standard loos- formation in section D.Application and Sub- tion for that information in Section 1II.l but mission Information). If procurement con- that does not preclude repeating the infor- tracts also may be awarded, this must be mation in Section•I or creating a cross ref- abated. erence between Sections 1 and M.1,as long as a potential applicant can find the infor- C.ELio-mn 1Tr'mammon motion quickly and easily from the standard This section addresses the considerations location. or factors that determine applicant or li- The sections of the bill text of the an- cation eligibility. This lII the eigi- nouncement are deeoribed in the following batty of particular types of applicant„gold., ParagraPha. rations,any factors affecting the eligibility A.PROGRAM DESORIPTION—REQUIRED of the principal investigator or project direc- tor,ntaine the bill program de and any criteria that make particular This section oo scription of the funding opportunity.It may makeprojeoclts ineligible.e. Federal agencies failure should be as long se needed toeta eligibility whether rian erionappliaby thetime ofo nicate to adequately comma- meet ea criterion by time potential applicants the areas in an application deadline will result In the which funding may be provided.It describes Federal awarding agency returning the ap- the Federal awarding agency's funding prior- *cation without review or,even though an 'ties or the technical or focus areas in which application may be reviewed, will preclude the Federal awarding agency intends to pro- the Federal awarding agency from making a vide assistance. As appropriate, it may in- Federal award.Key elements to be addressed elude any program history(e.g..whether this arm is a new program or a new or changed area of Announce- program emphasis). This Section may cram_ a. is mustu Applicants—Required.identify ihd. eeounae- municate indicators of successful projects manta s clearly tathe tf e there are (e,g., If the �i titles that are eligible to apply.If- are program encourages collabo- no restrictions on eligibility, this section rative efforts)and may include examples of may simply.indicate that.all potential appli- projects that have been funded previously, cants are eligible.If there are restrictions on This section also may Inclnds other informs- eligibility,it is Important to be der about tion the Federal awarding agency deems nee- the specific types of entities that are eligi- esesry,and must at a minimum include cita- ble, not just the types that are ineligible. tons for authorizing statutes and regale- For example, if the program is limited to tions for the funding opportunity. nonprofit organizatirma subject to 28 U.S.C. B.FEDERAL,AWARD INFORMATION—REQUIRED (0)(9)of the tax code(26 U.S.C.801(c)(9)). the announcement should say so.Similarly, This section provides sufficient infoima- it is better to state explicitly that Native tion to help an applicant make an informed American tribal organizations are eligible decision about whether to submit aproposal. than to assume that they can unambiguously Relevant information could include the total infer that from a statement that nonprofit amount of funding that the Federal awarding organizations may apply.Eligibility also can agency expects to award through the an- be expressed by exception, (e.g.,open to all nounoement;the anticipated number of Fed- types of domestic applicants other than indi- eral awards; the expected amounts of indi- viduals). This section should refer to any vidual Federal awards (which may be a portion of Section IV specifying doonmenta- range); the amount of funding per Federal lion that must be submitted to support an award, on average, experienced in previous eligibility determination (e.g., proof of years; and the anticipated start dates and 501(0)(3)status as determined by the Internal periods of performance for new Federal Revenue Service or an authorising tribal res- awards. This section also should address elution).To the extent that any l nding re- whether applications for renewal or sup- striation in Section-W.5 could affect the eli- plementation of existing projects are eligible gibility of an applicant or project, the au- to compete with applications for new Fed- nounooment must either restate that restrlo- oral awards. tion in this section or provide a oroas-ref- This section also must indicate the type(s) erence to ite description in Section m.o. of assistance instrument(e.g.,grant,cooper- 2. Cost Sharing or Matching--Required. An- ative agreement)that may be awarded if ap- nounoements must state whether there is re- plications are successful. If cooperative quired cost sharing, matching, or oast par- agreements may be awarded,this section ei- ticipation without which an application ther should describe the "substantial in- would be ineligible(if cost sharing is not re- volvement"that the Federal awarding alien- quired, the announcement must explicitly ey expects to have or should reference where say so).Required coat sharing may be a car- the potential applicant can find that infor- taro percentage or amount,or may be In the motion(e.g.,in the funding opportunity de- form of contributions of specified items or scription in A. Program Description—Re- activities(e.g.,provision of equipment).It is io OMB Guidance Pt.200,App.1 important that the announcement be clear quired forms or formats as part of the an- about any restrictions on the types of cost nonnoement or state where the applicant (e.g..in-kind contributions)that are accept- may obtain them. able as cost sharing.Oast sharing as an eligi- This aeotion should specifically address bility-criterion includes requirements based content and form or format requirements in statute or regulation, as described in for: 1200.308 Cost sharing or matching of this i. Pre-applications, letters of intent, or Part.This section should refer to the apply- white papers required or encouraged (see Pilate portlon(a) of section P. Application Section IV.3),including any limitations on and Submission Information stating eta Pre- the number of pages or other formatting re- award requirements for submission of lettere quirements similar to those for full applica- or other documentation to verify commit- tione, meats to meet oast-sharing requirements if a ii.The application as a whole.For all sub- Federal award is made. missions,this would include any limitations 3.Other—Required,If applicable.If there are on the number of pages,font size and type- other eligibility criteria (Le., criteria that faoe,margins,paper sire,number of copies, have the affect of making an application or and sequence or assembly requirements. If project ineligible for Federal awards,wheth- electronic submission is permitted or re- ar referred to as "responsiveness" criteria, quired, this could include special require- "go-no go" criteria,"threshold"criteria,or meats for formatting or signatures. In other ways), must be clearly stated and lit. Component pieces of the application must include a reference to the regulation of (e.g., if all copies of the application must requirement that describes the restriction. bear original signatures on the lace page or as applicable. For example, if entities that the program narrative may not exceed 10 have been found to be in violation of a par- pages).Thin includes any pieces that may be tinnier Federal statute are ineligible, it is submitted separately by third parties(e.g., important to say so.This section must also references or letters confirming commit- state any limit on the number of applies- meats from third parties that will be crea- tions an applicant may submit under the an- tribating a portion of any required cost spar- nouaoement end make clear whether the tng), limitation is on the submitting organization, iv.Information that successful applicants individual investigator/program director,,or must submit after notification of intent to both. This section should also address any make a Federal award,but prior to a Federal eligibility 'criteria for beneficiaries or for award.This could include evidence of cow program participants other than Federal pliance with requirements relating to human award recipients. subjects or information needed to comply D.APPLIoATroN AND SUMMON Isronnamos with the National Unviraumental Policy Act {!'ligpA)(43 U.S.O.4321-4370h). I.Address to Request Application Package— 3. Dun and Bradstreet Universal Numbering Required. Potential applicants must be told System(DUNS)Number and System for Award how to get application forms,kite,or other Management(SAM)-Required. materials needed to apply(if this announce- This paragraph must state clearly that meat contains everything needed, this see- each applicant(unless the applicant is an in- tics need only say so).An Internet address dividnal or Federal awarding agency that is where the materials can be accessed is ac- excepted from those requirements under 2 ceptable.However,since high-speed Internet OFB,425.110(b)or M.or has an exception ap- access is not yet universally available for proved by the Federal awarding agency downloading documents,and applicants may under 2 CFR 125.11o(d))is required to:(f)Be have additional accessibility requirements, registered in SAM before submitting its ap- there also should be a way for potential ap- plisstion;(li).provide a valid PUNS number plicants to request paper copies of materials, in its application;and(fit)continue to main- such as a U.S. Postal Service mailing ad- thin an active SAM registration with current dress,telephone or FAX number,Telephone information at all times during which it has Device for the Deaf(TOD),Text Telephone an active Federal award or an application or ern') number, and/or Federal Information plan under consideration by a Federal award- Relay Service(FIRS)number. tag agency.It also must state that the Fed- 2. Content and Form of Application Submis- eral awarding agency may not make a Fed- sion—Required. This section must identify eral award to an applicant until the appli- the required content of an application and cant has complied with all applicable DUNS the forma or formats that an applicant must and SAM requirements and,if an applicant use to sabmit it. It any requirements are has not folly complied with the requirements stated elsewhere because they are general re- by the time the Federal awarding agency is quirements that apply to multiple programs ready to make a Federal award,the"Federal or funding opportunities,this section should awarding agency may determine that the ap- refer to where those requirements may be plice.ut is not qualified to receive a Federal found. This section also should include re- award and use that determination es a basis /1 Pt.200,App.I 2 CFR Ch.II(1-1-14 Edition) for making a Federal award to another appli- mental Review of Federal Programs," the cant. notice most say ea. In alerting applicants 4. Submission Dates and Times—Required. that they must contact their state's Single Announcements must identify due dates and Point of Contact (WOO)to find out about times for all submissions.This includes not and comply with the state's process under only the full applications but also any pre- Executive Order 12872,it may be useful to in- lindnary submissions(e.g.,letters of intent, form potential applicants that the names white Papers,or pre'applioationa).It also in- and addressee of the SPOOs are listed in the chides any other submissions of information Office olManagement and.Budget's Web site. before Federal award that are separate from the fail application. If the funding oppor- www. ants/afwc.httaC Unity is a general announcement that is d' ceding Restrlcilons-Required. Notices open for a period of time with no specific due mast tnolude information on g restrio- dates for applications, this notion should bone ix order to allow an applicant to de say so.Note that the information on dates velop an application and budget consistent . that is included in this section also must ap- with program requirements. &samples are pear with other overview information in a to- whether construction is an allowable aotiv- cation preceding the full text of the an- ity, if there are any limitations on direct nouncement(see§200.208 Notices of funding costs scan as foreign travel or equipment opportunities of this Part). pmrohases,and if there are any limits on in- Each type of snhmtasion should be des- direct costs(or facilities and administrative feasted as encouraged or required and,if re- caste).Applicants must be advised if Federal quired, any deadline date (or dates, if the awards will not allow reimbursement of pre- Federal awarding agency plans more than Federal award costs. cue cycle of application submission,review, 7.Other Submission Requirements—Required., and Federal award under the announcement) This section must address any other enbm3s- should be specified.The announcement must aion requirements not included in the other state(or provide a reference to another docu- paragraphs of this section. This might in- mentthatstates); elude the format of submission,i.e.,paper r or I.Any deadline in terms of a date and local electronic,for each type of required aubmie- tUme. If the due date Palle on a Saturday, atop. Applicants should not be required to Sunday. or Federal holiday the reporting submit inmore than one format and this sec- package is due the next business day. tion should indicate whether they may fi.What the deadline means(e.g., whether choose whether to submit applications in it is the date and time by which the Federal hard copy or electronically,may submit only awarding agency must receive the applica, tion,the date by which the application-must in hard copy,or may submit only eleotroni- be postmarked,or something else) and how ° that depande, if at all, on the submission This section also must indicate where ap- method (e.g., mail, electronic, or personal/ plicatioss(and any pre-applications)must be courier delivery), submitted if sent by postal mail,electronic fit. The effect of missing a deadline (e.g., means, or hand-delivery. For postal mail whether late applications are neither re- submission,this must include the name of an viewed nor considered or are reviewed and ofiloe, official, individual or function considered under some circumstances). application receipt center) and a complete iv.flow the receiving Federal office deter- mailing addrem. For electronic submission, mines whether an application or lie-applies_ this must include the IIRL or email address; tion has been submitted before the deadline. whether a password(s) ie required; whether This includes the form of acceptable proof of particular software or other electronic cape- mailing or system generated documentation bilities are required;what to do in the event of receipt date and time. of system problems and a point of contact This section also may indicate whether, who will be available in the event the appli- when,and in what form the applicant will re- cant experiences technical-difficulties 1 ceive an acknowledgement of receipt. This information should be displayed in ways that IL APPLICATION REVIEW INFORMATION will be easy to understand'and use.It can be 1.Criteria—Required.This caution must ad- difficult to extract all needed information dress the criteria that the Federal awarding from narrative paragraphs, even when they agency will use to evaluate applications. are well written. A tabular form for pro- viding a summary of the information may help applicants for some programs and give i With respect to electronic methods for them what effectively could be a checklist to providing information about funding oppor- verify the completeness of their application tunities or accepting applicants'submissions package before submission. of information,each Federal awarding sgen- 6.Intergovernmental Review--Required,if up- cy is responsible for compliance with Section phobic.If the funding opportunity Is subject 608 of the Rehabilitation Act of 1973 (20 to Executive Order 12872, "Intergovern- U.S.0.794d). 192 OMB Guidance Pt.200,APP.I This includes the merit and other review cr1- people on an evaluation panel and how It op- terla that evaluators will use to judge appli- orates, the way reviewers.are selected, re- onions,including any statutory,regulatory, viewer qualifications,and the way that(sen- or other preferences(e.g.,minority statue or lints of interest are avoided.With respect to Native American tribal preferences) that electronic methods for providing informs- . will be applied in the review'process.These tion about fending opportunities or accept- criteria are distinct from eligibility criteria ing applicants' anbmissions of information, that are addressed before an application is each Federal awarding agency is responsible accepted for review and any program policy for compliance with Section 608 of the Reha- or other factors that are applied'during the bilttatlon Act of 1979(29II.S:C.794d). selection process,after the review process is in addition,if the Federal awarding agency completed.'The intent is to make the appli- permits applicants to nominate suggested re- cation process transparent so applicants oan viewers of their applications or suggest those make informed decisions whin preparing they feel may be inappropriate due to a con- their applications to maximize fairness of Mot of interest,that information should be the process.The announcement should clear- included in this section. ly describe all criteria,.including any sub- 3: Anticipated Announcement and Federal criteria.If criteria vary in importance, the Award Dates—Optional. This section is in- announcement should specify the relative tended to provide applicants with lnforma- percentages,weights,or other means used to Lion they can use for planting purposes. If distinguish among them.For statutory,Peg- there Is a single application deadline fol- ulatory,or other preferences.the announce- lowed by the simultaneous review of all ap- meat should-provide a detailed explanation plications,the Federal awarding agency can of those preferences with an explicit indica- Include in this section information about the Lion of their effect(e.g..whether they result anticipated dates for announcing or noti- in additional points being assigned). tging snot:medi l and unsuccessful applicants if an applicant's proposed coat sharing will and for having Federal awards in_place.If ap- be considered in the review process (as op- pliicatfone are received and evaluated on a posed to being an eligibility criterion de- "rolling"basis at different times daring ao scribed in Section III.2), the announcement extended period, it may be appropriate to must specifically address how it will be con- give applicants an estimate of the time need- Metered'(e.g., to assign a certain number of ed to process an application and notify the additional points to applicants who offer applicant of the Federal awarding agency's cost sharing,or to break ties among applies, decision. tione with equivalent scores after evaluation against all other factors). cost sharing will F.FEDERAL AWARD ADtUNISTRATION not be considered in the evaluation,the an- INFORMATION nounoement should say so,so that there is f, Federal Award Nodc ea-hequlred. This no ambiguity for potential applicants.Vague seotdon must address what a:successful appli- statements that cost sharing is encouraged, cant can expect to receive following salsa without clarification as to what that means, tion.If the Federal awarding agenby'e are unhelpful unhelpful to applicants.It also is impor- tics Is to provide a.separate notice stating tent that the announcement be clear about that an application has been selected before any restrictions on the types of coat(e.g..in- it actually makes.the Federal award, this kind contributions) that are acceptable as section would be the place to indicate that poet sharing. w and Selection Process— the letter is not an authorization to begin This aeottoa mdy easy in the level equlrea..f detail performance (to the extent that it allows charging to Federal .awards of pre-award provided. The announcement must list any costa at the non-Federal entity's own risk). program policy or other factors or elements. This section should indicate that the notice other than merit criteria,thatt the selecting of.Federal award signed by the grants officer official may use in selecting applications for (or equivalent)is the aathcrising document, Federal award(e.g.,geographical dispersion, end. whether it is provided through postal program balance,or diversity). The Federal mail or by electronic means and to whom.It awarding agency may also include other ap- also may-address the timing,-form,end con- proprlate details.For example, this section tent of notifications to umeaeceisihl appli- may indicate who is responsible for evalua- cants. See also 1200.210 Information con- tion against the merit criteria(e.g.,peers ex- Mined in a Federal award. ternal to the Federal awarding agency or 2. Adminlsiratiwe and National Policy Re- Federal awarding agency personnel) and/or quurementa—Required.This section must idea- who makes the final selections for Federal thy the usual administrative and national awards.If there is a multi-phase review prow policy requirements the Federal awarding ass(e.g.,an external panel advising internal agency's Federal awards may include.Pro- Federal awarding agency personnel who riding this information lets a potential ap- make final recommendations to the deciding plicant identify any .requiremente with official),the announcement may describe the which it would have difficulty complying if phases. It also may include: the number of its application is eecoesaid.In.those oases, 193 Pt.200,App.II 2 CFR Ch.11(1-1-14 Edition) early notification about the requirements al- IL Orin INFOOMATIop—OrrroottL lows the potential applicant to decide not to apply to take needed actions before re T section may include any additional calving the Federal award. The aauonnce- informatio that will Beset a potential ap- meat need not include all of the terms and plicaat.For example,the section might: oonditions of the Federal award, but i•Indicate whether this is a now program refer to a document(with information about or a Mention Initiative, how to obtain it) or Internet site where ap- p' g or related programs a w ordi other up - how can see the terms and conditions.If funding fuming op ortn ongoing Federal similararacti agency this funding opportunity will lead to F opportunities current t for t addressese f awards with some aopera- al awardinga agency Webt tthatfor pedal terms and omit- Federal sites that may Nona that differ from the Federal awarding be useful to an applicant in understanding agency's usual(sometimes called"general') the program. terms and conditions, this section should iv.Alert applicants to the need to identify highlight those special terms and conditions. proprietary information and inform them Doing so will alert applinouts that have re- about the way the Federal awarding agency ceived Federal awards from the Federal will-handle it. awarding agency previously and might not v.Include certain routine notices to appli- otherwise caveat different terms and condi- cants(e.g., that the Federal government is Nona For the same reason, the announce- not obligated to make any Federal award as meat should inform potential applicant a resultnto l the antiorouio oan bind the Federal gt only govern- about special requirements that could apply �iffio ependiture of funds)to particular Federal awards after the review of applications and other information,based APPE IDDE II TO PART 2O0—00NTRACT on the particular oircumstenoes of the effort PROyisIONS FOR NON-FEDERAT,Mal- to be supported(e.g.,if human subjects were Ty Ct7NTRACTi3 UNDER FEiDERAl, to be involved or if some situations may Ins- tify special terms on intellectual property, AWARDS data sharing or security requirements). In addition to other pasvitimrs required y 3. Peporttng—Required. This section must die.- i agency or igaL-Porkgral ty,all include general information about the type aoah (a. ., financial orthe, 1(ed iep"ez ovi Performance), frequency, under�1?e .awesrd_m4Tleit O�ttiiaprn�JF and means of submission (paper or elec- aeon:e0Verisg bainssisitt,aa a ileshle- tronic) of post-Federal award reporting re- (A):Oontritltesirirmore tinuitheadniplitisd quiremente.pighllght any special reporting �1 gion ,' satyr set at requirements for Federal awards u*inr this "m-- L w k i& 033 Watt adi ereI, funding opportunity that differ(e g.,b9 re Amin t dst band by t _Civilian�qg ecny do a.gtim port type, frequency, form/format, or lialtinCagnedland the DefelaseAcquitli- =instances for use)from what the Federal tl ,S ngstiana'Coaaaill (l7cannuii) at: u- awarding agency'a Federal awards usually 41t etei .ad require. =Matratire, contractual, or legal remedies in instances where contractors violate or G.FEDERAL AWARDING AGENCY CONTAC'r(s)-- breach oontraot tonne.and provide for such s sanctions and penalties as appropriate. The announcement must give potential ap- address termination forte cause(B)All contracts in cessiand fo$10,000r cmo- plicants a points)of contact for answering venienoe by the non-Federal entity including questions or helping with problems while the the manner by which it will be effected and funding opportunity ie open. The intent of the basis for settlement, this requirement Is to be as helpful as poa- (0) Equal Employment Opportunity. Ex- aible'to potential applicants,so the Federal cent as otherwise provided under 41 OFR awarding agency should consider approaches Part 80,all oontraote ta meet the donut-as giving; tion of"federally assisted d construction non- such Pointe of contact who may be reached in tract"in 41 CFR Part g0.1.8 must include the multiple ways(e.g..by telephone,FAX,and/ equal opportunity clause provided ender 41 or email,as well as regular mail). CFR 1.4(b),In accordancempl with Executive ii, A fax or email address that multiple Order 11248, "Equal Employment Oppor- people access,so that someone will respond tunny.,., ems•lamb,3 by Part,1tive even if others are unexpectedly absent dur- Order Comp•., "A88g as amended Executive Executier hag critical periods. 11876, "Amending Order iii.Different contacts for distinct kinds of 11248 Relating to Equal Employment Oppor- help(e.g.,one for questions of tunny,' and implementing regulations at 41 Programmatic Mt part 60, "Office of Federal Contract content and a second for administrative Compliance Programs, Equal Employment questions). Opportunity,Department of Labor." OMB Guidance Pt.200,APP.If (D)Davis-Bacon Act,as amended(40 U.S.C. matsrlala or article;ordinarily available on 3141-3148).When required by Federal program the open market, or contracts for transpor- legislation,all prime construction.contracts ration or tranemieeion of intelligence. in excess of 82,000 awarded by non-Federal (F) Rights to Inventions Made Under a entities must include a provision for oomph!- Contract or Agreement.If the Federal award race with the Davis-Bacon Aot (40 U.S.C. meets the definition of"funding agreement" 3141-3144, and 9146-814B)as supplemented by wider 37 OF14401R(a)and the recipient or Department of Labor regulations (29 OFR eubreoipient wishes to enter into a.contract Part 6, "Labor Standards Provisions Appii- with a small business firm or nonprofit orga- cable to Contracts Covering Federally Fi- ideation regarding the substitution of par- named and Assisted Construction"). In ac- ties, assignment or performance of expert- cordance with the statute.contractors must mental, developmental, or reeearch work be required to pay wages to laborers and me- ender that"funding agreement,"the reolpi- chanioe at a rate not less than the prevailing ant or subreoipient must comply with the re- wages specified in a wage determination quirements of 37 CFR Part 401."Welts to In- made by the Secretary.of Labor.In addition, ventions Made by Nonprofit Organisations oontracitors must be required to pay wages and Small Business Firms Under Govern- not less than once a week.The non-Federal ment (tents. Contract and Cooperative entity must place a copy of the current pre- Agreements,"and any implementing regale, veiling wage determination issued by the De- tions issued by the awarding agency. pertinent of Labor in each solicitation.The (G)Clean Air Aot(42 U.S.C.7401-7671g.)and decision to award a contract or subcontract. the Federal Water Pollution Control Act(33 must be conditioned upon the acceptance of U.S.C.1251-1387),as amended—Contracts and the wage determination.The non:Federal en- eubgrants of amounts in excess of.$150,000 tity must report all suspected or reported must contain a provision that requires the violations to-the Federal awarding agency. non-Federal award to agree to comply with The contracts must also inolude a provision all applicable standards, orders or regula- tor compliance with the Copeland "Anti- tions issued pursuant to the Olen Air Aot Kickback" Act (40 U.S.C. 3145), as supple- (42 U.S.C.7401-7671q)and the Federal Water mented by Department of Labor regulations Pollution Control Act as amended(33 U.A.C. (29 era Part 3, "Contractors and Sub- 1251-13U).Violations must be reported to the contractors on Public Building. or Public Federal awarding agency and the Regional Work Financed in Whole or in Part by Loans Office of the Environmental Protection or Grants from the United States").The Act- Agency(EPA). provides that each contractor or sub- (B) Mandatory standards and polices re- recipient must be prohibited from inducing, lating to energy (ftlolenay which are coo' by any means, any person employed in the Mined in the state energy conservation plan construction,completion,or repair of public) issued in compliance with the Energy Policy work,to give up any part of the oompenea- and Conservation Aot(42 U.S.C.8201). Lion to which he or she is otherwise entitled. (I) Debarment and Suspension (3lxecutdve The non-Federal entity must report all sus- Orders 12549 and 12889)-A contract award peoted or reported violations to the Federal (see 2 OFR 180,220)must not be made to par- awarding agency. ties listed on the governmentwide Excluded (B) Contract Work Sours and Safety Parties List-System in the System for Award Standards Act (40 U.S.C. 3701-3708). Where Management(SAM),in agoordance with the applicable,all contracts awarded by the non- OMB guidelines at 2 CFR 180 that implement Federal.entity In noses of$100,000 that in- Executive Orders 12649 (3 CM Pert 1988 volve the employment of mechanics or labor- Comp., p. 18) and 12009 (3 OFR Part 1989 ere must include a provision for oompliance Comp.,p.235),"Debarment and Suspension." with 40 U$.0.3702 and 3704.as supplemented The Fa:eluded Parties List System in SAM by Department of Labor regulations(29 OFR contains the names of parties debarred,sus- Part 5).Under 40 U.S.C.3702 of the Act,each pended,or otherwise excluded by agencies,as contractor must be required to compute the well as parties declared ineligible under sttat- wages of every mechanic and laborer on the utory or regulatory authority other than Ex- - basis of a standard work week of 40 hours. motive Order 12549. Work in excess of the standard work week is (a) Byrd And-Lobbying Amendment (31 permissible provided that the worker is own- 1J.S.C.1852)--Contractors that apply or bid peneated at a rate of not less than one and--a for an award of 3100,000 or more must file the half times the basic rate of pay for all hours required certification. Bach tier certifies to worked in excess of 40 hours in the work the tier above that it will not and has not week.The requirements of 40 U.B.C.3704 are used Federal appropriated fends to pay any applicable to construction work and provide- person or organization for influencing or at- that no laborer or mechanic must be re- tempting to infinenee an officer or employee gnired to work in surroundings or under of any agency,a member of Congress,offioer working oonditione which are unsanitary, or employee of Congress,or an employee of a hazardous or dangerous.These requirements member of Congress in connection with ob- do not apply to the purchases of supplies or taming any Federal contract, grant or any 196 Pt.200,App.tit 2 CFR Ch.II(1-1-14 Edition) other award covered by 31 U.S.C.1362.Each (1) Sponsored research means all research tier must also disclose any lobbying with and development activities that are (von- non-Federal funds that takes place in con- sored by Federal and non-Federal agencies nation with obtaining any Federal award_ and organizations.This term includes acttvi- Such disclosures are forwarded from tier to ties involving the training of individuals in tier up to the non-Federal award. research techniques (commonly called re- Of)See g200.322 Procurement of recovered search training)where snob activities utilise materials, the same facilities as other research and de- velopment activities and where such activi- Ai'PaNDIX III TO PART 20 —INDD3.EOT ties are not included in the instruction limo- (F&A) COSTS IDENTIFICATION AND Lion. AsaTns MENT,AND RATE D>inni/4A- (2) University research means all research TION FOB INSTITuT1oNs OF HIGBEE and development activities that are aepa- EDUCATION(IHES) rately budgeted and accounted for by the in- stitution ender an internal application of in- A.DiolfgaM, atitutional funds. University research; for This appendix provides criteria for'dent- of this document, must be com- i5ting and computing indirect (or indirect bined with sponsored research under the (F&A))rates at Ma(institutions).Indirect function of organised_resaaroh. (F&A) costs are those that are incurred for c.Ogler spmuoredacttsddtes means programa common or joint objectives and therefore and ejects financed by Federal and non- cannot be identified readily and specifically Federal agencies and organisations which in- with a particular sponsored project, an in- volve theperformanoe Of work other than in- structional activity, or any other institn- struction and organized research. Examplee Dew_activity. See subsection Ri, D - of such programa and projects are health tion of Facilities and Administration, for a service projects end.00mmwiity service pro. discussion of the components of indirect grams.However,when any of these activities (F&A)costs. are undertaken by the institution without I.Major Functions of an Institution other support, they may be classified ea other institutional activities, Refers to instruction, organised research, d.Other freadthctdoucl activities means all an- Refers sponsored activities and other instftu- tivltlea of as institution exaeyt for instruct tonal activities as defined in this section: lion, delata! research organised re- a. Instruction means the teaching and search,and other sponsored aotivities,as de- training activities of an institution.Except fined in this section;indirect(F&A)cost ac- for reeearob training as provided in sub- tivities identified In this Appendix para- section b,this term includes all teaching and graph B,Identification and assignment of in- training activities,whether they-are offered direct(P' )coats; and specialized services for credits toward a degree or certificate or facilities described in 1 .468 Specialized on a non-oredit basis,and whether they are service facilities of this Part. offered through regular academic depart- Examples of other institutional activities manta or separate divisions,such as a sum- include operation of residence balls, dining mer wheal division or an extension division. balls,hospitals and clinics,student unions, Also considered_part of this major function intercollegiate athletics,bookstores,faculty are departmental research, and, where housing, student apartments, guest hones, agreed to.university research. chapels,theaters,public museums,and other (1)sponsored instruction and framing moans similar auxiliary enterprises.This definition speolfio instructional or training activity es- also includes any other categories of activi- tablshed by grant,contract, or cooperative ties, costs of which are "unallowable" to agreement. For purposes of the cost pain- Federal awards, unless otherwise indicated ciples, this activity may he considered a in an award. major function even though an institution's 2.Criteria for Distribution accounting treatment may include it in the instruction function, a. Base period. A base period for distribu- (2) Departmental research means research, tion of indirect (F&A) costs is the period development and scholarly activities that during which the costa are incurred. The are not organised research and, con- base period normally should coincide with eequently, are not Separately budgeted and the fiscal year established by the Institution, accounted for. Departmental research, for but in any event the base period should be so purposes of this document,is not considered selected es to avoid inequities in the dig- as a major function,but as a part of the in- tribntion of costs. etruction function of the institution, b. Need for cost groupings.The overall ob- b. Organized research means all research jeotive of the indirect(p'&A)cost allocation and development activities of an institution process is to distribute the indirect (F&A) that are separately budgeted and accounted coats'described in Section B, Identification for.It includes: and assignment of indirect(F&A) costs, to 196 OMB Guidance Pt.200,App.ill the major functions of the institution in pro- expenses, or operation and maintenance ex- portions reasonably consistent with the na- purses to such activities should be accom- ture and extent of their use of the lnstitu- piisbed through cost groupings which include tion'e resources.In order to achieve this ob- only that portion of central indirect(F&A) jective. it may be necessary to provide for costa (such as for overall management) selective distribution by establishing sepa- which are properly allocable to such activi- rate groupings of cost within one or more of idea, the indirect (F&A) cost categories referred (6)If the institution elects to treat fringe to in subsection B.1,Definition of Facilities benefits as indirect (F&A) charges, such and Administration. In general, the cost costs should be set aside as a separate cost groupings established within a category grouping for selective distribution to related should constitute, in each oase, a pool of post objectives. those items of expense that are considered to (6)The number of separate cost groupings be of like nature in terms of their relative within a category should be held within contribution to (or degree of remoteness float)the particular cost objectives to which practical limits, after taking into consider- distribution is appropriate. Cost groupings atlon the materiality of the amounts in- shoald be established considering the general valved and the degree of precision attainable guides provided in subsection a of tale sec. through Lies selective methods of distribu- tion.ltlsoh such pool or cost grouping should tinn, d.Selection of distribution method then be distributed individually to the re- lated cost objectives,using the distribution CO Actual conditions must be taken into base or method most appropriate in light of account in selecting the method or base to the guidelines set forth in subsection d of be used in distributing individual coat this section. groupings.The essential consideration in se- a. General considerations on cost gran/dues. letting a base is that it be the one beat snit- The extent to which separate oast groupings ed for assigning the pool of costa to cost ob- and selective distribution would be appro- jectivee in accordance with benefits derived; priate at an institution is a matter of Jude.- with a traceable cause-and-effect relation- meat to be determined on a case-by-case ship;or with logic and reason,where neither basis.Typical situations which may warrant benefit nor a cause-and-effect relationship is the establishment of two or more separate determinable, cost groupings(based on a000u.ut classifies- (2)If a cost grouping can be Identified di- don or mallets) within an indirect (F&A) reotly with the oast objective benefitted,it coat category include but are not limited to should be assigned to that cost objective. (1)If certain items or categories of expense (3) If the expenses in a cost grau ag are relate solely to one of the major functions of hem be general is nature,the distribution which may the institution or to leas than all iinotlons, be based on a cost analysis distribution re- such expenses should be set aside as a separ suits in an'equitable.distribution of the rate cost grouping for direct assignment or oasts. Stroh ratcoai analysis studies may take selective allocation in accordance with the Into consideration weighting factors, papa- guide'provided in subsections b and d. lotion,or space occupied if appropriate.Cost (2)If any types of expense ordinarily treat- analyB1s studies,however,must(a)be appro- ed as general administration or depart- PristelY documented in sufficient detail for mental administration are charged to Fed- subsequent review by the cognizant agency eral awards as direct costs,expenses applies- for indirect costa.(b)distribute the costs to ble to other activities of the institution the related cost objectives in accordance when incurred for the same purposes in like with the relative benefits derived,(o)be eta- circamstances must, through separate coat tistically sound,(d)be performed specifically groupings, be excluded from the indirect at the institution at which the results are to (F&A) costs allocable to those Federal be used,and(a)be reviewed periodically,but awards and included in the direct cost of not leas frequently than rate negotiations, other activities for cost purposes. updated if necessary, and used consistently. (6)If it Is determined that certain expenses Any assumptions made in the study must be are for the support of a service unit or facil- stated and explained. The use of cost anal- ity whose output is susceptible of measure- ysts studies and periodic changes in the went on a workload or other quantitative method of cost distribution must be fully basis,each expenses should be set aside as a justified. separate cost grouping for distribution an (4) If a coat analysis study Is not per- such basis to organised research, ineirac- formed,or if the study does not result in an tional,and other activities at the institution equitable distribution of the costs, the die- or within the department. tribution must be made in accordance with (4) If activities provide their own per- the appropriate base cited in Section B,(den- chasing, personnel administration, building tittoation and assignment of indirect(F&A) maintenance or similar service,the diatribe.- costs,unless one of the following conditions tion of general administration and general is met: Pt.200,App.III 2 CFR Ch.11(1-1-14 Edition) (a)It can be demonstrated that the use of (1) Depreciation on buildings used exolu- a different base would result In a more Bpi- sively in the conduct of a single function, table allocation of the costa,or that a more and on capital improvements and equipment costsreacharged ily available base would not increase the used in such buildings,must be assigned to to Federal awards,or that remotion. (b)The institution qualifies for,and elects (2)Depreciation on buildings used for more to use,the simplified method for computing than one function,and on capital improve- indirect(F&A) cost rates described in See- manta and equipment used iu such buildings, lion D, Simplified Method for small inetite- must be allocated to the individual fanotione Lions. performed in each building on the basis of (5) Notwithstanding subsection (3), effec- usable square feet of space, excluding com- tive July 1.1998,a cast analysis or base other man areas snob as hallways, stairwells,and than that in Section B must not be used to rest rooms. distribute utility or student services costs. (3)Depreciation on buildings, capital im Instead, subsections B.4.o Operation and provsmente and equipment related to space maintenance expenses, may be used in the (e.g., individual rooms, laboratories) used recovery of utility costs. Jointly by more than one Emotion(as deter- e.Order of distribution. mined by the users of the space) must be (1)Indirect(F&A)costs are the broad cat- treated as follows.The cost of each jointly egonee of casts discussed in section B.f, used unit of space must be allocated to bane- Definitions of Facilities and Administration fitting&actions on the basis of (2) Depreciation, Interest expenses, over- (a) The employee full-time equivalents ation and maintenance expenses,end general (FMB)or salaries and wages of thole indi- administrative and general expenses should victual Emotions benetltttag from the use of be allocated in that order to the remaining that space;or indirect(F&A)cost categories as well as to (b)Institution-wide employee FTBs or sal- the major functions and specialised service axles end wages applicable to the benefitting facilities of the institution. Other cost oat- major'emotions (see Section A.1) of the in- egories may be allocated in the order deter- stitation. mined to be most appropriate by the lnatitu- (4) Depreciation on certain capital im- lions.When cross allocation of costs Is made provements to land, such as paved parking as provided in subsection(3),this order of al- areas,fences,sidewalks,and the like,not in- location does not apply. eluded in the cost of buildings,must be allo- (3)Normally an indirect (F&A) cost oat- sated to user categories of students and sm- egory will be considered closed once it has ployees on a full-time equivalent baste.The been allocated to other cost objectives,and amount allocated to the student category costs may not be subsequently allocated to must be assigned to the instruction function it. However, a cross allocation of costs be- of the institution.The amount allocated to twiner two or more indirect(F&A)cost oat- the employee category must be further silo- agories may be used if such allocation will cated to the major fractions of the institu- result in a more equitable allocation of don in proportion to the salaries and wages costs.If a cross allocation is used,an appro. of all employees applicable to those fina- priate modification to the composition of tions.' the indirect(F&A)cost categories described in Section B is required. 3.Interest B.IDENTIFICATION AND ASSIGNMENT OF' Interest on debt associated with certain InnOk OT(F&A)581GsCOST buildings, equipment and capital imprrove- ments, as defined in§200.449 Interest, must 1.Definition.of Facilities and Administration be classified as an expenditure under the cat- See §200.414 Indirect (F&A) costs which car tamed in the same mpn,wr as is meet ep ella- provides the basis for this indirect cost re- lion on the buildings, the decacapital quirements. b the intetrest and t . improvements to which the relates. 2.Depreciation 4.Operation and Maintenance Expenses a.The expenses under this heading are the a. The expenses under this heading are portion of the costs of the institution's those that have been incurred for the admin- buildings,capital improvements to land and intuition, supervision, operation, manta- buildings, and equipment which are corn- nance,preservation,and protection of the in puted in accordance with§200.436 Depreoia- stitution's physical plant. They include ela- tion, lenses normally incurred for such items as b. In the absence of the alternatives pro- Janitorial and utility services; repairs and vided for in Section A.2.d, Selection of dia- ordinary or normal alterations of buildings, tribution method, the expenses Included in furniture and equipment; care of grounds: this category must be allocated in the fol- maintenance and operation of buildings and lowing manner: other plant facilities; security; earthquake 198 OMB Guidance Pt.200,APP.III and disaster preparedness; environmental 5.General Administration and General Expenses safety; basardoua waste disposal; proPerty, a. The expenses under this heading are liability and all.other Insurance relating to those that have been inoarred for the general prop y;space and capital leasing;facility executive and administrative offines of edu- planning and management; and central re" °ationsl institutions and other expenses of a calving.The operation and maintenance ex- general character which do not relate solely penes category should also include its elle- to any major function of the institution;i.e., cable share of fringe benefit costs,defends- solely to (1) instraotion. (2) organised re_ don,and interest coats. searob, (8)other sponsored activities,or(4) b.In the absence of the alternatives pro- other institutional activities. The general vided for in Section A.2.d, the expenses in- administration and general expense category eluded in this category must be allocated in should also include its allocable share of the name manner as described in subsection fringe benefit costs, operation and mainte- lb for depreciation. nanoe expense, depreciation. and interest o.A.utility cost adjustment of up to 1.8 costs. Examples of general administtration percentage points may be included in the ne- and general expenses include:those expenses gotiated indirect cost rate of the IRE for or- incurred by administrative offices that serve ganized research,per the computation alter- the entire university system of which the in- natives in paragraphs (c)(1) and(2) of this stitation is a pert;central offices of the in- seotlon: etituticn such as the President's or (1)Where space is devoted to a single funs Chancellor's office, the offices for institu- tion and metering allows unambiguous mess- Lion-wide 'financial management, business urement of Image related to that space,costs services, budget and planning, personnel must be assigned to the function located in management, and safety and risk manage- that space. ment;the office of the General Counsel;and (2) Where apace is allocated to different the operations of the central administrative hinatioae and metering does not allow imam- management information items' General litmus measurement of usage by function, administration And general expenses must must be allocated as.follows. not include expenses incurred within non- costs(1)Utilities costs should be apportioned to par�vm Its, a deeds'researchoe units,or academic de- fhnotiona in the same manner as depreoia- ay °mall organized ts. (gee ctIon 6. Lion, based on the calculated difference be- Departmental anibs. (See acbee 8; tween the site or building actual square foot- tau on ironies.) age for monitored research laboratory space vieledb'in the Sectionabsence of the alternativesexpe pro- (site, building, floor, or room), and a sepa- elude for in category mustA.2.d the grouped In- (site, rats calculation prepared by the IfD,using accoralluded in this n functions croon o first the "effective square footage" described in institution to common themajor dertsery ofe or � to which they-render services or subsection(c)(2)(11)of this section. provide benefits. The aggregate expenses of (fi)"Effeotive square footage"allocated to each group must then be allocated to sera- research laboratory apace must be ca1,e 1 ted iced or benefltted-fiaotions on the modified as the actual square footage times the rdl- total coat basis.Modified total coats consist ative energy utilisation Index(REUI)posted of the cams elements as those in Section C.2, on the Ohm Web site at the time of a rate -when an activity included in this indirect determination. craw oast category provides a service or A.This index 1a the ratio of a laboratory product to another institution or organize, energy use index (lab EUI) to the nor- tion, as appropriate adjustment must be responding index for overall average college made to either the expenses or the basis of or university space(college BUD. allocation or both,to assure a proper allooa- B.In July 2012,values for these two indices Lion of coats. (taken respectively"Labe the Lawrence B.Departmental Administration Expanses Berkeley Laboratory'Labe for the 21st Cea tiny" benohmarking tool Jittp:// a. The expeneea under this heading are iabsllbenchmarkcinglbl.gov/CompareData.Ptp those that have been incurred for adminis- and the US Department of Energy trative and supporting services that benefit ings Energy Databook" and help:// common or joint departmental activities or buildingsdatabook.eren.doe.got CBECS.aspx) objectives in academic deans' offices, aca- were 310 kBtulsq ft-yr.and 155 kltu/sq ft-yr., demio departments and divisions,and orga- so that the adjustment ratio le 2.0 by this nized research units. Organized research methodology,To retain currency, OMB will units fnolude snob units as Institutes,study adjust the EUI numbers from time to time centers,and research centers.Departmental (no more often than annually nor less often administration expenses are subject to the than every 5 years),using reliable and pub- following limitations- Holy disclosed data. Current values of both (1) Academie deans' offices. Salaries and the Mils and the REUI will be posted on the operating expenses are limited to those at- OMB Web site. tributable to administrative functions. Pt.200'App'(4 2 CFR Ch.11(1-1-14 C (on) (2)Academic departments: c. In the absence of the alternatives pro- (a) Salaries and fringe benefits attrib- aided for in.Section A.2.d,the expenses l atable to the adannietrative work(including eluded In this category must be allocaated as bid and proposal preparation)of faculty(in- follows: eluding department heads)and other profes- (1) The administrative expenses of the atonal personnel conducting research and/or dean's dace of each college and school must instruction,must be allowed at a rate of 3.6 be allocated to the academic departments percent of modified total direct oasts.This within that college or school on the modified category does not include professional bust- total cost basis. ness or professional administrative officers. (2) The administrative expenses of each This allowance must be added to the cam- academic department,and the department's ,putatdon of the indirect(F&A)cost rate for share of the expenses allocated in subsection major fnnotions in Election C,Determination (1)must be allocated to the appropriate fano- and application of indirect(F&A)most rate tions of the department on the modified or rates;the expenses covered by the allow- total cost basis.. same must be exduded from the depart. mental administration cost pool. No docu- 7.SPonsored Projects Administration mentation is required to support this allow- a.The expenses under this her lint- Mar admtnietratise and lied to those Incurred by a separate organi- ez(b) Othere i admired withintri academic as tsation(s)established primarily to administer meats are allowable depart- sponsored,projects,including such functions provided they are treat- as grant and contract administration consistently (Fed- in like circumstances. This oral and non-Federal),special security,par- wield inal -: _ s as the salaries abasing,pereoamel,administration,and edit- cieeorIee lsmi cieriedi ,the salaries ing and publishing of research and other re- of of s Est ce ve aftiaare and assistants, ports.They include the salaries and expenses supplies, stockrooms, and the of the head of such organisation,assistants, like. and immediate staff, the th the gala- Other fringe benefit costs applicable to riee,and expenses of togetheroengaged In wages included in sub- personnel sections(1)and(2)are allowable,as well as Elea such asstock maintained d rint by the or- sections an appropriate share of general adminiatra- and the like.This category also.includes an tion and general expenses, operation and allocable share of fringe benefit omits.gen- ma�Federal nance expenses,and depreciation. oral administration and general expenses, agencies may authorize refm- operation and maintenance expenses,and de- bursement of additional costs for department predation.Appropriate adjustments will be heads and faculty only in exceptional oases made for.servioesprovided to other functions where an Institution can demonstrate undue or organfsatdons. hardship or detriment to project perform- b. In the absence of the alternatives pro- Mee- vided for in Section A.2:d, the wing guidelines expenses In-b.The folio apply to the de- eluded In this category must be allocated to termination of departmental administrative the major functions of the institution under costs as direct or indirect(F&A)•costa. which the sponsored projects are conducted (1)In developing the departmental admire- on the basis of the modified total cost of titration cost pool,special care should be ex- sponsored projects, ercieed to ensure that costs incurred for the e. An appropriate adjustment must be same purpose in like circumstances are made to eliminate any duplicate charges to treated consistently as either direct or indf- Federal awards when this category Includes root (F&A) costs. For example, salaries of similar or identical activities as those in.- technical staff, laboratory supplies (e.g., eluded in the general administration and (- ten icals), telephone toll charges,animals, general expense category or other indirect animal oars Goats, oomputer costs, travel (F&A)cost items,such as accounting, pro- costs, and specialized shop costs must be cerement,or personnel administration, treated as direct costs wherever identifiable to a particular cost objective.Direot°berg- 8.Library Expenses lug of these mists may be accomplished a. The expenses under this heading are through specific identification of Individual those that have been incurred for the oper- oaste to benefitting cost objectives, or ation of the library, Including the cost of through recharge centers or specialized sera-. books and library materials purchased for ice fnnilitdes,as appropriate under the cir- the library,less any items of library income oumstances. See§§200.413 Direct costa,para- that qualify as applicable credits under ggraph (a)and 200.468 Specialized service fa- §200,406 Applicable credits. The library ex- (2) Items such as office supplies, postage, benefits applicablepease category should to also salariesa andhe wfrings local telephone posts,and memberships must included therein, in, to thep appropriate share of normally be treated as Indirect(F&A)costa. Est an appdo of general administration and general expense, 200 Ole Guidance Pt.200,App.III operation and maintenance expense,and da- struotioa auction,and subsequently to Fed- preciation. Costs incurred.in the purchases eral awards in that function. of rare books(museum-type books)with no value to Federal awards should not be allo- cated 10. Offset for Indirect (MA) Eames Other- wise Provided for by the Federal Govern- b.In the absence of the alternatives pro- meant Tided:for in Section Aid, the expenses in- a.The items to be accumulated under this eluded In this category must be allocated heading are the reimbursements and other first on the basis Of primary categories of payments from the Federal government users, inoluding students, professional ern. which are made to the institution to support ployeee,and other users. solely,specifically,and directly,in whole or (1)The student category must consist of in part,any of the administrative or service fall-time equivalent students enrolled at the activities described in subsections 2 through • institution,regardless of whether they earn 9. credits-toward a degree or certificate. b.The items in this group,must be treated (2) The profeestbaal employee category as a credit to the affected individual indirect must consist of all faculty members and wow cost category before that category is other professional employees of the instate allocated to benetitting functions. tion, on a Hill-time equivalent basis. This category may also include poet-doctorate C.D AT1ON AND APPLICATION OP fellows and graduate students. Itinnesa i'(F9r.A)00er RATE OR RATES (3)The other users category'must consist 1.Indirect(FAA)Cost Pools of a reasonable factor as determined by insti- tutional records to account for all other a.(1)Subject to subsection b,the separate users of library facilities. categories of indirect(F&A)costs allocated c.Amount allocated in paragraph b of this to each major function of the institution as section,must be assigned farther ae follows: prescribed in paragraph B of this paragraph (1) The amount in the student category 01 Identification and aeeignment of indirect mast be assigned to the instruction function (F&A)coats,must be aggregated and treated of the institution. as a common pool for that function. The (2) The amount in the professional em- amount In each pool must be divided by the ployes category must be assigned to the distribution base described in subsection 2 to major functions of the institution in propor- arrive at a single indirect(F&A)cost rate for Lion to the salaries and wages of ell faculty each-function. members and other professional employees (2) The rate for each funotion Is need to applicable to those functions. distribute indirect(F&A)costs to individual (3)The amount in the other users category Federal awards of that function Since.a must be assigned to the other institutional common paol.is established for each major activities function of the institution. inaction of the institution, a separate indi- rect(FAA)cost rate would be established for 9.Student.Administration and Services each of the major functions described in Sec- tion a. The expenses under this heading A.l under which Federal awards are car- are tied out, those that have been incurred for the adman- (3) Each institution's indirect(F&A) cost istration of student affairs and for services rate process must be appropriately designed to students, including expenses of such no- to ensure that Federal sponsors do not in Mvities as deans of students,admissions,rag- any way subsidise the indirect(F&A)costa of istrar, counseling and placement services, oilier sponsors, specifically activities aeon- student advisers, student health and infir- cored by industry and foreign governments. mare services, catalogs. and commence- Accordingly,each allocation method used to mantic and convocations. The salaries of identify and allocate the indirect(FAA)cost members of the academic staff whose reason- pools, as described ia.-Sections A2,Criteria sibilitiea to the institution require adminie- for distribution,and B.2 through B.9, must trative work that benefits sponsored projects contain the fon amount of the-institution's may also be included to the extent that the modified total costs or other appropriate portion charged to student administration Is units of measurement need to make the corn- determined in accordance with Subpart E,— potations. In addition, the final rate die- Coat Principles of this Part. This expense bributton lase(as defined in subsection 2)for category also includes the fringe benefit each major function(organized research,in- costs applicable to the salaries and wages in- striation, etc., as described in Section Al, eluded therein,an appropriate share of gee Major functions of an institution)must oon- eral administration and general expenses, twin all the programs or activities which att.- operation and maintenance, interest ex- live the indirect (F&A) coats allocated to pantie,and depreciation. that major function.At the time an indirect b.In the absence of the alternatives pro- (FAA) cost proposal is submitted to a cog- aided for in Section A.2.d,.the expenses in nizant agency for indirect posts, each insti- this category must be allocated to the in- tution must describe the process it uses to 201 Pf.200,App.01 2 CFR Ch.11(1-1-14 Edrnon) ensure that Federal funds are not used to 3.Negotiated Lump Sum for Indirect(F&A) subsidise industry and foreign government funded programs. b.In some Instances a single rate basis for A negotiated fixed amount in lien of indi- nee across the board on all work within a mot(F&A)off-campus,a may rpprm primarily for oo - function at an institution contained.iv of the benefits Baboon- major erivd may not be treated activities where benefits derived appropriate. A single rate for research, for from an institution's indirect(P'&A)services example,might not take into account those cannot be readily determined. Such nego- different environments[ factors and other tiated Indirect(F&A)omits will be treated as conditions which may Mitt substantially an abet before allocation to instruction,or- the indirect(F&A)costs applicable to a par- ganized researoh,.other sponsored activities, Wader segment of research at the inetitn and other institutional activities. The base tion.A particular segment of research may on which such remaining expenses are allo- be that performed under a mingle sponsored cated should be appropriately adjusted. agreement or it may consist of reearoh 4'Predetermined Rates for Indirect(F&A)Costa under a group of Federal awards performed in a common environment. The environ- Public Law 37-698(78 Stat.437)as amended mental factors are not limited to the phys- (41 U.S.C. 4/08) authorizes the use of pre- trial location of the work. Other important determined rates In determining the"indi- factors are the level of the administrative rest Duets"(indirect(F&A)coats)applicable support required,the nature of the facilities fie'research agreements with educational or other resources employed, the scientific institutions.The stated objectives of the law disciplines or technical skills involved, the are to simplify the administration of coat- type research and development contracts(in- organizational arrangements used, or any combination thereof.If a particular segment tiediyg grants) with educational if cf their of a sponsored.agreement is.performed with �' to and facilitate permit preparatiox expeditious their in an environment which closeoutbudgets, and such ntac mhee he work is a significantly differenta level of indirect omplet of. contracts th potential the work is (F&A)costs,provisions should be made for a offeredcompleted. Ia view of the poteatl g nation separate indirect(F&A)cost pool applicable of6pr e byed this procedure,rest (F A) to such work. The separate indirect (F&A) of costsp or a period rates for four years should cost pool should be developed d_ forn a period of those situations whereyea reothe ular course of the rate determination Tes' co the norm fin thenart n facts and the separate indirect(F&&A)coat rateat re-s cost e;pe e and other pertinent a the available are deemed sufficient to enable the suiting therefrom should be utilized; pro- parties involved to reach an informed jndg- vided it is determined that(1)such indirect meat as to the probable level of indirect (F&A) cost rate differs significantly from (F&A) costs during the ensuing accounting that which would have been obtained under periods. subsection a,and(2)the volume of work to which such rate would apply is material in 5•Negotiated Fired Rates and Carry-Forward relation to other Federal awards at the insti- Provisions tution. When a fixed rate is negotiated in advance 2.The Distribution Basis for a fiscal year(or other time period), the over-or under-recovery for that year may be Indirect(F&A)costs meet be distributed to included as an adjustment to the indirect applicable Federal awards and other benefit- wet rate negotiated next rate nsthetatiry- ting activities within each major function When d the rate m ntisdetermined,before the carry- (see motion Al,Major functions of an insti- forward adjustment is bappliedthe the t tattoo)on the basis of modified total direct forward amount may be to the next (MTDC). con fisting of all salaries and subsequent rate negotiation.When such ad- cede wages, fringe benefits, materials and sup- satiated c is e d i area too be f made,each fixed rate nee plies,services,travel,and subgrants and sub- compucom•�in bydapply for a e given period will be contracts up to the first $26,(08 of each (F&A) oapplying the expectederalawardsindirect for subaward (regardless of the period covered thyfo costa allocable plust or s for by the aubaward).MTDC is defined in 1200.68 foe and adjustment period e minus ther oaeiy) Modified Total Direct Cost(MTDC).For this forward the r or period,r(over-or theforecastor he- purpose, an indirect(F&A)cost rate should tribfrom base. etor nt d er be determined for each of the separateLump-sun base. m s or co amounts ender rent(F&A)cost pools developed pursuant to lump of prior agreementsyearsm s cot be carrisharinged dfor- subesotion 1.The rate in each case should be alone of consideration n int not be rat edfor- stated as.theward for w vethr new rate nance Percentage which the amount nation.There must,however,be an advance of the Particular indirect(F&4)cost pool is understanding in each case between the In- of the modified total direct costs identified stitution and the cognizant agency for indi- with snob pooL rent coats as to whether these differences 202 OMB Guidance Pt.200,App.III will be considered in the rate negotiation Federal government at the time of an award rather than making the determination after (because the educational institution is a new the differences are known. Further.institu- reoiptent or the parties cannot reach agree- ttone electing to use this.carry-forward pro- meat on a rate),the provisional rate used at vision may not subsequently change without the time of the award most be adjusted once prior approval of the cognizant agency for a rate is negotiated and approved by the cog- indirect costs.In the event that an inetitn- nizant agency for indirect costa. tion returns to a post-determined rate, any over-or under-recovery during the period in 8.Limitation on Reimbursement of which negotiated fixed rates and carry for- Administrative Costs ward provisions were followed will be in- cluded in the subsequent poet-determined a. Notwithstanding the provisions of sub- rates. Where multiple rates are used, the section 01.a, the administrative coats same procedure will be applicable for deter- charged to Federal awards awarded or mining each rate, amended (including continuation and 6.Provtsionmi and Anal Rates for Indirect re- newal awards)with effective dates beginning (F8 ti)Costs en or or after the start of the Instituti first fiscal year which begins on or after October Where the cognizant agency for indirect 1.1991,must be limited to 28% of modified costs determines that cost experience and' total direct coats(as defined in subsection 2) other pertinent facts do not justify the use for the total of General Administration and of predetermined rates,or a fixed rate with General Expenses, Departmental Adminis- a carry-forward, or if the parties cannot tration,Sponsored Projects Administration, agree on an equitable rate,a;provisional rate and Student Administration and Services • must be established.To prevent substantial (including their allocable share of depreela- overpayment or underpayment, the provi- tion, interest casts, operation and mainte- atonal rate may be adjusted by the cognizant nano,expense,.and fringe benefits coats,as agency for indirect costs during the institu provided by Section B.Identification and as- tion's fiscal year. Predetermined or fixed slgament of indirect (F&A) costs, and ell rates may replace provisional rates at any other types of expenditures not listed ape- time prior to the close of the institution's re- ducally anderone of the subcategories of far fiscal year. If a provisional rate is not re- placed by a predetermined or fixed rate prior cilfties in 9eotion B. to the end of the institution's fiscal year, a b.Institutions should not change their so- final rate will be established and upward or counting or cost allocation methods if the ef- downward adjustments will be made based on feet is to change the charging of a particular the actual allowable costs incurred for the type of cost from F&A to direct,or to reoles- periodinvolved. eify costa, or increase allocations from the 7.Fired linter for the Life of the Sponsored administrative pools identified in paragraph Agreement B.1 of this Appendix to the other F&A cost pools or fringe benefits. Cognizant agencies Federal agencies mast use the negotiated for indirect cost are authorized to allow rates except as provided in paragraph(e)of changes where an institution's charging i200,414 redirect (F&A) costs, must para- practices are at variance with acceptable graph(b)(1)for indirect(F&A)costs in effect practices followed by a substantial majority at the time of the initial award throughout of other institution. the life of the Federal award. Award levels for Federal awards may not be adjusted in 9.Alternative Method for Administrative Costs inture years as a result of changes in sego- a.Notwithstanding the provisions of sub- tinted rates."Negotiated rates"per the rats agreement include final,fixed,and preedeter- section i a,an institution may elect to claim mined rates and exclude provisional rates. a fixed allowance for the 'Admialstratioa" "Life" for the purpose of this subsection portion of indirect mite) mesa.The allow- means each competitive segment of a awe could be either 24%of modified total di- project.A oompetttive segment is a period of rect costs or a percentage equal to 95%of the years approved by the Federal awarding most recently negotiated fixed or predator- mined at the time of the Federal award.If mined rate for the cost pools included under negotiated rate agreements do not extend "Administration"as defined in Section B1, through the life of the Federal award at the whichever is less.Under this alternative,no time of the initial award, then the nego- oast proposal need be prepared for the"Ad tinted rate for the last year of the Federal. ministration"portion of the indirect(F&A) award must be extended through the end of cost rate nor is further identification or doo- the life of the Federal award. umentation of these coats required(see sub- b. Except as provided in t289.4i4 Indirect section c). Where a negotiated indirect (F&A)costs,when an educational institution (F&A) cost agreement includes this alter- does not have a negotiated rate with the native,an institution must make no further Pt.200,App.III 2 CFR Ch.II 0-1-14 Edl ion) oharges for the expenditure categories de- tided based on mutual agreement between scribed in Seotion B.fi, General administra- HEM and DOD. tlum and general eidasaass.Sadism RB, Ds Afier cggnt:aims is established,it neat pertseatgl adoiligharation eraeieees,5eolds cent agto for islive-Yeur Pima, B.T.Sponsored proj and b, asegbuis,of rates.See 1201.414 Sad;- Se ddon SA Stunt administration and root(MO ooeia, servirist o. deflotecolea The cognisat b.In negattstions of amiss tsar subsequent wager for indirect coots must aegdtiate periods, an Weatents that has:slanted the . obmn i swam to anneot systemsclef. option.of sub a leay_aeotdnpe to*sr- ciemtao talattaIff ticanurnspleigillil for Fiala one it at themes rate without further SS- ang„,iwiritoi tl>�catton or.dodo cf costs t' amo ' r94t C. if"an li ablution eleota to belted te-Eye address the eirmgems of orb*: .- tt�vrept .a footed a�CEee,68 e�e'ogidi�ita,bmdmtnst se- lists a on.11 e: r ago ni fn sub iectioa a of gidild epaafal t+4teg fag Federal *Setae tegnkatt t4k* in a that netitiikat t4 lid recovery of IadF deleulett analysis of Int atininiontwaiwi ilia, rent carte by st lute... Rewever,in order to ewe bin facilities it._agog lab.9.eteetllised coats. The cog-compaaaemiie er ft I tireeat(P&A)coat rate, meant ageneyr for-indl act costa t.00e- � won meet rule in Indirect m0 aticadedrlEh on-mkt_ (veto don apace to ftd ihnaii. etata- catsonallaehltat a.regodiaq ameunte geee-. wows" . bone terandittialitiare dhotis Federal Bev= sad eolese llaati to idsetlfy the coede.oferonielitrigateil to costs covered by-a aage- each Inger!wastage ae deffined in Seat1ga tiated:agsn A.I.an Welt an to ldastbry asdatlotaate the fa. e.nOtoboriasso.Aegmbinesama.to cog- idea -44(0449nalita Adlablildlatin crams nitsat agencies f_Yaa'-fn iiont,costs Dar work that are net-identified Cue`scab by f - perfeedied made-mew Part may be-made by tuba %eoraanting system.(sash eye eborolarombiusiariak.bin*under,idle flconotny casered fa academic del OM be Act mg&le classified as -teats for paaposes i pi:144101-fec astmeding feeniided and m'reaamciling C all CL at- asla adeshilsizattesstem aanatbe established bry WI financial statute and _ um eta* - areaff fiotlmrtroma ugnisthcd ie *Aim cognizialt to.Individual Rate Components agency for indirect coats is responsible for In order to provide mutually agreed-neon negotiating and approving rates for an ado- information for cations]institution on behalf of all Federal management purposes.each agencies,Non-cognisant Federal agencies for indirect(F&A) coat rate negotiation or de- indirect costa,which maks Federal awards termination shall include development of a to an ednoationai institution, must notify rate for each indirect(F&A)cost pool as well the cognisant agency for Indirect costs of as the overall indirect(F&A)cost rate. epecian concerns (Le., a need to establish II.Negotiation and Approval of Indirect(F&A) special cost rates)which could affect the ne- gotiationagency for �� indirect costs mus Theddr cognizant concerns of a. Cognizant agency for indirect coats is all interested agencies, as appropriate. A defined in Subpart A—Acronyms and Defini- Pre-negotiation conference may be scheduled tons. among all interested agencies; if necessary. (1)Cost negotiation cognisance is assigned The cognizant agency for indirect costs most to the Department of Health and Human then arrange a negotiation conference with Services (HHB) or the Department of De- the educational institution. fense's Office of Naval Research(DOD),nor- (2)Other than formal negotiation.The cog- really depending on which of the two egen- absent agency for indirect costs and edn- des (Fl S or DOD)provides more funds to rational institution may reaoh an agreement the educational institution for the most re- on rates without a formal negotiation con- cent three years. Information on funding ferenee; for example, through correspond- must be derived from relevant data gathered enoe or use of the simplified method de- by the National Science Foundation.In cases scribed in this seotionD of this Appendix. where neither HES nor DOD.provides Fed- g. Formalising determinations and agree- eral funding to an educational institution. meats. The cognizant agency for indirect the cognizant agency for indirect oasts as- costs must formalize all determinations or signment must default to HRS. Notwith- agreements reached with an educational in- standing the method for cognizance deter- stitation and provide copies to other ages- mination described in this section,other ar- Dies having an interest. Determinations rangemente for cognizance of a particular should include a description of any adjust- educational institution may also be based in meats, the actual amount, both dollar and part on the types of research performed at percentage adjusted,and the reason for mak- the educational institution and must be de- lug adjustments. OMB Guidance Pt.200,APP.III h.Disputes and.disagreements. Where the are classified under the following titles or cognisant agency for Indirect coats is unable their equivalents: to reach agreement with an educational in- (1)General administration and general ea- stttotlon with regard to rates or audit rear- pauses(exclusive of costs of student admfnls- lution, the appeal system of the cognisant tration and services,student activities,star- agenov for indirect costa must be followed dent aid,and scholarships). for resolution of the disagreement. (2)Operation and maintenance of physical plant and depreciation(alter appropriate ad- 12.Standard Format for Submission Justment for costa applicable to other insti- For facilities and administrative(indirect tntionaiaotivltiee). (F&A)) rate proposals, educational instita- (�Lamy. hone must use the standard format, shown (i Departmentecomputedadmi es pern ntexpanses,t in section E of this appendix,to submit their which s endll e o as deans eat of the indirect (F&A) rate proposal to the cog- edeela�rlee expenses of deans and heads of niaant agency for indirect costs. The cog- Yn those cases where expenditures alassi- Went agency for indirect costa may.on an fled under subsection (1) have previously institution-by-institution basis,grant exoep- been allocated to other institutional aotdvi- tiona-from all or portions of Part II of the ties. they may be included in the indirect standard format requirement. This require- (F&A)cost pool.The total amount of aala- meat does not apply to educational install- rise and wages included in the Indirect(F&ii) Ilona that use the simplified method for cal- poet pool must be separately identified, cunning indirect(F&A)rates,as described in c.Establish a salary and wage distribution Election-D of this Appendix. base,determined by deducting Boom the total In order to provide mutually agreed upon of ealaries and wages as established in sub- information for management purposes,each section a from the amount of salaries and F&A cost rate negotiation or determination wages included under subsection b. mast include developmeat of a rate for each d. Establish the indirect(F&A)cost rate, F&A cost pool as well as the overall F&& determined by dividing the amount in the in- rate, direct(F&A,)cost pool,subsection b,by the amount of the distribution base, subsection D.SIMPLIFIED MEMO FOR$Mars, INSTIITUTIONa e.Apply the indirect(F&A)cost rate to 1.General di- rect salaries and wages for individual agree- meats to determine the amount of indirect a.Where the total direct cost of work cow- OVA)costs allocable to such agreements. ered by this Part at an institution does not 3.Simplified Procedure—Modified Total Direct exceed$10 million in a fiscal year,the aim- - Cast Base puffed procedure described.in subsections 2 or 9 may be used in determining allowable a.Establish the total costs incurred by the indirect (F&A) costa. Under this simplified institution for the base period. procedure,the institution's most recent an- b. Establish an indirect (FM.) oast pool anal financial report and immediately avail- consisting of the expenditures(exclusive of able supporting information most be utilited capital items and other costs specifically as a basis for determining the Indirect(F&A) sure tiflad elami ash alloy ble)whicustomarilyt coat rate applicable to all Federal awards following ti The institution may use either the salaries their equivalents: and wages (see subsection 2) or modified (1)General administration and general ea- total direct costs(see subsection 3) as the panes(exclusive of costs of student adminis- distribution basis. tration and services,strident activities,stu- b.The simplified procedure should not be dent aid,and scholarships). used where it produces remits which appear (2)Operation and maintenance of physical inequitable to the Federal government or the plant and depreciation(after appropriate ad- justment institution.In any such case,indirect(FBcA) for costs applicable to other insti- coats should be determined through use of tutional activities)' the regular procedure. (3)LIbr ' (4) Department administration expenses, 2.Simplified Procedure—Salaries and Wages which will be computed as 20 percent of the Base salaries and expenses of deans and heads of departments. In those oases where eapendi- a. Establish the total amount of salaries tures classified under subsection (1) have and wages paid to all employees of the insti- previously been allocated to other inatitu- tution. tional activities,they may be included in the b. Establish an indirect (F&A) coat pool indirect(F&A)coat pool.The modified total consisting of the expenditures (exclusive of direct costs amount included in the indirect capital items and other costs specifically (F&A)coat pool must be separately identi- identified as unallowable)which customarily fled. 2fl5 Pt.200,App.IV 2 CFR Ch.II(I-1-14 EdRIon) o. Establish a modified total direct cost rates in accordance with the requirements of distribution base, as defined in Section 0.2, this section, the Federal government must The distribution basis, that consists of all unilaterally establish such rates.Such rates institution's direct function& may be based upon audited historical data or d. Establish the indirect(F&A)cost rate, snob other data that have been furnished to determined by dividing the amount in the in- the cognisant agency for indirect costs and direct(F&A)poet pool,subsection b,be the for which it can be demonstrated that all un- amount of the distribution base, subsection allowable coats have been excluded.When in- c.e. A direct(F&A)cost rates are unilaterally ee- pply the indirect (F&A) oost rate to tabliehed by the Federal government because the modified total direct costs for individual of failure of the institution to submit a car- agreements to determine the amount of iadi- tidied proposal for establishing such rates in reet (F&A) coats allocable to such agree- accordance with this section, the rates ea- menm' tablisbed will be set at a level low enough to ensure that potential E.Aoom ENTATION REG>nREM5NTs willnot be reimbursed.y unallowable costs The standard format for documentation re- 0. Certificate. The certificate required by quirements for indirect(indirect(F&A))rate this section must be In the following form: proposals for claiming coots under the rag ular method is available on the CBgB Web CEaTlF tCAT1C OF INDIRECT(F&A)COSTS site here: hfiA✓/wwro.whftehouse.gon/omb/ Thie Is to certify that to the best of my grants_forms. knowledge and belief: F.CERTD4CATR)N (1)I have reviewed the indirect(F&A)cost Proposal submitted herewith; 1.Certification of Charges (2 All costs Included in this proposal Eiden- To aquae that expenditures for Federal root tify date]g 'b ile billing or final indi- od awards are proper and in accordance with covered by rate]are allowable is rate for n accorfy dance the agreement documents and approved with the requirements of the Federal agree- project budgets,the annual and/or final fis- ment(s) to which they apply and with the cal reports or vouchers requesting payment oat principles applicable to those agree- under the agreements will include a oertifl- melts. cation, signed by an authorised official of (3)This proposal does not include any costs the university,which reads"By signing this which are unallowable under applicable report,I certify to the beet of my knowledge principles such as(without limtato pub- a nd belief that the report ie true,complete, lie relations costs, contributions and dons,and accurate,and the expenditures,disburse- Lions, entertainment costs, fines and Pen- manta and cash receipts are for the purposes shies. lobbying coats, and defense of fraud and intent set forth in the award documents. proceedings;and I am aware that any false, fictitious, or (4)All coats included In this IrSiosal are fraudulent information, or the omission of properly allocable to.Federal agreements on any material fact,may subject me to orimi- the basis of a beneficial or causal relation- al, ofvil or administrative penalties for ship between the expanses inourred and the fraud.false statements,false claims or oth- agreements to which they axe allocated in erwise.(U.S.Code,Title 18,Section 1001 and accordance with applicable requirements. Title 31,Sections 3728-2733 and 38O]-33I3)". I declare that the foregoing is true and cor- 2.Certification of Indirect(F&A)Costs reef. a.Policy.Cognisant agencies must not so- Institution of Higher Education; cent a proposed indirect coat rate must un- N off Name of e ( OMicia1: less such costa have been 'certified by the Title: educational institution using the Certificate Date of Exeeoutlon: of indirect (F&A) Costs set forth in sub- section F.2.e APPENDIX IV TO P b.The certificate must be signed on behalf ART 200—INDIRECT AND of the institution by the chief financial offl- ASS1G COSTS IDENTIFICATION D TiON AND oar or an individual designated by an indt- AssmN)IaENT,AND RATE DETERAGNA- vfdusl at a level no lower than vice president TION FOR NONPROFIT OROANIZA- or chief financial offioer. TIONS (1) No indirect (F&A) cost rate must be binding upon the Federal government if the A.GENERAL most recent required proposal from the Intl- 1.Indirect costs are those that have been tution has not been certified. Where it is incurred for common or joint objectives and necessary to establish indirect (F&&) cost cannot be readily identified with a par- rates,and the institution has not submitted ocular final cast objective. Direct cost of a certified proposal for establishing such minor amounts may be treated as indirect 21(1€ OMB Guidance Pt.200,App.IV costs under the conditions] described in rating the organisation's total costa for the 1200.413 Direct costs paragraph (d) of this base period as either direct or indirect.and Fart. After direct costs have been deter- (fit dividing the total allowable indirect mined and assigned direotly to awards or costs(net of applicable credits)by an egai- other work as appropriate,indirect oasts are table distribution.base. The result of this those remaining to be allocated to benefit- process is an indirect cost rate which is used ting coin objectives.A coat may not be allo- to distribute indirect costs to individual sated to a Federal award as an indirect cost Federal awards.The rate should be expressed if any other cost incurred for the same pur- es the percentage which the total amount of pose, in like olroumstanoes, hail been as- allowable indirect costa bears to the base.as- signed to a Federall award as a direct cost. tented. This method should also be used "Major nonprofit organizations" are de- where an organization has only one major fined in 1200.414 Indirect(F&A)coats.gee in inflation encompassing a number of indi- direct cost rate reporting requirements in vidoal projects or activities, and may be sections 33.2.e and B.8.g of-this Appendix. , used where the level of Federal awards to an B.ALLOCATION OF I�I$a0T'CO8Te AND organization relatively small. D&TNeNaNATION OF INDI1L1i0'r Coal Urns b. Both the direct costs and the indirect costs must exclude capital expenditures and Z.General unallowable costa. However, unallowable s If a nonprofit organization has only one costs which represent activities must be in • - major function,or where all Its major funs- donsd described the do 1 costa irectunde ost aoadi- tions benefit from its indirect costa to ap- graph bona f in§200.4181)lrect oasts Paco- lions the same degree,the allocation a. (a)of thisb Prot. of indirect oasts and the computation.of an o. The a (excluding basecamay be total es indirect cost rate may be accomplished rest there it c s,suchtal expenditures through simplified allocation procedures,as and°�distortingr5,00 items,more),c directctoeets a- described in section B.2 of this Appendix. rubaand wages,ssrds for i25o h or as]Which as In b. If an organisation has eeveral major anrites and al distribution.other base Theeich distribution results!n functions which benefit from its indirect s] equitable participant di emu costs in varying degrees,allocation of.indi- as lent exclude artic support ooete rent costs may require the accumulation of costa as defined in $200.7b Participant support suit costa into separate cost groupings d. which then are allocated individually to ben- d Hues where a special rate(s) is re efitting inactions by memos of a base which q e�l'In accordance with section B.5 of tide best measures the relative degree of benefit Appendix, the indirect cost rate developed The indirect ante allocated to each functionwider a the above principles is applicable tc are then distributed to individual Federal Federal awards of tie organization.If a • awards and other'activities included in that special rate(s)to required,appropriate modi- function by means of an indirect cost rate(s). noat-lone must be made In order to develop c. The determination of what oa�nstitutee the apecialsate(s); an orgarizalion's major functions will de- a.For an organization that receives more pang on its purpose in being; the types of than$10 million in Federal funding of direct services it renders to the public,its clients. costs in a fiscal year.a breakout of the indi- and its members;and the amount of effort it root oast component into two broad oat devotes to snob activities as fundraising, egoriee Facilities and Administration as de - devotes information and membership aotivi- fined in section A.8 of We Appendix,is re- ties. quired:The rate in each case must be stated d.Specific methods for allocating indirect as the percentage which the amount of the coats and computing indirect cost rates tiesparticular, Indect Administration)s] the(i coat category (i.e., Ftiona along with the conditions under which each method should be used are described in sea bare identified with that category. tion 13.2 through B.5 of this Appendix. e.The base period for the allocation of In. 3.Maniple Allocation Base Method direct coats is the period in which such poste a. General. Where an organisation's indi- are incurred and accumulated for allocation rent costs benefit its major functions in to work performed in that,period.The base varying degrees.indirect costs must be mu- period normally should coincide with the or- mutated into separate cost groupings,as de- ganizetion's fiscal year but, in any event, eoribed in subparagraph b. Plach grouping must be so selected as to avoid inequities in must then be allocated individually to bane- the allocation of the costs. fitting functions by means of a base which 2.Simplified Allocation Method beet measures the relative benefits.The de • - fault allocation bases by cost pool are de- a.Where an organisation's major functions scribed in aeotion)I.3.o of this Appendix. benefit from its indirect coats to approxi- b. Identification of indirect costs. Cost mately the same degree,the allocation of in- groupings most be established so as to per- direat costs may be accomplished by(i)eepa- mit the allocation of each grouping on the 207 Pt.200,App.IV 2 CFR Ch.II(1-1-14 Etiftion) haat.al nentlite previdda be the umlar folic- Bemires rionarnten.he tniatenue-dirett ousts tioem.Eat&treagnif mina entlitlinite i Mull yawner IdeeSithible en a Deraeular pre- of esPetneter that are of like anneetar In gram.Thersalgieles and wages-iliedulintt terms of fanetinal.they Want imil la Uremia ave and mobil oferlogi staff ebnagg•near ef the apeman base WWI beet iftelaialcea nab- ha treated es halm*ads; Direct the relates benefits'provided to each limo, cherging.of the=ecirdeldeir lie nlilirePerate doe.The are aleeediad within the *here a Major project or entbrity eiplicitig tan bread dabegnrink`lentiiii *alit'Ad= requires and.httedetit for edwilandanteen or margistratlini."an denied:het hentotlim Ag of clerical..elevbalis Mid other ludrehlkeds in - Ode Appendix.The indErmat cost•Poole are de- valved can lie ideditled with db3.12allmat or lined utillewal activity. teleis'ma&an Oka applUgg.-pad, (1)Depreciation. The menses under this in,10411 6114020A.,','GO*"prtaitiOati 42fr heading are the portion of the costs of the madated**shawl*normally be teeeted•15 Olgailbatt011% buildings, capital improve, bodireohnient meats to lead and buildings,and equipment c....Allenethia beesm tgliii4 oludittons which are computed in accordance with meat be inketi into Monet fa itilordiftig*a i 200.4/1e Depreciation. been to be ined.in allocating tha ezpe In (3) Interest. Interest on debt associated Aachgrodteingio bmeetttgagalboothnta The with certain buildings, equipment and cap- eglellididetituddaDttioeineetiolditira needled Rai improvements are oeroputed in accord- or a bee,IN that It te gm use lien gaittel for ance with 1200.449 Interest. 831132lettikeleiel of mate.to te*thdenliT'Ain (31 OPorittitra sad mahrtvcanee semeenes. to uoreithineit-Otto h ,.:.-:41erient a irampeL Inin egpetbega tildav tiale heading Mil MOW able cease lua'afbakrabationeld*or logic that bairn-bees inodereat*O.ediusistak- aIjat_ ivitimit.whore neither the:um*"nee the lion. *retina-nnenenelne ek Peierlientindl, 404 eit the fedgeig*IP te ibiderininiebtt., Mid grateartioti at be Endlillitenthartetiaminal When an allimaidon au be tisk hil!--iisidau- plat. may twilit, seepeafeea.imemeetbi'Isi, ilidulli_Of a i:ingifiThiping direottir.4 tfla.Tana- Wittett for gunk lima ma limiter*and cal- Wit eiseeittveliViii ititOraitoit Ow be omits its hertienil-Mart said ofdittiotp-or-Muni Lti,,tkiit roan*.Whenhe Eispennesin:a.met alteratilmnalhedidtanalllifil-dlid MUD- Mr**are-votireiliegitiel it Para*the el- care dr grensdell.ralk*howbance and op- .Lasatkiii must lit ludo.&Nat&kge Use of a oration of-both***and other idasit gibili, defected*With**ptatiteeiTeettitirtbat are tderg eitetattn euettiogdaa and *eater lire. etpatibie to bottli.the Federal:goearnioant. 0104411* *vizokeneSiii beigkg'141140210412 eat the 010401ableib Ta..4110.1bilten•OsIII 1 MO etappeal;JaVtiertir,HOdimikr and attar be Cite In accordance with- the basis de- _ .. ., iniarenee relay Ve lituiStMai Spate anoi spread hereto begets It can lagief*Uato capitol lassutin funk,-misonihr.Atla man- that the use of a alifopedib:beet would Pima ahssannt; and eeellifel inislising-iThe open- In a more egnitabbt*Dectittan-lifthee coats, Wen end-.Innintrelease.erinteitee eddelint* cc-tibbh*Ilene reedit*awailnlite blie,-Would most also laultids ( hlificable chars of not ineietwar Ike mato charged to Federal fringe benefit:coats,deptrectatbin ant Inter- atearda.Wet Tomo*or Nimbi OW e,,'M'M ant mute. (ah4°1'04 en:neanneerlilistilito Study)'nag (1)General admialetratilen and general.iit# not be used to detertnireiendslhanite the Meet The:exproneelinder'tide leading are Omit tandel,e regarat_.aieeida these that bate teen theatereelihi.thseverall (I) Diggeobtidadt 41eleugttea ingingSwe general oinwintive and:adrojaienSeoffiese malt be alleoatidinbliaibIleedegatettgery of the orgitniestioa and otliskeapanitea of a (a Diepinotattest en.:.auDdippa need egoln- Reuend-calms*deb do_not relate-Oily to lavabo,in gut conduct of is gage,ternottoo, emr=lor ilomatian of the mannntlen.:Rhie and cis melted feePrOvansenttglili equipment cat mat Mao *dude its allot wog in suck buildings,Inset ba'aseigned to tiara'of fringe besiege coebi, *oration end tbat-fiknottoii: inateeepanee *lama depreciatinia ea&in- (b)Depreciation on buildings used for more tweet atistm Plemeeplie or this catienny in- than one function,and on capital improve- chair.oentntle Mom such as the dkeatorfs meats and equipment used in snob buildings, eince, the Oboe-of/blamer, bigiftellt may- must be allocated to the individual functions ode.budget end.pbuttArig,perseeneet wrote performed in each building on-the basis of and rich managentesh.general cants ,insa- usable square feet of space, exoluding cam- edetnent incrornintion Minitelle, and library mon areas,Erach as hallwaYs.stairwells.and ocean restrooms. In developing this coat pool, special care (c)Depreciation on buildings, capital Ina- should be exercised to ensure that cents in- provementa and equipment related space curred for the same purpose in like air- (e.g., individual rooms, and laboratories) cametances are treated consistently as at- used jointly by more than one function(as ther direct or indirect costs. For example, determined by the users of the space)moat salaries of technical staff, project supplies, be treated as follows.The cost of each Joint- project publication, telephone toll charm, ly used unit of space must be alleoated to computer costs,travel oasts,and specialised the benetitting function on the basis of: 208 Pt.200,App.IV 2 CPR Ch.II(1-1-14 Edition) may not be appropriate,since it would not f. Indirect cost proposal means the does- take into account those different factors mentatlon prepared•by an organization to which may substantially affect the indirect substantiate its claim for the reimbursement costs applicable to a particular segment of of indirect coat.This proposal provides the work.For this purpose,a particular segment basis for the review and negotiation leading of work may be that performed under a.sin- to the establishment of an organization's In- gle Federal award or it may consist of work direct cost rate. under a group of Federal awards performed g.Coat objective means a ihnotlon,organize, in a common environment. These factors tional anbdivislon, contract,Federal award, may include the physical location of the or other work unit for which oast data are work,the level of administrative support re- desired and for which provision is made to gaffed, the nature of the facilities or other accumulate end measure the cost of proo- resources employed,the scientific disciplines asses,projects,jobs and capitalized projects. or technical skills involved, the organiser tionel arrangements used, or any combine- 2.Negotiation and Approval of Rates Lion thereof: When a particular segment of a. unless different arrangements are work is performed in an environment which agreed to by the Federal agencies concerned, appears to generate a significantly different the Federal agency with the largest dollar level of indirect costs,provisions should be value of Federal awards with an organization made for a separate indirect cost pool apply- will be designated as the cognizant agency cable to such work. The separate Indirect for indirect coats for the negotiation and ap- cost pool should be developed during the proval of the indirect cost rates and,where oowee of the regular allocation process,and necessary,other rates such an fringe benefit the separate indirect cost rate resulting and computer charge-out rates. Once an therefrom should be used,provided it is de- mom Is assigned cognizance for a par termined that (i) the rate differs signii- ticular nonprofit organization, the assign- oantly from that which would have been ob- meat will not be changed unless there is a tamed under sections B.2,B.S,and B.4 of this &at in.the dollar volume of the Federal Appendix, end (ii) the volume of work to awards to the organization for at least three which the rate would apply is material.. years.All concerned Federal agencies must C.NEGOTIATION AND APPROVAL OF I14DIREOT be given the opportunity to participate in Oars RATES the negotiation process but,after a rate has been agreed upon,it will be accepted by all 1.Definitions Federal agencies.When a Federal agency has Areason to believe that special operating fan • s need in this section,the following terms have the me ton affecting its Federal awards neoessitate enings set forth in this section: aseeal indirect cost rates in accordance a.Cognizant agency for indirect costs means with section B.6 of this Appendix, it will, the Federal agency responsible for negoti- prior to the time the rates are negotiated, sting and approving indirect coat rates for a notify the oognizant agency for indirect nonprofit organization on behalf of all Fed- costa.(See also 1200.414 Indirect(MA)costs eral agencies. of Part 200.) b.Predetermined rate means an indirect cost b.Except as otherwise provided in 5200.414 rate,applicable to a specified current or fn- Indirect(F&cA) coats paragraph (e) of this tore period.usually the organisation's fiscal Fart,a nonprofit organization which bee not year.The rate is based on an estimate of the previously established an indirect cost rate costs to be incurred during the period.A pre- with a Federal agency must submit its ini- determined rate is not subject to adjust- tial indirect cast proposal immediately after ment. the organization Is advised that a Federal o. Filed rate means an indirect coat rate award will be made and,in no event, later which has the same characteristics as a pre- than three months after the effective date of determined rate, except that the difference the Federal award. between the estimated costs and the actual e.Unless approved by the cognizant agency costa of the period covered by the rate is car- for indirect Goats in accordance with 1200.414 tied forward as an adjustment to the rate Indirect (F&A) coats paragraph (i) of this computation of a subsequent period. Part,organizations that have previously sa- d. Final rate means an indirect cost rate tablished Indirect cost rates must submit a applicable to a specified past period which is new indirect cost proposal to the cognizant based an the actual costs of the period. A agency for indirect posts within six months final rate is not subject to adjustment, after the close of each fiscal year. e. Provisional rate or billing rate means a d.A predetermined rate may be negotiated temporary indirect cost rate applicable to a for use on Federal awards where there is rea- specified period which is used for funding,in- sonable assurance,based on past experience terim reimbursement,and reporting indirect and reliable projection of the organization's costs on Federal awards pending the estab- costs,that the rate is not likely to exceed a lishment of a final rate for the period. rate based on the organization's actual costs. 210 OMB Guidance Pt.200,App.V e. Fixed rates may be negotiated where to which they apply and with Subpart E— predetermined rates are not considered ap- Cost Principles of Part 200. propriety.A fixed rate,however,must not be (9)Thispropoaal dOes not Include any poste negotiated if(i)all or a substantial portion which axe unallowable under Subpart R— ot the organization's Federal awards are ex- Cost Principles of Part 200 such as(without petted to expire before the carry-forward ad- limitation):public relations costs,contribu- Juatment can be made;(ii)the mil of Federal lions and donations, entertainment costs, and non-Federal work at the organization is fines and penalties, lobbying costs, and de- too erratio to permit an equitable oarry-for- fenee of fraud proceedings;and ward adjustment: or(iii)the organization's (4)AD costs included in this proposal are operations fluctuate significantly from year properly allocable to Federal awards on the to year. basis of a beneficial or causal relationship f.Provisional and final rates must be nege- between the expenses incurred and the Fed- Mated where neither predetermined nor Seed eral awards to which they are allocated in rates are appropriate. Predetermined or accordance with applicable requirements. fired rates ma replace provisional rates at I declare that the-foregoing any time prior to the close of the organise. trot. reeoing true and cor- tion's fiscal year. If that event does not. occur,a final rate will be established and - Nonprofit Organization: ward or downward adinetments will be made, Signature: based on the actual allowable costs incurred Name of Official: _ for the period involved. Title: g.The results of each negotiation must be Date of Szeoution: formalized in a written agreement between the cognizant agency for indirect costs and APPENDIX V TO PART 200—STATB/LOCAi, the nonprofit organization. The cognizant GOVIMNICINT AND INDIAN TRIBE- agency for indirect costs must make avail- 'WIDE CINTRAL SP HV IC))) COST ALLO- able oopies of the agreement to all concerned CATION PLANS Federal agencies. h.If a dispute arises in a negotiation of an indirect cost rate between the cognizant A {+>➢lYia> i agency for indirect costs and the nonprofit 1.Most governmental unite provide certain organization,the dispute must be resolved in services,such as motor pools,computer can- accordance with the appeals procedures of tars purchasing, accounting, etc., to oper- the cognizant agency for.iadirect costs. acing agencies on a centralized basis. Since 1.To the extent that problems are anemia- federally-supported awards are performed tared among the Federal agencies in canna- within the individual operating agencies, tion with the negotiation and approval proc- there needs to be a process whereby these ese,OMB will lend assistance as required to central service costs can be identified and resolve such problems in a timely manner. assigned to beneftted activities on a reaeon- D.Certification of Indirect(F&A)Crete able and consistent basis.The central service cost allocation plan provides that process. Required Certification. No proposal to es- A11 costs and other data used to distribute tablish indirect(F&A)cost rates must be ao- the coats included in the plan should be sup- oeptable unless such costs have been car- ported by formal accounting dud other tified by the non-profit organization atone records that will support the propriety of the the Certificate of Indirect (F&A) Costa set coals assigned to Renard awards, forth in section J.of this appendix.The cer- 2. Guidelines and illustrations of Central tifloate must be signed on behalf of the orga- service cost allocation plans are provided in nization by an individual at a level no lower a brochure published by the Department of than vice president or chief financial officer Health and. Human Services entitled "A for the organization. Guide for State,Local and Indian Tribal Gay- j.Bach indirect cost rate proposal must be ernments: Cost Principles and Procedures for accompanied by a certification in the fol- Developing Cost Allocation Plans and Indirect lowing for= Cost Rates for Agreements with the Federal Certificate of Indirect(F&A)Costs Government." from the Superintendent of Doanpy of this brochure may e This is to certify that to the best of my manta,U.S.Government Printing Office. knowledge and belief; B.DDFulrrrONB (1)I have reviewed the indirect(F&A)cost proposal submitted herewith; 1.Agency or operating agency means an or- (2)All costs included in this proposal Elden- ganizational unit or sub-division within a tify date] to establish Miffing or final indi- governmental unit that is responsible for the root (F&A) costs rate for [identify period performance or eeminietratfon of Federal covered by rate]are allowable in accordance awards or activities of the governmental with the requirements of the Federal awards unit. 21) Choose 1+unding Program:(Circle all applicable) CDBG HOME ESG SHP Other CITY OF OMAHA-TENANT SURVEY FORM 20 A. GENERAL INFORMATION Tenant Name(s) Telephone Address 0 Apt.No. Initial Date of Lease Recertification Lease Date DEMOGRAPHICS&ANTICIPATED INCOME OF ALL HOUSEHOLD MEMBERS Head of Household is: Male❑ Female❑ Elderly❑. Number of Occupants: Total No.Adults No. Children Under 18 Please enter ethnicity and race for each household member in accordance with the attached definitions. Ethnicity-Choose either H or NH.Enter H for Hispanic or Latino. Enter NH for Not Hispanic or Latino. Race.Categories-Choose all that apply for each household member. Enter one or more of the following • •abbreviations: W,B,A,AI,PI,0. White(W);Black or African American(B);Asian(A);American Indian or Alaska Native(AI); • Native Hawaiian or Other Pacific Islander(PI) Other(0)(Please specify) Anticipated Anticipated Name ofHousehold Member (H or NH) (See Above) Monthly Alumni Age Ethnicity Race Handicap Income Income • $ $ $ $ $ $ $ $ . TOTAL $ $ 100%MEDIAN FAMILY INCOME(MFI)FOR HH SIZE $ %OF MFI FOR HH SIZE B. HOUSING CHARACTERISTICS Housing Costs HUD Rent Limits Monthly Housing Cost: Actual Contract Rent $ Average Monthly Utility Cost • $ Total Monthly Housing Cost $ $ Subsidized Rent Assistance Received(Please list source and amount): Section 8:$ Other Assistance: Source - Amount $ No Assistance Unit Type: Efficiency❑. 1BR❑ 2 BR❑ 3 BR❑ . Other❑ Handicap Accessible Unit: Yes.D No❑ Check one:50%Unit❑ 60%Unit❑ 80%Unit❑ C. TENANTS IN-PLACE AT TIME OF LOAN CLOSING. -Non-disclosure Form Required D. REMARKS: Owner or Authorized Representative - Phone Date. Please attach utility allowance determination form, City of Omaha Computing Annual Income Form and current lease agreement with each Tenant Survey. con.Manta OPPORTUFITT Revised 5/1/08 Page.1 of 2 4)(1144 •J 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, Philippine Islands,Thailand and Vietnam. the 3. Black or African American. A person having origins in any of the black racial groups of Africa. Terms such as"Haitian"or"Negro"can be used in addition to"Black"or"African American". 4. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples of Hawaii,Guam, Samoa or other Pacific Islands. 5. White. A person having origins in any of the original peoples of Europe,the Middle East or North Africa, • • Revised 5/1/08 Page 2 of 2 A. General Instructions: This form is to be completed by the head of household for those wishing to be served (applicants) and those that are currently served (tenants/owner-occupants) in housing assisted by the Department of Housing and Urban Development If the assisted property is a .rental unit, the owner or agent is required to offer the applicant/tenant the option to complete the form. The form is to be completed at initial application or at lease signing. In place tenants must also be offered the opportunity to complete the form as part of the next.interim or annual recertification. Once the form is completed, it need not be completed again unless the head of household changes. There is no penalty for persons who do not complete the form. However, the owner or agent may place a note in the tenant file stating the applicant/tenant refused to complete the form. Completed documents should be placed in,the household's file. The Office of Housing has been given permission to use this form for gathering race and 'ethnic data in assisted housing programs. • 1. The two ethnic.categories you should from are defined below. You should check one of the two categories. • A. Hispanic or Latino. A person of Cuban, Mexican, Puerto Rican, South or Central • American or other Spanish culture or origin,regardless of race. The term of"Spanish origin"can be used in addition to"Hispanic"or"Latino". B. Not Hispanic or Latino. A person not of Cuban, Mexican, Puerto Rican, South or Central American,or other Spanish culture or origin,regardless of race. 2. The five racial categories to choose from are defined below: You should check as many as apply to you. A. American Indian or Alaska Native. A person having origins in any of the original peoples of North and South America(including Central America), and who maintains tribal affiliation or community attachment. B. Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example,Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand and Vietnam. C. . Black or African American. A person having origins in any of the black racial groups of Africa. Terms such as "Hatian" or "Negro" can be used in addition to "Black"or"African American". D. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples of Hawaii,Guam, Samoa,or other Pacific Islands. E. • White. A person having origins in any of the original peoples of Europe,the Middle East or North Africa. • revised and approved 7/7/10 CITY OF OMAHA-DEFINITION OF INCOME Annual Income Includes: • 1. Wages,salaries,tips, commissions, etc.; 2. Self-employment income from owned non-farm business, including proprietorships and partnerships; 3. Farm self-employment income; 4. Interest,dividends,net rental income, or income from estates or trusts 5. Social security or railroad retirement; 6. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance or public welfare programs; 7. Retirement,survivor or disability pensions; 8. Any other sources of income received regularly including Veterans' (VA) payments, unemployment compensation, child support and alimony;and 9. Income from assets,as shown below: a. Amounts in savings certificates, money market funds and other investment accounts. b. Stocks,bonds,savings certificates,money market funds and other investment accounts. c. Equity in real property or other capital investments. Equity is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs(such as broker fees) that would be incurred in selling the asset. Do not include equity in principle residence (home equity). d. The cash value of trusts that are available to the household. e. IRA, Keogh and similar retirement savings accounts,even though withdrawal would result in a penalty. f. Contributions to company retirement/pension funds that can be withdrawn without retiring or terminating employment. g. Assets which,although owned by more than one person,allow unrestricted access by the applicant. h. Lump sum receipts such as inheritances, capital gains, lottery winnings, insurance settlements and other claims. i. Personal property held as an investment such as gems,jewelry, coin collections,antique cars,etc. j. Cash value of life insurance policies. k. Assets disposed of for less than fair market value during two years preceding certification or re- certification. • 10. Actual income from assets if total assets are$5,000 or less. 11. If assets are more than $5,000, the greater of (a) actual income from assets, or (b) total assets times passbook rate. Annual Income Does Not Include the Following Assets: 1. Necessary personal property,except as noted in 9(i). 2. Interest in Indian trust lands. 3. Assets that are a part of an active business or farming operation. NOTE: Rental properties are considered personal assets held as an investment rather than business assets unless real estate is the applicant's/tenant's main occupation. 4. Assets not accessible to the family and which provide no income for the family. 5. Vehicles especially equipped for the handicapped. 6. Equity in owner-occupied cooperatives and manufactured homes in which the family lives. 7. equity in principle residence(home equity): • I (we)acknowledge receipt of a copy of this Definition of Income. Date Witness Date Date Witness Date EQUAL HOUSING OPPORTUNITY Revised 4/12/07 Gy Li L1 A o F.At 11 eg d S lib P. v� qq 4 ; W v O U ; Q x do o b tel 0.0 CO fa O v Ii 1 g o v 2 410) m i 0 � 51. e gr. r5 G. V ► IC aTo E01 a ) m C Ed un W i1 Id d 3 z J ° % 0 1 it go el IN v v 0 Li v c. AEll 01. Ta Ti m 4 El ai C ct I fa 0 I Iii).. 0 �a.1 0 „ m es s h z . �as Ago1 o i E c m WZ 0 / A z z , 51Q3Wn > d w rr Reporting Form and Urban Development (exp. 03/31/2011) Office of Housing Name of Property Project No. Address of Property • • • Name of Owner/Managing Agent Type of Assistance or Program.Title Name of Head of Household Name of Household Member Date(mm/dd/yyyy.): Hispanic or Latino — Not-Hispanic or Latino ■ American Indian or Alaska Native Asian ❑ Black or African American ❑ Native Hawaiian or Other Pacific Islander ❑ • White • ❑ Other ❑ • *Definitions of these categories may be found on the reverse side. . There is no penalty for persons who do•not complete the form. • Signature Date • Public repelling burden for this collection is estimated to average•10 minutes per response, including the time for reviewing inst , seater existing data sources,gathering and rta ing due data needed,and completing and reviewing the collection of information. This irdormadmi is required to obtain benefits and volmrtary. HUD may not collect this information,and you are not required to complete this•form, unless it displays a mmendy valid OMB control number. This; is authorized by the U.S.Housing Act of 1937,as ,the Housing and Urban Rural Recovery Act of 1983.and Houising and Can—mly Development Technical Amendments of 1984. This information is needed to be ht comply with OMB ty to ted changes to Btlmic y aril Race for recording the 50059 Data R to HUD..pommy/agents rust offer the opportrmity to the head and co- iNnd of cads household ta"self certify"during the application interview or lease signing. In-place tenants must complete the format as part of their next interim or annual re• cation. This process will allow the.owner/agent to collect due needed in ormatio .on all m o wine household. Caap�d'do should be stapled together for each and plated.is the household's file. Parents or guardians are to complete the self-certification for children under the age of 18. Once system.development funds are provided and the wa riate system upgrades have been impleneited,owners/agents will be required to report the rase and ethnicity data anyelectronicallyspecial to tiro TRACS(Temmrt Rental Assistance Certification System). This information is consideed non-sensitive and does not require special Protection. revised and approved 7/7/10 CITY OF OMAHA-DEFINITION OF INCOME Annual Income Includes: 1. Wages, salaries,tips,commissions, etc.; 2. Self-employment income from owned non-farm business, including proprietorships and partnerships; 3. Farm self-employment income; 4. Interest, dividends, net rental income, or income from estates or trusts 5. Social security or railroad retirement; 6. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance or public welfare programs; 7. Retirement, survivor or disability pensions; 8. Any other sources of income received regularly including Veterans' (VA) payments, unemployment compensation,child support and alimony; and 9. Income from assets,as shown below: a. Amounts in savings certificates, money market funds and other investment accounts. b. Stocks, bonds, savings certificates, money market funds and other investment accounts. c. Equity in real property or other,capital investments. Equity is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset. Do not include equity in principle residence (home equity). d. The cash value of trusts that are available to the household. e. IRA, Keogh and similar retirement savings accounts,even though withdrawal would result in a penalty. f. Contributions to company retirement/pension funds that can be withdrawn without retiring or terminating employment. g. Assets which, although owned by more than one person, allow unrestricted access by the applicant. h. Lump sum receipts such as inheritances, capital gains, lottery winnings, insurance settlements and other claims. i. Personal property held as an investment such as gems,jewelry, coin collections, antique cars, etc. j. Cash value of life insurance policies. k. Assets disposed of for less than fair market value during two years preceding certification or re- certification. 10. Actual income from assets if total assets are$5,000 or less. 11. If assets are more than $5,000, the greater of (a) actual income from assets, or (b) total assets times passbook rate. Annual Income Does Not Include the Following Assets: 1. Necessary personal property, except as noted in 9 (i). 2. Interest in Indian trust lands. 3. Assets that are a part of an active business or farming operation. NOTE: Rental properties are considered personal assets held as an investment rather than business assets unless real estate is the applicant's/tenants main occupation. 4. Assets not accessible to the family and which provide no income for the family. 5. Vehicles especially equipped for the handicapped. 6. Equity in owner-occupied cooperatives and manufactured homes in which the family lives. 7. Equity in principle residence(home equity). EQUAL HOUSING OPPORTUNITY Revised and approved 7/12/2011 NON-HOMEOWNERSHIP FINANCIAL STATUS REPORT FORM (Please attach AIA G702 form and other comparable supporting documentation for expenditures) Developer Name: Brisco Investments LLC Program: CDBG ❑ ESG ❑ Developer's Contractor: HOME El NAHTF Project Address: 3518 North 54th Street NSP ❑ SHP ❑ Project Type: Acquisition ❑ Loan#: 24921 New Constr ❑ Rehab ❑ Reporting Period: From: to DEVELOPMENT PROJECT % BUDGET COSTS BUDGET COMPLETE REMAINING Hard costs $ % $ Soft costs(list): $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ TOTALS $ % $ TOTAL PAY REQUEST: $ Amount Amount City Funds Other Funds $ $ FUNDING SOURCES PROJECT % BUDGET BUDGET COMPLETE REMAINING $ % $ $ % $ $ % $ Other: $ % $ Other: $ % $ Other: $ % $ TOTALS: $ % $ I certify to the best of my knowledge that the above information is correct and complete and is for the purpose set forth in the award documents. Financial records are available for audit or review. Authorized Certifying Officer Title Date Printed Name: A EQUAL HOUSING OPPORTUNITY Revised and approved 6/18/2010 24 CFR 85.43 ENFORCEMENT (a) Remedies for non-compliance. If a grantee or sub-grantee materially fails to comply with any term of an award,whether stated in a federal statute or regulation, an assurance, in a State plan or application, a notice of award, or elsewhere,the awarding agency may take one or more of the following actions, as appropriate in the circumstances: (1) Temporarily withhold cash payments pending correction of the deficiency by the grantee or sub-grantee or more severe enforcement action by the awarding agency, (2) Disallow(that is,deny both use of funds and matching credit for)all or part of the cost of the activity or action not in compliance, (3) Wholly or partly suspend or terminate the current award for the grantee's or sub-grantee's program, (4) Withhold further awards for the program,or, (5) Take other remedies that may be legally available. (b) Hearings, appeals. In taking an enforcement action, the awarding agency will provide the grantee or sub-grantee an opportunity for such hearing, appeal or other administrative proceeding to which the .grantee or sub-grantee is entitles under any statute or regulation applicable to the action involved. (c) Effects of suspension and termination. Costs of grantee or sub-grantee resulting from obligations incurred by the grantee or sub-grantee during a suspension or after termination of an award are not allowable unless the awarding agency expressly authorizes them in the notice of suspension or termination or subsequently. Other grantee or sub-grantee costs during suspension or after termination which are necessary and not reasonably avoidable are allowable if: (1) The costs result from obligations which were properly incurred by the grantee or sub- grantee before the effective date of suspension or termination,are not in anticipation of it, and,in the case of a termination,are non-cancelable,and, (2) The costs would be allowable if the award were not suspended or expired normally at the end of the funding period in which the termination takes effect. (d) Relationship to Debarment and Suspension. The enforcement remedies identified in this section, including suspension and termination, do not preclude grantee or sub-grantee from being subject to "Debarment and Suspension"under EO 12549(see§ 85.35). 24 CFR 85.44 TERMINATION FOR CONVENIENCE Except as provided in§ 85.43 awards may be terminated in whole or in part only as follows: (a) By the awarding agency with the consent of the grantee or sub-grantee in which case the two parties shall agree upon the termination conditions, including the effective date and in the case of partial • termination,the portion to be terminated,or (b) By the grantee or sub-grantee upon written notification to the awarding agency, setting forth the reasons for such termination, the effective date, and in the case of partial termination, the portion to be terminated. However, if, in the case of a partial termination,the awarding agency determines that the remaining portion of the award will not accomplish the purposes for which the award was made, the awarding agency may terminate the award in its entirety under either § 85.43 or Paragraph(a)of this section. a�'aoa°ug'r"rr Rev.5/7/08 UNITED STATES CITIZENSHIP ATTESTATION FORM FOR PUBLIC BENEFIT For the purpose 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 are 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 (first. middle. last) SIGNATURE DATE Project ID No_ 24R44 • 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 oP oalie i Approved 6/1/10 Federal Sub-award Reporting System(FSRS) 9 Digit DUNS Number. Organization Name: Address: grey Oy State cup code+s Question 1:During.your organizations 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? 0 YES 0 NO • I If YES please answer Question 2 • Question 2:Does the public have access to information about the compensation of the executives in your organization F (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? • YES NO 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 - $- • 5 $ Signature of Authorized Official [t, 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. 1. 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 Fundina Accountability and Transparency Act Subaward Reporting System (FSRS). IL 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://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; ii. 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 iii. 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 b.1. of this award term: i. 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— 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 IL 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. ii. 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: l_ A Governmental organization,which is a State,local government, or Indian tribe; ii. A foreign public entity; iii, A domestic or foreign nonprofit organization; iv, 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. iiii. 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"). 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. iii. 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. CITY OF OMAHA-DEFINITION OF INCOME Annual Income Includes: 1. Wages, salaries, tips, commissions, etc.; 2. Self-employment income from owned non-farm business, including proprietorships and partnerships; 3. Farm self-employment income; 4. Interest, dividends, net rental income, or income from estates or trusts 5. Social security or railroad retirement; 6. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance or public welfare programs; 7. Retirement,survivor or disability pensions; 8. Any other sources of income received regularly including Veterans' (VA) payments, unemployment compensation, child support and alimony; and 9. Income from assets, as shown below: a. Amounts in savings certificates, money market funds and other investment accounts. b. Stocks, bonds, savings certificates, money market funds and other investment accounts. c. Equity in real property or other capital investments. Equity is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset Do not include equity in principle residence (home equity). d. The cash value of trusts that are available to the household. e. IRA, Keogh and similar retirement savings accounts, even though withdrawal would result in a penalty. f. Contributions to company retirement/pension funds that can be withdrawn without retiring or terminating employment. g. Assets which, although owned by more than one person, allow unrestricted access by the applicant. h. Lump sum receipts such as inheritances, capital gains, lottery winnings, insurance settlements and other claims. i. Personal property held as an investment such as gems,jewelry, coin collections, antique cars, etc. j. Cash value of life insurance policies. k. Assets disposed of for less than fair market value during two years preceding certification or re- certification. 10. Actual income from assets if total assets are$5,000 or less. 11. If assets are more than $5,000, the greater of (a) actual income from assets, or (b) total assets times passbook rate. Annual Income Does Not Include the Following Assets: 1. Necessary personal property, except as noted in 9 (i). 2. Interest in Indian trust lands. 3. Assets that are a part of an active business or farming operation. NOTE: Rental properties are considered personal assets held as an investment rather than business assets unless real estate is the applicants/tenant's main occupation. 4. Assets not accessible to the family and which provide no income for the family. 5. Vehicles especially equipped for the handicapped. 6. Equity in owner-occupied cooperatives and manufactured homes in which the family lives. 7. Equity in principle residence (home equity). EQUAL HOUSING OPPORTUNITY Revised and approved 7/12/2011 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 amilial 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 SECTION 3 CLAUSE All Section 3 covered contracts shall include the following clause (referred to as the Section 3 clause): A. The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (Section 3). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3 shall, to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing. B. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135, which implement Section 3. As evidenced by their execution of this contract,the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the part 135 regulations. C. The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding,if any, a notice advising the labor organisation or workers' representative of the contractor's commitments under this Section 3 clause, and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number and job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of the person(s)taking applications for each of the positions; and the anticipated date the work shall begin. D. The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 135, and agrees to take appropriate action,as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR part 135. The contractor will no6t subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 135. E. The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 CFR part 135 require employment opportunities to be directed were not filled to circumvent the contractor's obligations under 24 CFR part 135. F. Noncompliance with HUD's regulations in 24 CFR part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD- assisted contracts. G. With respect to work performed in connection with Section 3 covered Indian housing assistance, Section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises. Parties to this contract that are subject to the provisions of Section 8 and Section 7(b) agree to comply with Section 3 to the maximum extent feasible,but not in derogation of compliance with Section 87(b). Providing Other Economic Opportunities. (a) General. In accordance with the findings of the Congress, as stated in Section 3, that other economic opportunities offer an effective means of empowering low- income persons, a recipient is encouraged to undertake efforts to provide to low- income persons economic opportunities other than training, employment and contract awards,in connection with Section 3 covered assistance. (b) Other training and employment-related opportunities. Other economic opportunities to train and employ Section 3 residents include, but need not be limited to, use of "upward mobility", "bridge" and trainee positions to fill vacancies; and hiring Section 3 residents in part-time positions. (c) Other business-related economic opportunities: (1) A recipient or contractor may provide economic opportunities to establish, stabilize or expand Section 3 business concerns, including micro-enterprises. Such opportunities include, but are not limited to formation of Section 3 joint ventures,financial support for affiliating with franchise development, use of labor only contracts for building trades, purchase of supplies and materials from housing authority resident-owned businesses, purchase of materials and supplies from PHA resident-owned businesses and use of procedures under 24 CFR part 963 regarding HA contracts to HA resident-owned businesses. A recipient or contractor may employ these methods directly or may provide incentives to non-Section 3 businesses to utilize such methods to provide other economic opportunities to low-income persons. (2) A Section 3 joint venture means an association of business concerns, one of which qualifies as a Section 3 business concern, formed by written joint venture agreement to engage in and carry out a specific business venture for which purpose the business concerns combine their efforts, resources and skills for joint profit,but not necessarily on a continuing or permanent basis for conducting business generally, and for which the Section 3 business concern: (i) Is responsible for a clearly defined portion of the work to be performed and holds management responsibilities in the joint venture; and (ii) Performs at least 25 percent of the work and is contractually entitled to compensation proportionate to its work. MINORITY BUSINESS & WOMEN BUSINESS ENTERPRISE PLAN October 2014 n • AOAQrB ti PLANNING•OMAHA Jean Stothert,Mayor PLANNING DEPARTMENT James R.Thele City of Omaha CITY OF OMAHA City of Omaha Planning Department Omaha/Douglas Civic Center 1819 Farnam Street Omaha,Nebraska 68183 1 Reviewed and approved 10/3/2014 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 10/3/2014 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 10/3/2014 MBE/WBE FOR GOODS AM) 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,Development Section Manager ed.dantzler@cityofomaha.org (402)444-5150 Ext. 2009 Fax: (402)444-5201 City of Omaha Human Rights&Relations Contract Compliance 1819 Famam Street Room 502 Omaha,NE 68183 Maria Partida,Contract Compliance maria.partida@cityofomaba org (402)444-5050 Fax: (402)444-5058 Minority Economic Development Greater Omaha Chamber of Commerce 1301 Harney Street Omaha,NE 68102 . Winsley Durand, Senior Director-Business Attraction wdurand@selectgreateromaha.com (402)233-7144 Fax: (402)346-7050 4 Reviewed and approved 10/3/2014 MBE/WBE FOR GOODS AND SERVICES North Omaha Contractor Alliance 2505 North 24th Street Suite 409A 1 Omaha,NE 68110 Houston McKell,III,Executive Director houstonmckell@yahoo.com (402) 991-3420 Omaha Small Business Network, Inc. 2505 North 24th Street Omaha,NE 68110 Julie Parker, Executive Director info@osbnbtc.org (402)453-5336 Fax: (402)451-2876 Small Business Administration 10675 Bedford Avenue Suite 100 Omaha,NE 68134 Dwight Johnson dwight.johnson@sba.gov • (402)221-7206 Fax: (402)221-3680 Urban League of Nebraska,Inc. 3040 Lake Street Omaha,NE 68110 Thomas H. Warren,President/CEO thomas.warren@urbanleagueneb.org (402)451-1066 5 Reviewed and approved 10/3/2014 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 0 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 10/3/2014 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 10/3/2014 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 10/3/2014 MINORITY BUSINESSWOMEN BUSINESS ENTERPRISE AND FAIR HOUSING PLAN As Owner(s), , I/we agree that my/our contractors and subcontractors will make our best efforts to ensure the construction services, contracts and employment opportunities are affirmatively marketed to women and members of minority groups as outlined in the City of Omaha's Policy for Minority Business/Women Business Enterprise and to further Fair Housing, where applicable, in the following manner. 1. Provide employment opportunities without regard to race, color, sex, age, religion, national origin, familial or handicap status; 2. Encourage, increase and promote business and procurement opportunities for women-owned businesses; d 3. Award contracts to eligible minority-owned and women-owned firms; 4. Monitor contractor and vendor equal opportunity performance. As Owner(s), , I/we agree that our contractors and subcontractors will not discriminate against any employee or applicant for employment because of race, color, sex, age, religion, national origin, familial or handicap status. As Owner(s), I/we agree that my/our contractors and subcontractors shall in all solicitations or advertisements for employment give all qualified applicants consideration for employment without regard to race, color, sex, age, religion, • national origin, familial or handicap status. As Owner(s), , I/we certify that I/we support the furtherance of fair housing choice and that I/we will not discriminate on the basis of race, color, religion, sex, national origin, familial status, marital or handicap status in the rental or sale of the assisted property nor in any activities related to the sale, rental, and operation of the assisted property in accordance with the applicable laws and regulations. Dated this day of , 20 Business or Corporation(it applicable) By: Signature of Owner/Authorized Representative Name Print Owner/Authorized Representative Name Eo PORTUNITY Np M1� OP 9 Reviewed and approved 10/3/2014 l C Housing and Community Development Division City of Omaha Planning Department Cost Certification Form Project Name: Rental Rehab Project Owner: Brisco Investments LLC Project Address: 3518 N 54 St Certified amount: $59345 The Rehabilitation Division has reviewed the project cost estimate, work write-up or plans, specifications, &proposal. In our opinion the project cost proposed is reasonable given the type of work that is to- a complete . (See attached) Construction Specialist: i _ I % Date: 3 4 f� Development Section Manager: Date: 3 Z it r CITY OF OMAHA SUBSIDY LAYERING STANDARDS FOR THE HOME/NSP/NAHTF PROGRAM Standard: Before committing funds to a project, the City of Omaha will evaluate the project in accordance with the following guidelines and will not invest any more HOME/NSP/NAHTF funds, in combination with other, private and/or governmental assistance, than is necessary to provide affordable housing. This standard is established in accordance with Cranston Gonzalez National Affordable Housing Act, Section 212(F)as amended and 24 CFR Part 91. Layering Guidelines: Generally,there will be multiple levels of review of the assistance received on a project. The City of Omaha will rely on the determinations of the Nebraska Investment Finance Authority, the City's Tax Increment Financing Authority and the Nebraska Equity Fund, as appropriate, in evaluating such assistance. City of Omaha Community Development staff will review the project pro-forma in assessing whether or not the proposed HOME/NSP/NAHTF fund allocation is necessary to ensure feasibility of the project. All sources and uses of funds will be detailed in applications and reviewed to determine that funding sources are committed, an evaluation of all costs associated with the development will be conducted and the reasonableness and appropriateness of the development costs will be assessed. All costs will be compared to industry standards as to their reasonableness and certified by the Construction Specialist. The City shall ensure that costs being funded by HOME/NSP/NAHTF are eligible and that per unit assistance does not exceed the maximum. Developers will be required to provide a project pro forma to.the City of Omaha.. The aggregate amount of assistance from the US Department of Housing and Urban Development and all other sources will be considered to ensure the viability of the project. Factors relevant to the feasibility of the project will include, among other things, rates of returns to owners and investors relative to current interest rates, long-term needs of the project and the usual and customary fees charged to the project. The target population and the needs of tenants will also be considered when reviewing a project. The City's policy is that projects serving extremely low-income persons will generally require a higher subsidy than projects serving low-income persons, and that projects serving low-income persons will require a higher subsidy than projects serving moderate-income persons,and so forth. Other factors may include whether or not the project serves primarily persons with physical or mental disability, elderly persons, or others with special needs. Additionally, non-profit orgpni7ations will generally require a higher subsidy than for-profit businesses. Project cash flow and rate of return will also be evaluated. The City of Omaha normally will not allow an excessive gain or profit to be derived from a project. The specific standard governing rate of return is the return on investment shall not exceed twenty percent(20%);except in the case of a Single-Family Rental Rehabilitation Program project with no first mortgage, the project costs have been certified by the Planning Department,rents are affordable,and operating'expenses are reasonable,the maximum return on investment shall not exceed forty percent(40%). Certification: The Rental Rehabilitation Program project located 2215 W Street,has been evaluated in accordance with the above Subsidy Layering Standards for the HOME/NSPINAHTF Program guidelines, as approved by the Planning Director and the Housing and Community Development Manager. Contract Administration Date and Compliance Manager Revised and approved 12/4/2009 c 2sA CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: WHEREAS, the City annually receives Nebraska Affordable Housing Trust funds (NAHTF) for the purpose of providing affordable housing opportunities benefiting low- and moderate-income residents; and, WHEREAS, the Mayor recommended various projects in the 2014 Consolidated Submission for Community Planning and Development Programs (Consolidated Plan); and, WHEREAS,the City Council approved the 2014 Consolidated Plan as amended and approved by the City Council on October 22, 2014 by Resolution No. 1413, and as amended by Resolution No. 790 on July 15, 2014, which included the Rental Rehabilitation Program; and, WHEREAS, the City wishes to enter into an agreement with the Owner to assist the City in utilizing such NAHTF funds; and, WHEREAS,this property is located at 3518 North 541'' Street which is to be occupied by a qualified low- to moderate-income family whose annual household income is below 80% of Median Income by Family Size; and, WHEREAS,the total estimated project cost is $68,245.00 consisting of$20,000.00 in a Deferred Payment Loan, $13,500.00 in a Grant for lead hazard work and radon services and $34,745.00 in private match funds; and, WHEREAS, this project is in the best interest of the residents of the City of Omaha and those residing therein; and, WHEREAS, the Project is eligible for funding under the FY 2014 HOME Rental Rehabilitation Program and $33,500.00 as identified above was allocated to the Project. By Councilmember Adopted City Clerk Approved Mayor C-25A CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska NOW, THEREFORE, BE IT RESOLVED BY THE CITY CC CIL OF THE CITY OF OMAHA: THAT, the attached Deferred Payment Loan and Grant Agreement, as recommended by the Mayor, to provide funding in the amount of$33,500.00 for the rehabilitation and lead reduction work to the property located at 3518 North 54th Street, Omaha, NE 68104, owned by Brisco Investments, LLC, a Nebraska limited liability company, Brian Cloudt, Member Representative, is hereby approved. Funds in the amount of $33,500.00 shall be paid from the NAHTF Program funds, NAHTF Fund No. 14-TFHP-7072, Organization No. 128101. APPROVED AS TO FORM: f 3 JO 90 f 6 CITY ATTORNEY DATE 2390 dlh By & JJ7 -JUL �y unci Adopted U 1 2 2016 / -6 ....a.441 V . ........... CityT r C e k Approved .... lfr,. . '/gG Ma or A NO �i ' Jl" Resolution by Res. that. the attached Deferred Payment Loan and Grant Agreement, as recommended by the Mayor. to provide funding in the amount of -., $33,500.00 for the rehabilitation and lead reduction work to the property located at 3518 North 54th Street, Omaha, NE 68104, owned by Brisco Investments, LLC. a Nebraska limited `': liability company, Brian Cloudt, Member Representative, is hereby approved. Funds in the amount of $33,500.00 shall be paid from the NAHTF Program funds,NAHTF Fund No. 14-TFHP-7072, Organization No. 128101. 2390 dlh Presented to City Council JUL 12 2016 Adopted ;; gaiter grown City Clerk