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RES 2016-0427 - Agmt with Siena/Francis House to provide homeless shelter tAHA e o*� ,, ,N.4 .-- ` t Planning Department 0 ; t Omaha/Douglas Civic Center u �. 1819 Famam Street,Suite 1100 7 r ,� t p g ' ' Omaha,Nebraska 68183 c9/ w Lu i u 1 tho '. , i 1 i (402)444-5150 �0p� 4�ro Telefax(402)444-6140 'T., FEBR�P ,� `1 :f:,l', James R.Thele City of Omaha . Director Jean Stothert,Mayor 1"x . L 1 4 r }iz./\St April 5, 2016 Honorable President and Members of the City Council, The attached.Resolution approves an Agreement between the City of Omaha and the Siena-Francis House, a Nebraska Non-profit Corporation, P.O. Box 217 DTS, Omaha, Nebraska 68101, in the amount of$155,000.00 to provide shelter to homeless persons at its emergency shelter facilities (Francis Ilouse, located at 1111 North 17th Street, Omaha,NE 68102, and Siena House, located at 1702 Nicholas Street, Omaha,NE 68102) for approximately 3,400 homeless persons. Funds to be paid from the Fiscal Year 2015 Emergency Solutions Grant, Fund No. 12139, Organization No. 129028. The Omaha-Council Bluffs Consortium Consolidated Submission for Community Development Programs: 2015 Action Plan approved by the City Council on February, 24, 2015, Resolution No. 127, and was amended by the City Council on December 8, 2015, Resolution No. 1462. In the Consolidated Plan and amendments,emergency shelter,rapid re-housing,homelessness prevention and information management were identified along with funding priorities for Emergency Solutions Grant dollars. The City of Omaha has received a Fiscal Year 2015 Emergency Solutions Grant Entitlement of$392,397.00 from the U.S. Department of Housing and Urban Development. The City solicited proposals from non-profit organizations through a Request for Proposals process initiated August 28, 2015. Proposals were reviewed by City Planning staff and also by an independent panel convened by the Metro Area Continuum of Care for the Homeless (MACCH). The MACCH panel was charged with the task of making funding recommendations based on Continuum of Care funding priorities. Upon review of the panel's recommendations, the City recommends funding the following homeless programs for the purpose of addressing homelessness in the City of Omaha. Honorable President and Members of the City Council, Page 2 Organization Amount Youth Emergency Services $ 12,000.00 The Stephen Center-Emergency Shelter $ 50,000.00 Siena-Francis House-Emergency Shelter $155,000.00 Heartland Family Service-Rapid Re-housing $ 93,076.00 Together-Rapid Re-housing $ 39,892.00 Iowa Institute for Community Alliances- CoC Data System $ 13,000.00 Total $362,968.00 City Administration $ 29,429.00 Grand Total $392,397.00 As a result of this particular Agreement, Siena/Francis House will provide homeless persons with shelter at its Siena House and Francis House facilities. Siena/Francis House has a current Contract Compliance (CC-1) form on file in the Human Rights and Relations Department. As is City policy, the Human Rights and Relations Department will review the contractor to ensure compliance with the Contract Compliance Ordinance. We urge your favorable consideration of this Resolution. Sincerely, Referred to City Council for Consideration: -•_ R , 3/7/r e LEA.�-C 3l 14S 1 ames R. Thele., Date Mayor's Office Date Planning Dire, or Approved as to Funding: Approved: Stephe B. Curtiss CI ry,�j ate S ncer K. Danner, Jr. Finance Director Human Rights & Relatio s Director Date 2325 dlh AGREEMENT BETWEEN THE CITY OF OMAHA AND SIENA/FRANCIS HOUSE FOR THE USE OF EMERGENCY SOLUTIONS GRANT FUNDS FOR OPERATIONAL FUNDING Table of Contents SECTION 1. DEFINITIONS -ABBREVIATIONS SECTION 2. DUTIES AND CONDITIONS OF CITY FINANCING SECTION 3. DUTIES AND RESPONSIBILITIES OF THE CONTRACTOR SECTION 4. TERM OF THE AGREEMENT SECTION 5. MUTUAL AGREEMENTS BETWEEN CITY AND CONTRACTOR SECTION 6. CONTRACTOR'S COMPLIANCE WITH OTHER FEDERAL REGULATIONS SECTION 7. AUTHORIZED REPRESENTATIVES THIS AGREEMENT is entered into by and between the City of Omaha, a Municipal Corporation in Douglas County, Nebraska (sometimes hereinafter referred to as "City") and Siena/Francis House, a Nebraska Non-profit Corporation, P. 0. Box 217 DTS, Omaha, NE 68101, (sometimes hereinafter referred to as "Contractor") on the terms, conditions and provisions as set forth below: RECITALS: WHEREAS, the City of Omaha applied for Emergency Solutions Grant Program funds from the U.S. Department of Housing and Urban Development, as stated in the Omaha-Council Bluffs Consortium Consolidated Submission for Community Development Programs: 2015 Action Plan approved by the City Council on February, 24, 2015, Resolution No. 127, and as amended by City Council on December 8, 2015, Resolution No. 1462, and received a $392,397.00 grant; and, WHEREAS, the Metro Area Continuum of Care for the Homeless identified emergency shelter as a funding priority for the 2015 Emergency Solutions Grant Program; and, WHEREAS, Siena/Francis House,through its emergency shelter facilities (Francis House and Siena House), will provide shelter for homeless persons, as provided in the grant application submitted to the City of Omaha in response to the FY 2015 Emergency Solutions Grant Program Request for Proposals; and, WHEREAS, the City of Omaha has allocated $155,000.00 to the Siena/Francis House to continue to provide shelter for homeless persons and families through its Francis House and Siena House facilities; and, WHEREAS, the Planning Department and the Mayor recommend approval of this grant; and, NOW, THEREFORE, in consideration of these mutual covenants, Siena/Francis House and the City of Omaha do hereby agree as follows: SECTION 1. DEFINITIONS -ABBREVIATIONS 1.01 "City" shall mean—the City of Omaha, a Nebraska Municipal Corporation. 1.02 "Contractor" shall mean — Siena/Francis House, a Nebraska Non-profit Corporation, P.O. Box 217 DTS, Omaha,NE 68101 (see Exhibit"A"). 1.03 "Director" shall mean—the Planning Department 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 Emergency Solutions Grant Program funds to undertake eligible activities. In this Agreement,the Subrecipient is Siena/Francis House. 1.06 "HUD" shall mean—the U.S. Department of Housing and Urban Development. 1.07 "Emergency Solutions Grant Program (ESGP)" shall mean — the program administered by the City of Omaha and funded under Subtitle B of Title IV of the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11371 et seq.). The program purpose is to provide assistance to homeless and near homeless persons in accordance with Federal Regulations in 24 CFR Part 576, the program objectives, priorities, and strategies as stated in the City of Omaha Program Guidelines, the Consolidated Submission for Community Planning and Development, and the most recent ESGP Request for Proposals. 1.08 "ESGP Funds" shall mean — the portion of the Emergency Solutions Grant Program funds awarded to the City as may be available during Program Year 2015 for the use specified herein, in an amount not to exceed $155,000.00, subject to the terms, conditions, and requirements of said Grant. Availability of funds is subject to and conditioned upon actual receipt of same, by the City of Omaha. 1.09 "Homeless Person" shall mean — an individual or family who lacks a fixed, regular, and adequate nighttime residence; and an individual or family who has a primary nighttime residence that is: 1) a supervised publicly or privately operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing for the mentally ill), 2) an institution that provides a temporary residence for individuals intended to be institutionalized, or 3) a public or private place not designed for, or ordinarily used as a regular sleeping accommodation for human beings. 1.10 "Grant" shall mean — non-repayable ESGP funds made subject to the terms, conditions and provisions of the grant agreement under which said grant is made. -2- 1.11 "Program Income" shall mean — gross income received by the Recipient or Subrecipient directly generated from the use of ESGP funds. When such income is generated by an activity that is only partially assisted with ESGP funds, the income shall be prorated to reflect the percentage of ESGP funds used. (Exhibit 1.12 "Facility" shall mean—the two Siena/Francis House emergency shelters (Francis House, located at 1111 North 17th Street, Omaha,NE 68102, and Siena House, located at 1702 Nicholas Street, Omaha,NE 68102). 1.13 "ServicePoint" shall mean — an information management system developed by Bowman Internet Systems in Shreveport, LA, permitting social service agencies to share data about clients,resources, and services. 1.14 "Application" shall mean — The Siena/Francis House application submission on the basis of which ESGP Funds were approved by the City, including any certifications and assurances and any information or documentation required to meet any ESGP Funds conditions. A copy of the Application is maintained as part of the ESGP application by the City of Omaha Planning Department and incorporated herein by this reference. 1.15 "Continuum of Care" shall mean — the coordinated and responsive network of programs and services providing emergency, transitional, and supportive shelter and supportive services to the Omaha area's homeless individuals and families, or near homeless individuals and families. 1.16 "Contract Completion" shall mean —the complete expenditure of awarded funds, the completion of the Scope of Work as defined in Exhibit "C", or the expiration of the time frame of the Agreement, whichever comes first. 1.17 "Scope of Work" shall mean — the housing and/or supportive services to be provided homeless persons for the term of this Agreement; this work is detailed in Exhibit"C". SECTION 2. DUTIES AND CONDITIONS OF CITY FINANCING 2.01 Subject to and conditioned upon actual receipt of same, the City agrees to make available to the Contractor One Hundred Fifty-Five Thousand Dollars ($155,000.00) in ESGP Funds, for the purposes set forth in this Agreement, and as detailed in Exhibit"C" Scope of Work, incorporated herein by this reference. 2.01.1 City funding pursuant to this Section shall be contingent upon receipt of and subject to the availability of ESGP funds in amounts adequate to meet any contractual obligations in force upon the date of execution of the Agreement as well as this proposed obligation. Should adequate funding not be available, the City shall notify the Contractor as soon as reasonably possible. At this time, the responsibilities of the Contractor under Section 3 of this Agreement shall be released, the provisions of -3 - Section 5, Paragraph 5.8 will be exercised and the Agreement will be terminated. 2.01.2 Reimbursement shall be on a monthly basis for the attached budget line item expenditures (see Exhibit "D"). Payments shall be made on the basis of monthly requests for payment and shall be reimbursements for actual expenditures. 2.01.3 Monthly billing will be submitted to the Director by the Siena/Francis House with the monthly progress report. The monthly bill and monthly progress report is due not later than twenty (20) days following each monthly reporting period. 2.01.4 The City shall review and monitor the required monthly reports that identify the progress/accomplishments of the Siena/Francis House on the activities included in this Agreement and on contracts entered into with third parties pursuant thereto. 2.01.5 The City shall prepare monthly payment vouchers for the Siena/Francis House based upon the Contractor's monthly progress report and request for payment. 2.01.6 No financial assistance provided pursuant to this Agreement may be used to replace State or local funds previously used, or designated for use, to assist homeless persons. 2.01.7 The City may deobligate the remaining amounts for services in any year if the actual cost of services for that year is less than the total cost anticipated in the Application. 2.01.8 Eligible Contractors. Contractor shall submit to the Director a certificate verifying that Contractor is an eligible recipient for federal funding, i.e., has not been debarred or suspended by HUD. In addition, certification shall be submitted to the Director from each contractor or subcontractor to be used on the Project to the effect that each contractor or subcontractor has not been debarred or disqualified by HUD (24 CFR Part 5 and 24 CFR 570.609 — see Exhibit "K"). In addition, Contractor hereby certifies that it is in good standing with the Department of Health and Human Services. The Director shall approve all contractors and subcontractors prior to being hired by the Contractor. SECTION 3. DUTIES AND RESPONSIBILITIES OF THE CONTRACTOR PROJECT PERFORMANCE 3.01 The Contractor shall use the ESGP Funds ($155,000.00) solely and exclusively for the express purpose of continuing its services to homeless persons in accordance with Exhibit"C", Scope of Work. -4- REPORTING 3.02 The Contractor shall submit a monthly progress report to the Director delineating the accomplishments of Siena/Francis House for the previous 30-day period on the specific activities undertaken pursuant to this Agreement. Monthly progress reports shall contain information on number served by race, ethnicity, and household composition, along with subpopulation numbers, number served by housing type as well as other information deemed necessary by the City of Omaha, for the purpose of statistical evaluation, monitoring and coordination of client services (Exhibit"C"). 3.03 The Contractor shall submit a monthly Reimbursement Request to the Director detailing the operational expenses for which Siena/Francis House is seeking reimbursement. Eligible operational expenses are identified in Exhibit "C", Scope of Work. Invoices along with evidence that the invoices have been paid, i.e., a check register listing each expenditure by check number, payee, date and amount, is to be submitted. FINANCIAL MANAGEMENT 3.04 Audits. The Contractor shall comply with all provisions and regulations of the Emergency Solutions Grant Program and have an annual audit completed in compliance with 2 CFR Part 200.5 — Audit Requirements. A copy of the audit shall be provided to the Director. 2 CFR Part 200.5 — Audit Requirements is attached to this Agreement as Exhibit "E". 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 Contractor 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 Contractor's expense is less than $750,000.00 in each fiscal year. 3.04.1 Any deficiencies noted in audit reports must be fully cleared by the Contractor within 30 days after receipt of audit by the Contractor. Failure of the Contractor to comply with the above audit requirements will constitute a violation of this Agreement and may result in the withholding of future payments and may constitute a default subject to termination according to Section 5-8 referenced herein. 3.05 Accounting Standards. The Contractor agrees to comply with 2 CFR Part 215 — Uniform Administrative Requirements 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 "J", attached hereto and incorporated herein as though fully set forth). 3.06 Cost Principals. The Contractor shall comply with the requirements and the standards of 2 CFR Part 230 — Cost Principles for Non-Profit Organizations -5- (Exhibit "I"), and with the requirements of 2 CFR Part 215 — Uniform Administrative Requirements (Exhibit"J"). Both Exhibits are attached hereto and incorporated herein as though fully set forth. 3.07 Release of Information. The Contractor specifically hereby states, agrees and certifies that it is familiar with the limited purpose set forth in the Federal Laws, Rules and Regulations, and in the laws of the State of Nebraska, for which personal information requested may be used and that the information received will be used solely for those limited purposes and not to harass, degrade or humiliate any person. The information released shall be used solely for the limited purpose stated, and the Contractor further agrees to indemnify and hold harmless the City of Omaha for any liability arising out of the improper use by the Contractor of information provided. 3.08 Documentation & Record-Keeping. The Contractor 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 of America or any duly authorized representatives, or any duly authorized representatives of the City of Omaha, as approved by the Planning Director, shall have access to any books, documents, papers, records and accounts of the Contractor or subcontractors which are directly pertinent to this undertaking for the purpose of making audit, examination, excerpts and transcriptions. Such records and accounts shall be retained for five years from the Contract Completion. Any contract entered into by the Contractor with any Subcontractors shall include this Section to ensure said access. 3.08.1 The Contractor shall keep any records and make any reports (including those pertaining to race, ethnicity, gender, and disability status) that HUD may require within the time frame required. 3.09 Homeless Participation in Project. The Contractor must, to the maximum extent practicable, involve homeless individuals and families, through employment, volunteer services, or otherwise, in constructing, rehabilitating, maintaining, and operating the project and in providing supportive services for the project. 3.10 Continuum of Care Requirements. The Contractor shall regularly and reliably attend Metro Area Continuum of Care for the Homeless (MACCH) monthly meetings, ensure that all program information is listed in the MACCH Directory, participate in the MACCH client feedback process, install and implement the ServicePoint System as defined in Section 1.13., ensure that all relevant staff are utilizing the MACCH Listserve, pay on a timely basis annual MACCH dues, and participate in the MACCH monthly housing count(as applicable). 3.11 Matching Requirement: The Contractor will provide enough match to not only equal its grant allocation($155,000.00) but an additional proportional amount that will allow the entire match requirement of the City of Omaha ESGP allocation to -6- be met. (See Exhibit "C", Scope of Work, for the amount of "matching dollars" required by this grant- Item 6.) SECTION 4. TERM OF THE AGREEMENT This Agreement shall be in full force and effect from July 1, 2015 through and including June 30, 2016. The Director may extend the term of this Agreement or adjust the term to coincide with actual expenditure start dates to facilitate the complete expenditure of funds. In no event shall the term be extended beyond December 31, 2016. SECTION 5. MUTUAL AGREEMENTS BETWEEN CITY AND CONTRACTOR 5.01 Captions. Captions used in this Agreement are for convenience and are not used in the construction of this Agreement. 5.02 Applicable Law. 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 terms and the performance under this Agreement. 5.03 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. 5.04 Merger. This Agreement shall not be merged into any other oral or written agreement, lease or deed of any type. 5.05 Modification. This Agreement contains the entire agreement of the parties. No representations were made or relied upon by either party other than those that are expressly set forth herein. No agent, employee, or other representative of either party is empowered to alter any of the terms 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. 5.06 Assignment. The Contractor may not assign its rights or obligations under this Agreement without the express prior written consent of the City. 5.07 Strict Compliance. All provisions of this Agreement and each and every document that shall be attached shall be strictly complied with as written, and no substitution or change shall be made except upon written direction from authorized representatives of the parties. 5.08 Termination. This Agreement may be terminated by either party upon thirty (30) days written notice to the other party. Said notice shall be given when received by certified mail at the other party's usual place of business. This Agreement may also be suspended or terminated in accordance with 24 CFR 85.43, Enforcement -7- or 24 CFR 85.44, Termination for Convenience (Exhibit "H"). Upon termination of this Agreement all funds and interest in any account hereunder shall become the property of the City and shall be returned to the City. 5.09 Reversion of Assets. Upon the expiration of this Agreement the Contractor shall transfer to the City of Omaha any ESGP funds on hand at the time of expiration and any accounts receivable attributable to the use of ESGP funds. Additionally, the Contractor shall ensure that any real property under the Contractor's control that was acquired or improved in whole or in part with ESGP funds in excess of $25,000.00 is either: 5.09.1 Used to meet one of the national objectives in 24 CFR 570.208 until five years after expiration of the Agreement, or such longer period of time as determined appropriate by the City; or, 5.09.2 Is disposed of in a manner which results in the City being reimbursed in the amount of the current fair market value of the property less any portion thereof attributable to expenditures of non-ESGP funds for acquisition of, or improvement to,the property. Such reimbursement is not required after the period of time specified in accordance with(5.09.1) above. 5.10 Indemnification. The Contractor shall indemnify and hold the City harmless from and against: (1) any and all claims arising from contracts between the Contractor and third parties made to effectuate the purposes of this Agreement; and, (2) any and all claims, liabilities or damages arising from the preparation or presentation of any of the work covered by this Agreement. 5.11 Unenforceable Provisions. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition of enforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 5.12 Disclosure of Lobbying. The Contractor shall certify and disclose, to the best of its knowledge and belief,that: 5.12.1 No Federal appropriated funds have been paid or will be paid, by or on behalf of the Contractor, to any person for influencing or attempting to influence an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment or modification of any Federal contract, grant, loan, or cooperative agreement. 5.12.2 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 -8- or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the Contractor shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying", in accordance with its instructions. 5.12.3 The language of this certification is to be included in the award documents for all subawards at all tiers, (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and all subrecipients shall certify and disclose accordingly. 5.13 Subrecipients. The Contractor shall comply with the requirements and the standards 2 CFR Part 230—Cost Principles for Non-Profit Organizations (Exhibit "P'), and with the requirements of 2 CFR Part 215 — Uniform Administrative Requirements (Exhibit"J"). 5.14 Personnel and Participant Conditions. 5.14.1 Contract Compliance Clause. 5.14.1.1 Section 10-192 of the Omaha Municipal Code, Equal Employment Opportunity Clause. The Contractor and its contractors 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 contractors 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 (Exhibit"F"). 5.14.1.2 The Contractor and its contractors or subcontractors shall, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, age, sexual orientation, gender identity, national origin, familial or handicap status. 5.14.1.3 The Contractor and its contractors or 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' -9- 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. 5.14.1.4 The Contractor and its contractors or subcontractors shall furnish to the Human Rights and Relations Director all federal forms containing the information and reports required by the federal government for federal contracts under federal rules and regulations, including the information required by sections 10-192 to 10-194, inclusive, of the Omaha Municipal Code and shall permit reasonable access to his records. Records accessible to the Human Rights and Relations Director shall be those which related to paragraphs 5.14.1.1 through 5.14.1.7 of this subsection and only after reasonable notice is given the contractor. The purpose of this provision is to provide for investigation to ascertain compliance with the program provided herein. 5.14.1.5 The Contractor and its contractors or subcontractors shall take such actions with respect to any subcontractor as the City may direct as a means of enforcing the provisions of paragraphs 5.14.1.1 through 5.14.1.7 herein, including penalties and sanctions for noncompliance; however, in the event the contractor becomes involved in or is threatened with litigation as the result of such directions by the City, the City will enter into such litigation as is necessary to protect the interests of the City and to effectuate the provisions of this division, and, in the case of contracts receiving federal assistance, the contractor or the City may request the United States to enter into such litigation to protect the interests of the United States. 5.14.1.6 The Contractor and its contractors shall file and shall cause his subcontractors, if any, to file compliance reports with the Contractor's contractor in the same form and to the extent as required by the federal government for federal contracts under federal rules and regulations. Such compliance reports shall be filed with the City's Human Rights and Relations Director. Compliance reports filed at such times as directed shall contain information as to the employment practices, policies, programs and statistics of the Contractor and its subcontractors. 5.14.1.7 The Contractor and its contractors or subcontractors shall include the provisions of Paragraphs 5.14.1.1 through 5.14.1.7 of this section, "Equal Employment Opportunity Clause", and Section 10-193 in every contract, subcontract or - 10- 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). 5.14.2 Workers' Compensation. The Contractor shall provide Workers' Compensation Insurance coverage for all employees involved in the performance in this Agreement. 5.14.3 Minority Business/Women Business Enterprise Plan. The Contractor shall make its best efforts to ensure that construction services, contracts and employment opportunities are affirmatively marketed to women and members of minority groups. As used in this Agreement, the term "women and members of minority groups" means a business at least fifty-one percent (51%) owned and controlled by minority group members or women. 5.14.4 Section 3 - Employment of Low-Income Persons (Section 3 of HUD Act of 68, as amended, 1 U.S.C. 1701u). The Contractor shall make its best efforts to comply with Section 3. 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. (Exhibit"G") 5.14.5 Conflict of Interest. The Contractor agrees to abide by the provisions of 24 CFR 92.356 with respect to conflicts of interest, and covenants that it presently has financial interest and shall not acquire any financial interest, direct or indirect, which would conflict in any manner or degree with the performance of services required under this Agreement. The Contractor further covenants that in the performance of this Agreement no person having such a financial interest shall be employed or retained by the Contractor hereunder. These conflict of interest provisions apply to any person who is an employee, agent, consultant, officer or elected official or appointed official of the City or any designated public agencies or Subrecipients which are receiving funds under the entitlement program. 5.14.6 Attestation of Citizenship. To comply with Neb. Rev. Stat. 4-108 through 4-114, the Contractor agrees to comply with the requirements below. The Contractor shall comply with and 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 - 11 - electronic verification of the work authorization program authorized by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, 8 U.S.C. 1324a, known as the E-Verify Program, or an equivalent federal program designated by the United States Department of Homeland Security or other federal agency authorized to verify the work eligibility status of a newly hired employee. If the Contractor is an individual or sole proprietorship,the following applies: 5.14.6.1 The Contractor must complete the United States Citizenship Attestation Form available on the Department of Administrative Services website at www.das.state.ne.us. 5.14.6.2 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. 5.14.6.3 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 "L") verifying eligibility status for the purposes of receiving a public benefit. 5.14.7 Employee Classification Act. To comply with the Nebraska Employee Classification Act, all general contractors and subcontractors who perform construction or delivery services pursuant to this contract shall submit to the City an Affidavit for Employee Classification Act (Exhibit "M") attesting that (1) each individual performing services for such contractor is properly classified under the Nebraska Employee Classification Act, 2010 LB 563 ("the Act"), (2) such contractor has completed a federal I-9 immigration form and has such form on file for each employee performing services, (3) such contractor has complied with Neb. Rev. Stat. section 4-114 (federal immigration verification system), (4) such contractor has no reasonable basis to believe that any individual performing services for such contractor is an undocumented worker, and (5) as of the time of the contract, such contractor is not barred from contracting with the state or any political subdivision pursuant to the Act. The contractor shall follow the provisions of the - 12- Act. A violation of the Act by a contractor is grounds for rescission of the contract by the City. 5.14.8 Federal Funding Accountability and Transparency Act. The Developer and Contractor shall comply with applicable regulations of the Federal Funding and Accountability and Transparency Act (FFATA) (75 Reg 55663 (September 14, 2020) and (to be codified at 2CFR part 170) Contractor shall complete and provide to the City (Exhibit"N"). SECTION 6. CONTRACTOR'S COMPLIANCE WITH OTHER FEDERAL REGULATIONS 6.1 Environmental Review. The Developer agrees to comply with the following regulations insofar as they apply to the performance of this Agreement: 6.01.1 Clean Air Act, 42, U.S.C., 1857, et seq. 6.01.2 Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251, et seq., as amended 1318 relating to inspection, monitoring entry, reports and information as well as other requirements specified in Section 114 and Section 308, and all regulations and guidelines issued thereunder. 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. 6.01.7 Lead-Based Paint Regulations at 24 CFR 570.608 and 24 CFR Part 35 and in particular Sub-Part B thereof. Such regulations pertain to all HUD-assisted housing and require that all owners, prospective owners and tenants of properties constructed prior to 1978 be properly notified that such properties may include lead-based paint and require specific treatments according to the amount of HUD funding allocated to the Project. 6.01.8 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 - 13 - 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 Developer shall comply with the applicable regulations of the Uniform Relocation Act of 1970, as amended (URA) (42 U.S.C. 4601-4655), or Section 104 (d) of the Housing and Community Development Act of 1974, as amended (Section 104 (d)), which require relocation assistance be provided to resident Developers, tenants, businesses and other occupants that are displaced as a result of a federally-assisted project. In the event that the Developer 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 Accessibility Requirements. The Contractor must comply with The Fair Housing Act and with Section 504 of the Rehabilitation Act of 1973 in the provision of reasonable accommodation to prospective clients and must adopt procedures to make available information on the existence and locations of facilities and services that are accessible to persons with a handicap and maintain evidence of implementation of the procedures. 6.04 Non-Discrimination. The Contractor shall not, in the performance of this Agreement, discriminate or permit discrimination in violation of federal or state laws or local ordinances because of race, color, handicap, familial status, marital status, sex, age, political or religious opinions, affiliations or national origin. 6.05 Remedies. If,through any cause,the Contractor shall fail to fulfill in a timely and proper manner any obligations under this Agreement, or violate any of the covenants, representations or agreements hereof, the City may upon written notice terminate this Agreement or such parts thereof as to this Agreement, and may hold the Contractor liable, to the extent permitted by Nebraska Law, for any damages caused to the City by reasons of such default and termination. - 14- SECTION 7. AUTHORIZED REPRESENTATIVES In further consideration of the mutual covenants herein contained, the parties hereto expressly agree that for the purposes of notice, including legal service of process, during the term of this Agreement, and for the period of any applicable statute or limitations thereafter, the following named individuals shall be authorized representatives of the parties: (1) City of Omaha Director, Planning Department Omaha/Douglas Civic Center 1819 Farnam Street Omaha,NE 68183 (2) Siena/Francis House Mike Saklar Executive Director P. O. Box 217 DTS Omaha,NE 68101 - 15 - IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates indicated below. SIENA/FRANCIS HOUSE, a Nebraska Non-profit Corporation: �4,4% 4 /.zb/6 Mike Saklar Date Executive Director ATTEST: CITY OF OMAHA: it Jerk of the City of Omaha a e Mayor of the City of Omaha Da e APPROVED AS TO FORM: CITY ATTORNEY DATE 2325 dlh - 16 - SCHEDULE OF EXHIBITS Agreement Exhibit Location Description A 1.02 Articles of Incorporation, Directors, Corporate Resolution B 1.07, 1.11 HUD 24 CFR Part 576 C 1.16, 1.17, 2.01, 3.01, Scope of Work 3.02, 3.03, 3.11 D 2.01.2 Annual Operating Budget E 3.04 2 CFR Part 200.5 —Audit Requirements F 5.14.1.1 Equal Employment Opportunity Clause G 5.14.4 Section 3 Clause H 5.08 Termination- CFR 85.43 and CFR 85.44 I 3.06, 5.13 2 CFR Part 230—Cost Principles for Non-Profit Organizations J 3.05, 3.06, 5.13 2 CFR Part 215 —Uniform Administrative Requirements K 2.01.8 Use of Debarred, Suspended or Ineligible Contractors L 5.14.6 United States Citizenship Attestation Form for Public Benefit M 5.14.7 Affidavit for Employee Classification Act N 5.14.8 Federal Funding Accountability and Transparency Act - 17- CORPORATE RESOLUTION I, Brian Pierce, do hereby certify that I am the duly elected Secretary of Siena/Francis House,a Nebraska Non-Profit Corporation authorized to do business in the State of Nebraska,and that the following is a copy of the Resolution adopted at a meeting of the Board of Directors of said Corporation,held on February 23 ,2016. WHEREAS,the Siena/Francis House through its emergency shelter facilities will provide shelter and essential services for homeless persons;and, WHEREAS, the Siena/Francis House submitted a grant application to the City of Omaha in response to the FY 2015 Emergency Shelter Grant Program Request for Proposals;and, WHEREAS, the City of Omaha has granted$155,000 to the Siena/Francis House to continue to provide shelter and essential services for homeless persons and families for a twelve month period through its Francis House and Siena House facilities;and, NOW,THEREFORE,BE IT RESOLVED that the Corporation does hereby agree to enter into an Agreement with the City of Omaha to accept an Emergency Shelter Grant in the amount of ONE-HUNDRED FIFTY-FIVE THOUSAND DOLLARS ($155,000); and, IT IS FURTHER RESOLVED that Mike Saklar, Executive Director of the Corporation, shall be, and hereby is, authorized to take all such actions, including the execution of an Agreement with the City of Omaha to carry out the purpose of this Resolution. I do hereby further certify that since the adoption of said Resolution, it has been neither revoked nor amended;and, I do hereby further certify that on January 27,2016 Thomas Chapman was elected Chair, and that on January 27, 2016, I, Brian Pierce was elected Secretary, and that we have been since that date and are now,respectively,Chair and Secretary of Siena/Francis House. Witness my hand on this o2 3 day of February,2016. Se retary, Siena/Frakhcis House Board of Directors AUTHENTICATED U.S.GOVERNMENT INFORMATION GPO Ofc.of Asst.Secy.,Comm. Planning, Develop., HUD Pt.576 result of privately undertaken rehabili- to this program, except where funds re- tation, demolition, or acquisition of ceived under this part are combined the real property, the term "initiation with funds from other Federal pro- of negotiations" means the execution grams that are subject to the Act. of the agreement between the grantee [59 FR 17201,Apr.11,1994] and the project sponsor. §574.635 Lead-based paint. PART 576-EMERGENCY The Lead-Based Paint Poisoning Pre- SOLUTIONS GRANTS PROGRAM vention Act (42 U.S.C. 4821-4846), the Subpart A--General Provisions Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851- sec. 4856), and implementing regulations at 576.1 Applicability and purpose. part 35, subparts A, B, H, J, K, M, and 576.2 Definitions. R of this part apply to activities under 576.3 Allocation of funding. this program. Subpart B-Program Components and [64 FR 50226,Sept.15,1999] Eligible Activities §574.640 Flood insurance protection. 576.100 General provisions and expenditure Noproperty to be assisted under this limits. 576.101 Street outreach component. part may be located in an area that has 576.102 Emergency shelter component. been identified by the Federal Emer- 576.103 Homelessness prevention compo- gency Management Agency (FEMA) as nent. having special flood hazards,unless: 576.104 Rapid re-housing assistance compo- (a)(1) The community in which the nent. area is situated is participating in the 576.105 Housing relocation and stabilization services. National Flood Insurance Program and 576.106 Short-term and medium-term rental the regulations thereunder (44 CFR assistance. parts 59 through 79);or 576.107 HMIS component. (2) Less than a year has passed since 576.108 Administrative activities. FEMA notification regarding such haz- 576.109 Indirect costs. ards;and Subpart C-Award and Use of Funds (b)The grantee will ensure that flood insurance on the structure is obtained 576.200 Submission requirements and grant in compliance with section 102(a)of the approval. Flood Disaster Protection Act of 1973 576.201 Matching requirement. (42 U.S.C.4001 et seq.). 576.202 Means of carrying out grant activi- ties. §574.645 Coastal barriers. 576.203 Obligation, expenditure, and pay- In accordance with the Coastal Bar- ment requirements. rier Resources Act,16 U.S.C.3501,no fi- Subpart D-Reallocations nancial assistance under this part may be made available within the Coastal 576.300 In general. Barrier Resources System. 576.301 Metropolitan cities and urban coun- ties. §574.650 Audit. 576.302 States. 576.303 Territories. The financial management system 576.304 Alternative method. used by a State or unit of general local government that is a grantee must pro- Subpart E-Program Requirements vide for audits in accordance with 24 576.400 Area-wide systems coordination re- CFR part 44. A nonprofit organization quirements. that is a grantee or a project sponsor is 576.401 Evaluation of program participant subject to the audit requirements set eligibility and needs. forth in 24 CFR part 45. 576.402 Terminating assistance. 576.403 Shelter and housing standards. §574.655 Wage rates. 576.404 Conflicts of interest. 576.405 Homeless participation. The provisions of the Davis-Bacon 576.406 Faith-based activities. Act (40 U.S.C. 276a-276a-5) do not apply 576.407 Other Federal requirements. 217 §576.1 24 CFR Ch. V(4-1-12 Edition) 576.408 Displacement,relocation,and acqui- housing or living situation will be ter- salon. minated within 21 days after the date Subpart F—Grant Administration of application for assistance; (D) Lives in a hotel or motel and the 576.500 Recordkeeping and reporting re- Cost of the hotel or motel stay is not quirements. paid by charitable organizations or by 576.501 Enforcement. Federal, State, or local government AUTHoarrY:42 U.S.C. 11371 et seq.,42 U.S.C. programs for low-income individuals; 3535(d). (E) Lives in a single-room occupancy SOURCE: 76 FR 75974, Dec. 5, 2011, unless or efficiency apartment unit in which otherwise noted. there reside more than two persons or lives in a larger housing unit in which Subpart A—General Provisions there reside more than 1.5 persons re- side per room, as defined by the U.S. .§576.1 Applicability and purpose. Census Bureau; This part implements the Emergency (F) Is exiting a publicly funded insti- Solutions Grants (ESG) program au- tution, or system of care (such as a thorized by subtitle B of title IV of the health-care facility, a mental health McKinney-Vento Homeless Assistance facility, foster care or other youth fa Act(42 U.S.C. 11371-11378). The program cility, or correction program or insti- authorizes the Department of Housing tution);or and Urban Development (HUD) to (G) Otherwise lives in housing that make grants to States,units of general has characteristics associated with in- purpose local government, and terri- stability and an increased risk of tories for the rehabilitation or conver- homelessness, as identified in the re- sion of buildings for use as emergency cipient's approved consolidated plan; shelter for the homeless, for the pay- (2) A child or youth who does not ment of certain expenses related to op- qualify as "homeless" under this sec- erating emergency shelters, for essen- tion, but qualifies as "homeless"under tial services related to emergency shel- section 387(3) of the Runaway and ters and street outreach for the home- Homeless Youth Act (42 U.S.C. less, and for homelessness prevention 5732a(3)), section 637(11) of the Head and rapid re-housing assistance. Start Act (42 U.S.C. 9832(11)), section 41403(6) of the Violence Against Women §576.2 Definitions. Act of 1994 (42 U.S.C. 14043e-2(6)), see- At risk of homelessness means: (1) An tion 330(h)(5)(A) of the Public Health individual or family who: Service Act (42 U.S.C. 254b(h)(5)(A)), (i) Has an annual income below 30 section 3(m) of the Food and Nutrition percent of median family income for Act of 2008(7 U.S.C. 2012(m)),or section the area,as determined by HUD; 17(b)(15) of the Child Nutrition Act of (ii)Does not have sufficient resources 1966(42 U.S.C. 1786(b)(15));or or support networks, e.g., family, (3) A child or youth who does not friends, faith-based or other social net- qualify as "homeless" under this sec- works, immediately available to pre- tion, but qualifies as "homeless" under vent them from moving to an emer- section 725(2) of the McKinney-Vento gency shelter or another place de- Homeless Assistance Act (42 U.S.C. scribed in paragraph (1) of the "home- 11434a(2)), and the parent(s) or guard- less"definition in this section;and ian(s) of that child or youth if living (iii)Meets one of the following condi- with her or him. tions: Consolidated plan means a plan pre- (A) Has moved because of economic pared in accordance with 24 CFR part reasons two or more times during the 91. An approved consolidated plan means 60 days immediately preceding the ap- a consolidated plan that has been ap- plication for homelessness prevention proved by HUD in accordance with 24 assistance; CFR part 91. (B) Is living in the home of another Continuum of Care means the group because of economic hardship; composed of representatives of rel- (C) Has been notified in writing that evant organizations, which generally their right to occupy their current includes nonprofit homeless providers; 218 Ofc.of Asst.Secy., Comm. Planning, Develop., HUD §576.2 victim service providers; faith-based (2) An individual or family who will organizations; governments; busi- imminently lose their primary night- nesses; advocates; public housing agen- time residence,provided that: des; school districts; social service (1) The primary nighttime residence providers; mental health agencies;hos- will be lost within 14 days of the date pitals; universities; affordable housing of application for homeless assistance; developers; law enforcement; organiza- (ii)No subsequent residence has been tions that serve homeless and formerly identified; and homeless veterans, and homeless and (iii) The individual or family lacks formerly homeless persons that are or- the resources or support networks, e.g., ganized to plan for and provide, as net- family, friends, faith-based or other so- essary, a system of outreach, engage- cial networks, needed to obtain other ment, and assessment; emergency shel- permanent housing; ter; rapid re-housing; transitional (3) Unaccompanied youth under 25 housing; permanent housing; and pre- years of age, or families with children qual- vention strategies to address the var- ify and youth, who do not otherwise ious needs of homeless persons and per- as homeless under this definition, but who: sons at risk of homelessness for a spe- bu geographic area. (1)Are defined as homeless under sec- cifiction 387 of the Runaway and Homeless Emergency shelter means any facility, Youth Act (42 U.S.C. 5732a), section 637 the primary purpose of which is to pro- of the Head Start Act (42 U.S.C. 9832), vide a temporary shelter for the home- section 41403 of the Violence Against less in general or for specific popu- Women Act of 1994 (42 U.S.C. 14043e-2), lations of the homeless and which does section 330(h) of the Public Health not require occupants to sign leases or Service Act (42 U.S.C. 254b(h)), section occupancy agreements. Any project 3 of the Food and Nutrition Act of 2008 - funded as an emergency shelter under a (7 U.S.C. 2012),section 17(b)of the Child Fiscal Year 2010 Emergency Solutions Nutrition Act of 1966 (42 U.S.C. 1786(b)) grant may continue to be funded wider or section 725 of the McKinney-Vento ESG. Homeless Assistance Act (42 U.S.C. Homeless means: 11434a); (1)An individual or family who lacks (ii) Have not had a lease, ownership a fixed, regular, and adequate night- interest, or occupancy agreement in time residence,meaning: permanent housing at any time during (i)An individual or family with a pri- the 60 days immediately preceding the mary nighttime residence that is a date of application for homeless assist- public or private place not designed for ante; or ordinarily used as a regular sleeping (iii) Have experienced persistent in- accommodation for human beings, in- stability as measured by two moves or eluding a car, park, abandoned build- diamore during the 60-day period imme- ing, bus or train station, airport, or for homelessy preceding assi the date of applying camping ground; for assistance;and in (ii) An individual or family living in (iv) Can be expectedanextendedt continue period of a supervised publicly or privately oper- such staus for an e period of ated shelter designated to provide tern- time becauseof chronic ordis mental al g chronic physical. health or mental porary living arrangements (including health conditions, substance addiction, congregate shelters, transitional hous- histories of domestic violence or child- ing, and hotels and motels paid for by hood abuse (including neglect), the charitable organizations or by federal, presence of a child or youth with a dis- state, or local government programs ability, or two or more barriers to em- for low-income individuals);or ployment, which include the lack of a (iii) An individual who is exiting an high school degree or General Edu- institution where he or she resided for cation Development (GED), illiteracy, 90 days or less and who resided in an low English proficiency, a history of emergency shelter or place not meant incarceration or detention for criminal for human habitation immediately be- activity, and a history of unstable em- fore entering that institution; ployment; or 219 §576.3 24 CFR Ch.V(4-1-12 Edition) (4)Any individual or family who: Recipient means any State, territory, (1)Is fleeing, or is attempting to flee, metropolitan city, or urban county, or domestic violence,dating violence,sex- in the case of reallocation, any unit of ual assault, stalking, or other dan- general purpose local government that gerous or life-threatening conditions is approved by HUD to assume finan- that relate to violence against the indi- cial responsibility and enters into a vidual or a family member, including a grant agreement with HUD to admin- child, that has either taken place with- ister assistance under this part. in the individual's or family's primary State means each of the several nighttime residence or has made the States and the Commonwealth of Puer- individual or family afraid to return to to Rico. their primary nighttime residence; Subrecipient means a unit of general (ii)Has no other residence;and purpose local government or private (iii) Lacks the resources or support nonprofit organization to which a re- networks, e.g., family, friends, faith- cipient makes available ESG funds. based or other social networks, to ob- Territory means each of the following: taro other permanent housing. the Virgin Islands, Guam, American Homeless Management Information Sys- Samoa, and the Northern Mariana Is- tem (HMIS) means the information sys- lands. tern designated by the Continuum of Unit of general purpose local govern- Care to comply with the HUD's data ment means any city, county, town, collection, management, and reporting township, parish, village, or other gen- standards and used to collect client- eral purpose political subdivision of a level data and data on the provision of State. housing and services to homeless indi- Urban county means a county that viduals and families and persons at- was classified as an urban county risk of homelessness. under 42 U.S.C. 5302(a) for the fiscal Metropolitan city means a city that year immediately preceding the fiscal was classified as a metropolitan city year for which ESG funds are made under 42 U.S.C. 5302(a) for the fiscal available. year immediately preceding the fiscal Victim service provider means a private year for which ESG funds are made nonprofit organization whose primary available. This term includes the Dis- mission is to provide services to vic- trict of Columbia. tims of domestic violence, dating vio- Private nonprofit organization means a lence, sexual assault, or stalking. This private nonprofit organization that is a term includes rape crisis centers, bat- secular or religious organization de- tered women's shelters, domestic vio- scribed in section 501(c) of the Internal lence transitional housing programs, Revenue Code of 1986 and which is ex- and other programs. empt from taxation under subtitle A of the Code, has an accounting system §576.3 Allocation of funding. and a voluntary board, and practices (a) Territories. HUD will set aside for nondiscrimination in the provision of allocation to the territories up to 0.2 assistance. A private nonprofit organs- percent, but not less than 0.1 percent, zation does not include a governmental of the total amount of each appropria- organization, such as a public housing tion under this part in any fiscal year. agency or housing finance agency. HUD will allocate this set-aside Program income shall have the mean- amount to each territory based on its ing provided in 24 CFR 85.25. Program proportionate share of the total popu- income includes any amount of a secu- lation of all territories and its rate of city or utility deposit returned to the compliance with the most recent ex- recipient or subrecipient. penditure deadline under§576.203. Program participant means an indi- (b) States, metropolitan cities, and vidual or family who is assisted under urban counties. HUD will allocate the ESG program. amounts that remain after the set- Program year means the consolidated aside to territories under paragraph(a) program year established by the recipi- of this section to States, metropolitan ent under 24 CFR part 91. cities,and urban counties,as follows: 220 Ofc.of Asst.Secy.,Comm. Planning, Develop., HUD §576.101 (1) HUD will provide that the per- and other overhead costs directly re- centage of the total amount available lated to carrying out street outreach, for allocation to each State,metropoli- emergency shelter, homelessness pre- tan city, or urban county is equal to vention, rapid re-housing, and HMIS the percentage of the total amount are eligible costs of those program available under section 106 of the Hous- components. These costs are not sub- ing and Community Development Act ject to the expenditure limit in para- of 1974 for the prior fiscal year that was graph(c)of this section. allocated to that State, metropolitan city,or urban county. §576.101 Street outreach component. (2) Except as otherwise provided by (a) costs. to the ex- law, if the amount a metropolitan city pandit Eligiblere limits in §Subjecte tob), ex- or urban county would be allocated funds may be usedn for costs of pnder p the h (b)(1) s lessythan appro-.05 viding essential services necessary to pro- percent of the total fiscalam yearwillbe reach out to unsheltered homeless peo- added nfor ESG, that amount State be ple; connect them with emergency which to the allocation ocountyfor lothc l , in shelter, housing, or critical services; which the city or is located. and provide urgent, nonfacility-based (c) Notification eachc allocation amount. care to unsheltered homeless people HUD will notify State, metropoli- who are unwilling or unable to access tan city,l urban county, and territoryao emergency shelter, housing, or an ap- that is eligible to receive an allocation under this section of the amount of its propriate health facility. For the pur- allocation. poses of this section, the term "unsheltered homeless people" means Subpart B—Program Components individuals and families who qualify as and Eligible Activities Eli itivities homeless under paragraph (1)(i) of the g� "homeless"definition under§576.2.The §576.100 General provisions and ex- eligible costs and requirements for es- penditure limits. sential services consist of: (a) ESG funds may be used for five (1) Engagement. The costs of activi- program components: street outreach, ties to locate, identify, and build rela- emergency shelter, homelessness pre- tionships with unsheltered homeless vention, rapid re-housing assistance, people and engage them for the purpose and HMIS; as well as administrative of providing immediate support, inter- activities. The five program compo- vention, and connections with home- nents and the eligible activities that less assistance programs and/or main- may be funded under each are set forth stream social services and housing pro- in§576.101 through§576.107.Eligible ad- grams.These activities consist of mak- ministrative activities are set forth in ing an initial assessment of needs and §576.108. eligibility; providing crisis counseling; (b) The total amount of the recipi- addressing urgent physical needs, such ent's fiscal year grant that may be as providing meals, blankets, clothes, used for street outreach and emergency or toiletries; and actively connecting shelter activities cannot exceed the and providing information and refer- greater of: rals to programs targeted to homeless (1) 60 percent of the recipient's fiscal people and mainstream social services year grant;or and housing programs, including emer- (2) The amount of Fiscal Year 2010 gency shelter, transitional housing, grant funds committed for homeless as- community-based services, permanent sistance activities. supportive housing, and rapid re-hous- (c) The total amount of ESG funds ing programs. Eligible costs include that may be used for administrative the cell phone costs of outreach work- activities cannot exceed 7.5 percent of ers during the performance of these ac- the recipient's fiscal year grant. tivities. (d) Subject to the cost principles in (2) Case management. The cost of as- OMB Circulars A-87 (2 CFR 225)and A- sassing housing and service needs, ar- 122 (2 CFR 230) and other requirements ranging, coordinating, and monitoring in this part, employee compensation the delivery of individualized services 221 §576.101 24 CFR Ch.V(4-1-12 Edition) to meet the needs of the program par- (iv) Eligible treatment consists of ticipant. Eligible services and activi- crisis interventions, the prescription of ties are as follows: using the central- psychotropic medications, explanation ized or coordinated assessment system about the use and management of as required under §576.400(d); con- medications, and combinations of ducting the initial evaluation required therapeutic approaches to address mul- under §576.401(a), including verifying tiple problems. and documenting eligibility; coup- (5) Transportation. The transportation seling; developing, securing and coordi- costs of travel by outreach workers, so- nating services; obtaining Federal, cial workers, medical professionals, or State, and local benefits; monitoring other service providers are eligible, and evaluating program participant provided that this travel takes place • progress; providing information and re- during the provision of services eligible ferrals to other providers; and Bevel- under this section. The costs of trans- oping an individualized housing and portingunsheltered service plan, including planning a path people to emer to permanent housing stability. gency shelters or other service facili- (3)Emergency health services. (i) Eligi- ties are also eligible. These costs in- ble costs are for the direct outpatient elude the following: treatment of medical conditions and (i) The cost of a program partici- are provided by licensed medical pro- pant's travel on public transportation; fessionals operating in community- (ii) If service workers use their own based settings, including streets, vehicles, mileage allowance for service parks, and other places where workers to visit program participants; unsheltered homeless people are living. (iii)The cost of purchasing or leasing (ii) ESG funds may be used only for a vehicle for the recipient or sub- these services to the extent that other recipient in which staff transports pro- appropriate health services are Mac- gram participants and/or staff serving cessible or unavailable within the area. program participants, and the cost of (iii)Eligible treatment consists of as- gas, insurance, taxes and maintenance sessing a program participant's health for the vehicle;and problems and developing a treatment (iv) The travel costs of recipient or plan; assisting program participants to subrecipient staff to accompany or as- understand their health needs; pro- sist program participants to use public viding directly or assisting program transportation. participants to obtain appropriate (6) Services for special populations. emergency medical treatment;and pro- ESG funds may be used to provide serv- viding medication and follow-up serv- ices for homeless youth, victim serv- ices. (4) Emergency mental health services, ices, and services for people living with (i) Eligible costs are the direct out- HIV/AIDS, so long as the costs of pro- patient treatment by licensed profes viding these services are eligible under sionals of mental health conditions op- paragraphs (a)(1) through (a)(5) of this erating in community-based settings, section. The term victim services means including streets, parks, and other services that assist program partici- places where unsheltered people are pants who are victims of domestic vio living. lence, dating violence, sexual assault, (ii) ESG funds may be used only for or stalking, including services offered these services to the extent that other by rape crisis centers and domestic vio- appropriate mental health services are lence shelters, and other organizations inaccessible or unavailable within the with a documented history of effective community. work concerning domestic violence, (iii) Mental health services are the dating violence, sexual assault, or application of therapeutic processes to stalking. personal, family, situational, or occu- (b) Minimum period of use. The recipi- pational problems in order to bring ent or subrecipient must provide serv- about positive resolution of the prob- ices to homeless individuals and fami- lem or improved individual or family lies for at least the period during which functioning or circumstances. ESG funds are provided. 222 Ofc.of Asst.Secy.,Comm. Planning, Develop., HUD §576.102 (c) Maintenance of effort. (1)If the re- lies and individuals, and operating cipient or subrecipient is a unit of gen- emergency shelters. eral purpose local government,its ESG (1) Essential services. ESG funds may funds cannot be used to replace funds be used to provide essential services to the local government provided for individuals and families who are in an street outreach and emergency shelter emergency shelter,as follows: services during the immediately pre- (i) Case management. The cost of as- ceding 12-month period,unless HUD de- sessing, arranging, coordinating, and termines that the unit of general pur- monitoring the delivery of individual- pose local government is in a severe fi- ized services to meet the needs of the nancial deficit. program participant is eligible. Compo- (2)Upon the recipient's request, HUD nent services and activities consist of: will determine whether the unit of gen- (A) Using the centralized or coordi- eral purpose local government is in a nated assessment system as required severe financial deficit, based on the under§576.400(d); recipient's demonstration of each of (B) Conducting the initial evaluation the following: required under §576.401(a), including (i) The average poverty rate in the verifying and documenting eligibility; unit of general purpose local govern- (C)Counseling; ment's jurisdiction was equal to or (D) Developing, securing, and coordi- greater than 125 percent of the average nating services and obtaining Federal, national poverty rate, during the cal- State,and local benefits; endar year for which the most recent (E) Monitoring and evaluating pro- data are available, as determined ac- gram participant progress; cording to information from the U.S. (F) Providing information and refer- Census Bureau. rals to other providers; (ii)The average per-capita income in (G) Providing ongoing risk assess- the unit of general purpose local gov- ment and safety planning with victims ernment's jurisdiction was less than 75 of domestic violence, dating violence, percent of the average national per- sexual assault,and stalking;and capita income, during the calendar (H) Developing an individualized year for which the most recent data housing and service plan, including are available, as determined according planning a path to permanent housing to information from the Census Bu- stability. reau. (ii) Child care. The costs of child care (iii)The unit of general purpose local for program participants, including government has a current annual budg- providing meals and snacks, and com- et deficit that requires a reduction in prehensive and coordinated sets of ap- funding for services for homeless peo- propriate developmental activities, are ple. eligible. The children must be under (iv) The unit of general purpose local the age of 13, unless they are disabled. government has taken all reasonable Disabled children must be under the steps to prevent a reduction in funding age of 18.The child-care center must be of services for homeless people. Rea- licensed by the jurisdiction in which it sonable steps may include steps to in- operates in order for its costs to be eli- crease revenue generation, steps to gible. maximize cost savings, or steps to re- (iii) Education services. When nec- duce expenditures in areas other than essary for the program participant to services for homeless people. obtain and maintain housing, the costs of improving knowledge and basic edu- §576.102 Emergency shelter compo• cational skills are eligible. Services in- nent. elude instruction or training in con- (a) General. Subject to the expendi- sumer education, health education, ture limit in §576.100(b), ESG funds substance abuse prevention, literacy, may be used for costs of providing es- English as a Second Language, and sential services to homeless families General Educational Development and individuals in emergency shelters, (GED). Component services or activi- renovating buildings to be used as ties are screening,assessment and test- emergency shelter for homeless fami- ing; individual or group instruction; 223 §576.102 24 CFR Ch. V(4-1-12 Edition) tutoring; provision of books, supplies fere with the program participant's and instructional material; counseling; ability to obtain and retain housing. and referral to community resources. (B) Emergency Solutions Grant (iv) Employment assistance and job (ESG)funds may be used only for these training. The costs of employment as- services to the extent that other appro- sistance and job training programs are priate legal services are unavailable or eligible, including classroom, online, inaccessible within the community. and/or computer instruction; on-the- (C) Eligible subject matters are child job instruction;and services that assist support, guardianship, paternity, individuals in securing employment, emancipation, and legal separation, or- acquiring learning skills, and/or in- ders of protection and other civil rem- creasing earning potential. The cost of edies for victims of domestic violence, providing reasonable stipends to pro- dating violence, sexual assault, and gram participants in employment as- stalking, appeal of veterans and public sistance and job training programs is benefit claim denials, and the resolu- an eligible cost.Learning skills include tion of outstanding criminal warrants. those skills that can be used to secure (D) Component services or activities and retain a job, including the acquisi- may include client intake, preparation tion of vocational licenses and/or cer- of cases for trial, provision of legal ad- tificates. Services that assist individ- vice, representation at hearings, and uals in securing employment consist of counseling. employment screening, assessment, or (E) Fees based on the actual service testing; structured job skills and job- seeking skills; special training and tu- performed(i.e., fee for service)are also Loring, including literacy training and eligible, but only if the cost would be than the cost of hourly fees. Filing prevocational training; books and in- fees and other necessary court costs structional material; counseling or job coaching; and referral to community are also eligible. If the subrecipient is resources. a legal services provider and performs (v) Outpatient health services. Eligible the services itself, the eligible costs costs are for the direct outpatient are the subrecipient's employees' sala- treatment of medical conditions and ries and other costs necessary to per- are provided by licensed medical pro- form the services. fessionals. Emergency Solutions Grant (F) Legal services for immigration (ESG)funds may be used only for these and citizenship matters and issues re- services to the extent that other appro- lating to mortgages are ineligible priate health services are unavailable costs. Retainer fee arrangements and within the community. Eligible treat- contingency fee arrangements are in- meat consists of assessing a program eligible costs. participant's health problems and de- (vii) Life skills training. The costs of veloping a treatment plan; assisting teaching critical life management program participants to understand skills that may never have been their health needs; providing directly learned or have been lost during the or assisting program participants to course of physical or mental illness, obtain appropriate medical treatment, domestic violence, substance use, and preventive medical care, and health homelessness are eligible costs. These maintenance services, including emer- services must be necessary to assist gency medical services; providing the program participant to function medication and follow-up services; and independently in the community. Com- providing preventive and noncosmetic ponent life skills training are budg- dental care. eting resources, managing money, (vi) Legal services. (A) Eligible costs managing a household, resolving con- are the hourly fees for legal advice and filet, shopping for food and needed representation by attorneys licensed items, improving nutrition, using pub- and in good standing with the bar asso- lie transportation,and parenting. ciation of the State in which the serv- (viii)Mental health services. (A) Eligi- ices are provided, and by person(s) ble costs are the direct outpatient under the supervision of the licensed treatment by licensed professionals of attorney, regarding matters that inter- mental health conditions. 224 Ofc. of Asst.Secy.,Comm. Planning, Develop., HUD §576.102 (B) ESG funds may only be used for program participants, and the cost of these services to the extent that other gas, insurance, taxes, and maintenance appropriate mental health services are for the vehicle;and unavailable or inaccessible within the (D) The travel costs of recipient or community. subrecipient staff to accompany or as- (C)Mental health services are the ap- sist program participants to use public plication of therapeutic processes to transportation. personal, family, situational, or ocou- (xi) Services for special populations. pational problems in order to bring ESG funds may be used to provide serv- about positive resolution of the prob- ices for homeless youth, victim serv- lem or improved individual or family ices,and services for people living with functioning or circumstances. Problem HIV/AIDS, so long as the costs of pro- areas may include family and marital viding these services are eligible under relationships, parent-child problems, paragraphs (a)(1)(i) through (a)(1)(x) of or symptom management. this section. The term victim services (D)Eligible treatment consists of cri- means services that assist program sis interventions;individual, family, or participants who are victims of domes- group therapy sessions; the prescrip- tic violence, dating violence,sexual as- tion of psychotropic medications or ex- sault, or stalking, including services planations about the use and manage- offered by rape crisis centers and do- went of medications;and combinations mestic violence shelters, and other or- of therapeutic approaches to address ganizations with a documented history multiple problems. of effective work concerning domestic (ix)Substance abuse treatment services. violence, dating violence, sexual as- (A) Eligible substance abuse treatment sault,or stalking. .. services are designed to prevent, re- (2) Renovation. Eligible costs include duce,eliminate, or deter relapse of sub- labor, materials, tools, and other costs stance abuse or addictive behaviors and for renovation (including major reha- are provided by licensed or certified bilitation of an emergency shelter or professionals. conversion of a building into an emer- (B) ESG funds may only be used for gency shelter). The emergency shelter these services to the extent that other must be owned by a government entity appropriate substance abuse treatment or private nonprofit organization. services are unavailable or inaccessible (3) SheIter operations. Eligible costs within the community. are the costs of maintenance(including ent intake andrtreatment assessment, and outt(C)Eligible consists of cli- minor or routine repairs), rent, secu- - patient treatment for up to 30 days. rity, fuel, equipment, insurance, utili- Group and individual counseling and ties, food, furnishings, and supplies drug testing are eligible costs. Inpa- necessary for the operation of the tient detoxification and other inpa- emergency shelter. Where no appro- tient drug or alcohol treatment are not priate emergency shelter is available eligible costs. for a homeless family or individual,eli- (x) Transportation. Eligible costs con- gible costs may also include a hotel or sist of the transportation costs of a motel voucher for that family or indi- program participant's travel to and vidual. from medical care, employment, child (4) Assistance required under the Uni- care, or other eligible essential serv- form Relocation Assistance and Real ices facilities. These costs include the Property Acquisition Policies Act of 1970 following: (URA). Eligible costs are the costs of (A) The cost of a program partici- providing URA assistance under pant's travel on public transportation; §576.408, including relocation payments (B) If service workers use their own and other assistance to persons dis- vehicles, mileage allowance for service placed by a project assisted with ESG workers to visit program participants; funds. Persons that receive URA assist- (C) The cost of purchasing or leasing ance are not considered "program par- a vehicle for the recipient or sub- ticipants"for the purposes of this part, recipient in which staff transports pro- and relocation payments and other gram participants and/or staff serving URA assistance are not considered 225 §576.103 24 CFR Ch. V (4-1-12 Edition) "rental assistance" or"housing reloca- nally served with the assistance (e.g., tion and stabilization services" for the families with children, unaccompanied purposes of this part. youth, disabled individuals, or victims (b) Prohibition against involuntary of domestic violence) or serves home- family separation. The age, of a child less persons in the same area where the under age 18 must not be used as a recipient or subrecipient originally basis for denying any family's admis- provided the services or shelter. sion to an emergency shelter that uses (d)Maintenance of effort. The mainte- Emergency Solutions Grant (ESG) nance of effort requirements under funding or services and provides shelter §576.101(c), which apply to the use of to families with children under age 18. ESG funds for essential services related (c) Minimum period of use. (1) Ren- to street outreach, also apply for the ovated buildings. Each building ren- use of such funds for essential services ovated with ESG funds must be main- related to emergency shelter. tained as a shelter for homeless indi- viduals and families for not less than a §576.103 Homelessness prevention period of 3 or 10 years, depending on component. the type of renovation and the value of ESG funds may be used to the building. The "value of the build- housing relocation and stabilization provide ing" is the reasonable monetary value assigned to the building, such as the services and short- and/or medium- value assigned by an independent real term rental assistance necessary to estate appraiser. The minimum use pe- prevent an individual or family from riod must begin on the date the build moving into an emergency shelter or ing is first occupied by a homeless indi- another place described in paragraph vidual or family after the completed (1) of the "homeless" definition in renovation. A minimum period of use §576.2. This assistance, referred to as of 10 years,required for major rehabili- homelessness prevention, may be pro- tation and conversion, must be en- vided to individuals and families who forced by a recorded deed or use re- meet the criteria under the "at risk of striction. homelessness" definition, or who meet (i) Major rehabilitation. If the reha- the criteria in paragraph (2), (3), or (4) bilitation cost of an emergency shelter of the "homeless" definition in §576.2 exceeds 75 percent of the value of the and have an annual income below 30 building before rehabilitation, the min- percent of median family income for imum period of use is 10 years. the area, as determined by HUD. The (ii) Conversion. If the cost to convert costs of homelessness prevention are a building into an emergency shelter only eligible to the extent that the as- exceeds 75 percent of the value of the sistance is necessary to help the pro- building after conversion, the min- gram participant regain stability in imum period of use is 10 years. the program participant's current per- (iii)Renovation other than major reha- manent housing or move into other bilitation or conversion. In all other permanent housing and achieve sta- cases where ESG funds are used for bility in that housing. Homelessness renovation, the minimum period of use prevention must be provided in accord- is 3 years. ance with the housing relocation and (2) Essential services and shelter oper- stabilization services requirements in ations. Where the recipient or sub- §576.105, the short-term and medium- recipient uses ESG funds solely for es- term rental assistance requirements in sential services or shelter operations, §576.106, and the written standards and the recipient or subrecipient must pro- procedures established under§576.400. vide services or shelter to homeless in- dividuals and families at least for the §576.104 Rapid re-housing assistance period during which the ESG funds are component. provided. The recipient or subrecipient ESG funds may be used to provide does not need to limit these services or housing relocation and stabilization shelter to a particular site or strut- services and short- and/or medium- ture, so long as the site or structure term rental assistance as necessary to serves the same type of persons origi- help a homeless individual or family 226 • Ofc.of Asst.Secy., Comm. Planning, Develop., HUD §576.105 move as quickly as possible into per- counts as one month. This assistance manent housing and achieve stability may only be provided if the program in that housing. This assistance, re- participant or a member of the same ferred to as rapid re-housing assist- household has an account in his or her ance, may be provided to program par- name with a utility company or proof ticipants who meet the criteria under of responsibility to make utility pay- paragraph(1) of the "homeless" defini- ments.Eligible utility services are gas, tion in §576.2 or who meet the criteria electric, water, and sewage. No pro- under paragraph (4) of the "homeless" gram participant shall receive more definition and live in an emergency than 24 months of utility assistance shelter or other place described in within any 3-year period. paragraph(1) of the "homeless" defini- (6) Moving costs. ESG funds may pay tion. The rapid re-housing assistance for moving costs, such as truck rental must be provided in accordance with or hiring a moving company. This as- the housing relocation and stabiliza- sistance may include payment of tern- tion services requirements in §576.105, porary storage fees for up to 3 months, the short- and medium-term rental as- provided that the fees are accrued after sistance requirements in §576.106, and the date the program participant be- the written standards and procedures gins receiving assistance under para- established under§576.400. graph(b) of this section and before the §576.105 Housing relocation and sta- program participant moves into perma- bilization services. nent housing. Payment of temporary (a) Financial assistance costs. Subject storage fees in arrears is not eligible. to the general conditions under§576.103 (b) Services costs. Subject to the gen- and§576.104,ESG funds may be used to eral restrictions under §576.103 and pay housing owners, utility companies, §576.104, ESG funds may be used to pay and other third parties for the fol- the costs of providing the following lowing costs: services: (1) Rental application fees. ESG funds (1) Housing search and placement. may pay for the rental housing applica- Services or activities necessary to as- tion fee that is charged by the owner to sist program participants in locating, all applicants. obtaining, and retaining suitable per- (2) Security deposits. ESG funds may manent housing, include the following: pay for a security deposit that is equal (1) Assessment of housing barriers, to no more than 2 months'rent. needs,and preferences; (3) Last month's rent. If necessary to (ii)Development of an action plan for obtain housing for a program partici- locating housing; pant, the last month's rent may be (iii)Housing search; paid from ESG funds to the owner of (iv)Outreach to and negotiation with that housing at the time the owner is owners; paid the security deposit and the first (v)Assistance with submitting rental month's rent. This assistance must not applications and understanding leases; exceed one month's rent and must be (vi) Assessment of housing for com- included in calculating the program participant's total rental assistance, pliance with Emergency Solutions which cannot exceed 24 months during Grant (ESG) requirements for habit- any 3-year period. ability, lead-based paint, and rent rea- (4) Utility deposits. ESG funds may sonableness; pay for a standard utility deposit re- (vii) Assistance with obtaining utili- quired by the utility company for all ties and making moving arrangements; customers for the utilities listed in and paragraph(5)of this section. (viii)Tenant counseling. (5) Utility payments. ESG funds may (2) Housing stability case management. pay for up to 24 months of utility pay- ESG funds may be used to pay cost of ments per program participant, per assessing,..arranging, coordinating, and service, including up to 6 months of monitoring the delivery of individual- utility payments in arrears, per serv- ized services to facilitate housing sta- ice. A partial payment of a utility bill bility for a program participant who 227 §576.106 24 CFR Ch. V (4-1-12 Edition) resides in permanent housing or to as- (5) Credit repair. ESG funds may pay sist a program participant in over- for credit counseling and other services coming immediate barriers to obtain- necessary to assist program partici- ing housing. This assistance cannot ex- pants with critical skills related to ceed 30 days during the period the pro- household budgeting,managing money, gram participant is seeking permanent accessing a free personal credit report, housing and cannot exceed 24 months and resolving personal credit problems. during the period the program partici- This assistance does not include the pant is living in permanent housing. payment or modification of a debt. Component services and activities con- (c) Maximum amounts and periods of sist of: assistance. The recipient may set a (A) Using the centralized or coordi- maximum dollar amount that a pro- nated assessment system as required gram participant may receive for each under §576.400(d), to evaluate individ- type of financial assistance under para- uals and families applying for or re- graph (a) of this section. The recipient ceiving homelessness prevention or may also set a maximum period for rapid re-housing assistance; which a program participant may re- (B) Conducting the initial evaluation ceive any of the types of assistance or required under §576.401(a), including services under this section. However, verifying and documenting eligibility, except for housing stability case man- for individuals and families applying agement, the total period for which for homelessness prevention or rapid any program participant may receive re-housing assistance; the services under paragraph(b)of this (C)Counseling; section must not exceed 24 months dur- (D) Developing, securing, and coordi- ing any 3-year period. The limits on nating services and obtaining Federal, the assistance under this section apply State,and local benefits; to the total assistance an individual re- (E) Monitoring and evaluating pro- ceives, either as an individual or as gram participant progress; part of a family. (F) Providing information and refer- (d) Use with other subsidies. Financial rals to other providers; assistance under paragraph (a) of this section cannot be provided to a pro- (G) Developing an individualized gram participant who is receiving the housing and service plan, including same type of assistance through other planning a path to permanent housing public sources or to a program partici- stability;and pant who has been provided with re- (H) Conducting re-evaluations re- placement housing payments under the quired under§576.401(b). URA, during the period of time covered (3) Mediation. ESG funds may pay for by the URA payments. mediation between the program partic- ipant and the owner or person(s) with §576.106 Short-term and medium-term whom the program participant is liv- rental assistance. ing,provided that the mediation is net- (a) General provisions. Subject to the essary to prevent the program partici- general conditions under §576.103 and pant from losing permanent housing in §576.104, the recipient or subrecipient which the program participant cur- may provide a program participant rently resides. with up to 24 months of rental assist- (4) Legal services. ESG funds may pay ance during any 3-year period. This as- for legal services, as set forth in sistance may be short-term rental as- §576.102(a)(1)(vi), except that the eligi- sistance, medium-term rental assist- ble subject matters also include land- ance,payment of rental arrears, or any lord/tenant matters, and the services combination of this assistance. must be necessary to resolve a legal (1)Short-term rental assistance is as- problem that prohibits the program sistance for up to 3 months of rent. participant from obtaining permanent (2) Medium-term rental assistance is housing or will likely result in the pro- assistance for more than 3 months but gram participant losing the permanent not more than 24 months of rent. housing in which the program partici- (3) Payment of rental arrears con- pant currently resides. sists of a one-time payment for up to 6 228 Ofc. of Asst.Secy., Comm. Planning, Develop., HUD §576.106 months of rent in arrears, including will be provided, including the require- any late fees on those arrears. ments that apply under this section. (4) Rental assistance may be tenant- The rental assistance agreement must based or project-based, as set forth in provide that, during the term of the paragraphs(h)and(i)of this section. agreement, the owner must give the re- (b) Discretion to set caps and condi- cipient or subrecipient a copy of any tions. Subject to the requirements of notice to the program participant to this section, the recipient may set a vacate the housing unit, or any corn- maximum amount or percentage of plaint used under state or local law to rental assistance that a program par- commence an eviction action against ticipant may receive,a maximum num- the program participant. ber of months that a program partici- (f) Late payments. The recipient or pant may receive rental assistance, or subrecipient must make timely pay- a maximum number of times that a ments to each owner in accordance program participant may receive rent- with the rental assistance agreement. al assistance. The recipient may also The rental assistance agreement must require program participants to share contain the same payment due date, in the costs of rent. grace period,and late payment penalty (c) Use with other subsidies. Except for requirements as the program partici- a one-time payment of rental arrears pant's lease. The recipient or sub- on the tenant's portion of the rental recipient is solely responsible for pay- payment, rental assistance cannot be ing late payment penalties that it in- provided to a program participant who curs with non-ESG funds. is receiving tenant-based rental assist- (g) Lease. Each program participant ance,or living in a housing unit receiv- receiving rental assistance must have a ing project-based rental assistance or legally binding, written lease for the operating assistance, through other rental unit, unless the assistance is public sources. Rental assistance may solely for rental arrears. The lease not be provided to a program partici- must be between the owner and the pant who has been provided with re- program participant. Where the assist- placement housing payments under the ance is solely for rental arrears, an URA during the period of time covered oral agreement may be accepted in by the URA payments. place of a written lease, if the agree- (d) Rent restrictions. (1) Rental assist- ment gives the program participant an ance cannot be provided unless the rent enforceable leasehold interest under does not exceed the Fair Market Rent state law and the agreement and rent established by HUD, as provided under owed are sufficiently documented by 24 CFR part 888, and complies with the owner's financial records, rent HUD's standard of rent reasonableness, ledgers, or canceled checks. For pro- as established under 24 CFR 982.507. grain participants living in housing (2) For purposes of calculating rent with project-based rental assistance under this section, the rent shall equal under paragraph (i) of this section, the the sum of the total monthly rent for lease must have an initial term of one the unit, any fees required for occu- year. pancy under the lease (other than late (h) Tenant-based rental assistance. (1) fees and pet fees) and, if the tenant A program participant who receives pays separately for utilities, the tenant-based rental assistance may se- monthly allowance for utilities (ex- lest a housing unit in which to live and eluding telephone) established by the may move to another unit or building public housing authority for the area and continue to receive rental assist- in which the housing is located. ance, as long as the program partici- (e) Rental assistance agreement. The pant continues to meet the program re- recipient or subrecipient may make quirements. rental assistance payments only to an (2)The recipient may require that all owner with whom the recipient or sub- program participants live within a par- recipient has entered into a rental as- ticular area for the period in which the sistance agreement. The rental assist- rental assistance is provided. ance agreement must set forth the (3) The rental assistance agreement terms under which rental assistance with the owner must terminate and no 229 §576.107 24 CFR Ch.V (4-1-12 Edition) further rental assistance payments months over which rental assistance under that agreement may be made if: can be provided, the recipient or sub- (i) The program participant moves recipient must suspend or terminate out of the housing unit for which the the rental assistance payments for the program participant has a lease; unit. If the payments are suspended, (ii) The lease terminates and is not the individual or family may remain in renewed; or the assisted unit as permitted under (ili) The program participant be- the lease, and the recipient or sub- comes ineligible to receive ESG rental recipient may resume payments if the assistance. individual or family again becomes eli- (i) Project-based rental assistance. If gible and needs further rental assist- the recipient or subrecipient identifies ance. If the payments are terminated, a permanent housing unit that meets the rental assistance may be trans- ESG requirements and becomes avail- ferred to another available unit in the able before a program participant is same building, provided that the other identified to lease the unit, the recipi- unit meets all ESG requirements. ent or subrecipient may enter into a (5) The rental assistance agreement rental assistance agreement with the must have an initial term of one year. owner to reserve the unit and subsidize When a new program participant moves its rent in accordance with the fol- into an assisted unit, the term of the lowing requirements: rental assistance agreement may be ex- (1) The rental assistance agreement tended to cover the initial term of the may cover one or more permanent program participant's lease. If the pro- housing units in the same building. gram participant's lease is renewed, Each unit covered by the rental assist- the rental assistance agreement may ance agreement ("assisted unit") may be renewed or extended, as needed, up only be occupied by program partici- to the maximum number of months for pants, except as provided under para- which the program participant remains graph(1)(4)of this section. eligible. However, under no cir- (2)The recipient or subrecipient may cumstances may the recipient or sub- pay up to 100 percent of the first recipient commit ESG funds to be ex- month's rent, provided that a program pended beyond the expenditure dead- participant signs a lease and moves line in §576.203 or commit funds for a into the unit before the end of the future ESG grant before the grant is month for which the first month's rent awarded. is paid. The rent paid before a program (j) Changes in household composition. participant moves into the unit must The limits on the assistance under this not exceed the rent to be charged under section apply to the total assistance an the program participant's lease and individual receives, either as an indi- must be included when determining vidual or as part of a family. that program participant's total rental assistance. §576.107 HMIS component. (3) The recipient or subrecipient may (a)Eligible costs. make monthly rental assistance pay- (1) The recipient or subrecipient may ments only for each whole or partial use ESG funds to pay the costs of con- month an assisted unit is leased to a tributing data to the HMIS designated program participant. When a program by the Continuum of Care for the area, participant moves out of an assisted including the costs of: unit, the recipient or subrecipient may (i) Purchasing or leasing computer pay the next month's rent,i.e., the first hardware; month's rent for a new program partic- (ii) Purchasing software or software ipant, as provided in paragraph (i)(2)of licenses; this section. (iii) Purchasing or leasing equip- (4) The program participant's lease ment, including telephones, fax ma- must not condition the term of occu- chines,and furniture; pancy to the provision of rental assist- (iv)Obtaining technical support; ance payments. If the program partici- (v)Leasing office space; pant is determined ineligible or (vi) Paying charges for electricity, reaches the maximum number of gas, water, phone service, and high- 230 Ofc. of Asst.Secy.,Comm. Planning, Develop., HUD §576.108 speed data transmission necessary to into a comparable database must not operate or contribute data to the be entered directly into or provided to HMIS; an HMIS. (vii) Paying salaries for operating (b) General restrictions. Activities HMIS,including: funded under this section must comply (A)Completing data entry; with HUD's standards on participation, (B) Monitoring and reviewing data data collection, and reporting under a quality; local HMIS. (C)Completing data analysis; (D)Reporting to the HMIS Lead; §576.108 Administrative activities. (F) Training staff on using the HMIS (a) Eligible costs. The recipient may or comparable database;and use up to 7.5 percent of its ESG grant (G) Implementing and complying for the payment of administrative with HMIS requirements; costs related to the planning and exe- (viii) Paying costs of staff to travel cution of ESG activities. This does not to and attend HUD-sponsored and HUD- include staff and overhead costs di- approved training on HMIS and pro- rectly related to carrying out activi- grams authorized by Title IV of the ties eligible under §576.101 through McKinney-Vento Homeless Assistance §576.107, because those costs are eligi- Act; ble as part of those activities. Eligible (ix) Paying staff travel costs to con- administrative costs include: duct intake;and (1) General management, oversight and (x) Paying participation fees charged coordination. Costs of overall program by the HMIS Lead, if the recipient or management, coordination, moni- subrecipient is not the Lead.The toring, and evaluation. These costs in- HMIS Lead is the entityy designated by elude,but are not limited to,necessary the Continuum of Care to operate the expenditures for the following: area's HMIS. (2) If the recipient is the HMIS lead (i) Salaries, wages, and related costs agency, as designated by the Con- of the recipient's staff, the staff of sub- tinuum of Care in the most recent fis- recipients, or other staff engaged in cal year Continuum of Care Homeless program administration. In charging Assistance Grants Competition, it may costs to this category, the recipient also use ESG funds to pay the costs of: may either include the entire salary, (i) Hosting and maintaining HMIS wages, and related costs allocable to software or data; the program of each person whose pri- (ii)Backing up,recovering, or repair- mary responsibilities with regard to the ing HMIS software or data; program involve program administra- (iii) Upgrading, customizing, and en- tion assignments, or the pro rata share hancing the HMIS; of the salary, wages, and related costs (iv) Integrating and warehousink of each person whose job includes any data, including development of a data program administration assignments. warehouse for use in aggregating data The recipient may use only one of from subrecipients using multiple soft- these methods for each fiscal year ware systems; grant. Program administration assign- (v)Administering the system; ments include the following: (vi) Reporting to providers, the Con- (A) Preparing program budgets and tinuum of Care,and HUD;and schedules, and amendments to those (vii) Conducting training on using budgets and schedules; the system or a comparable database, (B) Developing systems for assuring including traveling to the training. compliance with program require- (3) If the subrecipient is a victim ments; services provider or a legal services (C) Developing interagency agree- provider, it may use ESG funds to es- ments and agreements with subrecipi- tablish and operate a comparable data- ents and contractors to carry out pro- base that collects client-level data over gram activities; time (i.e., longitudinal data) and gen- (D)Monitoring program activities for erates unduplicated aggregate reports progress and compliance with program based on the data. Information entered requirements; 231 §576.109 24 CFR Ch. V(4-1-12 Edition) (E)Preparing reports and other docu- §576.109 Indirect costs. ments directly related to the program (a) In general. ESG grant funds may for submission to HUD; be used to pay indirect costs in accord- (F) Coordinating the resolution of ance with OMB Circular A-87 (2 CFR audit and monitoring findings; (G) Evaluating program results part 225), or A-122 (2 CFR part 230), as against stated objectives;and applicable. (H) Managing or supervising persons (b) Allocation. Indirect costs may be whose primary responsibilities with re- allocated to each eligible activity unnderder§576.101 through §576.108, so long gard to the program include such as- as that allocation is consistent with an signments as those described in para- indirect cost rate proposal developed in graph (a)(1)(i)(A) through (G) of this accordance with OMB Circular A-87 (2 section. CFR part 225), or A-122 (2 CFR part (ii) Travel costs incurred for moni- 230),as applicable. toring of subrecipients; (c) Expenditure limits. The indirect (iii) Administrative services per- costs charged to an activity subject to formed under third-party contracts or an expenditure limit under §576.100 agreements, including general legal must be added to the direct costs services,accounting services,and audit charged for that activity when deter- services;and mining the total costs subject to the (iv) Other costs for goods and serv- expenditure limit. ices required for administration of the program, including rental or purchase Subpart C—Award and Use of of equipment, insurance, utilities, of- Funds five supplies, and rental and mainte- nance (but not purchase) of office §576.200 Submission requirements space. and grant approval. (2) Training on ESG requirements. (a) Application submission and ap- Costs of providing training on ESG re proval. In addition to meeting the ap- quirements and attending HUD-spon- plication submission requirements in sored ESG trainings. 24 CFR part 5, subpart K, each State, (3) Consolidated plan. Costs of pre- urban county, or metropolitan city paring and amending the ESG and must submit and obtain HUD approval homelessness-related sections of the of a consolidated plan in accordance consolidated plan in accordance with with the requirements in 24 CFR part ESG requirements and 24 CFR part 91. 91, and each territory must submit and (4)Environmental review. Costs of car- obtain HUD approval of a consolidated rying out the environmental review re- plan in accordance with the require- sponsibilities under§576.407. ments that apply to local governments (b) Sharing requirement. (1) States. If under 24 CFR part 91. As provided the recipient is a State, the recipient under 24 CFR 85.12, HUD may impose must share its funds for administrative special conditions or restrictions on a costs with its subrecipients that are grant, if the recipient is determined to units of general purpose local govern- be high risk. ment. The amount shared must be rea- (b) Amendments. The recipient must sonable under the circumstances. The amend its approved consolidated plan recipient may share its funds for ad- in order to make a change in its alloca- ministrative costs with its subrecipi- tion priorities; make a change in its ents that are private nonprofit organi- method of distributing funds; carry out zations. an activity not previously described in (2) Territories, metropolitan cities, and the plan; or change the purpose, scope, urban counties. If the recipient is a ter- location, or beneficiaries of an activ- ritory, metropolitan city, or urban ity. The amendment must be corn- county, the recipient may share its pleted and submitted to HUD in ac- funds for administrative costs with its cordance with the requirements under subrecipients. 24 CFR 91.505. 232 Ofc. of Asst.Secy.,Comm. Planning, Develop., HUD §576.201 §576.201 Matching requirement. pended within the expenditure deadline (a) Required amount of matching con- §576.203, and noncash contributions tributions. (1) Except as provided under must be made within the expenditure paragraphs (a)(2) and (a)(3) of this sec- deadline in§576.203. tion, the recipient must make match- (4) Contributions used to match a ing contributions to supplement the re- previous ESG grant may not be used to cipient's ESG program in an amount match a subsequent ESG grant. that equals the amount of ESG funds (5) Contributions that have been or provided by HUD. will be counted as satisfying a match- (2) If the recipient is a State, the ing requirement of another Federal first $100,000 of the fiscal year grant is grant or award may not count as satis- not required to be matched. However, fying the matching requirement of this the recipient must transfer the benefit section. of this exception to its subrecipients (d)Eligible types of matching contribu- that are least capable of providing the tions. The matching requirement may recipient with matching contributions. be met by one or both of the following: (3) This matching requirement does (1) Cash contributions. Cash expended not apply if the recipient is a territory. for allowable costs, as defined in OMB (b) Eligible sources of matching con- Circulars A-87 (2 CFR part 225) and A- tributions. (1) Subject to the require- 122 (2 CFR part 230), of the recipient or ment for States under paragraph (a)(2) subrecipient. of this section, the recipient may re- (2)Noncash contributions.The value of quire its subrecipients to make match- any real property, equipment,goods,or ing contributions consistent with this services contributed to the recipient's section to help meet the recipient's or subrecipient's ESG program, pro- matching requirement. vided that if the recipient or sub- (2) Matching contributions may be recipient had to pay for them with obtained from any source, including grant funds, the costs would have been any Federal source other than the ESG allowable. Noncash contributions may program, as well as state, local, and also include the purchase value of any private sources.However, the following donated building. requirements apply to matching con- (e) Calculating the amount of noncash tributions from a Federal source of contributions. (1) To determine the funds: value of any donated material or build- (i) The recipient must ensure the ing, or of any lease, the recipient must laws governing any funds to be used as use a method reasonably calculated to matching contributions do not prohibit establish the fair market value. those funds from being used to match (2) Services provided by individuals Emergency Solutions Grant (ESG) must be valued at rates consistent with funds. those ordinarily paid for similar work (ii) If ESG funds are used to satisfy in the recipient's or subrecipient's or- the matching requirements of another ganization. If the recipient or sub- Federal program, then funding from recipient does not have employees per- that program may not be used to sat- forming similar work, the rates must isfy the matching requirements under be consistent with those ordinarily this section. paid by other employers for similar (c) Recognition of matching contribu- work in the same labor market. tions. (1)In order to meet the matching (3) Some noncash contributions are requirement, the matching contribu- real property, equipment, goods, or tions must meet all requirements that services that, if the recipient or sub- apply to the ESG funds provided by recipient had to pay for them with HUD, except for the expenditure limits grant funds, the payments would have in§576.100. been indirect costs.Matching credit for (2) The matching contributions must these contributions must be given only be provided after the date that HUD if the recipient or subrecipient has es- signs the grant agreement. tablished, along with its regular indi- (3) To count toward the required rect cost rate, a special rate for allo- match for the recipient's fiscal year sating to individual projects or pro- grant, cash contributions must be ex- grams the value of those contributions. 233 §576.202 24 CFR Ch.V (4-1-12 Edition) (f)Costs paid by program income. Costs a letter of award requiring payment paid by program income shall count to- from the grant to,a subrecipient. ward meeting the recipient's matching (ii) Within 120 days after the date requirements,provided the costs are el- that the State obligates its funds to a igible ESG costs that supplement the unit of general purpose local govern- recipient's ESG program. ment, the subrecipient must obligate 576.202 Means of carrying out grant all of those funds by a subgrant agree- activities. ment with, or a letter of award or- (a) requir- States. If the recipient is a State, ing payment to, a private nonprofit the recipient thye use an amount con-, ganization; a procurement contract; or sistent with the restrictions in §576.100 menthe written detsignation of a depahe and §576.108 to carry out administra- subrecipient within tohd government carry of the directly carry out an tive activities through its employees or eligible activity. procurement contracts. If the recipient (2) Funds allocated to metropolitan cit- is a State, and has been identified as ies, urban counties, and territories. With- the HMIS lead by the Continuum of in 180 days after the date that HUD Care, the State may use funds to carry signs the grant agreement (or a grant out HMIS activities set forth in amendment for reallocation of funds) §576.107(a)(2). The recipient must with the metropolitan city, urban subgrant the remaining funds in its fis- county, or territory, the recipient cal year grant to: must obligate all the grant amount, ex- (1)Units of general purpose local gov- cept the amount for its administrative ernment in the State, which may in- costs. This requirement is met by an elude metropolitan cities and urban agreement with, or a letter of award counties that receive ESG funds di- requiring payment to, a subrecipient; a rectly from HUD; or (2) Private nonprofit organizations, procurement contract; or a written provided that for emergency shelter ac- designation of a department within the tivities the recipient obtains a certifi- government of the recipient to directly cation of approval from the unit of gen- carry out an eligible activity. If the re- eral purpose local government for the cipient is an urban county, this re- geographic area in which those activi- quirement may also be met with an ties are to be carried out. agreement with, or letter of award re- (b) Recipients other than States; sub- quiring payment to, a member govern- recipients. The recipient, if it is not a ment, which has designated a depart- State, and all subrecipients may carry ment to directly carry out an eligible out all eligible activities through their activity. employees, procurement contracts, or (b) Expenditures. The recipient must subgrants to private nonprofit organi- draw down and expend funds from each zations. If the recipient is an urban year's grant not less than once during county, it may carry out activities each quarter of the recipient's program through any of its member govern- year. All of the recipient's grant must ments,so long as the county applies to be expended for eligible activity costs its members the same requirements within 24 months after the date HUD that are applicable to local govern- signs the grant agreement with the re- ment subrecipients under this part. cipient. For the purposes of this para- graph, expenditure means either an ac- §576.203 Obligation, expenditure, and tual cash disbursement for a direct payment requirements. charge for a good or service or an indi- (a) Obligation of funds. (1) Funds alto- rect cost or the accrual of a direct cated to States. (i) Within 60 days from charge for a good or service or an indi- the- date that HUD signs the grant rect cost. agreement with the State (or grant (c) Payments to subrecipients. The re- amendment for reallocated funds), the cipient must pay each subrecipient for recipient must obligate the entire allowable costs within 30 days after re- grant, except the amount for its ad- ceiving the subrecipient's complete ministrative costs. This requirement is payment request. This requirement met by a subgrant agreement with, or also applies to each subrecipient that 234 Ofc.of Asst.Secy.,Comm. Planning, Develop., HUD §576.303 is a unit of general purpose local gov- §576.302 States. ernment. Grant funds returned by a State will be reallocated as follows: Subpart D—Reallocations (a) Eligible recipients. HUD will make the funds available: §576.300 In general. (1) To metropolitan cities and urban (1)Funds not awarded by HUD due to counties in the State that were not al- failure by the recipient to submit and located funds under §576.3 because the obtain HUD approval of a consolidated amount they would have been allocated plan will be reallocated in accordance did not meet the minimum require- with§§576.301 through 576.303. (2)merit under§576.3(b)(2); govern- (2) Recaptured funds will be awarded merits If funds State to county by formula. In October and April each in the State other than urban year, HUD will determine if the counties; metro- amount of recaptured funds is at least poli(3) Then, sf funds urban countiesu, to 30 percent of the most recent fiscal State cities and und in thr State that were allocated funds under year appropriation. If so, HUD will §576.3. amend all existing grants and reallo- (b) Notification of availability. HUD cate the funds. If the amount is less will notify eligible recipients of the than 30 percent of the most recent fis- availability of the funds by a notifica- cal year appropriation, the funds will tion letter or FEDERAL REGISTER no- be reallocated in conjunction with the tice,which will specify how the awards next fiscal year's allocation of funding. of funds will be made. (c)Application requirements. Within 45 §576.301 Metropolitan cities and days after the date of notification, the urban counties. eligible recipient must submit to HUD: Grant funds returned by a metropoli- (1) A substantial amendment to its tan city or urban county will be reallo- approved consolidated plan in accord- cated as follows: ance with 24 CFR part 91;or (a) Eligible recipient. HUD will make (2) If the eligible recipient does not the funds available to the State in have an approved consolidated plan,an which the city or county is located. abbreviated consolidated plan that (b) Notification of availability. HUD meets the requirements in the FED- will promptly notify the State of the ERAL REGISTER notice or notification availability of the amounts to be re- letter from HUD. (d) Restrictions that apply to reaIlo- allocated. cated amounts. The same requirements (c) Application requirement. Within 45 fundsallocated days after the date of notification, the that apply to grant re- State must submit to HUD a substan- under §d this section. apply to grant funds tial amendment to its consolidated allocated under plan in accordance with 24 CFR part 91. §576.303 Territories. (d) Restrictions that apply to reallo- (a)General. Grant funds returned by a cated amounts. The same requirements territory will be reallocated to other that apply to grant funds allocated territories, then if funds remain, to under §576.3 apply to grant funds re- States. allocated under this section, except (b) Allocation method. The funds will that the State must distribute the re- be allocated as follows: allocated funds: (1) For territories, the funds will be (1)To private nonprofit organizations allocated among the territories in di- and units of general purpose local gov- rect proportion with each territory's ernment in the geographic area in share of the total population of all of which the metropolitan city or urban the eligible territories. If HUD deter- county is located; mines that a territory failed to spend (2) If funds remain, to private non- its funds in accordance with ESG re- profit organizations and units of gen- quirements,then HUD may exclude the eral purpose local government located territory from the allocation of re- throughout the State. allocation amounts under this section. 235 §576.400 24 CFR Ch. V(4-1-12 Edition) (2) For States, the funds will be allo- (4)HUD—Veterans Affairs Supportive cated to each State in direct propor- Housing(HUD-VASH) (division K, title tion with each State's share of the II, Consolidated Appropriations Act, total amount of funds allocated to 2008, Pub. L. 110-161 (2007), 73 FR 25026 States under§576.3. (May 6,2008)); (c) Notification of availability. HUD (5) Education for Homeless Children will notify eligible recipients of the and Youth Grants for State and Local availability of the fund by a letter or Activities (title VII-B of the McKin- FEDERAL REGISTER notice, which will ney-Vento Homeless Assistance Act (42 specify how the awards of funds will be U.S.C.11431 et seq.)); made. (6)Grants for the Benefit of Homeless (d) Application requirements. Within 45 Individuals (section 506 of the Public days after the date of notification, the Health Services Act (42 U.S.C. 290aa- eligible recipient must submit to HUD 5)); a substantial amendment to its con- (7) Healthcare for the Homeless (42 solidated plan in accordance with 24 CFR part 51c); CFR part 91. (8) Programs for Runaway and Home- (e) Restrictions that apply to reallo- less Youth (Runaway and Homeless cated amounts. The same requirements Youth Act(42 U.S.C.5701 et seq.)); that apply to grant funds allocated (9) Projects for Assistance in Transi- under §576.3 apply to grant funds re- tion from Homelessness (part C of title allocated under this section. V of the Public Health Service Act (42 U.S.C.290cc-21 et seq.)); Subpart E—Program Requirements (10) Services in Supportive Housing Grants (section 520A of the Public *576.400 Area-wide systems coordina- Health Service Act); tion requirements. (11) Emergency Food and Shelter (a) Consultation with Continuums of Program (title III of the McKinney- Care. The recipient must consult with Vento Homeless Assistance Act (42 each Continuum of Care that serves the U.S.C. 11331 et seq.)); recipient's jurisdiction in determining (12) Transitional Housing Assistance how to allocate ESG funds each pro- Grants for Victims of Sexual Assault, gram year; developing the performance Domestic Violence, Dating Violence, standards for, and evaluating the out- and Stalking Program (section 40299 of comes of, projects and activities as- the Violent Crime Control and Law En- sisted by ESG funds; and developing forcement Act(42 U.S.C.13975)); funding, policies, and procedures for (13)Homeless Veterans Reintegration the administration and operation of Program (section 5(a)(1)) of the Home- the HMIS. less Veterans Comprehensive Assist- (b) Coordination with other targeted ante Act(38 U.S.C.2021); homeless services. The recipient and its (14) Domiciliary Care for Homeless subrecipients must coordinate and in- Veterans Program(38 U.S.C.2043); tegrate, to the maximum extent prac- (15) VA Homeless Providers Grant ticable, ESG-funded activities with and Per Diem Program (38 CFR part other programs targeted to homeless 61); people in the area covered by the Con- (16) Health Care for Homeless Vet- tinuum of Care or area over which the erans Program(38 U.S.C.2031); services are coordinated to provide a (17) Homeless Veterans Dental Pro- strategic, community-wide system to gram(38 U.S.C.2062); prevent and end homelessness for that (18) Supportive Services for Veteran area.These programs include: Families Program(38 CFR part 62);and (1) Shelter Plus Care Program (24 (19) Veteran Justice Outreach Initia- CFR part 582); tive(38 U.S.C.2031). (2) Supportive Housing Program (24 (c) System and program coordination CFR part 583); with mainstream resources. The recipient (3)Section 8 Moderate Rehabilitation and its subrecipients must coordinate Program for Single Room Occupancy and integrate, to the maximum extent Program for Homeless Individuals (24 practicable,ESG-funded activities with CFR part 882); mainstream housing, health, social 236 Ofc.of Asst.Secy., Comm. Planning, Develop., HUD §576.400 services, employment, education, and must consistently apply those stand- youth programs for which families and ards for all program participants. The individuals at risk of homelessness and recipient must describe these standards homeless individuals and families may in its consolidated plan. be eligible.Examples of these programs (2)If the recipient is a state: include: (i) The recipient must establish and (1) Public housing programs assisted consistently apply, or require that its under section 9 of the U.S.Housing Act subrecipients establish and consist- of 1937 (42 U.S.C. 1437g) (24 CFR parts ently apply, written standards for pro- 905,968, and 990); viding ESG assistance. If the written (2) Housing programs receiving ten- standards are established by the sub- ant-based or project-based assistance recipients, the recipient may require under section 8 of the U.S. Housing Act these written standards to be: of 1937 (42 U.S.C. 1437f) (respectively 24 (A) Established for each area covered CFR parts 982 and 983); by a Continuum of Care or area over (3) Supportive Housing for Persons which the services are coordinated and with Disabilities (Section 811) (24 CFR followed by each subrecipient pro- part 891); viding assistance in that area;or (4) HOME Investment Partnerships (B) Established by each subrecipient Program(24 CFR part 92); and applied consistently within the (5) Temporary Assistance for Needy subrecipient's program. Families (TANF) (45 CFR parts 260- (ii) Written standards developed by 265); the state must be included in the (6) Health Center Program (42 CFR state's Consolidated Plan. If the writ- part 51c); ten standards are developed by its sub- (7) State Children's Health Insurance recipients, the recipient must describe Program(42 CFR part 457): its requirements for the establishment (8) Head Start (45 CFR chapter XIII, and implementation of these standards subchapter B); in the state's Consolidated Plan. (9) Mental Health and Substance (3) At a minimum these written Abuse Block Grants (45 CFR part 96j; standards must include: and (I) Standard policies and procedures (10) Services funded under the Work- for evaluating individuals' and fami- force Investment Act (29 U.S.C. 2801 et lies' eligibility for assistance under seq.). Emergency Solutions Grant(ESG); (d) Centralized or coordinated assess- (ii) Standards for targeting and pro- ment. Once the Continuum of Care has viding essential services related to developed a centralized assessment sys- street outreach; tem or a coordinated assessment sys- (iii) Policies and procedures for ad- tern in accordance with requirements mission, diversion, referral, and dis- to be established by HUD, each ESG- charge by emergency shelters assisted funded program or project within the under ESG,including standards regard- Continuum of Care's area must use ing'length of stay, if any, and safe- that assessment system. The recipient guards to meet the safety and shelter and subrecipient must work with the needs of special populations, e.g., vie- Continuum of Care to ensure the tiros of domestic violence, dating vio- screening, assessment and referral of lence, sexual assault, and stalking; and program participants are consistent individuals and families who have the with the written standards required by highest barriers to housing and are paragraph (e) of this section. A victim likely to be homeless the longest; service provider may choose not to use (iv) Policies and procedures for as- the Continuum of Care's centralized or sessing, prioritizing, and reassessing coordinated assessment system. individuals' and families' needs for es- (e) Written standards for providing ESG sential services related to emergency assistance. (1) If the recipient is a met- shelter; ropolitan city, urban county, or terra- (v) Policies and procedures for co- tory, the recipient must have written ordination among emergency shelter standards for providing Emergency So- providers, essential services providers, lutions Grant (ESG) assistance and homelessness prevention, and rapid re- 237 §576.401 24 CFR Ch.V (4-1-12 Edition) housing assistance providers; other tered directly into or provided to an homeless assistance providers; and HMIS. mainstream service and housing pro- viders (see §576.400(b) and (c) for a list §576.401 Evaluation of program par. of programs with which ESG-funded ac- ticipant eligibility and needs. tivities must be coordinated and ante- (a) Evaluations. The recipient or its grated to the maximum extent prac- subrecipient must conduct an initial ticable); evaluation to determine the eligibility (v1)Policies and procedures for deter- of each individual or family's eligi- mining and prioritizing which eligible bility for ESG assistance and the families and individuals will receive amount and types of assistance the in- homelessness prevention assistance dividual or family needs to regain sta- and which eligible families and individ- bility in permanent housing. These uals will receive rapid re-housing as- evaluations must be conducted in ac- sistance; cordance with the centralized or co- (vii) Standards for determining what ordinated assessment requirements set percentage or amount of rent and utili- forth under §576.400(d) and the written ties costs each program participant standards established under§576.400(e). must pay while receiving homelessness (b)Re-evaluations for homelessness pre- prevention or rapid re-housing assist- vention and rapid re-housing assistance. ance; (1) The recipient or subrecipient must (viii) Standards for determining how re-evaluate the program participant's long a particular program participant eligibility and the types and amounts will be provided with rental assistance of assistance the program participant and whether and how the amount of needs not less than once every 3 that assistance will be adjusted over months for program participants re- time;and ceiving homelessness prevention assist- (ix) Standards for determining the ance, and not less than once annually type, amount, and duration of housing fora program participants receiving stabilization and/or relocation services rapid reach re-eing assistance. At a min- to provide to a program participant,in- imum, each re-evaluation of eligibility eluding the limits,if any, on the home- must establishr that: lessness prevention or rapid re-housing (i) The program participante does not assistance that each have an annual income that exceeds 30 program partici- percent of median family income for pant may receive, such as the max- the area,as determined by HUD;and imum amount of assistance, maximum (ii) The program participant lacks number of months the program partici- sufficient resources and support net- pant receive assistance; or the max- works necessary to retain housing imum number of times the program without ESG assistance. participant may receive assistance. (2)The recipient or subrecipient may (f) Participation in HMIS. The recipi- require each program participant re- ent must ensure that data on all per- ceiving homelessness prevention or sons served and all activities assisted rapid re-housing,assistance to notify under ESG are entered into the appli- the recipient or subrecipient regarding cable community-wide HMIS in the changes in the program participant's area in which those persons and activi- income or other circumstances (e.g., ties are located, or a comparable data- changes in household composition) base, in accordance with HUD's stand- that affect the program participant's ards on participation, data collection, need for assistance under ESG. When and reporting under a local HMIS. If notified of a relevant change, the re- the subrecipient is a victim service cipient or subrecipient must re-evalu- provider or a legal services provider, it ate the program participant's eligi- may use a comparable database that bility and the amount and types of as- collects client-level data over time sistance the program participant (i.e., longitudinal data) and generates needs. unduplicated aggregate reports based (c) Annual income. When determining on the data. Information entered into a the annual income of an individual or comparable database must not be en- family, the recipient or subrecipient 238 Ofc.of Asst.Secy.,Comm. Planning, Develop., HUD §576.403 must use the standard for calculating (2) The recipient or subrecipient is annual income under 24 CFR 5.609. exempt from the requirement under (d) Connecting program participants to paragraph (e)(1)(i) of this section if the mainstream and other resources. The re- Violence Against Women Act of 1994(42 cipient and its subrecipients must as- U.S.C. 13701 et seq.) or the Family Vio- sist each program participant, as need- lence Prevention and Services Act (42 ed, to obtain: U.S.C. 10401 et seq.) prohibits that re- (1) Appropriate supportive services, cipient or subrecipient from making its including assistance in obtaining per- shelter or housing conditional on the manent housing, medical health treat- participant's acceptance of services. ment, mental health treatment, coun- seling, supervision, and other services §676.402 Terminating assistance. essential for achieving independent liv- (a) In general. If a program partici- ing;and pant violates program requirements, (2) Other Federal, State, local, and the recipient or subrecipient may ter- private assistance available to assist minate the assistance in accordance the program participant in obtaining with a formal process established by housing stability,including: the recipient or subrecipient that rec- (i) Medicaid (42 CFR chapter IV, sub- ognizes the rights of individuals af- chapter C): fected. The recipient or subrecipient (ii) Supplemental Nutrition Assist- must exercise judgment and examine ance Program(7 CFR parts 271-283); all extenuating circumstances in deter- (iii) Women, Infants and Children mining when violations warrant termi- (WIC) (7 CFR part 246); nation so that a program participant's (iv) Federal-State Unemployment In- assistance is terminated only in the surance Program (20 CFR parts 601-603, most severe cases. 606,609,614-617,625,640,650); (b) Program participants receiving rent- Security Insur- rent- al assistance or housing relocation and (v) Social(SS l CFR part Disability stabilization services. To terminate rent- ance404); (vi) al assistance or housing relocation and Supplemental Security Income (SSI)(20 CFR part 416); stabilization services to a program par- ticipant, the required formal process, (vii) Child and Adult Care Food Pro- at a minimum,must consist of: gram (42 U.S.C. 1766(t) (7 CFR part 226)); (1) Written notice to the program Other assistance available participant containing a clear state- (viii) ment of the reasons for termination; under the programs listed in (2) A review of the decision, in which §576.400(c). the program participant is given the (e) Housing stability case management. opportunity to present written or oral (1) While providing homelessness pre- objections before a person other than vention or rapid re-housing assistance the person (or a subordinate of that to a program participant, the recipient person) who made or approved the ter- or subrecipient must: mination decision;and (i) Require the program participant (3)Prompt written notice of the final to meet with a case manager not less decision to the program participant. than once per month to assist the pro- (c)Ability to provide further assistance. gram participant in ensuring long-term Termination under this section does housing stability;and not bar the recipient or subrecipient (ii) Develop a plan to assist the pro- from providing further assistance at a gram participant to retain permanent later date to the same family or indi- housing after the ESG assistance ends, vidual. taking into account all relevant con- siderations, such as the program par- §576.403 Shelter and housing stand- ticipant's current or expected income arda. and expenses; other public or private (a) Lead-based paint remediation and assistance for which the program par- disclosure. The Lead-Based Paint Poi- ticipant will be eligible and likely to soning Prevention Act (42 U.S.C. 4821- receive; and the relative affordability 4846), the Residential Lead-Based Paint of available housing in the area. Hazard Reduction Act of 1992 (42 U.S.C. 239 §576.403 24 CFR Ch. V (4-1-12 Edition) 4851-4856), and implementing regula- access to sanitary facilities that are in tions in 24 CFR part 35, subparts A, B, proper operating condition,are private, H, J, K, M, and R apply to all shelters and are adequate for personal cleanli- assisted under ESG program and all ness and the disposal of human waste. housing occupied by program partici- (7) Thermal environment. The shelter pants. must have any necessary heating/cool- (b) Minimum standards for emergency ing facilities in proper operating condi- shelters. Any building for which Emer- tion. gency Solutions Grant (ESG) funds are (8) Illumination and electricity. The used for conversion, major rehabilita- shelter must have adequate natural or tion, or other renovation, must meet artificial illumination to permit nor- state or local government safety and mal indoor activities and support sanitation standards,as applicable,and health and safety. There must be suffi- the following minimum safety, sanita- dent electrical sources to permit the tion, and privacy standards. Any emer- safe use of electrical appliances in the gency shelter that receives assistance shelter. for shelter operations must also meet (9) Food preparation. Food prepara- the following minimum safety, sanita- tion areas, if any, must contain suit- tion,and privacy standards. The recipi- able space and equipment to store, pre- ent may also establish standards that pare, and serve food in a safe and sani- exceed or add to these minimum stand- tary manner. ards. (10) Sanitary conditions. The shelter (1) Structure and materials. The shel- must be maintained in a sanitary con- ter building must be structurally sound dition. to protect residents from the elements (11) Fire safety. There must be at and not pose any threat to health and least one working smoke detector in safety of the residents. Any renovation each occupied unit of the shelter. (including major rehabilitation and Where possible, smoke detectors must conversion) carried out with ESG as- be located near sleeping areas. The fire sistance must use Energy Star and alarm system must be designed for WaterSense products and appliances. hearing-impaired residents. All public (2) Access. The shelter must be acces- areas of the shelter must have at least sible in accordance with Section 504 of one working smoke detector. There the Rehabilitation Act (29 U.S.C. 794) must also be a second means of exiting and implementing regulations at 24 the building in the event of fire or CFR part 8; the Fair Housing Act (42 other emergency. U.S.C. 3601 et seq.) and implementing (c) Minimum standards for permanent regulations at 24 CFR part 100; and housing. The recipient or subrecipient Title II of the Americans with Disabil- cannot use ESG funds to help a pro- ities Act (42 U.S.C. 12131 et seq.) and 28 gram participant remain or move into CFR part 35;where applicable. housing that does not meet the min- (3) Space and security. Except where imum habitability standards provided the shelter is intended for day use in this paragraph (c). The recipient only, the shelter must provide each may also establish standards that ex- program participant in the shelter with ceed or add to these minimum stand- an acceptable place to sleep and ade- ards. quate space and security for them- (1) Structure and materials. The struc- selves and their belongings. tures must be structurally sound to (4) Interior air quality. Each room or protect residents from the elements space within the shelter must have a and not pose any threat to the health natural or mechanical means of yen- and safety of the residents. tilation. The interior air must be free (2) Space and security. Each resident of pollutants at a level that might must be provided adequate space and threaten or harm the health of resi- security for themselves and their be- dents. longings. Each resident must be pro- (5) Water supply. The shelter's water vided an acceptable place to sleep. supply must be free of contamination. (3) Interior air quality. Each room or (6) Sanitary facilities. Each program space must have a natural or mechan- participant in the shelter must have ical means of ventilation. The interior 240 Ofc.of Asst.Secy.,Comm. Planning, Develop., HUD §576.404 air must be free of pollutants at a level ESG assistance may not be conditioned that might threaten or harm the on an individual's or family's accept- health of residents. ance or occupancy of emergency shel- (4) Water supply. The water supply ter or housing owned by the recipient, must be free from contamination. the subrecipient, or a parent or sub- (5) Sanitary facilities. Residents must sidiary of the subrecipient. No sub- have access to sufficient sanitary fa- recipient may, with respect to individ- cilities that are in proper operating uals or families occupying housing condition, are private, and are ade- owned by the subrecipient, or any par- quate for personal cleanliness and the ent or subsidiary of the subrecipient, disposal of human waste. carry out the initial evaluation re- (6) Thermal environment. The housing quired under §576.401 or administer must have any necessary heating/cool- homelessness prevention assistance ing facilities in proper operating condi- under§576.103. tion. (7) Illumination and electricity. The (b) Individual conflicts of interest. For structure must have adequate natural the procurement of goods and services, or artificial illumination to permit the recipient and its subrecipients normal indoor activities and support must comply with the codes of conduct health and safety. There must be suffi- and conflict of interest requirements cient electrical sources to permit the under 24 CFR 85.36 (for governments) safe use of electrical appliances in the and 24 CFR 84.42 (for private nonprofit structure. organizations). For all other trans- (8) Food preparation. All food prepara- actions and activities, the following re- tion areas must contain suitable space strictions apply: and equipment to store, prepare, and (1) Conflicts prohibited. No person de- serve food in a safe and sanitary man- scribed in paragraph (b)(2) of this sec- ner. tion who exercises or has exercised any (9) Sanitary conditions. The housing functions or responsibilities with re- must be maintained in a sanitary con- spect to activities assisted under the dition. ESG program, or who is in a position (10) Fire safety. (i) There must be a to participate in a decision-making second means of exiting the building in process or gain inside information with the event of fire or other emergency. regard to activities assisted under the (ii) Each unit must include at least program, may obtain a financial inter- one battery-operated or hard-wired est or benefit from an assisted activity; smoke detector, in proper working con- have a financial interest in any con- dition, on each occupied level of the tract, subcontract, or agreement with unit. Smoke detectors must be located, respect to an assisted activity; or have to the extent practicable, in a hallway a financial interest in the proceeds de- adjacent to a bedroom. If the unit is rived from an assisted activity, either occupied by hearing impaired persons, for him or herself or for those with smoke detectors must have an alarm whom he or she has family or business system designed for hearing-impaired persons in each bedroom occupied by a ties, during his or her tenure or during hearing-impaired person. the one-year period following his or her (iii) The public areas of all housing tenure. must be equipped with a sufficient (2) Persons covered. The conflict-of- number, but not less than one for each interest provisions of paragraph (b)(1) area, of battery-operated or hard-wired of this section apply to any person who smoke detectors. Public areas include, is an employee, agent, consultant, offi- but are not limited to, laundry rooms, cer, or elected or appointed official of community rooms, day care centers, the recipient or its subrecipients. hallways, stairwells, and other com- (3) Exceptions. Upon the written re- mon areas. quest of the recipient, HUD may grant §576.404 Conflicts of interest. an exception to the provisions of this subsection on a case-by-case basis,tak- (a) Organizational conflicts of interest. ing into account the cumulative effects The provision of any type or amount of of the criteria in paragraph (b)(3)(ii) of 241 §576.405 24 CFR Ch. V (4-1-12 Edition) this section, provided that the recipi- with the same requirements that apply ent has satisfactorily met the thresh- to subrecipients under this section. old requirements of paragraph (b)(3)(1) of this section. §576.405 Homeless participation. (i) Threshold requirements. HUD will (a) Unless the recipient is a State, consider an exception Only after the re- the recipient must provide for the par- cipient has provided the following doe- ticipation of not less than one home- umentation: less individual or formerly homeless (A) If the recipient or subrecipient is individual on the board of directors or a government, disclosure of the nature other equivalent policy-making entity of the conflict, accompanied by an as- of the recipient, to the extent that the surance that there has been public dis- entity considers and makes policies closure of the conflict and a descrip- and decisions regarding any facilities, tion of how the public disclosure was services, or other assistance that re- made;and ceive funding under Emergency Solu- (B) An opinion of the recipient's at- tions Grant(ESG). torney that the interest for which the (b) If the recipient is unable to meet exception is sought would not violate requirement under paragraph (a), it state or local law. must instead develop and implement a (ii) Factors to be considered for excep- plan to consult with homeless or for- tions. In determining whether to grant merly homeless individuals in consid- a requested exception after the recipi- Bring and making policies and deal- ent has satisfactorily met the thresh- sions regarding any facilities, services, old requirements under paragraph or other assistance that receive fund- (b)(3)(1) of this section, HUD must con- ing under Emergency Solutions Grant elude that the exception will serve to (ESG). The plan must be included in further the purposes of the ESG pro- the annual action plan required under gram and the effective and efficient ad- 24 CFR 91.220. ministration of the recipient's or sub- (c) To the maximum extent prac- recipient's program or project, taking ticable, the recipient or subrecipient into account the cumulative effect of must involve homeless individuals and the following factors,as applicable: families in constructing, renovating, (A)Whether the exception would pro- maintaining, and operating facilities a significant cost benefit or an es- assistedunder ESG, in providing serv- videsential degree of expertise to the pro- viesi assisted under ESG, and in pro- gram or project that would otherwise viding services for occupants of facili- not be available; ties assisted under ESG. This vol- (B) involve- Whether an opportunity was pro- mint may include employment or vided for open competitive bidding or unteer services. negotiation; §576.406 Faith-based activities. (C) Whether the affected person has (a) Organizations that are religious withdrawn from his or her functions, or faith-based are eligible, on the same responsibilities or the decision-making basis as any other organization, to re- process with respect to the specific ac- ceive ESG funds. Neither the Federal tivity in question; Government nor a State or local gov- (D) Whether the interest or benefit ernment receiving funds under ESG was present before the affected person shall discriminate against an organiza- was in the position described in para- tion on the basis of the organization's graph(b)(1)of this section; religious character or affiliation. (E) Whether undue hardship results (b) Organizations that are directly to the recipient, the subrecipient, or funded under the ESG program may the person affected, when weighed not engage in inherently religious ac- against the public interest served by tivities, such as worship, religious in- avoiding the prohibited conflict; and struction, or proselytization as part of (F) Any other relevant consider- the programs or services funded under ations. ESG. If an organization conducts these (c) Contractors. All contractors of the activities, the activities must be of- recipient or subrecipient must comply fered separately, in time or location, 242 Otc.of Asst.Secy.,Comm. Planning, Develop., HUD §576.407 from the programs or services funded erning real property disposition (see 24 under ESG, and participation must be CFR parts 84 and 85). voluntary for program participants. (f) If the recipient or a subrecipient (c) Any religious organization that that is a local government voluntarily receives ESG funds retains its inde- contributes its own funds to supple- pendence from Federal, State, and ment federally funded activities, the local governments, and may continue recipient or subrecipient has the option to carry out its mission, including the to segregate the Federal funds or corn- definition, practice, and expression of mingle them. However, if the funds are its religious beliefs, provided that the commingled, this section applies to all religious organization does not use di- of the commingled funds. rect ESG funds to support any inher- ently religious activities, such as wor- §576.407 Other Federal requirements. ship, religious instruction, or pros- (a) General. The requirements in 24 elytization. Among other things,faith- CFR part 5, subpart A are applicable, based organizations may use space in including the nondiscrimination and their facilities to provide ESG-funded equal opportunity requirements at 24 services, without removing religious CFR 5.105(a). Section 3 of the Housing art,icons,scriptures,or other religious and Urban Development Act of 1968, 12 symbols. In addition, an ESG-funded U.S.O. 1701u, and implementing regula- religious organization retains its au- tions at 24 CFR part 135 apply, except thority over its internal governance, that homeless individuals have priority and the organization may retain reli- over other Section 3 residents in ac- gious terms in its organization's name, cordance with§576.405(c). select its board members on a religious (b)Affirmative outreach. The recipient basis, and include religious references or subrecipient must make known that in its organization's mission state- use of the facilities, assistance, and ments and other governing documents. services are available to all on a non- (d) An organization that receives discriminatory basis. If it is unlikely ESG funds shall not, in providing ESG that the procedures that the recipient assistance, discriminate against a pro- or subrecipient intends to use to make gram participant or prospective pro- known the availability of the facilities, gram participant on the basis of reli- assistance, and services will to reach gion or religious belief. persons of any particular race, color, (e) ESG funds may not be used for religion, sex, age, national origin, fa- the rehabilitation of structures to the milial status, or disability who may extent that those structures are used qualify for those facilities and services, for inherently religious activities. So- the recipient or subrecipient must es- lutions ESG funds may be used for the tablish additional procedures that en- rehabilitation of structures only to the sure that those persons are made aware extent that those structures are used of the facilities, assistance, and serv- for conducting eligible activities under ices. The recipient and its subrecipi- the ESG program. Where a structure is ents must take appropriate steps to en- used for both eligible and inherently sure effective communication with per- religious activities,ESG funds may not sons with disabilities including, but exceed the cost of those portions of the not limited to, adopting procedures rehabilitation that are attributable to that will make available to interested eligible activities in accordance with persons information concerning the lo- the cost accounting requirements ap- cation of assistance, services, and fa- plicable to ESG funds. Sanctuaries, cilities that are accessible to persons chapels, or other rooms that an ESG- with disabilities. Consistent with Title funded religious congregation uses as VI and Executive Order 13166, recipi- its principal place of worship, however, ents and subrecipients are also re- are ineligible for funded improvements quired to take reasonable steps to en- under the program. Disposition of real sure meaningful access to programs property after the term of the grant, or and activities for limited English pro- any change in use of the property dur- ficiency(LEP)persons. ing the term of the grant, is subject to (c) Uniform Administrative Require- government-wide regulations gov- ments. The requirements of 24 CFR part 243 §576.408 24 CFR Ch.V (4-1-12 Edition) 85 apply to the recipient and subrecipi- exceeds $10,000 or the value of the ents that are units of general purpose quantity acquired by the preceding fis- local government, except that 24 CFR cal year exceeded $10,000; procuring 85.24 and 85.42 do not apply, and pro- solid waste management services in a gram income is to be used as match manner that maximizes energy and re- under 24 CFR 85.25(g). The require- source recovery; and establishing an af- ments of 24 CFR part 84 apply to sub- firmative procurement program for recipients that are private nonprofit procurement of recovered materials organizations, except that 24 CFR 84.23 identified in the EPA guidelines. and 84.53 do not apply, and program in- come is to be used as the nonfederal §576.408 Displacement,relocation,and share under 24 CFR 84.24(b). These reg- acquisition. ulations include allowable costs and (a) Minimizing displacement. Con- non-Federal audit requirements. sistent with the other goals and objec- (d) Environmental review responsibil- tives of Emergency Solutions Grant ities. (1) Activities under this part are (ESG), the recipient and its subrecipi- subject to environmental review by ents must assure that they have taken HUD under 24 CFR part 50. The recipi- all reasonable steps to minimize the ent shall supply all available, relevant displacement of persons(families, indi- information necessary for HUD to per- viduals, businesses, nonprofit organiza- form for each property any environ- tions, and farms) as a result of a mental review required by 24 CFR part project assisted under Emergency Solu- 50. The recipient also shall carry out tions Grant(ESG). mitigating measures required by HUD (b) Temporary relocation not permitted. or select alternate eligible property. No tenant-occupant of housing (a HUD may eliminate from consideration dwelling unit)that is converted into an any application that would require an emergency shelter may be required to Environmental Impact Statement relocate temporarily for a project as- (EIS). sisted with ESG funds, or be required (2) The recipient or subrecipient, or to move to another unit in the same any contractor of the recipient or sub- building/complex. When a tenant recipient, may not acquire, rehabili- moves for a project assisted with ESG tate, convert, lease, repair, dispose of, funds under conditions that trigger the demolish, or construct property for a Uniform Relocation Assistance and project under this part, or commit or Real Property Acquisition Policies Act expend HUD or local funds for eligible of 1970(URA), 42 U.S.C. 4601-4655, as de- activities under this part, until HUD scribed in paragraph(c)of this section, has performed an environmental review the tenant should be treated as perma- under 24 CFR part 50 and the recipient nently displaced and offered relocation has received HUD approval of the prop- assistance and payments consistent erty. with that paragraph. (e)Davis-Bacon Act. The provisions of (c) Relocation assistance for displaced the Davis-Bacon Act (40 U.S.C. 276a to persons. (1) In general. A displaced per- 276a-5) do not apply to the ESG pro- son (defined in paragraph (c)(2) of this gram. section) must be provided relocation (f)Procurement of Recovered Materials. assistance at the levels described in, The recipient and its contractors must and in accordance with,the URA and 49 comply with Section 6002 of the Solid CFR part 24. A displaced person must Waste Disposal Act, as amended by the be advised of his or her rights under Resource Conservation and Recovery the Fair Housing Act (42 U.S.C. 3601 et Act. The requirements of Section 6002 seq.). Whenever possible, minority per- include procuring only items des- sons shall be given reasonable opportu- ignated in guidelines of the Environ- nities to relocate to comparable and mental Protection Agency (EPA) at 40 suitable decent, safe, and sanitary re- CFR part 247 that contain the highest placement dwellings, not located in an percentage of recovered materials prac- area of minority concentration, that ticable, consistent with maintaining a are within their financial means. This satisfactory level of competition, policy, however, does not require pro- where the purchase price of the item viding a person a larger payment than 244 Ofc.of Asst.Secy., Comm. Planning, Develop., HUD §576.408 is necessary to enable a person to relo- (ii) Notwithstanding paragraph cate to a comparable replacement (c)(2)(i) of this section, a person does dwelling. (See 49 CFR not qualify as a displaced person if: 24.205(c)(2)(ii)(D).) As required by Sec- (A) The person has been evicted for tion 504 of the Rehabilitation Act (29 cause based upon a serious or repeated U.S.C. 794) and 49 CFR part 24, replace- violation of the terms and conditions ment dwellings must also contain the of the lease or occupancy agreement; accessibility features needed by dis- violation of applicable Federal, State placed persons with disabilities. or local law, or other good cause; and (2) Displaced Person. (i) For purposes the recipient determines that the evic- of paragraph (c) of this section, the tion was not undertaken for the pur- term "displaced person" means any pose of evading the obligation to pro- person (family, individual, business, vide relocation assistance. nonprofit organization,or farm,includ- (B) The person moved into the grop- ing any corporation,partnership, or as- erty after the submission of the appli- sociation) that moves from real prop- cation but, before signing a lease and erty, or moves personal property from commencing occupancy, was provided real property, permanently, as a direct written notice of the project, its pos- result of acquisition, rehabilitation, or sible impact on the person (e.g., the demolition for a project assisted under person may be displaced), and the fact the ESG program. This includes any that the person would not qualify as a permanent, involuntary move for an "displaced person" (or for any assist- assisted project, including any perma- ance under this section) as a result of nent move from the real property that the project; is made: (C) The person is ineligible under 49 (A)After the owner(or person in con- CFR 24.2(a)(9)(ii);or trol of the site)issues a notice to move (D) HUD determines that the person permanently from the property or re- was not displaced as a direct result of fuses to renew an expiring lease, if the acquisition, rehabilitation, or demoli- move occurs on or after: tion for the project. (I)The date of the submission by the MO The recipient or subrecipient to recipient (or subrecipient, as applica- may, at anyw time, request displacement that HUD or ble) of an application for assistance to determine whether a l is or HUD (or the recipient, as applicable) would ite ationcove of negotiations.b this rule. that is later approved and funded if the (3) Initiation typeF ofr re- recipiente- (or subrecipient, as applica- placeoses a determining the ble) has site control as evidenced by a tplacemprovided nt housing paymenta assistance ble)deed, sales contract, or option contract pursuanto be pt to this to a displaced person to acquire the property;or the section: (II) The date on which the recipient (i) If displacement kis the direct result of privately undertaken rehabili- (or subrecipient, as applicable) selects tation, demolition, or acquisition of the applicable site, if the recipient (or the real property, "initiation of nego- subrecipient, as applicable) does not tiations" means the execution of the have site control at the time of the ap- agreement between the recipient and plication, provided that the recipient the subrecipient or the agreement be- (or subrecipient, as applicable) eventu- tween the recipient (or subrecipient, as ally obtains control over the site; applicable) and the person owning or (B)Before the date described in part- controlling the property; graph (c)(2)(i)(A) of this section, if the (11) If site control is only evidenced recipient or HUD determines that the by an option contract to acquire the displacement resulted directly from ac- property, the "initiation of negotia- quisition, rehabilitation, or demolition tions" does not become effective until for the project; or the execution of a written agreement (C) By a tenant-occupant of a dwell- that creates a legally enforceable corn- ing unit and the tenant moves after mitment to proceed with the purchase, execution of the agreement covering such as a sales contract. the acquisition, rehabilitation, or dem- (d) Real property acquisition require- olition of the property for the project. ments. The acquisition of real property, 245 §576.500 24 CFR Ch. V (4-1-12 Edition) whether funded privately or publicly, service or legal service providers are for a project assisted with Emergency acceptable evidence of third-party doc- Solutions Grant (ESG) funds is subject umentation and intake worker obser- to the URA and Federal government- vations if the HMIS retains an wide regulations at 49 CFR part 24,sub- auditable history of all entries, includ- part B. ing the person who entered the data, (e) Appeals. A person who disagrees the date of entry, and the change with the recipient's (or subrecipient's, made; and if the HMIS prevents over- if applicable)determination concerning rides or changes of the dates on which whether the person qualifies as a dis- entries are made. placed person, or the amount of reloca- (1) If the individual or family quali- tion assistance for which the person fies as homeless under paragraph (1)(i) may be eligible, may file a written ap- or (ii) of the homeless definition in peal of that determination with the re- §576.2, acceptable evidence includes a cipient under 49 CFR 24.10. A low-in- written observation by an outreach come person who disagrees with the re- worker of the conditions where the in- cipient's determination may submit a dividual or family was living, a written written request for review of that de- referral by another housing or service termination by the appropriate HUD provider, or a certification by the indi- field office. vidual or head of household seeking as- sistance. Subpart F—Grant Administration (2) If the individual qualifies as homeless under paragraph(1)(iii)of the §576.500 Recordkeeping and reporting homeless definition in §576.2, because requirements. he or she resided in an emergency shel- (a) In general. The recipient must ter or place not meant for human habi- have policies and procedures to ensure tation and is exiting an institution the requirements of this part are met. where he or she resided for 90 days or The policies and procedures must be es- less, acceptable evidence includes the tablished in writing and implemented evidence described in paragraph (b)(1) by the recipient and its subrecipients of this section and one of the following: to ensure that ESG funds are used in (i) Discharge paperwork or a written accordance with the requirements. In or oral referral from a social worker, addition, sufficient records must be es- case manager, or other appropriate of- tablished and maintained to enable the ficial of the institution, stating the be- recipient and HUD to determine wheth- ginning and end dates of the time re- er ESG requirements are being met. siding in the institution. All oral state- (b) Homeless status. The recipient ments must be recorded by the intake must maintain and follow written in- worker;or take procedures to ensure compliance (ii) Where the evidence in paragraph with the homeless definition in §576.2. (b)(2)(i) of this section is not obtain- The procedures must require docu- able, a written record of the intake mentation at intake of the evidence re- worker's due diligence in attempting to lied upon to establish and verify home- obtain the evidence described in para- less status. The procedures must estab- graph (b)(2)(i) and a certification by lish the order of priority for obtaining the individual seeking assistance that evidence as third-party documentation states he or she is exiting or has just first, intake worker observations sec- exited an institution where he or she ond, and certification from the person resided for 90 days or less. seeking assistance third.However,lack (3) If the individual or family quali- of third-party documentation must not fies as homeless under paragraph (2) of prevent an individual or family from the homeless definition in §576.2, be- being immediately admitted to emer- cause the individual or family will im- gency shelter, receiving street out- minently lose their housing, the evi- reach services, or being immediately dence must include: admitted to shelter or receiving serv- (1)(A)A court order resulting from an ices provided by a victim service pro- eviction action that requires the indi- vider. Records contained in an HMIS or vidual or family to leave their resi- comparable database used by victim dense within 14 days after the date of 246 Ofc.of Asst.Secy.,Comm. Planning, Develop., HUD §576.500 their application for homeless assist- children or youth, and is defined as ance; or the equivalent notice under homeless under another Federal stat- applicable state law, a Notice to Quit, ute or section 725(2) of the McKinney- or a Notice to Terminate issued under Vento Homeless Assistance Act (42 state law; U.S.C. 11434a(2)), the evidence must in- (B) For individuals and families elude: whose primary nighttime residence is a (I) For paragraph (3)(i) of the home- hotel or motel room not paid for by less definition in§576.2, certification of charitable organizations or federal, homeless status by the local private state, or local government programs nonprofit organization or state or local for low-income individuals, evidence governmental entity responsible for that the individual or family lacks the administering assistance under the resources necessary to reside there for Runaway and Homeless Youth Act (42 more than 14 days after the date of ap- U.S.C. 5701 et seq.), the Head Start Act plication for homeless assistance;or (42 U.S.C. 9831 et seq.), subtitle N of the (C) An oral statement by the indi- Violence Against Women Act of 1994(42 vidual or head of household that the U.S.C. 14043e et seq.), section 330 of the owner or renter of the housing in which Public Health Service Act (42 U.S.C. they currently reside will not allow 254b), the Food and Nutrition Act of them to stay for more than 14 days 2008 (7 U.S.C. 2011 et seq.), section 17 of after the date of application for home- the Child Nutrition Act of 1966 (42 less assistance. The intake worker U.S.C. 1786), or subtitle B of title VII of must record the statement and certify the McKinney-Vento Homeless Assist- that it was found credible. To be found ance Act (42 U.S.C. 11431 et seq.), as ap- credible, the oral statement must ei- placable; ther: (I) be verified by the owner or (ii) For paragraph(3)(ii) of the home- renter of the housing in which the indi- less definition in §576.2, referral by a vidual or family resides at the time of housing or service provider,written ob- application for homeless assistance and servation by an outreach worker, or documented by a written certification certification by the homeless indi- by the owner or renter or by the intake vidual or head of household seeking as- worker's recording of the owner or sistance; renter's oral statement; or (II) if the (iii) For paragraph (3)(iii) of the intake worker is unable to contact the homeless definition in §576.2, certifi- owner or renter, be documented by a cation by the individual or head of written certification by the intake household and any available supporting worker of his or her due diligence in at- documentation that the individual or tempting to obtain the owner or rent- family moved two or more times dur- er's verification and the written cer- ing the 60-day period immediately pre- tification by the individual or head of ceding the date of application for household seeking assistance that his homeless assistance, including: re- or her statement was true and com- corded statements or records obtained plete; from each owner or renter of housing, (ii) Certification by the individual or provider of shelter or housing, or social head of household that no subsequent worker, case worker, or other appro- residence has been identified;and priate official of a hospital or institu- (111) Certification or other written tion in which the individual or family documentation that the individual or resided; or, where these statements or family lacks the resources and support records are unobtainable, a written networks needed to obtain other per- record of the intake worker's due dili- manent housing. gence in attempting to obtain these (4) If the individual or family quali- statements or records. Where a move fies as homeless under paragraph (3) of was due to the individual or family the homeless definition in §576.2, be- fleeing domestic violence, dating vio- cause the individual or family does not lence, sexual assault, or stalking, then otherwise qualify as homeless under the intake worker may alternatively the homeless definition but is an unac- obtain a written certification from the companied youth under 25 years of age, individual or head of household seeking or homeless family with one or more assistance that they were fleeing that 247 §576.500 24 CFR Ch. V (4-1-12 Edition) situation and that they resided at that legal assistance provider, health-care address;and provider, law enforcement agency, (iv) For paragraph (3)(iv) of the legal assistance provider, pastoral homeless definition in §576.2, written counselor, or any other organization diagnosis from a professional who is li- from whom the individual or head of tensed by the state to diagnose and household has sought assistance for do- treat that condition(or intake staff-re- mestic violence, dating violence, sex- corded observation of disability that ual assault, or stalking. The written within 45 days of date of the applica- referral or observation need only in- tion for assistance is confirmed by a elude the minimum amount of infor- professional who is licensed by the mation necessary to document that the state to diagnose and treat that condi- individual or family is fleeing, or at- tion); employment records; department tempting to flee domestic violence, of corrections records; literacy, dating violence, sexual assault, and English proficiency tests; or other rea- stalking. sonable documentation of the condi- (c) At risk of homelessness status. For tions required under paragraph (3)(iv) each individual or family who receives of the homeless definition. (5) If the individual or family quali- Emergency Solutions Grant MSG) fies under paragraph (4) of the home- homelessness prevention assistance, less definition in§576.2, because the in- the records must include the evidence dividual or family is fleeing domestic relied upon to establish and verify the violence, dating violence, sexual as- individual or family's"at risk of home- sault, stalking, or other dangerous or lessness" status. This evidence must life-threatening conditions related to include an intake and certification violence, then acceptable evidence in- form that meets HUD specifications eludes an oral statement by the indi- and is completed by the recipient or vidual or head of household seeking as- subrecipient. The evidence must also sistance that they are fleeing that situ- include: ation, that no subsequent residence has (1) If the program participant meets been identified and that they lack the the criteria under paragraph (1) of the resources or support networks, e.g., "at risk of homelessness" definition in family, friends, faith-based or other so- §576.2: cial networks, needed to obtain other (i) The documentation specified housing. If the individual or family is under this section for determining an- receiving shelter or services provided nual income; by a victim service provider, the oral (ii)The program participant's certifi- statement must be documented by ei- cation on a form specified by HUD that ther a certification by the individual or the program participant has insuffi- head of household; or a certification by cient financial resources and support the intake worker. Otherwise, the oral statement that the individual or head networks; e.g., family, friends, faith- of household seeking assistance has not based or other social networks, imme identified a subsequent residence and diately available to attain housing sta- lacks the resources or support net- bility and meets one or more of the works, e.g., family, friends, faith-based conditions under paragraph (1)(iii) of or other social networks, needed to ob- the definition of "at risk of homeless- tain housing must be documented by a ness"in§576.2; certification by the individual or head (iii)The most reliable evidence avail- of household that the oral statement is able to show that the program partici- true and complete, and, where the safe- pant does not have sufficient resources ty of the individual or family would or support networks; e.g., family, not be jeopardized, the domestic vio- friends, faith-based or other social net- lence, dating violence, sexual assault, works, immediately available to pre- stalking, or other dangerous or life- vent them from moving to an emer- threatening condition must be verified gency shelter or another place de- by a written observation by the intake scribed in paragraph (1) of the "home- worker or a written referral by a hous- less" definition. Acceptable evidence ing or service provider, social worker, includes: 248 Ofc. of Asst.Secy.,Comm. Planning, Develop., HUD §576.500 (A) Source documents (e.g., notice of the recipient's or subrecipient's intake termination from employment, unem- staff describing the efforts taken to ob- ployment compensation statement, taro the required evidence; or bank statement, health-care bill show- (2) If the program participant meets ing arrears, utility bill showing ar- the criteria under paragraph (2) or (3) rears); of the "at risk of homelessness" defini- (B) To the extent that source docu- tion in§576.2, certification of the child ments are unobtainable, a written or youth's homeless status by the agen- statement by the relevant third party cy or organization responsible for ad- (e.g., former employer, public adminis- ministering assistance under the Run- trator, relative) or the written certifi- away and Homeless Youth Act (42 cation by the recipient's or subrecipi- U.S.C. 5701 et seq.), the Head Start Act ent's intake staff of the oral (42 U.S.C. 9831 et seq.), subtitle N of the verification by the relevant third party Violence Against Women Act of 1994(42 that the applicant meets one or both of U.S.C. 14043e et seq.), section 330 of the the criteria under paragraph (1)(ii) of Public Health Service Act (42 U.S.C. the definition of "at risk of homeless- 254b), the Food and Nutrition Act of ness"in§576.2;or 2008 (7 U.S.C. 2011 et seq.), section 17 of (C) To the extent that source docu- the Child Nutrition Act of 1966 (42 ments and third-party verification are U.S.C. 1786)or subtitle B of title VII of unobtainable, a written statement by the McKinney-Vento Homeless Assist- the recipient's or subrecipient's intake ance Act (42 U.S.C. 11431 et seq.), as ap- staff describing the efforts taken to ob- plicable. taro the required evidence;and (d) Determinations of ineligibility. For (iv) The most reliable evidence avail- each individual and family determined able to show that the program partici- ineligible to receive Emergency Solu- pant meets one or more of the condi- tions Grant (ESG) assistance, the tions under paragraph (1)(iii) of the record must include documentation of definition of "at risk of homelessness" the reason for that determination. in§576.2. Acceptable evidence includes: (e) Annual income. For each program (A) Source documents that evidence participant who receives homelessness one or more of the conditions under prevention assistance, or who receives paragraph (1)(i11) of the definition (e.g., rapid re-housing assistance longer than eviction notice, notice of termination one year, the following documentation from employment,bank statement); of annual income must be maintained: (B) To the extent that source docu- (1) Income evaluation form con- ments are unobtainable, a written taming the minimum requirements statement by the relevant third party specified by HUD and completed by the (e.g., former employer, owner, primary recipient or subrecipient;and leaseholder, public administrator, (2) Source documents for the assets hotel or motel manager) or the written held by the program participant and certification by the recipient's or sub- income received over the most recent recipient's intake staff of the oral period for which representative data is verification by the relevant third party available before the date of the evalua- that the applicant meets one or more tion (e.g., wage statement, unemploy- of the criteria under paragraph (1)(iii) ment compensation statement, public of the definition of "at risk of home- benefits statement,bank statement); lessness";or (3) To the extent that source docu- (C) To the extent that source docu- ments are unobtainable, a written ments and third-party verification are statement by the relevant third party unobtainable, a written statement by (e.g., employer, government benefits the recipient's or subrecipient's intake administrator) or the written certifi- staff that the staff person has visited cation by the recipient's or subrecipi- the applicant's residence and deter- ent's intake staff of the oral mined that the applicant meets one or verification by the relevant third party more of the criteria under paragraph of the income the program participant (1)(iii) of the definition or, if a visit is received over the most recent period not practicable or relevant to the de- for which representative data is avail termination, a written statement by able;or 249 §576.500 24 CFR Ch. V(4-1-12 Edition) (4) To the extent that source docu- determine compliance with the rent re- ments and third party verification are striction. unobtainable, the written certification (j) Shelter and housing standards. The by the program participant of the records must include documentation of amount of income the program partici- compliance with the shelter and hous- pant received for the most recent pe- ing standards in §576.403, including in- riod representative of the income that spection reports. the program participant is reasonably (k)Emergency shelter facilities. The re- expected to receive over the 3-month cipient must keep records of the emer- period following the evaluation. gency shelters assisted under the ESG (f) Program participant records. In ad- Program, including the amount and dition to evidence of homeless status type of assistance provided to each or "at risk of homelessness" status, as emergency shelter. As applicable, the applicable, records must be kept for recipient's records must also include each program participant that docu- documentation of the value of the ment: building before the rehabilitation of an (1) The services and assistance pro- existing emergency shelter or after the vided to that program participant, in- conversion of a building into an emer- cluding, as applicable, the security de- gency shelter and copies of the re- posit, rental assistance, and utility corded deed or use restrictions. payments made on behalf of the pro- (1) Services and assistance provided. gram participant; The recipient must keep records of the (2) Compliance with the applicable types of essential services, rental as- requirements for providing services and sistance, and housing stabilization and assistance to that program participant relocation services provided under the under the program components and eli- recipient's program and the amounts gible activities provisions at §576.101 spent on these services and assistance. through §576.106, the provision on de- thThe recipient and its subrecipientsloa termining eligibility and amount and governmentvt are units must generalrecords purpose dem- type of assistance at§576.401(a)and(b), onstr keep to dem- and the provision on using appropriate nance to compliance withm the includmainting and services at §576.401(d) records of efforthe unitreq of the general including pur- and(e);and of the of the Where applicable, compliance pose local government's annual budg- (3) ets and sources of funding for street with the termination of assistance re- outreach and emergency shelter serv- quirement in§576.402, ices. (g) Centralized or coordinated assess- (m) Coordination with Continuum(s) of ment systems and procedures. The recipi- Care and other programs. The recipient ent and its subrecipients must keep and its subrecipients must document documentation evidencing the use of, their compliance with the require- and written intake procedures for, the ments of §576.400 for consulting with centralized or coordinated assessment the Continuum(s) of Care and coordi- system(s) developed by the Continuum nating and integrating ESG assistance of Care(s) in accordance with the re- with programs targeted toward home- quirements established by HUD. less people and mainstream service and (h) Rental assistance agreements and assistance programs. payments. The records must include (n) HMIS. The recipient must keep copies of all leases and rental assist- records of the participation in HMIS or ance agreements for the provision of a comparable database by all projects rental assistance, documentation of of the recipient and its subrecipients. payments made to owners for the pro- (o) Matching. The recipient must vision of rental assistance, and sup- keep records of the source and use of porting documentation for these pay- contributions made to satisfy the ments,including dates of occupancy by matching requirement in §576.201. The program participants. records must indicate the particular (i) Utility allowance. The records must fiscal year grant for which each match- document the monthly allowance for ing contribution is counted. The utilities (excluding telephone) used to records must show how the value 250 Ofc.of Asst.Secy.,Comm. Planning, Develop., HUD §576.500 placed on third-party, noncash con- with the displacement, relocation, and tributions was derived. To the extent acquisition requirements in§576.408. feasible, volunteer services must be (u) Financial records. (1)The recipient supported by the same methods that must retain supporting documentation the organization uses to support the al- for all costs charged to the ESG grant. location of regular personnel costs. (2) The recipient and its subrecipi- (p) Conflicts of interest. The recipient ents must keep documentation showing and its subrecipients must keep records that ESG grant funds were spent on al- to show compliance with the organiza- lowable costs in accordance with the tional conflicts-of-interest require- requirements for eligible activities ments in §576.404(a), a copy of the per- under §576.101-§576.109 and the cost sonal conflicts of interest policy or principles in OMB Circulars A-87 (2 codes of conduct developed and imple- CFR part 225) and A-122 (2 CFR part mented to comply with the require- 230). ments in §576.404(b), and records sup- (3) The recipient and its subrecipi- porting exceptions to the personal con- ents must retain records of the receipt filets of interest prohibitions. and use of program income. (q) Homeless participation. The recipi- (4) The recipient must keep docu- ent must document its compliance mentation of compliance with the ex- with the homeless participation re- penditure limits in§576.100 and the ex- quirements under§576.405. penditure deadline in§576.203. (r) Faith-based activities. The recipi- (v) Subrecipients and contractors. (1) ent and its subrecipients must docu- The recipient must retain copies of all ment their compliance with the faith- solicitations of and agreements with based activities requirements under subrecipients, records of all payment §576.406. requests by and dates of payments documenta- (s) Other Federal requirements. The re- tiomade to subrecipients, and cipient and its subrecipients must doe- subrecipients,of all monitoring and sanctions of cipient their compliance with the Fed- as applicable.recipientIf the mustt eral requirements in §576.407, as appli- cipient os a State, the recapture dis- cable,including: keep records of each and(1) Records demonstrating compli- tribution of recaptured funds under ance with the nondiscrimination and §5(2) . equal opportunity requirements under ents(2) Thes recipient and its subrecipi- equal including data concerning ment must retainctscopies of all documentationarof race, ethnicity, disability status, sex, mp contracts theh procurementofre-family characteristics of persons compliance with 5n CFR and households who are applicants for, quirements in 24 CFR 85.36 and 24 CFR 84.40-84.48. or program participants in, any pro- (3) The recipientits gram or activity funded in whole or in must ensure that comply record- part with ESG funds and the affirma- subrecipients with the tive outreach requirements in keepingrequirements specified by the §576.407(b). recipient and HUD notice or regula- tions. (2) Records demonstrating compli- (w) Other records specified by HUD. ance with the uniform administrative The recipient must keep other records requirements in 24 CFR part 85 (for specified by HUD. governments) and 24 CFR part 84 (for (x) Confidentiality. (1) The recipient nonprofit organizations). and its subrecipients must develop and (3) Records demonstrating compli- implement written procedures to en- ance with the environmental review re- sure: quirements, including flood insurance (i) All records containing personally requirements. identifying information (as defined in (4) Certifications and disclosure HUD's standards for participation, data forms required under the lobbying and collection, and reporting in a local disclosure requirements in 24 CFR part HMIS) of any individual or family who 87. applies for and/or receives ESG assist- (t) Relocation. The records must in- ance will be kept secure and confiden- elude documentation of compliance tial; 251 §576.501 24 CFR Ch.V(4-1-12 Edition) (ii)The address or location of any do- of the United States, or any of their mestic violence, dating violence, sex- authorized representatives, must have ual assault, or stalking shelter project the right of access to all books, docu- assisted under the ESG will not be ments, papers, or other records of the made public, except with written au- recipient and its subrecipients that are thorization of the person responsible pertinent to the ESG grant, in order to for the operation of the shelter;and make audits, examinations, excerpts, (iii) The address or location of any and transcripts. These rights of access housing of a program participant will are not limited to the required reten- not be made public, except as provided tion period but last as long as the under a preexisting privacy policy of records are retained. the recipient or subrecipient and con- (2) Public rights. The recipient must sistent with state and local laws re- provide citizens, public agencies, and garding privacy and obligations of con- other interested parties with reason- fidentiality. able access (consistent with state and (2) The confidentiality procedures of local laws regarding privacy and obli- the recipient and its subrecipients gations of confidentiality and the con- must be in writing and must be main- fidentiality requirements in this part) tamed in accordance with this section. to records regarding any uses of ESG (y) Period of record retention. All funds the recipient received during the records pertaining to each fiscal year preceding 5 years. of ESG funds must be retained for the (aa) Reports. The recipient must col- greater of 5 years or the period speci- lect and report data on its use of ESG fled below. Copies made by micro- funds in the Integrated Disbursement filming, photocopying, or similar and Information System (IDIS) and methods may be substituted for the other reporting systems, as specified original records. by HUD. The recipient must also com- a) Documentation of each program ply with the reporting requirements in participant's qualification as a family 24 CFR parts 85 and 91 and the report- or individual at risk of homelessness or ing requirements under the Federal as a homeless family or individual and Funding Accountability and Trans- other program participant records parency Act of 2006, (31 U.S.C. 6101 must be retained for 5 years after the note), which are set forth in appendix expenditure of all funds from the grant A to 2 CFR part 170. under which the program participant was served; §576.501 Enforcement. (2) Where ESG funds are used for the (a)Performance reviews. renovation of an emergency shelter in- (1) HUD will review the performance volves costs charged to the ESG grant of each recipient in carrying out its re- that exceed 75 percent of the value of sponsibilities under this part whenever the building before renovation, records determined necessary by HUD, but at must be retained until 10 years after least annually. In conducting perform- the date that ESG funds are first obli- ance reviews, HUD will rely primarily gated for the renovation;and on information obtained from the (3) Where ESG funds are used to con- records and reports from the recipient vert a building into an emergency shel- and, when appropriate, its subrecipi- ter and the costs charged to the ESG ents, as well as information from on- grant for the conversion exceed 75 per- site monitoring, audit reports, and in- cent of the value of the building after formation from IDIS and HMIS. Where conversion, records must be retained applicable, HUD may also consider rel- until 10 years after the date that ESG evant information pertaining to the re- funds are first obligated for the conver- cipient's performance gained from sion. other sources, including citizen corn- (z)Access to records. (1)Federal govern- ments, complaint determinations, and ment rights. Notwithstanding the con- litigation. Reviews to determine con- fidentiality procedures established pliance with specific requirements of under paragraph (w) of this section, this part will be conducted as nec- HUD, the HUD Office of the Inspector essary, with or without prior notice to General, and the Comptroller General the recipient. 252 Ofc. of Asst.Secy.,Comm. Planning, Develop., HUD §576.501 (2) If HUD determines preliminarily fected activities to other eligible ac- that the recipient or one of its sub- tivities; recipients has not complied with an (v) Suspending disbursement of ESG ESG program requirement, HUD will funds for some or all activities; give the recipient notice of this deter- (vi) Reducing or terminating the re- mination and an opportunity to dem- maining grant of a subrecipient and re- onstrate,within the time prescribed by allocating those funds to other sub- HUD and on the basis of substantial recipients;and facts and data, that the recipient has (vii) Making matching contributions complied with Emergency Solutions before or as draws are made from the Grant (ESG) requirements. HUD may recipient's ESG grant. change the method of payment to re- (2) HUD may change the method of quire the recipient to obtain HUD's payment to a reimbursement basis. prior approval each time the recipient (3) HUD may suspend payments to draws down Emergency Solutions the extent HUD deems it necessary to Grant (ESG) funds. To obtain prior ap- preclude the further expenditure of proval, the recipient may be required funds for affected activities. to manually submit its payment re- (4) HUD may remove the recipient quests and supporting documentation from participation in reallocations of to HUD in order to show that the funds funds under subpart D of this part. to be drawn down will be expended on (5) HUD may deny matching credit eligible activities in accordance with for all or part of the cost of the af- all ESG program requirements. fected activities and require the recipi- (3) If the recipient fails to dem- ent to make further matching con- onstrate to HUD's satisfaction that the tributions to make up for the contribu- activities were carried out in compli- tion determined to be ineligible. ance with ESG program requirements, (6)HUD may require the recipient to HUD will take one or more of the reme- reimburse its line of credit in an dial actions or sanctions specified in amount equal to the funds used for the paragraph(b)of this section. affected activities. (b)Remedial actions and sanctions. Re- (7)HUD may reduce or terminate the medial actions and sanctions for a fail- remaining grant of a recipient and re- are to meet an ESG program require- allocate those funds to other recipients ment will be designed to prevent a con- in accordance with subpart D of this tinuation of the deficiency; mitigate, part. to the extent possible, its adverse ef- (8) HUD may condition a future fects or consequences; and prevent its grant. recurrence. (9) HUD may take other remedies (1)HUD may instruct the recipient to that are legally available. submit and comply with proposals for (c)Recipient sanctions.If the recipient action to correct, mitigate, and pre- determines that a subrecipient is not vent noncompliance with ESG require- complying with an ESG program re- ments,including: quirement or its subgrant agreement, (i) Preparing and following a sched- the recipient must take appropriate ac- ule of actions for carrying out activi- tions, as prescribed for HUD in para- ties affected by the noncompliance, in- graphs(a)and(b) of this section. If the eluding schedules, timetables, and recipient is a State and funds become milestones necessary to implement the available as a result of an action under affected activities; this section, the recipient must reallo- (ii) Establishing and following a cate those funds to other subrecipients management plan that assigns respon- as soon as practicable. If the recipient sibilities for carrying out the remedial is a unit of general purpose local gov- actions; ernment of territory, it must either re- (iii) Canceling or revising activities allocate those funds to other subrecipi- likely to be affected by the noncompli- ents or reprogram the funds for other ance, before expending ESG funds for activities to be carried out by the re- the activities; cipient as soon as practicable. The re- (iv) Reprogramming ESG funds that cipient must amend its Consolidated have not yet been expended from af- Plan in accordance with its citizenship 253 Pt. 581 24 CFR Ch. V (4-1-12 Edition) participation plan if funds become Excess property means any property available and are reallocated or repro- under the control of any Federal execu- grammed under this section. The re- tive agency that is not required for the allocated or reprogrammed funds must agency's needs or the discharge of its be used by the expenditure deadline in responsibilities, as determined by the §576.203. head of the agency pursuant to 40 U.S.C. 483. PART 581—USE OF FEDERAL REAL GSA means the General Services Ad- PROPERTY TO ASSIST THE HOME- ministration. LESS HHS means the Department of Health and Human Services. Sec. Homeless means: 581.1 Definitions. (1) An individual or family that lacks 581.2 Applicability. a fixed, regular, and adequate night- 581.3 Collecting the information. time residence;and 581.4 Suitability determination. (2)An individual or family that has a 581.5 Real property reported excess to GSA. primary nighttime residence that is: 581.6 Suitability criteria. (i) A supervised publicly or privately 581.7 Determination of availability. 581.8 Public notice of determination. operated shelter designed to provide 581.9 Application process. temporary living accommodations (in- 581.10 Action on approved applications. eluding welfare hotels, congregate 581.11 Unsuitable properties. shelters, and transitional housing for 581.12 No applications approved. the mentally ill); 581.13 Waivers. (ii) An institution that provides a AUTHORITY: 42 U.S.C. 11411 note: 42 U.S.C. temporary residence for individuals in- 3535(d). tended to be institutionalized; or SOURCE:56 FR 23794,23795,May 24,1991,un- (iii) A public or private place not de- less otherwise noted signed for, or ordinarily used as, a reg- ular sleeping accommodation for §581.1 Definitions. human beings. This term does not in- Applicant means any representative elude any individual imprisoned or oth- of the homeless which has submitted erwise detained under an Act of the an application to the Department of Congress or a State law. Health and Human Services to obtain HUD means the Department of Hous- use of a particular suitable property to ing and Urban Development. assist the homeless. ICH means the Interagency Council Checklist or property checklist means On the Homeless. the form developed by HUD for use by Landholding agency means a Federal landholding agencies to report the in- department or agency with statutory formation to be used by HUD in mak- authority to control real property. ing determinations of suitability. Lease means an agreement between Classification means a property's des- either the Department of Health and ignation as unutilized, underutilized, Human Services for surplus property, excess,or surplus. or landholding agencies in the case of Day means one calendar day includ- non-excess properties or properties sub- ing weekends and holidays. ject to the Base Closure and Realign- Eligible organization means a State, ment Act(Public Law 100-526; 10 U.S.C. unit of local government or a private 2687), and the applicant, giving rise to non-profit organization which provides the relationship of lessor and lessee for assistance to the homeless, and which the use of Federal real property for a is authorized by its charter or by State term of at least one year under the law to enter into an agreement with conditions set forth in the lease docu- the Federal government for use of real ment. property for the purposes of this sub- Non-profit organization means an or- part. Representatives of the homeless ganization no part of the net earnings interested in receiving a deed for a par- of which inures to the benefit of any titular piece of surplus Federal prop- member, founder, contributor, or indi- erty must be section 501(c)(3) tax ex- vidual; that has a voluntary board; empt. that has an accounting system or has 254 EXHIBIT"C" SCOPE OF WORK 1. Provide emergency shelter for homeless individuals and families. 2. Maintain emergency shelter facility in compliance with all relevant State and local codes and ordinances. 3. Keep emergency shelter facility open on a 24-hour, 7 day per week basis. 4. Provide two meals daily. 5. Coordinate client placement with other shelters, service providers, housing providers, and referral agencies within the City, as need dictates. Each person seeking ESG assistance—to the extent practicable—is offered an assessment by the ESG-funded program for eligibility screening and housing plan with appropriate referrals to providers for housing, mainstream resources, support, treatment, and other programs to prevent or end their homelessness 6. Supplement the City ESGP Grant with matching funds, in an amount not less than $167,567.00,to be used for homeless assistance. a. Matching funds must be expended for homeless assistance during the effective period of this Agreement. b. The expenditure and use of matching funds is to be documented pursuant to Section 3 of this Agreement. c. Allowable sources for matching funds are agency cash, salary paid to staff to carry out shelter program, and volunteer hours. 7. Allowable activities which are reimbursable under the provisions of this grant agreement are: Utilities (OPPD and MUD), Insurance, Shelter Maintenance Staff Salaries, Shelter Security Staff Salaries, and other Shelter Staff Salaries up to $20,000.00. 8. Provide monthly and annual reports containing information on number served by race, ethnicity, household composition, along with subpopulation numbers, number served by housing type as well as other information deemed necessary by the City of Omaha, for the purpose of statistical evaluation, monitoring and coordination of client services 9. Participate in Metro Area Continuum of Care for the Homeless (MACCH) activities, including: - The MACCH Client Feedback process; - Providing updated information to maintain the MACCH Directory; - Participating in the MACCH HMIS (ServicePoint); - Providing information for the shelter and service provider census counts administered by MACCH; - Paying on a timely basis annual MACCH dues; and - Ensuring that relevant staff is utilizing MACCH's Listserve. - 18- EXHIBIT "D" ALLOWABLE EXPENDITURES Siena/Francis House - Francis House and Siena House $155,000.00 Shelter Operating Expenses* *Shelter Operating Expenses include Utilities (OPPD and MUD), Insurance, Phones, Trash Removal, Exterminator Services, Dishwasher Lease & Chemicals, Kitchen Supplies, Shelter Maintenance Staff Salaries, Shelter Security Staff Salaries, and other Shelter Staff Salaries up to $20,000.00. - 19- OMB Guidance §2O0.501 5701-11, ("Travel and Subsistence Ex- Subpart F—Audit Requirements penes; Mileage Allowances"), or by the Administrator of General Services, G ENSItAL or by the President(or his or her des- ignee) pursuant to any provisions of t 200.500 Purpose. such subchapter mast apply to travel This part sets forth standards for ob- under Federal awards (48 CFR 81.205- Wrong consistency and uniformity 48(a)). among Federal agencies for the audit (d) Commercial air travel. (1) Airfare of non-Federal entities expending Fed- costs in excess of the basic least expel', eral awards. sive unrestricted accommodations class offered by commercial airlines AUDITS are unallowable except when such ae- §200.501 Audit requirements. commodations would: (i)Require circuitous routing; (a)Audit required.A non-Federal anti- .(ii) 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 costs that program-specific audit conducted for would onset the transportation•saw that year in accordance with the provi- hogs;or sions of this part, (v)Offer accommodations not reason- (b)Single audit Anon Federal entity ably adequate for the traveler's red- t expends $750,000 or more during in ical needs. The non-Federal entity the non-Federal entity's havefisaal year le must justify and document these Bondi- Federal awards must a pith Lions on a case-by-case basis in order audit conducted in accordance exept when with for the use of first-class or business- a�•51t Scopea of audit except it class airfare to be allowable in snob elects to have1 aaccordance program-specificwithaudit conducted in with para- cases. graph.(a)of this section. (2) "Unless a pattern of avoidance is (c) 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 cns- gram(excluding-R&D)and the Federal tomary standard airfare or other dis- program's statutes. regulations, or the count airfare is unavailable for specific terms and conditions•of the Federal trips if the non-Federal entity can award do not require a financial state- demonstrate that such 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 4200.507 Program-specific audits.A pro- entity-owned, -leased, or -chartered gratin-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, Cr the same suranoe, and other related costs. The Federal agency and the same pass- portion of such costs that exceeds the entity,and that Federal agen- cost of airfare as provided for in aura- cy, or pass-t rough entity in the case graph (d) of this section, is unallow- of a subrecipient, approves in advance gb a program-specific audit. (d)Exemption when Federal awards ex- §200.475 Trustees. pended are less than S750,000.A non-Fed Travel and subsistence costs of trust- eral entity that expends less than $750,000 during the non-Federal entity's ees(or directors)at 1HEs and nonprofit fiscal year in Federal awards is exempt organisations are allowable. See also from Federal audit requirements for §200.474 Travel costs. that year, except as noted in §200.503 Relation to other audit requirements, 171 1200 502 2 CFR Ch.0(1-1-14 Edition) but records must be available for re- eponsibillty.Methods to ensure view or audit by appropriate officials epee for Federal awards for- of the Federal oompii- agency,pas moo Profit subrecipients eras made to tit, and Government Accountability P monitoring iaol ins tp e- ( ) ty award audits, st-awr during the ve(egn¢Federally CentersFunded Research and, also agreement,and.331 at-award Audits. See s meat a an ) Manage- through entities,Requirements for pass_ auditee FRDC etas a FFRDC that owns or open_ FFRDC as a separate entity elect to for pie §� Basis� 8�iaimg Fes_ poses of this part. ( and Contractors. An (a) Determining Federal awards ex audiendues may simultaneous pended• The determination of when a a ass simultaneously dba con- Federal award is expended should be tractor.cipie Federal cipien based on when the activity related to a sabwards expended subjectd as a the Federal award occ� e p recipient or a thisactivity pertains to events e�y, tocaudit forn geode part.The payments quire the non-Federal entitythat re- to or services provided with Federal statutes,re to comply as a contractor are not Federal awards. the terms and conditions and Section §200.330 subreoiplent andohs of Federal tractor determinations should be con-n- awards, ons so eXP withi aw sidered in determining whether transactions eats cost-reimbursement away yaw manta oonstitete a Fe Pay' eludiracts ng ag grants, , compacts Federal award or a width Indian deb the, FAR, vemgree- payment for goods or services provided as a contractor. Tribes, cooperative agree - as Compliance responsibility for con- its, and direct appropriations; the tractors. In most cases, the a disbursement of fends to s, compliance uditee'e the use of loan proceeds under loanid compliance only o responsibility for contras- loan guarantee programs,the reoeipt of meat, receipt,to ensure that the procure- property; the receipt of and complypayment for goods arty; the receipt or use of program Prop- and servicescsto with Federal stat- come; the distribution or seofin- o conditions of Fedsraldaward's.the terms and commodities; the disbursementof food award compliance l ir Federal amounts entitling the non-Federal en- award do not pass through requirements nor- tity to an interest subsidy;and the ge- nially However, the roughee to craspon rind when insurance is in force. oans). Bible for ensuring compliance for (b) Loan and loan guarantees Bible f nt transactions which pro- Since the Federal government ebt �is at tired such that the con are strut- risk for loans until the debt is repaid, tared for traotor is re- the following guidelines must be used the sible or prog��compliance or to calculate the value of Federal viewed to determine must be re- awards expended under loan programs, ance. Also,t when gram oomph- except as noted in P premed transactions relatehethese procurement (d)of this s paragraphs (c) and toa major pro- section: gam, the scope of the audit must (1)v duringValr of new lit period; made or re- gram,date in- calved the audit period; echoes aese whether these trans- (2)BePly actio sad regulations,compliance with Federal ance of loans g the audit perioda b for and conditions regu ao Federal, and the terns which the Federal years (d) nd�ronst sabred awards. continuing governmqui imposes plant. Since this glue compliance requirements; part does not not apply to for-profit sub- (3)Any interest subsidy, cash,or ad- recipients, for pass-through b ough entity is ministrative cost allowance received. responsiblemap necessary,establishing require- (o)Loan and loan guarantees(loans)at awe by for-profits , to ensure oomph- IHRs.When loans are made to students agreement th sui�cipients. The of an IHE but the agree recipient should the for-profit sub- the loans, then only, e valuenot of loans compliance o describe applicable made quirements and the for- consideereed Federal awards e% mustd Ibe n profit subrecipient's compliance re- that audit period.The balance of in lance of loans 172 OMB Guidance §200.503 for previous audit periods is not in- §200,603 Relation to other anal ru- eluded as Federal awards expended be- cause the lender accounts for the prior Quiromente. balances. (a)An audit conducted in accordance (d) Prior loan and guarantees with this part must be in lieu of any fi- (loans). Loans, the proceeds of which nanofal audit of Federal awards which were received and expended in prior anon-Federal entity is required to nn- dergo under any other Federal statute years, are not considered Federal awards expended wader this part when or regulation. To the extent that such the Federal statutes, regulations, and audit provides a Federal agency with the terms and conditions of Federal the information it requires to carry awards pertaining to such loans impose out its responsibilities under Federal no • continuing compliance require- statute or regulation,a Federal agency meats other than to repay the loans. must rely upon and use (e)Endowment funds. The cumulative ton. balance informs- balance of Federal awards for endow- (b)Notwithstanding subsection(a), a ment funds that are federally re- Federal agency,Inspectors General, or stained are considered Federal awards GAO may conduct or arrange for addi- expended in each audit period in which tional audits which are necessary to the funds are still restricted. carry out its responsibilities under (i) Free rent. Free rent received by Federal statute or regulation.The pro- itself is not considered a Federal award visions of this part do not authorize expended de dived as part.is However,free anY non Federaa entity to constrain,in part of a Federal any manner,such Federal agency from award to carry oat a Federal program carrying out or arranging for such ad. must be included in detprrnining Fed- ditional audits,except that the Federal auditoral nn awder his expended and subject to agency must plan such audits to not be part• duplicative of other audits of Federal (g) Vauingh non-cash assistance. Fed awards. Prior to commencing such an foodn commodities,t assistance, � as free aft, the Federal agency or pass- rent,erty,or donated surplus property,mustonated �recentougn entity.must review the FAC non- be valued'at fair for audits submitted by the market value at the Federal entity,and to the extent such time of receipt or the assessed value sadits meet a Federal agency or pass- provided by the Federal agency. through entity's (h)Medicare. Medicare ruds, the Federal non-Federal entity�p�ents to a agency or pass-through entity-must tient care services to Mei providing r le di�tionaal audits must be upon and use such its.Any ad- tient are not considered individuals ered Federal performed in such a way as to build expended under this part. upon work performed, including the (i)Medicaid. Medicaid payments to a audit documentation, sampling, and subreciplient for providing patient care testing already performed, by other services to 1lfedicaid-eligible individ- auditors. uals 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 bursement is on a cost-reim basis. bursemeat awards,nor limit the authority of any (j) Certain loans Federal agency Inspector General or 7n ovided 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 Insult- and conditions of a cost-reimbursement anoe Fund and the Central Liquidity contract may include additional appli- Facility that are fended by oontribu- 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 r §200.504 2 CFR Ch.II(1-1-14 Edition) conducts or arranges for additional au_dits must, consistent with other appli_ en its audits pursuant to this part bi- cable Federal statutes and r ennraAy regulations, arrange for funding the fail cost of §200405 Sanctions. such additional audits. (e) Request for a program to au In cases of continued inability or un- dated as a major program. A - willingness to have an audit Conducted be and di havegency� request that an agein ncies andd pas this part, Federal a audited particular Federal pro_ must es pees-te augh pro- gramo- lien of the Fes ala �or Program in v1� take�.33 Remediess e as onw g agency for non- lieu or Ong for the addi- tional compliance. requests$ ah uld o for Audit such be Wig, §S00.bo0 eta. 180 calendar made at least days Prior to the end of See§200.425 Audit services. theheitisee, year to be audited. The auditor, should ter consultation with its §800.607 dam-specific audits. a a request bypromptly respond to (a) Program-specific audit guide avail- suchs awardinginforming the Fed- able.In many cases,a gram wouldagency Whether the pro- audit guide will beotherwise be audited as a specific guidance to the au de audit approach using the -based respect to in auditor with Major described in 1200.518 ante internal controls, oomph- audit t, theam determination and, if Procedures, suggested audit the Federalestimated incremental cost. quirements. A listing auit currentreporting ro- w g agency must gram-specific audiguides of eand then promptly confirm to the auditee in the pplcan be found whether it wants the program audited compliance 2014 supplement of id- as a major program. If the program is ligg Federalh the ward �a enrcyt in tact to be audited as a major program based of awarding upon this Federal a information aades agency Wh�eret$a upon d the aragency re- copy of the guide can be obtained. quest, toawarding agen- When a current program-specific audit Costa,agrees pay the full incremental guide Is available, the auditor must costs, then the hed as must have the follow SAGAS and the guide when per- program and entity n�opro�m•A forming a program-specific audit. ssions r this pa Prove- (b) Program-specific audit recipient. regress for a sub- available. (1) When a guide not audit guide is not available, program-specific auditee and auditoraala ve the �0'504 Frequency of audits. must have liasi- Except for the provisions for bee rally the same responsibilities for the audits provided in biennial Federal program as they would have (b) of this section,paragraphs (a) and for an audit of a major program in a audits required by single audit. this part must be performed annually. (2) The auditee must Any biennial audit must cover both nanoiai eta Prepare the fi- al years within the biennial period. statement(s) for the Federal (a)A state,local government, or In- aarsg that includes,expenditures r a minimum, eral dian tribe that is required byoo schedulefor of eapeadm and of es that Lion or statute,in ���- awards for the Program and cotes that 1987,tion ute i effect on Januaryactuary 1, desoribe the significant accounting y less Ire- policies used in preparing the schedule, than andit�y, is permitted to a summary schedule of prior audit find- undergourt its _pursuant to this lags consistent with stillPart bei in call effect forthe biennial period..must of §200,5ll Audit findings the requirementsow- p, Paragraph (b),to and wi a coerrcquir m nts (b) Any nonprofit organization that Plan consistent with the requirements had biennial audits for all biennial pe-riods ending between July 1, 1992, and pparagof raph Audit follow-up, January 1, 1995, is permitted to and (0) (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 gram;and in accordance with GAGAS; (iv)A schedule of findings and ques- (ii)Obtain au 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 §200.514 Scope of audit, paragraph (a) §200.515 Audit reporting, paragraph for a major program; (dX1)and findings and questioned costs (iii)Perform procedures to determine consistent with the requirements of whether the auditee has complied with §200.515 Audit reporting, paragraph Federal statutes, regulations, and the (d)(3). terms and conditions of Federal awards (o) Report submission for program-ape- that could have a direct and material cific aud#ts. (1)The audit must be corn- effect on the Federal program con- pleted and the reporting required by sistent with the requirements of paragraph(e)(2)or(exit)of this section §200.514 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 on 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, ments 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 pereonnally identifiable informs- ing;and tion. (v) Report any audit findings con- (2) When a program-specific audit sistent with the requirements of guide is available, the auditee must §200.516 Audit findings. electronically submit to the FAO the (4)The auditor's report(s)may be in data collection form prepared in aa- the form of either combined or sepa- cadence with §200.512 Report submis- rate reports and may be organized dii 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(e) 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 a program-specific audit ion) as to whether the financial state- must consist of the financial state- ment(s)of the Federal program is pre- ment(s)of the Federal program,a stun- sented flirty in all material respects in many schedule of prior audit findings, accordance with the stated accounting and a corrective 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 soribed 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 (iii)A report on compliance which in- a program-specific audit, and one copy chides an opinion (or disclai nc r of of this reporting package must be elec- opinion) as to whether the auditee Ironically submitted to the FAO. complied with laws, regulations, and (d) Other sections of this part may the terms and conditions of Federal apply.Program-specific audits are sub- awards which could have a direct and ject to: 175 §200.508 2 CFR Ch.II(i-1-14 Edition) (1)200.500 Purpose through 200.503 Re- Subpart 1)- 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) 200.508 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, para- 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 GAGAS. Factors to be oon- 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 ness to the request for proposal, rel- part unless contrary to the provisions avant 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, A�Dl7E8 and price. Whenever possible, the auditee must make positive efforts to §2O0.BO8 Anditee respcnaibilitles utilize small businesses, minority- audAue must: �owned firms,and women's business en- The(a) Procure otherwise arrange for prises,in Proeumng audit services as the audit stated in §200:821 Contracting with required by this part in se- small and minority businesses, worn- cadence with §200.509 Auditor selec- 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. cordance with §200.512 Report submis- (b)Restriction on auditor preparing in- sion. direct cost proposals. An auditor who (b) Prepare appropriate financial prepares the indirect cost proposal or statements, including the schedule of cost allocation plan may not also be se- expenditures of Federal awards in ac- leoted to perform the audit required by cordance with§200.510 Financial state- this part when the indirect costs recov- ments. Bred by the auditee during (a)Promptly follow up and take cor- the prior trio- rective action on audit fin year applies to$1 million. This sedri n dimes, in- tion applies the base year used in eluding preparation of a summary the preparation of the indirect cost schedule of prior audit findings and a proposal or cost 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 er cost paragraph (b) and §200.511 Audit find- allocation plan is used to recover costs. Jugs follow-uP, paragraph (o), respec- (o) 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 §2O0.509 Auditor selection must prepare financial statements that (a) Auditor reflect its financial position, results of procurement. In procuring operations or changes in net assets, audit services, the auditee 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 niaational unit and fiscal year that is through 20.326 Contract provisions of chosen to meet the requirements of 176 OMB Guidance §200.511 this part.However,non-Federal entity- the schedule the balances outstanding wide financial statements may also in- at the end of the audit period. This is elude departments,agencies,and other in addition to including the total Fed- organizational units that have separate oral awards expended for loan or loan audits in accordance with §200.514 guarantee programs in the sohedule. 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 §200.414 Indirect auditee's financial statements which (F&A)costs. must include the total Federal awards expended as determined in accordance 6200.511 Audit fins:nags follow-up. with §200.502 Basis 'for determining (a)General.The auditee is responsible Federal awards expended.While not re- for follow-up and corrective action on giired,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 ings: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 correo- of Federal awards expended for each tive action plan must include the ref- Federal award year separately. At a erenoe numbers the auditor assigns to minimum,the schedule must: audit findings under §200.516 Audit (I) List individual Federal programs findings,paragraph(o). Since the sum- by Federal agency.For a cluster of pro- mazy 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 lugs relating to the financial state- Federal award or by Federal agency ments which are required to be re- and major subdivision within the Fed- ported in accordance with.GAGAS. eral agency. For example,the National (b) Summary schedule of prior audit Institutes of Health is a major subdivi- 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- assiglned by the pass-through entity lugs reported in the prior audit's sum- must be included. mart' schedule of prier audit findings (3) Provide total Federal awards ex- except audit findings listed as cor- pended for each individual Federal pro- rooted in accordance with paragraph gram and the CFDA number or other (b)(1)of this section,or no longer valid identifying number when the CFDA in- or not warranting further action in ao- formation is not available.For a clue- cordange with paragraph (b)(3) 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 aubrecipients 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 eor- grams described in §200.502 Basis for rested 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 171 §200.512 2 CFR Ch.11(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- oration. 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 farther 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 farther action is that all of data elements described 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 cc- the audit was completed in accordance curred was submitted to the FAC; with this and provides _ (ii) The Federal agency or pass- tionpart about 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 finding;and available from the audit required by (iii)A management decision was not this part that is necessary for Federal issued. agencies to use the audit to ensure in- (c)Corrective action plan.At the corn- 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 ONB, available from the FAG, and the auditor's findings described in include collections of information from §200.516 Audit findings,a corrective ac- the reporting package described in tion plan to address each audit finding paragraph (o) 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- name,chief executive officer, or chief tact person(s) responsible for oorrec- 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 oor- part,the data were prepared in accord- rective action is not required,then the ante with this part (and the instru - corrective action plan must include an tions accompanying the form), the re- explanation and specific reasons, porting package does not include pro- tected§200,6� Report submission. tected personally identifiable informer (a) General. (1) The audit must be entiretytion, accuratetion included complete, in, its is and complete, and completed and the data collection form that the FAC is authorized to make the described in paragraph (b) of this.seo- reporting package and the form pub- tion and reporting package described in Rely available on a Web site. paragraph (e) of this section must be (2) Exception 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 nation 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 utes or regulations, the auditee must for submitting the reporting package 178 OMB Guidance 1200.513 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 eras 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 submis- • prior audit findings reported the status sion to the FAG. 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 accordance 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 (c) to must make oopies of the reporting the public, except for Indian tribes ex- package available for public inspec- excising the option in(b)(2)of this sec- tion. tion,and maintain a data base of coin- (8)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 collet elements of the data collection form. tion forms and reporting packages. The auditor must sign a statement to (h) Electronic filing. Nothing in this be included as part of the data colieo- part must preclude electronic submis- tion form that indicates, at a rain- dons to the FAC in each manner as imum, the source of the information may be approved by OMB. included in the form, the auditor's re- sponsibility for the information, that FEDERAL AGENCIES the form is not a substitute for the re- porting package described in paragraph §200.613 Responsibilities. (c)of this section,and that the content (a)(1) Cognizant agency for audit re- of the form is limited to the collection sponsibilities.A non-Federal entity co- of information prescribed by OMB. pending more than$50 million a year in (a) Reporting package. The reporting Federal awards must have a cognizant package must inolude the: agency for audit. The designated cog- (1) Financial statements and ached- nizant agency for audit must be the ule of expenditures of Federal awards Federal awarding agency that provides discussed. in §200.510 Financial state- the predominant amount of direct meats, paragraphs (a) and (b), reaper,- 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 §200.511 Audit findings follow-up, tity's fiscal years ending in 2009, 2014, you paragraph(c). 2019 and every fifth ye 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(a)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- nuance 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 fending 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 copy 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.II(1-1-14 Edition) change to the FAC, the auditee,and,if standard performance by auditors must known, the auditor. The cognizant 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. tical, 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 OMB with this part.to lead a governmentwide project to determine the quality of single audits (vii) Coordinate a managementauditdin s(as by providing a statistically reliable es- definedon for in -c findings(at timate of the extent that single audits defined it � •�affect theCross-cutting pro- conformapi- to applicable requirements, finding) Lan n agencyl standards,and procedures;and to make requested of more than one when recommendations to address noted s any Federal awarding audit quality'.lasses, including ree- agency whose awards are included in ommnend Q8 to ap, ations for any Rba, the audit finning of the auditee. Nimble requirements, standards and ( )Coordinate the audit work and procedures indicated by the results of reporting responsibilities among audi- the project.This goverpmentwide audit to to achieve the most cost-effective quality project must be performed once audit. every 6 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 pubHj. (b) Oversight agency for audit re- (hi) Promptly inform other affected sponsibilities.An auditee who does not Federal agencies and appropriate Fed- have a designated cognizant agency for oral 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 §200.73 Oversight and regulations, agency for audit. A Federal agency (iv) Advise the community of rode- with oversight for an auditee may reas- pendent auditors of any noteworthy or sign oversight to another Federal agen- important factual trends related to the oir that agrees to be the oversight quality of audits stemming from qoal- agency for audit. Within 30 calendar ity control reviews. Significant prob- days after any reassignment, both the lems 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 anditee,and, if to appropriate state lioeilsing 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 deficiencies (2)May assume all or some of the re- found in the audits when the defi- sponsibilities normally performed by a ciencies require corrective action by cognizant agency for audit. the auditor. When advised of deft- (a) Federal awarding agency respon- eienoies, the auditee must work with sibilities.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 entities 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- quirements of this part. AO 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. (it) Promote interagency coordina- (3)Follow-up on audit findings to en- tion, consistency, and sharing in areas sure that the recipient takes appro- such as 000rdinating 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 (1) Issue a management decision as utility of the.FAC; and studying ways prescribed in §200.521 Management de- to use single audit results to improve oision; Federal award accountability and best (ill Monitor the recipient taking ap, practices. propriate and timely corrective action; (iii) Oversee training for the Federal (iii)Use cooperative audit resolution awarding agency's program manage- mechanisms (see §200.25 Cooperative ment 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 correc- agency's use of cooperative audit reac- tive action;and lution mechanisms. (iv)Develop a baseline, metrics, and (v) Coordinate the Federal awarding targets to track, over time, the effec- agency's activities to ensure emo- tiveness of the Federal agency's proo- priate and timely follow-up and correct ess 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 deal.- Federal programs of more than one lions. Federal awarding agency. (4) Provide OMB annual updates to (vii) Ensure the Federal awarding the compliance supplement and work agency provides annual updates of the with (MB to ensure that the oomph- compliance supplement to OMB. once supplement focuses the auditor to (viii) Support the Federal awarding test the compliance requirements most agency's single audit accountable offi- likely to cause improper payments, cial's mission. fraud, waste, abuse or generate audit finding for which the Federal awarding AUDI1OuS agency will take sanctions. (5)Provide OMB with the name of a §200.514 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- §200.513 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- oral 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 expendi- paragraph(c)(3)(iv)of this section. tures of Federal awards for each such (ail.) Responsible for designating the department, agency, and other organi- Federal agency's key management sin- zational unit, which must be consid gle audit liaison. ered to be a non-Federal entity.The fi- (6) Provide OMB with the name of a nancial statements and schedule of ex- 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 §2(0.515 2 CFR Ch.II(1-1-14 EdInnon) statements of the auditee are presented Lions of Federal awards that may have fairly in all material respects in ac- a direct and material effect on each of cordance with generally accepted ac- 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 Btat- grams and the compliance require- ed fairly in all material respects in re- ments of the lation to thei the anditee's financial state- largest Federal a sume- ments as a whole. nclud ed in the compli ance supple- ment.Internal control. (1) The cempli_ meat. ante supplement provides guidance on la) d For the Federal programs requirements internal controls over Federal pro-. related to uppgeams contained grams based upon the guidance in o the compliance supplement,all audit Standards for Internal Control in the of these requirements of this part. Where there have been changes to the Comptroller General of the United States and the Internal Control—Irate- compliance not reflected and the grated Framework,issued by the Com- changes are reflected in the emi- grated of Sponsoring Organizations of p1�Oe supplement, the auditor must the Treadway Commission(COSO), determine the current compliance re- (2)In addition to the requirements of tiresquire cconts and ly.modify the audit prone- GAGAS,the auditor must perform pro- ,.4. lures accordingly. For those Federal cedures to obtain an upderstaading programs not covered in the compli- internal control over Federal programs ante supplement, the auditor should sufficient to plan the audit to support follow the compliance supplement's a low assessed level of control risk of guidance for programs not included in noncompliance for major program, the supplement. (3) Except as provided in paragraphf4) The compliance testing must in- (3) of this section, the auditor must: elude tests of transactions and such (i) Plan the testing of internal con- other auditing procedures necessary totrol over compliance for major pro- provide the auditor sufficient appro- grams to support a low assessed level Prints audit evidence to support an of control risk for the assertions rel- opinion on compliance. avant to the compliance requirements (e)Audit follow-up. The auditor must for each major program;and follow-up on prior audit findings, per- (ii) Perform testing of internal con- form procedures to assess the reason- trol as planned in paragraph(c)(3)(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 compliance requirements Audit findings follow-up paragraph(b), for a major programp are likely to be in- and report, as a current year audit effective in preventing or detecting ceding, when the auditor concludes noncompliance, the planning and per- that the summary schedule of prior forming of testing described in pars- audit findings materially misrepre- sents the status of any prior audit find- graph(c)(S) of this section are not re- ciuired for those compliance require- The auditor must perform audit meats. However, the auditor,must re follow up procedures regardless of port a significant deficiency or mate- whether a prior audit finding relates to Mal weakness in accordance with a major program in the current year. §200.516 Audit findings, assess the re- (f) Data Collection Form. As required lated control risk at the maximum, in §200.512 Report submission para- and consider whether additional com- 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. requirements of GAGAS, the auditor oro the porting §200.615 Audit re 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 182 OMB Guidance §200.515 from the manner presented in this sec- (iii) A statement as to whether the tion.The auditor's report(s)must state audit disclosed any noncompliance that the audit was conducted in ac- that is material to the finanoial 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- manta are presented fairly in all mate- trol over major programs were die- rial respects in accordance with gen- closed 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 ea- grams(i.e., unmodified opinion, quail- penditures of Federal awards is fairly fled opinion, adverse opinion, or die- stated in all material respects in relay claimer of opinion); tion to the financial statements as a (v1) 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 §200.518 Audit findings paragraph(a); with Federal statutes,regulations,and (vii) An identification of major pro- the terms and conditions of the Federal award, noncompliance with which grams by listing each individual major could have a material effect on the fl- program;however in the case of a clus- nancial statements. This report most ter of programs only the cluster name describe the scope of testing of internal as shown d the wardSches is ofg fired;Bxpe - control and compliance and the resultstures of Federal Awards is required; of the tests, and, where applicable, it (viii) The dollar threshold used to will refer to the separate eohednle of distinguish 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 pars- e) A report on compliance for each graph(b)(1),or(b)(3)when a recalcula- major program and report and internal tion of the Type A threshold is re- control over compliance. This report qun'ed for large loan or loan gaaran- must describe the scope of testing of tees;and internal control over compliance, in- (ix) A statement as to whether the elude au opinion or modified opinion as auditee 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 conditions 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 (8) Findings and questioned costs for questioned costs described in para- Federal awards which must include graph(d)of this section. audit findings as defined in §200.516 (d) A schedule of findings and gees- Audit findings,paragraph(a). tioned costs which must include the (i) Audit findings (e.g., internal con- following three components: troI findings, compliance findings, (1) A summary of the auditor's re- questioned costs, or fraud) that relate suits,which must include: to the same issue should be presented (i) The type of report the auditor as a single audit finding. Where prao- issued on whether the financial state- tical, audit findings should be orga- meats audited were prepared in accord- nized by Federal agency or pass- aace with GAAP(i.e.,unmodified opia- 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- financial statements; porting in one section of the schedule 1 1 $200.5Id 2 CFR Ch.11(1-1-14 Edition) Y be in summary form with a ref- arenoe to a detailed reporting' the auditor must include offer section aof theschedule. g in the to provide proper perspective foro indg- (& erd conseq n es of Noel* in thin Part eludes �the prevalence and consequences of co(mirmbining g of the audit reporting re- questioned costs. ing y this° tint with the ration- ea er'than 4 # anar ©oats that are re y$200.512 Ro ort his- greater' 8 (l0�far a Falderal pros allowed l f;rwhich is not major wham Colleetiom audited as a w to allot d by AGAS and Appel M. Except for aired tallow-up.e (Form BF'-M.0). Collection Form 01°is not a�eq sired under this part to perform audit _procedures for such a Federal program,there fore; the 5200.516 Audit findings. (a) Audit auditor ill normally r not find clue g- tor mustfindings reported. The soul- based costa for a program that 9s not for mus report the following as audit encllteri aB a for fw°Fra i..gowever. 8 a schedule of findings and # t�AB :a&ditot doers tonic swats of gneatfoned costa liwesuclied+tas(1)Significant deficiencies and mate- that in�t. t8 foT a Federal Parana overialweaknesses internal l control (e.g•,go__ cri ditf Il ited as a major program instancesa major oprograms t significant auditmun)and no or other acos, The trel�d ng to major tfQte®d costs are greater then$25 pU, of whether a Can t e•auditor ifie in mat iepitrt' as:an tml€B.�significant . Internal aoai- audit#1�idigg, tr weakness fax enoy�.or Mats- (5) The circumstances concerning leg six audit ties of report- why the auditor's report on compliance type.of relatioy to:a for each major program is other than oomph lnfremeut Air a an unmodified o Mitten , pt. o - oumstauces are otherwise unless such cir- 7 uonp audit findings in the schedulreported of find- (2) pliante with the Previsions of Feserai a4,tu. and questioned costs for Federal thane. or the rei;'ttla- awards. thaFederal. a and o pour (0)Known or like fraud Qd to aiona Drsting a Min. The auditor's di t g,Man of otli eral. repo, sinless such fraud is Whether a nonce tpl ¢oe with teepro- i ise reported as an audit.finding a ncom l Statutes. in Behedule of fY bons. ar the to batted cos for•Fe tiditw and ones- visions a m and condftj Df ttea awe, pose of WaT*is inater1 for the per- t cortr dues not requireni do auditor po a type of rting an audit finding is in to report of promly i stina ive or rrelation li,B not ftEa h i!liainm re- le mpron Investigative or (Zaire, iS ea ®eon 'ideahl- h _tn.tusks Bn i- out- Cal Kind c °ken ee.supplemefts- firms that the auditor,con- ned than questioned costa that that the fraud was aerted oq OQ)for a typo of .= side the auditor's reports ender the rag t for adi- , grin SPKnownmajor ern= met rernrting; utrammiF of GALAS. pllaur qnnotioned omits a (7) Istaatcies whore awe specifically identified by the audit foliew- -re the results of auditor. In evaluatingthe effect .y premodern ri deer t�esl7i-cningl ant on t at that the o en cal audit an any theh of pits° compliance, the auditor considers the in aceg pith 4 ed§1 Audit audits- t'agate of total Dona questioned ings fait®*- Brits-agraph slit Sri- (likely question costa), not just the ally miersprese i rag, to f-an- gueatfQa*d°Data.BPQci eealY identified Prior audit statue Of-any (blown questioned caste)• The auditor Must aAsq i�apurt (b) Audit f# detail known questioned Audit ands ted i Casts when likely 4ueetioned are nt det man be presented in greater than$25,000 ior a typeseism prepare and rrr oti for the lsfiance �gmeitt for a, of cam s�tee to prepet+s a oara�eotive a°tfon cram, In reporting q do coats. plant and t c, ,votive action sad for Federal agencies and pass-through 184 OMB Guidance §200.517 entities to arrive at a management de- resent an isolated instance or a sys- cision. The following specific informer tunic problem. Where appropriate, in- Lion 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 eral award identification including the dollar value.The auditor should report CFDA title and number,Federal award whether the sampling was a stafis- identification number and year, name tically valid sample. of Federal agency,and name of the ap- (8) Identification of whether the plioable pass-through entity. When in- audit finding was a repeat of a finding formation,shah 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 fa- available to describe the Federal tore occurrences of the deficiency iden- award. titled in the audit finding. (2) The criteria or specific require- (10) Views of responsible officials of meat upon which the audit finding is the anditee. based, including the Federal statutes, (c) Reference numbers. Each audit regulations, or the terms and condi- finding in the schedule of findings and tions of the Federal awards. Criteria questioned costs must include a ref- generally identify the required or de- ermine 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 donee and understanding findings. allow for easy referencing of the audit (8) The condition found, including findings during follow-up. facts that support the deficiency iden- tified in the audit finding. 3200.51.7 Audit documentation. (4)A statement of cause that identi- (a) Retention of audit documentation. Pies 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 recommenda- fled in writing by the cognizant agency tions for corrective action. for audit, oversight agency for audit, (5) The possible asserted effect to cognisant 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 anditee 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 finding 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 mast be made (8) Identification of questioned costs available upon request to the cognizant and how they were computed. Known 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- ings, or to carry out oversight reepon- spective for judging the prevalence and sibilities consistent with the purposes consequences of the audit findings, of this part. Access to audit docu- such as whether the audit findings rep- mentation includes the right of Federal 185 §200.518 2 CFR Ch.II(1-1-14 Ed ion) 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 §800 b18 total Federal awards expended for the 'for determine" program. A cluster of programs is treated as one program and the value (a) General. The auditor must use a of Federal awards expended under a risk-based approach to determine loan program is determined as de- which Federal programs are major pro- scribed in §200.502 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 4200.504 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 upon the Fed- eral program. The process in pare- eral awards expended during the two- graphs (b) through (i) of this section year period. must be followed. (a) 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 er the requirements in§200.519 Criteria Federal programs with Federal awards for Federal program risk paragraph(a), expended during the audit period ex- the results of audit follow-up, or any ceeding the levels outlined in the table changes in personnel or systems affect- in this paragraph(b)(1): Mg the program indicate significantly Total real amide ex- d sk & pended Type ws thresholdgramincrease frothri being lowAdpreclude risk Forthe a Type Equal $750,000 but leas mom $Program to be considered low-risk,it non or acting to$25 million must have been audited as a major pro- Exceed$25 million but his Total Federal awards ex- gram in at least one of the two most then or equal to$100 mu- pended Ihnes.at. recent audit periods (in the most re- °on' cent audit period in the case of a bien- 6tceed$i00 million but less $3 million. nial audit), and, in the most recent than a equal to 51 billion. Exceed$1 bison but lees Total Federal awards ex- audit period, the program must have then or equal to$10 b51on. pended times.003. not had: Exceed$10 boon but lase $30 million (i) Internal control deficiencies than w equal b$20 Won which were identified as material Exceed$10 billion Total Federal awards ex- panded times.0015. weaknesses in the auditor's report on internal control for major programs as (2) Federal programs not labeled required under §200.515 Audit report- Type A under paragraph (b)(1) of this ing,paragraph(a); section must be labeled Type B pro- (ii) A modified opinion on the pro- grams.The inclusion of largegram in the auditor's report on major (3) loan and programs as required under 4200.515 loan guarantees (loans) should not re- Audit reporting,paragraph(0);or suit 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 gram. is considered a large loan program,and (2) Notwithstanding paragraph (o)(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 oonsid- Type A programs.This recalculation of ered 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 titular recipient to allow the Federal to be a Federal program providing awarding agency to comply with 31 18 OMB 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 aggre- if known, the auditor of OMB's ap- gate,all major programs encompass at proval at least 150 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- dited. tor must audit the major programs (d) Step three. dentified in Step 4 (paragraphs (e)(1) (1) The auditor must identify Type B programs which are land(2)of this section) and such adds- high-risk using professional judgment tional Federal programs with Federal and the criteria in§200.519 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 B 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 sea- tion the risk analysis process used in tion).Except for known material weak- determining major programs. ness in internal control or compliance (h) Auditor's judgment. When the problems as discussed in §200.519 Cri- major program determination was per- tells. for Federal program risk para- formed and documented in accordance graphs (b)(1),(b)(2), and (c)(1), a single with this Subpart, the auditor's jndg- criteria. in risk would seldom cause a meat in applying the risk-based ap- Type B program to be considered mach 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 which 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- dited as major over a period of time. pass-part. However, Federal agencies and (2)The auditor is not expected to per- auditors guidanceugh entities may provide form risk assessments on relatively auditors about the risk of a small Federal programs.Therefore,the particular Federal program and the auditor is only required to perform risk auditor must consider this guidance in assessments on Type B programs that determining major programs in audits exceed twenty-five percent(0.25)of the not yet completed. Type A.threshold determined in Step 1 §200.fi19 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)General The auditor's determine- as major programs: lion should be based on an overall eval- (1) All Type A programs not identi- nation of the risk of noncompliance co- tied as low risk under step two (pare- inuring that could be material to the graph(o)(1)of this section). Federal program. The auditor must (2)All Type B programs identified as consider criteria, such as described In high-risk under step three (paragraph paragraphs (b), (c), and (d) of this seo- (d)of this section). tion, to identify risk in Federal pro- (3)Such 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 tentage 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 §200.520 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- eral programs and such factors as the grams identified in Step 4 (paragraph expectation of management's adher- (e)(1) and (2) of this section) and such ence to Federal statutes, regulations, 18? §200.520 2 CFR Ch.II(1-1-14 Edition) and the terms and conditions of Fed- eral awards and the competence and lowsonal services, but otherwise be at experience of personnel who administer gram in the Federal programs. (�#Tile phase of a.Feder (i) A Federal Program administered its life smote .at the Fedeal r tnew�armultiple internal control struo- ral agency maY i lfeate rimiso Forth or I,a rim may have higher risk. When as- Federal uis relay with new or interim sessing risk in a large single audit, the an established Program B rme than auditor mast consider whether eak- ed l ¢d wltl� nessea are isolated in aregulations.Fe gs. time-testating - auditor wait(e.g., single open- changes in Federal significant pervasive one college campus)or regulathms, or statutes, throughout the entity. the tants and(u) When significant parts of a Fed- of Federal awards t intirectse eral sabre pie gram are passed through to (3)The toning seats a W�system for moni- Its life e�or te Federal Proemial in .a PUY in._ wouldindicate male at higher risk. risk.For esagnfde.d (a) Prior auditand task during the fire- cats findings would indi- Pates in a _ t an.gzmatineeere_ catshigher sk,p e�ly when the t> ,y be higher dnd to the risk s close- situations could have identified significant inthe aimPt� out of am aativit an or& ia Federalld pave a or have not been (4)TYPO li Weir- corrected. ' lamer bgh arA1 die sled g'Gnlde.af 7sjg3�(3)Federal programs not recently au- diced as major programs may be of Malay rer riish Wan Programs with swards _ centlY than Federal programs re- out audit audited as smalor programs with- f 200.6g0 Criteriafor k (a)Otani/Mr andideE, s �•rielk yes sib Page-through Federal exeitated by ages- An auditee that meets all of the fol- ht.o ieetd Federal (I) Over- lowing conditions for each of the pre- flight es he F agencies or ceding two audit periods must qualify ;!sews 3i�sk. For aouId be used to as a low-rislt auditee and be eligible for wpm,recent mogi- reduced audit coverage in accordance taring or ether reviews nerforibed bywith oversight entity that disclosed n §240.b18 Major program deter- eignificant o mblems woau1 cafehat ruination. Single audits were performed on lotve.r risk.disello d significant sig�cant problems Vielo annualan bft in aSubp a t, In lu the Crete higher risk: would eras of this Subpart, fnatng (2)Federal agegoies with apbiniittiag the data molleetion form rends of OMB th the concur- and:the report package Programs that' area identify Federal within the re a FAO will Provide higher risk. OMB §20a;512 geport emit me sPeo - In this identification in the erg easti P'e audits compliance sapPleaient. entity that 1 hi does not law-rink nial d (d)l Inherentt of the Patera' o 4 1tte ' pin1on whether grant. (i) The nature of a Federal pro- the i aaaditor a opb3otors as whether gran may indicate risk. Consideration in a emits ware prepared should be given to the sampled accordance with .nr a basis d the Program and the extent to which t� 5 in relation tio stop is , eta the Federal program contracts for t tioie of to `peaditi to ofFed sil goods and services, For example, Fe awards were Of Federal anal grOgr that disburse. eligig&h third (c) There were no deficiencies in in_thro g;t COIItEaets or have tercel control which were identified as Federal y criteria may be of homer material weaknesses under the require- risk. gr prb iv in- ments of GAGAS. q bmyroli costs may have (d)The auditor did not report a sub- high risk far noncompliance with ro- stantial doubt about the auditee's abil- cinirementa of t200.49e 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 class!- {a)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 pass- were identified as material weaknesses through entity.must be responsible for in the auditor's report om internal con- issuing a management decision for trol for major programs as required audit findings that relate to Federal under $200.515 Audit reporting, para- awards it makes to subrecipients. graph(c); (d) Time requirements. The Federal (2) A modified opinion on a major awarding agency or pass-through enti- program in the auditor's report on ty responsible for issuing a manage- major programs as required under ment decision must do so within six $200.515 Audit reporting, paragraph(c); months of acceptance of the audit re- ar port by the FAO.The auditee must ink- (3) Known or likely questioned costs tiate and proceed with Corrective so- that exceeded five percent of the total tion as rapidly as possible and cameo- Federal awards expended for a Type A dye action should begin no later than program during the audit period. upon receipt of the audit report. (e) Reference numbers. Management MANAGEMENT DECISIONS decisions must include the reference $200.C81 numbers the auditor assigned to each Management decision. audit finding in accordance with (a) General. The management deoi- $200.516 Audit findings paragraph(a). don must clearly state whether or not � �I TC PST 200—Ft1I.I.TEST of the auditfinding is sustained, the rear NoT1on OF FUNDING OPPORTUNITY sons for the decision, and the expected auditee action to repay disallowed The fall text of the notice of foging op- costs, make financial adjustments, or portunitY is organized in sections. The re- take other action. If the auditee has wired format outlined in this appendix indi- not completed corrective action, a Gates immediately following the title of each timetable for follow-up should be section whether that section i required in given. Prior to issuing the manage- ��announcement or fe a Federal award- ment decision, the Federal agency or lug a9 otypes The format is will l appear ar that Aimtlnr types of information wi app pass-through entity may request add!- in the same sections in announcements of tional information or documentation different Federal flmding opportunities To- from the auditee, including a request ward that end, there is text in each of the for auditor assurance related to the following sections to describe the types of in- documentation,as a way of mitigating formation that a Federal awarding agency disallowed costs. The management de- would include in that section of an actual announcement.vision should describe any appeal Prof,- A Federal awarding agency that wishes to ess available to the auditee. While not inoiigde information that the format does not required, the Federal agency or pass- epeoifically disown 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 anIIouncement,it might do so in the funding With GAGAS. opportunity description,the application con (b) Federal agency. As provided tent,or the reporting thismat requirements. $200.513 Responsibilities, paragraph pe n+l info when format calls far a (ax7), the type of information to be!n a Particular see- cognisant agency for audit tion, a Federal awarding agency wishing to must be responsible for coordinating a address that,subject in other sections may management deninlgn for audit find_ tefone to use cross references information nforaioin In thoosse sec- tions that affect the programs of more bons or(there shs than one Federal agency. As provided references in any electrbe onic versions olinks forof those in §200.513 Responsibilities, paragraph announcement). For example, a Federal (c)(3),a Federal awarding agency is re- awarding agency nifty 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 quired or Federal award administration in- apply.The format specifies a standard loos, formation Incaution D.Application and Sub- tion for that information in Section 11I.1 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- stated. erenoe between Sections I and III.l,as long as a potential applicant can find the infor- C.ELIGIBILITY INFORMATION mutton quickly and easily from the standard This section addresses the considerations location. or factors that determine applicant or appli- The sections of the fall text of the an- cation eligibility. This includes the eligi- nouncement are described in the following bility of particular types of applicant organi- paragraphs. rations,any factors affecting the eligibility A.PROGRAM DEsORreTroN—REQUIRED of the principal investigator or project direc- section contains the faitdirec- tor. and any criteria that make particular This scription the fundingprogram de prows ineligible. Federal agencies should opportunity.It may make clear whether an applicant's failure to be as long as needed to adequately comma- meet an eligibility criterion by the time of nicate to 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- plication without review or,even though an ities 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 dude any program history(e.g..whether this , is a new program or a new or changed area of 1. Eligible Applicants—Re Announce- program emphasis). This section may coo- Applicants—Required.typesof en- municate indicators of successful treats must clearly identifyt the fthere f ate projects titles that are eligible to apply.If are (e.g.. If the program encourages collabo- no restrictions on eligibility, tbie section ratios 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 include other informa- eligibility,it is important to be clear about tion the Federal awarding agency deems nee- the specific types of entities that are eligi- eseary,and must at a minimum include cite- me, not just the types that are ineligible. tion for authorizing statutes and regale- For example, if the program is limited to tion for the funding opportunity nonprofit organizations subject to 26 U.S.C. B.FEDERAL AWARD INFORMATION—REQIImED 501(c)(3)of the tax code(26 U.S.C.501(c)(8)), the announcement should say so. i;imilA,rly, This section provides sufficient informa- 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 a proposal, 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 nouncement;the anticipated number of Fed- types of domestic applicants other than indi- eral awards; the expected amounts of indi- viduaja). This section should refer to any vidual Federal awards (which may be a portion of Section IV specifying documenta- range); the amount of funding per Federal tion 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(cX8)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 (gallon).To the extent that any funding re- whether applications for renewal or sup- striation in Section Ip.5 could affect the eli- plementation of existing projects are eligible gibility of an applicant or project, the an- to compete with applications for new Fed- nouncement must either restate that restric- eral awards. tion in this section or provide a cross-ref- This section also must indicate the type(s) creme to its description in Section IV.5. of assistance instrument(e.g.,grant,cooper- 2. Cost Sharing or Matching—Required. An- ative agreement)that may be awarded if ap- nouncements must state whether there is re- plications are successful. If cooperative quired cost sharing, matching, or cost 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 agen- quired, the announcement must explicitly cy expects to have or should reference where say so).Required cost sharing may be a cer- the potential applicant can find that infor- taro percentage or amount,or may be in the mation(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 190 OMB Guidance Pt.200,App.I important that the announcement be clear quired forms or formats as part of the an- about any restrictions on the types of cost nounoement or state where the applicant (e.g..in-kind contributions)that are accept- may obtain them. able as cost sharing.Cost sharing as an eligi- This section should specifically address btlity.oriterion includes requirements based content and form or format requirements in statute or regulation, as described in for: 4200.806 Cost sharing or matching of this i. Pre-applications, letters of intent, or Part.This section should refer to the appro- white papers required or encouraged (see priate portion(s) of section D. Application Section 11/.8),including any limitations on and Submission Information stating any pre- the number of pages or other formatting re- award requirements for submission of letters gnirements similar to those for full applies, or other documentation to verify commit- tins, ments to meet cost-�ar1 requirements if a II.The application as a whole.For all sub- Federal award is made. missions,this would include any limitations 8.Other—Required,if applicable.If there are on the number of pages,font size and type- other eligibility criteria (i.e.. criteria that face,margins,paper size,number of copies, have the effect 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, gaited, this could include special require- "go-no go"criteria, "threshold"criteria,or ments fax formatting or signatures in other ways), must be clearly stated and jii. Component pieces of the application must include a reference to the regulation of (es., if all copies of the application must requirement that describes the restriction, bear original signatures on the face 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).This 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 applica- manta from third parties that will be con- tions an applicant may submit under the an- tributing a portion of any required cost sli r- nouncement and make clear whether the ing), 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,bat prior to a Federal eligibility 'criteria for beneficiaries or for award.This could include evidence of coin- program participants other than Federal pliaaoe with requirements relating to human award recipients: subjects or information needed to comply D.APPLICATION AND SUBMISSION INFORMATION with the National Environmental Policy Act (NEPA)(42 U.S.C. 1-4870h). 1.Address to Request Application Package— 8.Dun and Bradstreet Universal Numbering Required. Potential applicants mast be told System(DONS)Number and System for Award how to get application forms,kits,or other Management(SAM—Required. materials needed to apply(if this announce- This paragraph must state clearly that went contains everything needed, this sec- each applicant(unless the applicant is an in- tion need only say so).An Internet address dividual 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 CFR§25.110(b)or(c),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§25.110(d))is required to:(I)Be have additional accessibility requirements, registered in UK before submitting its ap- there also should be a way for potential ap- plication;(ii)provide a valid DUNS number plicants to request paper copies of materials. in its application;and(111)continue to main- such as a U.S. Postal Service mating ad- tain an active SAM registration with current dress, telephone or FAX number,Telephone information at all times during,which it has Device for the Deaf(TDD),Text Telephone an active Federal award or an application or (TTY) number, and/or Federal Information plan under consideration by a Federal award- Relay Service(FIRS)number. rag 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 oral award to an applicant until the appli- the required content of an application and cant has complied with all applicable DUNS the forme or formats that an applicant must and SAM requirements and, if an applicant use to submit it. If any requirements are has not fully 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 plicant is not qualified to receive a Federal found. This section also should include re- award and use that determination as a basis 191 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 must say so. 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 (SPOC) to find out about times for all submissions.This includes not and c ly with the state's process under only the full applications but also any pre- Executive Order 12372,it may be useful to in- liminary submissions(e.g.,letters of intent, form Potentialapplicants that the names white papers,or pre-applications).It also in- and addressee of the SPOOs are listed in the eludes any other submissions of information Office of$Iunwgervert and Budget's Web site. before Federal award that are separate from merm.mhirehoumnymiemdlyrontersoodmi, the hal Welty is sap general announcement than-If the funding upPor- 6. 0 g Restrictions—Required. Notices open for a period of time with no specific due mast mama Information on finding restrict dates for applications, this section.should lions in 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. Examples are pear with other overview information in a 10- whether construction is an allowable activ- cation preceding the full text of the an- ity. if there are any limitations on direct nounoement(see§200.203 Notices of funding costs such as foreign travel or equipment opportunities of this Part). purchases,and if there are any limits on In- Each type of submission should be des- direct costs(or facilities and administrative ignated as encouraged or required and,if re- costs).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. one cycle of application submission,review, 7.Other Submission Requirements=Required., and Federal award under the announcement) This section must address any other submis- should be specified.The announcement must lion requirements not included in the other state(or provide a reference to another doca- paragraphs of this section. This might la- ment that states): elude the format of submission,Le.,paper or i.Any deadline in terms of a date and local electronic,for each type of required aubmis- time. If the due date falls on a Saturday, alon. Applicants should not be required to Sunday, or Federal hNtdwy, the reporting submit inmore than one format and this sec- package is due the next business day. Lion should inriiente whether they may 11.What the deadline means(e.g.,whether choose whether to schist applications in it is the date and time by which the Federal hard copy or electronically,may submit only awarding agency must receive the applies- in hard copy,or may submit only electrons- tion,the date by which the application must be postmarked, or something else)and how off' that depends, if at all, on the submission fihie section also must indicate where ap- method (e.g., mail. electronic, or parsons/ plications(and any pre-applications)must be courier delivery), submitted if sent by postal mail, electronic ill. The effect of missing a dealilinA (e.g„ means, or hail-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 office, official, individual or function (e.g., considered under some circumstances). application receipt center) and a complete iv:How the receiving Federal office deter- mailing address. For electronic submission, mines whether an application or pre-applies- this must include the TTRL or email address; Lion has.been submitted before the deadline, whether a password(s) is required; whether This includes the form of acceptable proof of particular software or other electronic cape- mailing or system-geperated documentation bslitses 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? calve an acknowledgement of receipt. This information should be displayed in ways that E.APPLICATION REVIEW INFORMATION will be easy to understand and use.It can be 1.C,tteiia—Required.This section 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 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 trinities or accepting applicants'submissions package before submission, of information,each Federal awarding agen- 5.Intergovernmental Review—Required,if ap- cy is responsible for compliance with Section plicable.If the funding opportunity is subject 508 of the Rehabilitation Act of 1973 (29 to Executive Order 12372, "Intergovern- U.S.C.794d). 192 • OMB Guidance Pt,200,App,I This includes the merit and other review cri- people on an evaluation panel and how it op- teria that evaluators will use to judge appli- orates, the way reviewers are selected, re- cations,including any statutory,regulatory, viewer qualifications,and the way that con- or other preferences(e.g.,minority statue or flints of interest are avoided.With respect to Native American tribal preferences) that electronic methods for providing inform- will ebe la a�dletinoed in the e reom ew process.These tion about funding opportunities or accept- that area addressed before anw eligibility criteria ins applicants' submissions of information, acceptedh for review and application is each Federal awarding agency is responsible ar other furors that are appliedProgram policy for compliance with Section 508 of the Rehe- ar during the bilitatdon Act of 1973(29 U.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 can viewers of their applications or make informed decisions when preparing they feel maybe inappropriatesuggestduet icon- o a con- their applioatdoss to maximize fairness of flirt of interest, that information should be the process.The announcement should clear- included in this section. Iy 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 informa- dperc�t ges,weights,or other means used to tion they can use for planning purposes. If uish among them.For statutory,rag- there is a single application deadline fol- ulatory,or other preferences,the announce- lowed by the simultaneous review of all ap- ment 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 tion of their effect(e.g.,whether they result anticipated dates for announcing or noti- in additional points being assigned). Eying successful and unsuocessftd applicants If an applicant's proposed cost sharing will and for having Federal awards in place.If ap- be considered in the review process (as op- plications are received and evaluated on a posed to being an eligibility criterion de- "rolling"basis at different times during an scribed in Section III.2), the announcement extended period, it may be appropriate to must specs/Sally address how it will be con- give applicants an estimate of the time need- sidered(eal pg., assign ss �a certain number of ed to process an application and notify the applicants who offer applicant of the Federal awarding'agency's cost sharing,or to break ties among applica- decision. tions with equivalent scores after evaluation against all other factors).If cost sharing will. F.FEDERAL AWARD ��TgON not be considered in the evaluation,the an- noWATION noun t should say so, �s 1. ped� Award Notices—Required. This ambiguity for potenti a�al section must address what a successful appli- statements that cost sharing is encouraged, cant can expect to receive.following selec- without clarification as to what that.means, Mon.If the Federal awarding tact that thare e annto ouncement be clearplicants.It also is iabpor-o t tine is to provide a separate notice staff any restrictions on the types of cost(e.g.,in- that an application has been al award,ar before kind contributions) that are acceptable as R sectionactu wouldlly be the Federal this cat sharing, be the place to indicate that 2. sharing. and Selection Process—Regutred. performa� letter is not an authorization to begin This section may vary in the level of detail charging to Federal(te extent that pre-awardallows provided. The announcement must list any cocosts at to awards of own risk). program policy or other factors or elements. This ec then shouldnon-Fe indicate entity'sa ohs* other than merit criteria,that the selectingThis section should signedthe grantss notcr official may use in selecting applications of Federal award by the o officer Federal award(e.g.,geographical (or whether- e i is the provided authorizing document, program balance, or diversity).The dispersion. and r by electronic it is mt d togh om.It awarding agency may also include other ap- alsmaol aayydssth means and to and con- propriate details. For example, this section tent may notifications the timing,ounsuccessful corm,andappli- may indicate who is responsible for evatue.- of alsotif 520 t1 nfdo ontion against the merit criteria(e.g.,.peers ex- tamed. See del award. Information cau- tion to the Federal'awardingseined in a Federal awarding agency or 2. Administrative and National Policy Re- FederalFh make de agency personnel) and/or quirements—Required.This sectdonmust iden- final selections for Federal tify the usual administrative and national awards.If there is a multi-phase review prop- policy requirements the Federal awarding ass(e.g.,an external panel adviatig internal agency's Federal awards may include. Pro- . Federal awarding agency personnel who aiding make final recommendations to the deciding this t ideinfntify any requirements re q a potential withap- official),the announcement may describe th which itit would have difficulty complying plying if phases. It also may include: the number of its application is successful In those cases, 198 Pt.200,App.11 2 CFR Ch.It(1-1-14 Edition) early notification about the requirements al- H.OTHER ooMATIoN—OPTION L lows the potential applicant to decide not to apply or to take needed actions before re- Thissection may include any additional sewing the Federal award. The announce- information that ,l assist a potential ap meat need not include all of the terms and pli.Indicaten For example,the section might: conditions of the Federal award, but may i' one-ti whetheri this is a new program refer to a document(with information about or a one-time initiative. up- how to obtain it)or Internet site where aMentionor related Federalprograms d other plicants can see the terms and conditions.If comingfunding p ongoing awarding agency current for similarne eef. this sanding opportunity will lead to Federal 111.Include current Internet addresses for awards with some special terms and condi- Federal awarding agency Web sites that may Mons 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 applicants that have re- about the way the Federal awarding agency oeived Federal awards from the Federal will handle it. awarding agency previously and might not v.Include certain routine notices to appli- otherwise expect different terms and condi- Dante(e.g., that the Federal government is bons. For the same reason, the announce not obligated to make any Federal award as meat should inform potential applio�_ a result of the announcement or that only -about special requirements that could apply meatanta officers enn bind the nds). i govern- . particular Federal awards after the review to the expenditure of funds). of applications and other information,based APPEND II TO PART 200—CONTRACT on the particular circumstances of the effort PROVISIONS FOR NON-FEDERAL WIT- to be supported(e.g.,if human subjects were to be involved or if some situations may jus- A C9NlRACT6 UNDER FEDERAL tify special terms on intellectual property, CONTRACTS data sharing or security requirements). In addition to other provisions required by 3. Reporting—Required. This section must the Federal agency or non-Federal entity,all include general information about the type contracts made by the non-Federal entity (e.g., finw.nniai or performance), frequency, under the Federal award must contain provi- and means of submission (paper or elect dons covering the following.as applicable. Ironic) of post-Federal award reporting re- (A)Contracts for more than'the simplified quiremente.Flghltght any special reporting acquisition threshold currently set at requirements for Federal awards under this ,000, which is the inflation adjusted funding opportunity that differ(e.g., by re amountdetermined by the Civilian Agency type, frequency, form/format, or air- A°gwei gal Council and the Defense Amulet- port cametaneea for use) from what the Federal tion Regulations Council (Councils) as au- awarding agency's Federal awards usually fauns r by , contractual,U.S.0 or et addressm diad- es require. ministrative, legal remedies in instances where contractors violate or G.FEDERAL AWARDINGA[}ENCY C°NTACT(9)— breath contract terms,and provide for such RERuDtEu sanctions and penalties as appropriate. (B)The announcement must give potential a - address contracts in excess of$10,000 must plicants a point(s)of contact for answering venfence bye theem non for andcause forl di n- questions or helping with problems while the the mannerentity including funding opportunity isbye which it will be effected and open. The intent of the basis for settlement. this requirement is to be as helpful as pos- (C) Equal Employment Opportunity. Ex- Bible'to potential applicants,so the Federal cept as otherwise provided under 41 CFR awarding agency should consider approaches Part 60, all contracts that meet the depni- snch as giving: ton of'`federally assisted construction con- 1.Points of contact who may be reached in tract"in 41 CFR Part 60-1.3 must include the multiple ways(e.g.,by telephone, sac and/ equal opportunity clause provided under 41 or email,as well ea regular mail). CFR 6D-1.4(b),in accordance with Executive ii. A fax or email address that multiple Order 11246, "Equal Employment6.8OFRPOpp64- people access, so that someone will respond is Comte FR 39),as ame,d d by Part,1964- people even if others are unexpectedly absent dur- p "A as amendedu Executive Order ing critical periods. Order 11375, `Amending Executive Order iii.Different contacts for distinct kinds of 1I296 Relating to Equal Employment Oppor- help(e.g.,one for questions of minty,"and implementing regulations at 41 content and ' programmatic CFR. part 60, "Office of Federal Contract second foradministrative content a Compliance Programs, Equal Employment Opportunity,Department of Labor." 194 OMB Guidance Pt.MO,App.II (D)Davie-Bacon Act,as amended(40 U.S.C. materials or articles ordinarily available on 3141-3148).When required by Federal program the open market. or contracts for transpor- legislation,all prime oonstraction contracts tation or in excess of$2,000 awarded by non-Federal Rights to issive ofti intelligence. Under entities must include a provision for com li- to Inent.If f t Made alaw a Luce with the Davis-Hewn Act (40 U.S.C. meetsdefinition of"fundingthe agree ant" 3141-$144, and 3145-8148)as supplemented by under 87 CFR 401.8(a) agreement" Department of Labor regulations (29 Cgs subrecipient wishes t enter into a contract Part 5, "Labor Standards Provisions Appli- with a small business firm or nonprofit orga- cable to Contracts Covering Federally Pi- nization regarding the substitution of parr. named id A�e statute,conted tractors In a- ties, assignment or performance of esperi- beoord required wi to tractors must mental, developmental, or research work pay wages to laborers and me- under that'ohaniss at a rate not less than the `funding or subreoiplant must t comply m ply the with the eeire- wages - bys the peom eored in ay wage f d.determination q t ments of 377 OFR Part 40� is to In- madenontrbytore must be required toaddition, ventione Made by Nonprofit Organizations less than once apay wages and Small Business Firms Under Govern- not entity week.The non Federal meat Grants, Contracts and Cooperative veiling wage determination py issuethe current the D � andssued by any implementing partment of Labor in each solicitation.The awarding agency. re)and decision to award a contract or the Federale Air Act of42 uiU.S.O.Control Ac and must be conditionedsubcontract Water Pollution Control Bat(83 upon the acceptance of U.S.C.1251 1387),as amended--Contracts and the wage determination.The non Federal en- subgranta 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 compliancentracts must also the Cow a vision all applicable standards, orders or regula- tor Kickback" Act with U.S.C. Copp�d Ants bons issued pursuant to the Olean Air Ao mmi kba byk" Act (40 U. .cof Labor supple- (42 U.S.C.7401-7671q)and the Federal Water ted ep 3, regulations Pollution Control Act as amended(33 U.S.C. contractors Parton 3, "Contractors an Sub- 1851-1897).Violations must be reported to the Work Financed in Whole or m�Pg or Public Federal awarding agency and the Regional or Grants from the United States"). Loans Office of the Environmental Protection provides that each con The Act Agency(EPA). provides must be tractor or sub- (E) Mandatory standards and policies re- recipientProhibited from inducing., lating to energy efficiency which are con- by onany uctmeans, any person employed in the tamed in the state energy conservation plan on,completion,or repair of public issued in compliance with the Energy Policy work,to give up any part of the compsnsa- and O Lion to which he or she is otherwise entitled. oeber'Debarment Act 8 Suspension (Executive). The non-Federal entity must report (I)Orders12549 and ).-Aoncontract petted or all sus- B.1 and 128�)--A bemade award reported violations to the Federal (see 2 CFR 180.220)must not made to par- awarding agency. ties listed on the governmentwide Excluded Standards CAotontract (40 Work U.S.C.Hours and. Where Parties List Systtera in the System for Award applicable,all contracts awarded by the non- O Management(SAND, m a000rda that implement pleh ent Federal entity m excess of$100,000 that in give Orders sa 2 12549CF (88D Far85 volve the employment of mechanics or labor- ����p. 'Clo t 1989198 era must include a provision for compliance p p. 5) and"DeL188barment and S Part ." with 40 U.S.C.3702 and 3704.as supplemented Comp.,Excluded debas Lis System Suspension." by Department of Labor regulations(29 CFR co Parties partiesrt eba in SAM 5).Under 40 U.S.C.3702.of the Act,each �de�the names of usedby agency sus- Part as contractor must be required to compute the well as,or parties otherwise excluded l undems,t- wages of every mechanic and laborer the utory well as or declared ineligible r than s Ex- basis of a standard work week of 40 hours. eoattive Order regulatory authority other Ex_ Work in excess of the standard work week is (J) Byrd Anti-Lob permissible provided that the worker is coin- U.S.C. thrs that Amendment or id pensated at a rate of not lessaward $100.000 or apply or bid half times the basic rate of then one and for an of$300,000 or more must file the certification.Each tier certifies to worked in excess of 40 homes lnrthe all hours the above that it will not and has not week.The requirements of 40 U.S.C.8704 are used Federal appropriated finds to pay any applicablea o laborer or mecnawork and c must be re- person or organization for influencing or at- that to in me ooun tempting to influence an officer or employee qufred working conditions workin which so of any mac+,a member of Congress,officer hazardous or dangerous.These requirem ts membero or f Congress of Cong in or connection employee of a do not apply to the purchases of supplies or edrl contract,grant with ob- any taming any Federal grant or any 195 Pt.200,App.III 2 CFR Ch.II(1-1-14 Edition) other award covered by 31 U.S.C. 1352.Each (1) Sponsored research means all research tier must also disclose any lobbying with and development activities that are spon- nonFederal finds that takes place in con- Bored by Federal and non-Federal agencies nection with obtaining any Federal award. and organizations.This term includes activi- 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- (K)See§200.322 Procurement of recovered search training)where such activities utilize materials. the same facilities as other research and APPENDI% III TO PART 200—Ii�tiiEIGT de- velopment activities and where such activi- (F&A) COSTS IDENTIFICATION AND ties arenot inrinded in the instruction fl1nC- ASSIGNMENT,AND RATE DETERM NA- (2) University research means all research TION FOR INSTITUTIONS OF HIGHER and development activities that are sepa- EDUCATION(MB) rately budgeted and accounted for by the in- stitution under an internal application of in- GlighttAI, stttutional funds. University research, for This appandir provides criteria for identi- purposes of this document, must be com- tying and competing indirect (or indirect blued with sponsored research under the (F'&A))rates at IHBs(institutions).Indirect fanatic=of organized research. (F&A) costs are those that are incurred for c.Other sponsored activities meane programs common or joint objectives and therefore and projects financed by Federal and non- nanuot be identified readily and specifically Federal agencies and organizations which in- with a particular apngaored project, an volve the performance of work other than in- structional activity, or any other institu- strnction and organised research. Examples tonal activity. See subsection B1,.Defini- of such programs.and projects are health ton of Facilities and Administration. for a service projects and community service pro- discussion of the components of indirect grams.However,when any of these activities (F&A)costs. are undertaken by the institution without 1.Major Functions of an Institution outside� they' ma be classified as Refers to instruction, organized research, d.Other institutional activities means all ac- other sponsored activities and other institn tivities of an institution except for instruc- tion , tional activities as defined in this section: , departmental researchorganised re- a. Instruction means the teaching and search,and other sponsored activities,as de training activities of an institution.Except fined in this section;indirect(F&A)cost an- for research training as provided in sub- tivities identified in this Appendix pare,- section b,this term includes all teaching and graph B,i e ntfticatioa and assignment of in- training activities,whether they are offered direct(F&A)costs; and specialized services for credits toward a degree,or certificate or facilities described in §200.468 Specialized on a non-credit basis,and whether they are service facilities of this Part. offered through regular anadamie depart- Examples of other institutional activities meats or separate divisions,such as a sum- include operation of residence halls, dining mar school division or an extension division. halls,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 houses, agreed to,university research. chapels,theaters,public museums,and other (1)Sponsored instruction and training means similar auxiliary enterprises.This definition specific instructional or training activity ea- also includes any other categories of activi- tablished by grant, contract, or cooperative ties, costs of which are "unallowable" to agreement. For purposes of the cost prim- Federal awards, unless otherwise indicated cipies, this activity may be 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, flan of indirect (F&A) costa is the period development and scholarly activities that during which the costs are incurred. The are not organized research and, con- base period normally should coincide with sequently, are not deparately 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 as to avoid inequities in the dis- as a major function,but as a part of the in- tribution of costs. etruct ion function of the institution, b. Need for cost groupings.The overall ob- b. Organized research means all research jeotive of the indirect(F&A)cost allocation and development activities of an institution process is to distribute the indirect (F&A) that are separately budgeted and accounted costs'described in Section B, Identification for.It includes: and assignment of indirect (F&A) costs, to 196 OMB Guidance PI 200,App.III the major functions of the institution in pro- expenses, or operation and maintenance ex- portions reasonably consistent with the na- penes to such activities should be acoom- tore and extent of their use of the institu- pushed through cost groupings which include tion's resources.In order to achieve this ob- only that portion of central indirect(F&A) jective, it may be necessary to provide for costs (such as for overall management) selective distribution by estabttaht,ig sepa- which are properly allocable to such activi- rate groupings of cost within one or more of ties, the indirect (F&A) cost categories referred (5)If the institution elects to treat fringe to in subsection 13.1,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 case, a pool of cost objectives. those items of expense that are considered to (B)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 Practical limits, after taking into rn'u Mer- from)the particular cost objectives to whichdistr ation materiality of the amounts in- volvedtion and the degree of precision attainable should be established considering the general through less selective methods of distribn- guides provided in subsection c of this sec- tion.Each such pool or cost grouping should tion.. then be distributed individually to the re- d.Selection of distribution method. lated cost objectives.Twine the distribution (1) 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 cost this section. groupings.The essential consideration in se- c. General considerations on cost groupings. leafing a base is that it be the one best suit- The extent to which separate cost groupings ed for assigning the pool of costs to cost ob- and selective distribution would be appro- actives in accordance with benefits derived; priate at an institution is a matter of judg- with a traceable cause-and-effect relation- meat to be determined ou a case-by-case ship;or with logic and reason,where neither basis.Typical situations which may warrant benefit nor a cane-and-effect relationship is the establishment of two or more separate determinable. cost groupings(based on account classifies- (2)If a Cost grouping can be identified di- than or analysis) within an indirect (F&A) m tly with the cost objective benefitted,it cost category include but are not limited to should be assigned to that cost objective. the following: (1)If certain steeps or categories of (8)If the expenses in a cost grouping are relate solely to one of the for functionsof bem be lenel in nature,ana the distributionitr may the institution or to less than all functions, be based on a cost analysis study which re- such expenses should be set aside as a saps- suits in an'equitable distribution of the rate cost grouping for direct assignment or casts. Such 0a studies may take i selective allocation in accordance with the into consideration weighting factors, papa guides provided.in subsections b and d. tip.or space occupied if appropriate.Cost (2)If any types of expense ordinarily treat- mania studies,however,must(a)be appro- ed as general administration or depart- priately documented in suffioient detail for mental administration are charged to Fed- subsequent review by the cognizant agency eral awards as direct costs,expenses applies- for Indirect costs.(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,(a)be eta- circumstances must, through separate cost tisticelly sound,(d)be performed specifically groupings, be excluded from the indirect at the institution at which the results axe to. • (F&A) caste allocable to those Federal be used,and(e)be reviewed periodically,bat awards and included in the direct cost of not lees frequently than rate negotiations, other activities for cost allocation purposes. updated if necessary, and used consistently. (8)If it is determined that certain expenses Any assumptions made in the study must be are for the support of a service unit or bon- stated and explained. The use of cost anal- ity whose output is susceptible of measure- yids studies and periodic changes in the meet on a workload or other quantitative method of cost distribution must be fully basis,such expenses should be set aside as a justified. separate cost grouping for distribution on (4) If a cost analysis study is not per- such basis to organized research, metros- 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 pur- the appropriate base cited in Section B,Idea- chasing, personnel administration, building tification and assignment of indirect(F&A) maintenance or nimiiwr service,the diatribe- costs.unless one of the following conditions tion of general administration and general is met: 197 Pt.200,,App,111 2 CFR Ch.II(1-1-14 EdtIon) (a)It can be demonstrated that the use of (1) Depreciation on buildings need min- a different base would result in a more egni- sively in the conduct of a single function, table allocation of the costs, readily available base would not increase the usedon in each buildings, must be capital improvements and��pm �t costs charged toFederal awards,or that function. assigned to (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 Sec- manta and equipment used in each buildings, tion D, Simplified method for small institu- must be allocated to the individual functions time.(5) perfbrmed in each buil on the basis of five Julyww ithstanding subsection (8), effec- usable square feet of space, exolnding corn- than that in Section Bamust not be used to rest rooms.or base other mon areas 8ach as hallways.stairwells,and distribute utility or student services costs. (3) Depreciation on buildings, im- Instead. subsections B.4.o Operation and provements and equipment a capital ted to space maintenance expenses, may be used in the (e.g., individual rooms, laboratories) used reoovery of utility costs. Jointly by more than one function(as deter- e.Order of distribution. mined by the users of the space) must be (1)Indirect(F&A)costs are the broad oat- treated as follows.The cost of each jointly egorjes of costa discussed in Section B.1, used unit of space must be allocated to bane- Definitions of Facilities and Administration fitting functions on the basis of: (2) Depreciation, interest expenses, oper- (a) The employee full-time equivalents ation and maintenance expenses,and general (awns)or salaries and wages of those indi- administrative and general expenses should vidual functions benefitting allocated in that order to the from the use of indirect(F&A) cost categories as well (b)Institution-wide the major flmctdone and wages employeebleo the ben or sal- efitting facilities of the institution.Other cost oat- major functions (sereSe Section A.1) of the in- egories may be allocated in the order deter- stitutdn. mined to be most appropriate by the institu- (4) Depreciation on certain capital im- tions.When cross allocation of costs is made provements to land, such as paved parking as provided in subsection(8),this order of al- areas,fences,sidewalks,and the like,not in- location does not apply. eluded in the cost of buildings,must be cello (8)Normally an indirect (F&A) cost cat- aided to user categories of students and em- egory will be considered closed once it has Ployees on a full-time equivalent basis.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 tween two or more indirect(F&A)-cost oat- the employee category must be further allo- w/lee may be used if such allocation win Gated to the major functions of the institu- result in a more equitable allocation of tion in proportion to the salaries and wages costs.If a cross allocation is used,an appro- of all employees applicable to those hinc- priate modification to the composition of tions the indirect(F&A)cost categories described in Section B is required. 3.Interest B.IDHNrlU'lnATIUN AND ASSIGNMENT OF Interest on debt associated with certain INDJATtT(F&A)COSTSSSIGN buildings, equipment and capital improve- ments, as defined in§200.449 Interest, mast I.Definition of Facilities and Administration be classified as an expenditure under the cat- eghese costs must be allo- See 8200.414 Indirect (F&A) costa which caatory in the Facilities.same manner as the deprecia- provid enthe basis for this indirect cost re- tion onthe buildings,equipment and capital improvements to which the interest relates. 2.Depreciation 4.Operation and Maintenance Expenses a.The expenses ceder 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 sdmin- buildings,capital improvements to land and iatration, supervision, operation, mainte- buildings, and equipment which are corn- nance,preservation,and protection of the in prated in accordance with§200.436 Degrade.- stitutdon's physical plant. They include ex- tion. pauses 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 dis- 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 Guidwtce PI.200,App.BI and disaster preparedness; environmental 5.General Administration and General Expenses safety; hazardous waste disposal; property, liability and all other insurance relating to a. The expenses under this heading are property; space and capital leasing;facility execute ve have been inadministrativecurred forces genera.- pT i ni*ig and management; and central re- executive institutions and and f offices e e of calving.The operation and maintenance ex- gcations,'character whichand other expenses solely a pease category should also include its allo- tooneral ca corium thdoe not relate .e cable share of fringe benefit costs, eta- Day major function of th( organized institution;i.e., tion,and interest costs. search,a solely to(8)(o other sponsored (2)activities, e or(4) b.In.the absence of the alternatives pro- other institutional) activities.act The generall aided 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 same manner as described in subsection fringe benefit coats, operation and mainte- 2.b for depreciation. name expense, depreciation, and interest o. A utility cost adjustment of up to 1.8 costa. Examples of general action percentage points may be included in the ne- and general expenses include:those expenses gotiated+nai'eot cost rate of the 1'»for or- incurred by administrative offices that serve pulsed research,per the computation alter- the entire university system of which the in- natives in paragraphs (c)(1) and (2) of this siltation is a part;central offices of the In- section: stitutiin< such as the President's or (1)Where sparse is devoted to a single funo- Chancellor's office, the offices for institu- tion and metering allows unambiguous mesa- tion-wide fj ncial management, business urement of usage related to that space,costs services, budget and planning, personnel must be assigned to the function located in management, and safety and risk manage- th at space. ment;the office of the General Counsel;and (2)Where space is allocated to different the operations of the central administrative functions and.metering does not allow warm- management informatloa systems. General bigaous measurement of usage by function, administration and general expenses must costs be as follows: not include expenses incurred within non- (i) musttier aorta allocatedald be apportioned to university-wide deans' offices,academic de- functions in the same manner as deprecia-• parpar orenni a io organized units.research units,or on 6. tion,based on the calculated difference be- ,. par organizational (See, pen subsection 6, tweed the site or building actual square foo- Departmental administration expenses.) b.in the absence of the alternatives pro- age for monitored research laboratory space aided fur in Section A.2.d, the expenses in- (site, building, floor, or room), and a sepa- chided in this category must be grouped first rate calculation prepared by the DSE using according to common major functions of the the `effective square footage" described in institution to which they render services or subsection(o)(2)(11)of this section. provide benefits.The aggregate expenses of (if)"Effective square footage"allocated to each group must then be allocated'to sera- research laboratory space must be calculated iced or benefit-tad functions on the modified as the actual square footage times the rat- total cost basis.Modified total costs consist ative energy utilization index(REM)posted of the same elements es those in Section 0.2. on the OMB Web site at the time of a rate When an activity included in this indirect determination. (F&A) cost category provides a service or A.This index is the ratio of a laboratory product to another institution or organize- energy use index (lab EU') to the nor- tion, an appropriate adjustment must be responding index for overall average college made to either the expenses or the basis of or university space(college hut), allocation or both,to assure a proper alloca- B.In July 2012.values for these two indices thin of coats. (taken respectively from the Lawrence Berkeley Laboratory"Labs for the 21st Cen- It Departmental Administration Expensestury" benohmarking tool http:// a. The expenses under this beading are labs2lbenchmarking.i61govrCompareData.php those that have been incurred for aiminjn- and the US Department of Energy "Build- trative and supporting services that benefit ings Energy Datebook" and http:// common or joint departmental activities or buildingsdatabook.eren.doe.goWCBECS.asps) objectives in academic deans' offices, ace- were 310 kBtu/aq ft-yr.and 155 kBtu/sq ft-yr., demic departments and divisions,and orga- so that the adjustment ratio is 2.0 by this nized research units. Organized research methodology. To retain currency, OMB will units include snob unite as institutes,study adjust the EIII 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. Italy disclosed data. Current values of both (1) Academic deans' offices. Salaries and the Erna and the REM will be posted on the operating expenses are limited to those at- OMB Web site. tributable to administrative functions. 199 Pt.200,App.01 (2)Academia departments: 2 CFR Ch.II(I-1-14 Edition) c. In the absence stable to Salaries fringe benefits attrib- aided for in.Section of the theerexpenes - a) Ssleafes and administrative work ateg A 2 d, expenses in- bid and proposal Preparation)of faculty eludedoin this category must be allocated as 01uding department heads)and other atonal personnel conducting research and/or' {1) The administrative and schoolses of the instruction,most be allowedbeaalloated toeach college and ents Percent of modified at a rate of 9.6 be allocated the academic c total erect orate. This within that college or school on category does not include professional buss- total cost basis. departments nese or professional administrative officers. the ofmo each h This allowance must be added to the ad administrative of the indirect(F&A)cost rate academia de expensesin subsection each major_potation no th a in indirect Section C, share of the enemies n department,and the department's and applicationfractions tions of termination (1)must be allocated toot the appropriate in. fa - ardat :the indirect(F&A)coat rate tions of the de hm 6 ance mast be� d by the apart- total cost basis. sat on the modified from the depart- mmental administration hon i q d to oat pool. No doca- 7.Sponsored Projects Administration en Other sujp°rt this allow- icea.d The expenses ender this heading are lim- eZPBnses incurred administrative and supporting ited toe}established d by a separate organi- (b)expe sere ncurred wpithin acadeed mic depart- sponsored projects,including administerudons ed insistently in like circumstances. This ase treat- l grant and contract Pedal administration tiara would include Z� the salaries chat and non-Federal). rl sowiri edi(Fet- - of searetarfal anBd clerical the salaries chasing,Personnel.administration,research re- of administrative officers and assistants, ports.They include of rs r and ether travea office supplies, stockrooms, and the y inaauch the salaries and like. of the head of such expenses tens. (3)Other fringe benefit costs and immediate.staffottogether with assistants. eel s, the salaries and wages included aflinbsub- sto ties and expenses of personnel engaged in or- sectionsan (1)and 2)are avowable,aseral ad s well as ganisao tioa,such rting �as stookties �d by the , appropriate generalshare of and the like.This cat printces an ton and ndnoeera/ and expenses,d operation and allocable ble share of 8°r9 also icoats. g n- ai(4) Federal agencies m administration and general ex a. see. btusemede of agencies oasts for department operation and maintenance fides. burse and faculty onlyPreciation. Appropriate estmen s will be headwhere an institutionculty d exceptional oases made for servicesprovided adjustments functions hardship or detriment c to demonstrate undue or organisations. to other rasa. project perform- b. In the absence of the The following guidelines applyaided for in Section A.2.d, the alternatives in- b. pu - terminationThefollowing of n guid to the de- chided in this category must be allocated ces to administrative the majorfunctions of the institution under costs as direct or indirect(F&A) (1)In developing the departmental admix- on the basiwhich the is the moponsored dified total cost of titration cost Pool,special care should be ea- conducted ercised to ensure that costs' sponsored projects. same purpose like cn incurred for the c. An appropriate adjustment must be treated consistently as either directorsindi made Federal awards la whente any this category y includes to rect (F&A) costs. For example, salaries of similar in- technical staff, laboratoryidentical activities as technical), telephone supplies (e.g., eluded in the those nd chemicals), care cents, toll charges, animals, general expense gccate ad or tehertind and coifs, and specialized dPater costa, travel (F&A) coat items, such a other indirect as directci coatsshop costs must be ourement,or personnel administration. ae n tea . pro to a particular dir cost wherever identifiable tag of these costs objective.Direct charg- ing 8.Library&menses ingthrough specific c costs may be accomplished a. The expenses under this thro to ecific identification ti ication of individual those that have been for the er- ire cost objectives, or incurred the st of foe iagh recharge a enters or specialised serv-. bon of andoe library. ter books including the cost of ice fact ties. as appropriate under the air- the library,lees any materials purchasednc for graph (c) and 200.468100.419 Direct penalised servicea- that qualify as applicable librarytems of income grail es. 3200.E Applicable credits library ee- (2) Items inch ae tflYce Pens category should also include th ea s Local telephonesupplies, Postage, benefits lnormally costs,and memberships must includedatthhflsen, to the appropriate salaries andh fringe f be treated as indirect(F&A)costs. general an appropriate share of ! 8eaeraI administration and general expense. 200 E t f i OMB Guidance Pt.200,App.HI operation and maintenance expense,and de- struotion function,and subsequently to Fed- predation. 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- 10. Offset for Indirect (F&A) Expenses Other- cated to them. wise Provided for by the Federal Govern- b.In the absence of the alternatives pro- mane vided for in Section A24, 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, including students, professional em- which are made to the institution to support ployees,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 full-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 professional employee category as a credit to the affected individual indirect must consist of all faculty members and (F&A) cost category before that category is other professional employees of the institu- allocated to benefitting functions. tion, on a fell--time equivalent basis. This C.Da�temvaTtox AIM APPLICATION OP may also include post-doctorate fellows and graduate students. ItmIB$CT(F&A)COST RATS OR RATES (3)The other users category must consist 1.Indirect(F&A)Cost Pooh 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 o.Amount allocated in paragraph b of this to each major function of the institution as section must be assigned farther as follows: prescribed in paragraph B of this paragraph (1) The amount in the student category Cl Identification and assignment of indirect must be assigned to the instruction function (F&A)costs,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 ployee 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 tion to the salaries and wages of all faculty each function. members and other professional employees (2) The rate for each function is used 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 pool is established for each major activities function of the institution. function of the institution, a separate indi- rect(F&A)cost rate would be established for 9.Student Administration and services each of the major functions described in Sec- tiona The expenses under this heading are Al under which Federal awards are car- those that have been incurred for the admin- (3)Tied Ea istration of student affairs and for services rate Be cech smustinstitution's indirect (F&A)designed cost to students, including expenses of such an- process be appropriately nn to ensure that Federal sponsors do not in tivities as deans of students,admissions,rag- any way subsidize the indirect(F&A)costs of iatrar, counseling and placement services, other sponsors, specifically activities spon- student advisers, student health and hat- acted tar industry and foreign governments. many services, catalogs, and commence- Accordingly,each allocation method used to runts and convocations. The salaries of idaatify and allocate the indirect(F&A.)cost members of the academic staff whose rowan- pools, as described in Sections A2,Criteria sihilities to the institution require adminie- for distribution, and B2 through B.S. must trative work that benefits sponsored projects contain the full 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 used to make the com- determined in accordance with Subpart E.— potations. In addition, the Baal rate die- Cost Principles of this Past. This expense tribution base(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- etruction, etc., as described in Section Al, eluded therein, an appropriate share of gen- Major functions of an institution)must con- eral administration and general expenses, taro all the programs or activities which ati- operation and maintenance, interest ex- litre the indirect (F&A) costs allocated to penee,and depreciation. that major function.At the time an indirect b.In the absence of the alternatives pro- (F&A) cost proposal is submitted to a cog- vided for in Section A24, the expenses in nizant agency for indirect costs,each insti- this category must be allocated to the in- tution must describe the process it uses to 201 Pt.200,App.III 2 CFR Ch.11(1-1-14 Edition) ensure that Federal funds are not used to 3.Negotiated Lump Sum for Indirect(F&A) subsidize industry and foreign government Costs funded programs. b.In some instances a single rate basis for A'negotiatedfixed amount in lien of self- useindf- across the board on all work within a corent(F&A)orate may be or primarily for function at an institutiontracted activities off-ca he, the benefits salmon- major ,rived appropriate. A may not be traded where derived single rate for research, for from an institution's indirect(F&A)services example,might not take into account those cannot be readily determined. Such nego- different environmental factors and other tiated indirect(F&A)costs will be treated as conditions which may affect substantially an off et before allocation to instruction,or- the indirect(F&A)costs applicable to a par- ganized research,.other sponsored activities, ticular segment of research at the institn- and other institutional activities. The base non.A particular segment of research may on which such remaining expenses are allo- be that performed minor a single sponsored cated should be appropriately adjusted. agreement or it may consist of research 4,Predetermined Rates for Indirect(F&A)Costs under a group of Federal awards performed in a common environment. The environ- Public Law 87-696(76 Stat.437)as amended mental factors are not limited to the phys- (41 17.S.C. 4708) authorises the use of pre- loal location of the work. Other important determined rates in determining the"indi- factors are the level of the administrative rent costs"(indirect(F&A)coats)applicable support required,the nature of the facilities under research agreements with educational or other resources employed, the scientificinstitutions.The stated objectives of the law disciplines or terthninel skills involved, the are to abcpllfy the administration of cost- typeorganizandmai arrangements used, or any research and development contracts(in- combination thereof.if a particular segment tions,ag grants) with preparation ff their of a sponsored agreement is performed with- s, an facilitate the preparation of their in an environment which appears to generate budgets, and to permit more expeditions a significantly- different level of indirect closeout of such contracts when the work is (F&A)costs,provisions should be made for a taps ffd do view of the potential iati n separate indirect(F&A)cost pool applicable taps offered predeterminedb this rates procedure,negotiation to such work. The separate indirect (F&A) of e for indirect (F&A) cost pool should be developedcosts the norm period of two t ftio whereYears shouldth ular course of the rate determination ce be peri in those situations pertinentr factss and the separateprocess cost experience and other indirect(F&A)cost rate re- available are deemed sufficient to enable the suiting therefrom should be utilized; pro- parties involved to reach an informed judg- 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 5.Negotiated Fixed Rates and Carry-Forward which such rate would apply is material in 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 must be distributed to included as an adjustment to the indirect applicable Federal awards and other benefit- (F&A) cost for the next rate negotiation. tang activities within each major function Whwa d a rate is n Is deter minor,the carry- (see section A.1,Major hrnctions of an inert- forward adjustmentmutny be applied to the the next button)on the basis of modified total direct forwardubsq nt rate applied _ costs(MTDC), consisting of all salaries and jsubsequent rate negotiation.a, When r such ae- wages, fringe benefits, materials and sup- g ttaned i are advance be f 9a,even fe rio rate nee plies,services,travel,and subgrants and sub- copute in ypy for a given Indirect will be contracts up to the first 525,000 of each computed�'allocable the expected awardsf subaward (regardless of the period covered forecastA)costs periodplus t Federal ecarry- by for the subaward).MTDC is defined in.$lo0.68 the (over- minds the carry) Modified Total Direct Cost(MTDC).For this forward thea prior ent , orunder-recovery)the ecastia purpose, an indirect (F&A) cost rate should tribfrom base. period, etor te forecast die- be determined for each of the separatelump-sum base.menUnr soon co amounts under rent(F&A)cost pools developed pursuant to inane of f p io agreements must cot be carriedug prior_ for- subsection 1.The rate in each case should be wardane o Prins darat not be stated as the percentage for There a must,however,n thr new rate nance which the amount tiation. be an advance of the particular indirect(F&A)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 such pool rect 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- recipient or the parties cannot reach agree- tions 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 must be adjusted once prior approval of the cognisant agency for a rate is negotiated and approved by the cog- indirect costs.In the event that an instita natant agency for indirect costs. 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- eluded in the subsequent poet-determined a. Notwithstanding the provisions of sub- rates. Where multiple rates are used, the section 0.i.a, the administrative costs same procedure will be applicable for deter- charged to Federal awards awarded or mining each rate, amended (Inrtlnding continuation and re- 6.Provisional and Final Rates for Indirect newal awards).with effective dates beginning nning (F&A))Costs on or after the start of the institution a first fiscal year which begins on or after October Where the cognisant agency for indirect 1,1991.must be limited to 28% of modified costa determines that cost experience and total direct costs(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 mince- a carry-forward, or if the parties cannot tration,Sponsored Projects Administration, agree an an equitable rate,a provisional rate and Student Administration and Services • must be established.To prevent substantial (including their allocable share of deprecia- overpayment or underpayment, the provi- tion,interest costs, operation and mainte- atonal rate may be adjusted by the cognisant nanoe expenses,and fringe hpnpftts costs,as agency for indirect costs during the institu- provided by Section B,Identification and as- don's fiscal year. Predetermined or fixed. signment of indirect (F&A) oasts, and all rates may replace provisional rates at any other types of expenditures not listed spe- time prior to the close of the institution's officially under one of the subcategories of fa- fiscal year. If a provisional rate is not re- oilities to Seolson B. placed by a predetermined or fixed rate prior b.Institutions should not change their ec- to the end of the institution's fiscal year, a 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 ebange the charging of a particular the actual allowable costs incurred for the type of cost from F&A to direct,or to realm- period involved, sits costs, or increase allocations from the administrative pools identified in paragraph 7.Fixed Rates for the Life of the Sponsored B.1 of this Appendix to the other F&A cost Agreement pools or fringe benefits.Cognisant agencies Federal agencies must use the negotiated for indirect cost are authorised to allow rates except as provided in paragraph(e) of changes where an institution's charging §200.414 Indirect (F&A) costs, must pare- practices are at variance with acceptable graph(b)(1)for indirect(F&A)costa in effect practices followed by a substantial majority at the time of the initial award throughout of other-institutions. the life of the Federal award. Award levels for Federal awards may not be adjusted in 9.Alternative Method for Administrative Costs future years as a result of changes in nego- a. Notwithstanding the provisions of sub- tinted rates."Negotiated rates"per the rate section La,an institution may elect to claim agreement include final,fixed,and predator- a fixed allowance for the "Administration" mined rates and exclude provisional rates. "Life" for the purpose of this subseotion portion Indirect (F&A) costs. The allow- means each competitive segment of a anoe could be either 24%of modified total di- project.A.competitive segment is a period of °t caste or a percentage equal to 96%of the years approved by the Federal awarding most recently negotiated fixed or predator- agency 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 B.1, through the life of the Federal award at the. whichever is less.Under this alternative,ne time of the int.,. award, then the nego- cost proposal need be prepared for the"Ad tiated 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 doe- the life of the Federal award.. umentation of these costs required(see sub- b. Except as provided in §200.414 Indirect section o). 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 20s Pt.2(X),App.111 2 CFR Ch.II(1-1-14 Edition) charges for the expenditure categories de- cided based on mutual agreement between scribed in Section B.5, General administra- HHS and DOD. thin and general expenses, Section B.6, De- (2)After cogniz partmental administration expenses,Sectionan°e ee�dlishad it must B.7, Sponsored projects administration b.and ca Ace forn a ofyrat period. Section 8.9, Student administration and ceptec of rates. See §200.414 Indi- services. rest(F&A)costa. b.In negotiations of rates for anbsegne�t c. Correcting deficiencies. The cognizant Periods, an institution that has elected the . agency forded. tof costscorrect must negotiate dell-- option of subsection a may continue to ewer- changes eeeded ccoun systems Fed_ ties it at the same rate without farther iden- oral awtes relating-s. Cognizant to nt agencies sifo for Fel tification or documentation of costs. erat amust dressst the concernss of otherindirect- c. If an �tution elects to accept a arts aget taee,asss must s- threshold rate as defined in subsection a of waste feotsdagencies es ibr riFtd and agencies es this seco section.it is snot its administrative to perform ee costea that are required rates to limit rrecoverery ofmdi- However,in order to compute the facilities rect costs Resolvingby statute. cog- components of its indirect(F&A)cost rate. d. forindirect questioned costs. The the institution must reconcile its indirect dissent agency negotiations costs must con- (F&A) cost proposal to its financial state- duct any necessary n regard regarding amountsn ees- ment a and make appropriate adjuetulents ticme°s'od auditinstitution t that are du thFederal gov- and reclassifications to identify the costs of aline tb lat are due the Federal ego- each major function as defined in Section �agreeant relatedt. to costs covered by a n�o- A.1.as well as to identify and allocate the fa- e.Reimbursement.Reimbursement to cog- °ilithes components. Administrative costs nizsnt agencies for indirect costs for work that are not identified as such by the insti- tution's accounting system(such as those in- reir�ormsd under this Partn eruy be made by onrred in academic departments) will be t 31 Uement billing under the Economy classified as instructional costs for purposes Act.Procedured fob. of reconciling indirect(F&A)cost proposals I. iirativ for es mutt be tailie and to flnanni statements and allocating facia- administrative rates be established by ties casts. one of the following methods: 10.Individual Rate Components agency for indirect costs is The c for responsible for negotiating and In order to provide mutually agreed-linen catioasl institutionapprovingonehal f of for Fan edu- ederal information for management purposes,each agencies.Non-cognizant Federal agencies for indirect (F&A) cost rate negotiation or de- indirect costa, which make Federal awards termination shall include development of a to an educational institution, must notify rate for each indirect(F&A)cost pool as well the cognizant agency for indirect costs of as the overall indirect(F&A)cost rate. specific concerns (La., a need to establish n.Negotiation and Approval of Indirect(FAA) special cost rates)which could affect the ne- gate gotiation process.The cognizant agency for a. Cognizant agency for indirect coats i9 indirect rested must address the concerns of ms and Defini- aenden as a be scheduled A defined in Subpart A—Aorony dons. pre-negotiation oonfereoe may (1)Cost negotiation cognizance is ass among all interested agencies, if necessary. to the Department of Health and Human then ofte agency for indirect negotiation c nce must Services OMB) or the Department of De- the edn tipnal instituttien_ conference with fence's Office of Naval Research(DOD),nor- (2)Other than formal negotiation.The cog- maily depending on which of the two aeon- nizant agency for indirect costs and edu- dee (HIS or DOD) provides more funds to rational institution may reach an agreement the educational institution for the most re- on rates without a formal negotiation con- cent three years. Information on must be derived from relevant data gatheredre encen or use of for �the les t simplifroughied method odode- by the National Science Foundation.In cases scribed in this section D o�f�thiss Am ,de where neither Has nor DOD provides Fed- g. Formalizing eral funding to an educational institution. meats. izant determinations and direct agency for indirect the cognizant agency for indirect costs as- costs must formalize all determinations or signment must default to HIS. Notwith- agreements reached with an educational in- standing the method for cognizance deter- stitution and provide copies to other agen- on described in this section,other ar- des having an interest. Determinations edr ngemennts fj�co�gnizance of a particular should include a description of any adjust- edrt on the on may also be based in mats, the actual amount, both dollar and types of research performed at percentage adjusted,and the reason for mak- the educational institution and must be de- ing adjustments. 204 OMB Guidance Pt.200,App.Ill h.Disputes and disagreements. Where the are classified under the following titles or cognisant agency for indirect costs Is unable their equivalents: to reach agreement with an educational in- (1)General administration and general ex- stitution with regard to rates or audit reap- pauses(exclusive of costs of student adminie- lation, the appeal system of the cognisant tra..tioa and services,student activities,stu- agency far indirect costs must be followed dent aid,and scholarships). for resolution of the disagreement. (2)Operation and maintenance of physical plant and depreciation(after appropriate ad I2.Standard Format for Submission iustment for costs applicable to other insti- tutionalFor facilities and administrative(indirect activities). (F&A)) rate proposals, educational institu- (� nse s. time must use the standard format, shown (4) Department administration a0pr nt of the in section E of this appendix,to submit their which galaxies awilnd be cmpet od ds 20 and h ad the indirect (F&A) rate Proposal to the cog- dparents expenses of degas and heads of nizant agency for indirect costs. The cog- In those oases where expenditures olassi- nizant agency for Indirect costs may.on an fled under subsection (1) have previously institution-by institution basis.grant excep- been allocated to other institutional activi- tions 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 eala- ment does not apply to educational instita- ries and wages included in the Indirect(F&A) tions that use the simplified method for cal- cost pool must be separately identified. culating indirect(F&A)rates,as described in c.Establish a salary and wage distribution Section D of this Appendix. bass,determined by deducting from the total In order to provide mutually agreed upon of salaries and wages as established in sub- information for management purposes,each section a from the amount of salaries and F&A coat rate negotiation or determination wages included under subsection b. must include development of a.rate for each d.Establish the indirect(F&A) cost rate, F&A cost pool as well as the overall F&A determined by dividing the amount in the in- rate. direct(F&9.)cost pool,Subsection b,by the amount of the distribution base, subsection D.S1MPLwr.To METHOD FOB F.MAT.r, C. INSITMIONs a.Apply the indirect(F&A)cost rate to di- rect salaries and wages for individual agree- /.General manta to determine the amount of indirect a.Where the total direct cost of work coy- (F&A)coats allocable to such agreements. ered by this Part at as institution does not 3•SimpNJied Procedure—Modified Total Direct exceed$10 million in a fiscal year, the aim- Cost Base pilled procedure described in subsections 2 or 3 may be used indetermining allowable a.Estolli5h the total costs incurred by the indirect (F&A) costs. Under this simplified institution for the base period. Procedure.the institution's most recent aa- b. Establish en indirect (F&A) cost pool anal financial report and immediately avail- consisting of the expenditures (exclusive of able supporting information must be utilised capital items and other casts specifically as a basis for determining the indirect(F&A) identified as unallowable)which customarily cost rate applicable to all Federal awards. are classified under the following titles or The institution may use either the salaries their equivalents: and wages (see subsection 2) or modified (1)General administration and general ex- total direct costs (see subsection 3) as the pis(exclusive of coats of student a ,mini,- distribution basis. tration and services,strident activities,stu- b.The simplified procedure should not be dent aid,and scholarships). used where it produces results which appear (2)Operation and maintenance of physical • inequitable to the Federal government or the Plant and depreciation(after appropriate ad- institution.In any such case,indirect(F&A) iustment for costs applicable to other insti costs should be determined through use of tntional activities). the regular procedure. (i<)Limey (4) Department administration ration 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 cases where expendi- a. Establish the total amount of salaries tures (detained under subsection (1) have and wages paid to ell employees of the insti- previously been allocated to other institu- tution. tional activities,they may be included in the b. Establish an indirect (F&A) cost pool indirect(F&A)cost pool.The modified total consisting of the expenditures (exclusive of direct costs amount included in the indirect capital items and other costa specifically (F&A) cost pool must be separately ideuti- identified as unallowable)which customarily fled. 206 Pt.200,App.IV a. Establish a modified total direct cost rates accordance 2 CFR Ch.11(1-1-14 Edition) distribution base, as defined in Section C.2, thie seeti with the The distribution basis, requirements m sof t institution's direct foti�t contOO s of all unilaterally establishFederal government mast suchmay be based upon rates. Such rates determined bps the indirectthe amount in(F&A) cost rate, such other data that have historical data tor o dire and direct(F&A)cost pool,8ubseation b, by the- the cognisant agency foron indirect coIttruists e distribution base, subsection which it can be been demonstrated that all nu- amount allowable costs have been collided. e. Apply the indirect (F&A) cost rate to direct(F&A)cost rates are unilaterally t When es- the modified total direct coats for individualtablished by the Federal government�'eements to determine the amount ofiud- of tilled failureo oo thel for establish to u a Den red (F&A) allocable to such agree- Proposal estab rates es- lishing b>ction, such rates in E. tablished will be set a level lowsenough to standard TeTiE g s ensure not be that r potentially unallowable costs 4 The scan for documentationfor re- P. Certificate. The certificate required indirect(indirect(F&A))rate this section moat be in the following form:by Proposals for claiming costs under the reg- ular method 16 available on the OMB Web CERTDPICATE of 1ND/RECT(F&A)Men site here: ht1P:/houno.whitehouae.9ov/omb/ site knowledge�is to certify that to the beat of my F.OERTIMATION (1)I have reviewedef: submittedthe indirect(Ellen)cost 1.Certification of Charges proposal(a)All costs included i this proposal Ilden- To assure that eipenditnree for Federal WY date]to establish awards billing are th and is a000rdaaoe with rest (F&A) costs rate ford n final period the agreement propero documents nts and a covered by rate]are allowable in accordance project bumett the annual and/or approved with the requirements of the Federal agree- oai st reportsuore vouchers raga final fie- ment(s) to which they aPPAY and with the cation. e agreements will inolauude a P jfl manta.cost applicable to those agree- under e university,which rned by an eads ed official of (8)Thisare proposal does not include any costs thPub- and beliefreport,I ,to the best of signing this wunallowable under applicable that the re rt ie my knowl principles such as on): cost and beliefh and the true,complete, lie relations costs.(without contributions :onh_ accurate,ands and e s dreceiptshexpenditures,disburse- Lions entertainment oasts, fins and ripen-. is set forth in the awardr e purposesties. lobbying mkt costs.defense and paw- 1-and intent thatfictitious, Yang costs, and defense of fraud fraudulent aware any�e,o tious, or proceedings;4)All osts included In this proposal are n 1 material fact.may subject me -ission of properly allocable f Federal agreements r eati on fraud,civil orr administrative penalties for ship between e a beneficial or causal rand th- r de. se stat.S. Di, claims or oth- agreements which incurred and the Title e. Sections Code,Title 1 ,Secand Don 1001 0 j,.sari accordance with applicable are allocated in I declare that the foregoing and 2.Certification of Indirect(F&A)Costs reel. $Dint$is true and cor- rect. a.Policy. Cognizant agencies must not ac- Signature: of Higher cept a.proposed indirect coat rate most un- Edneation less such 8ignatnre: costs have been certified by the Name of Official: educational institution using theCertificate of indirect (F&A) Costs set forth in Date of Eseoutlon section F.2.0 b.The certificate must be signed on behalf APPENDIX IV TO PART 200—INDIRECT of the institution by the chief financial oh- (F&A) COSTS lb Per or an individual designated by an indi_ ASSIGNMENT, IDENTIFICATION AND vidual at a level no lower than vice Nam'AND RATE DETERM>NA_ or Chief financial officer. president TION FOR NONPROFIT ORGANIZA_ G.) No indirect (B'&A) cost rate must be TIONS binding upon the Federal most recent required government if the A.CRaGRAI, hasn not proposal from the butt- 1.Indirect costs are tution to establish Where it is incurred for common orjojoint that have beenn necessary es.and the institution indirect not submitted& ) o cannot be readilyobjectives s and identified with a a certified proposal for establishing such minor amoaulntsm may objective. treated Direct indirect 206 OMB Guidance Pt.200,App.IV costs under the conditions described in rating the organization's total costs for the $200.413 Direct 0osts paragraph (d) of this base period as either direct or indirect,and Part. After direct costs have been deter- (ii) dividing the total allowable indirect mined and assigned directly to awards or costs(net of applicable credits)by an equi- other work as appropriate,indirect costs 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 cost objectives.A coat may not be alio- to distribute indirect costs to individual cated to a Federal award as an indirect cost Federal awards.The rate should be expressed if any other cost incurred for the same pur- as the percentage which the total amount of pose, in like circumstance'', has been as- allowable indirect costs bears to the base as- signed to a Federal award as a direct cost. looted. This method should also be used "Major nonprofit organizations" are de- where an organisation has only one major fined in§200.414Indirect(F&A.)Goats.See in- function encompassing a number of indi- sections B.2.and 33.34 ct cost rate fthiisAppendlx,uirements in �wh�jects or the level of Federalawards t may o an B.ALLOCATION OF T�IDmEOT COSTS AND organization is relatively small. DETER/MAIMS of INDmac'r Cosa'Ramsb. Both the direct costs and the indirect costs must exclude capital expenditures and 1.General unallowable costs. However, unallowable a.If a nonprofit organization has only one eluded which represent activities must be in eluded is the direct costs under the condi- major function,or where all its major funs- tions described in§200.413 Direct poets,parer bona benefit from its indirect costa to ap- ,ph(e)of this Part. proximately the same degree,the allocation c.The distribution base may be total di- al indirect coats and the computation of an rent coats (excluding capital expenditures indirect cost rate may be accomplished and other distorting items,such contracts or through slsgpliified allocation procedures,as aubawards for 325,000 or more), direct Bala_ described in section B.2 of this Appendix. ries and wages,or other base which results in b. If an organization has several major an equitable distribution. The distribution functions which benefit from its indirect base matt exclude participant support costa costs in varying degrees, allocation of indi- as defined in §200.48 Participant support rent costs may require the accumulation of coma. such coats into separate oust groupings d. Except where a special rate(e) is re_ which then are allocated individually to ben- slitting functions by means of a base which quired in accordance with section B.5 of this best measures the relative degree of benefit. Appendix, the indirect cost rate developed The indirect coats allocated to each function under the above principles is applicable to are.then distributed to individual Federal Federal awards of the organise tion If a awards and other'activities included in that 510 rate(s)is required,appropriate mods- function by means of an indirect cost rate('')_ must be made in order to develop c.The determination of what constitutes the special ratei(s). an organisation's major functions will de- e.For an organization that receives more pend on its purpose in being; the types of than 310 million in Federal funding of direct services it renders to the publics,its clients, costa in a fiscal year.a breakout of the indi- and its members;and the amount of effort it rest cost component into two broad oat- devotee to such activities as fundraising, egorles,Facilities and Administration as de- public information and membership activi- fined in section A.3 of this 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 costs and computing indirect cost rates pear indirect oast category(i.e.,Facili- along with the convictions uwier which each ties or Administration)is of the distribution method should be used are described in sec- base identified with that category. Lion B.2 through B.5 of this Appendix. 3.Multiple Allocation Base Method e.The base period for the allocation of in- direct costs is the period in which such costs a. General. Where an organisation's Judi- are incurred and accumulated for allocation rest costs benefit its major functions in to work performed in that period. The base varying degrees,Indirect costs must be eat- period normally should coincide with the or- mutated into separate cost groupings,as de- ganiaation's fiscal year but, in any event. scribed in subparagraph b. Each 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.Nita/gifted Allocation Method best measures the relative benefits.The de- fault allocation bases by cost pool are de- e.Where an organisation's major functions scribed in section$.S.e of this Appendix. benefit from its indirect costs to approxi- b. Identification of indirect costa. Cost mately the same degree,the allocation of in- groupings must be established so as to per- direct costs may be accomplished by(1)sepa- mit the allocation of each grouping on the 207 Pt.20f),App. IV 2 CFR Ch.I1(1-1-14 Edition) Weft- of benefits"avoided to the makes fore= services costs must be treated as direct costs tikes.Raub.grouping.ffiiist oonstit a pool wherever identifiable to a particular pro- teems of t are of like oharactaj in gram.The salaries and wages of administra- ti me benefit.and in termE tive and pooled clerical staff should nor- MB unaustico bate which beet measures madly be treated as indirect costs. Direct don restive Ileusafltit Dreeide4 to lean charging. of these costs may be appropriate two. pilule are ell livit t where a major project or activity explicitly orietk'°lnaoilities"and"Ad requires and budgets for administrative or won. as desoe'ibed in section L.9 of clerical services and other individuals in- thisAppendix..The greet cost pools are de- volved can be identified with the program or fined agfo>le 1. activity.Items such as office supplies, (1) Depreciation. The expenses under this age, local telephone costs, periodicals are the portion of the costs of the membsrebips shouldyee treat a t and organizatdon's buildings, capital improve- indirect costs. normally be treated as meats to land and buildings,and equipment c. Allocation bases. Actual conditions which are computed in accordance with must be taken Into account in selecting the 6200.436 Depreciation. . base to be used in allocating(2) Interest. Interest on debt associated each the functions- with certain buildings, equipment and cap- groaning to benefiting sel sting am method essential Gip j is in a e best$21sf cd itch improvements are computed in accord- gr.a d���,t�� � eriita�t Aos race with§200.449Interest. (I) Operation:and m..t t lw.we ewes, t�6:poaP. €dggit .d.�e,aitr e- The wee.under We*eliding those aocau enca with.bandits onsh p- tint, • that have beau iaeaived for awe a mot relat cau p or lggie_. , .tEifi, natal uanc tic- And reason,where neither theIsdeter nog the and pros a etio of tie. e' tier, Oka of the relit l pis-determinable. r be tjoiaof th o b.deal an idea can be a by: _ planed fur rota items tin:.ianisnharem*jin_- i e of a cogL groupi try to the fps osl ed-f r 0.maim sad tie*.Witted;;the allnoi$ios"lost be made alb dint of7�,��� ry or noi'a al in that manner.Whet t13e exp�e,his most F, a .-fi. lltaes chit' g are'more a 1'ha'}Jethro,the al- metal-care of grounds,ireinttelasioa and,gip- legation mast be ..thstaith the use of a exation of buildings and other plant ihoili-ilea; r'itq t.earthquake aid diseetsr sanded base t! Federaledenoe thatB are . �g map equitable gato both thea i govornmut e�ty: �. and the organization.The dietsibntiOII must weete;Om** property liability and Other be made in accordance with the bases de- insgeenee relating to ; space and seethed herein unless it can be demonstrated melba leasing' f elility and kum- that the use of a different base would result agement; and central receiving. The oper- in a more equitable allocation of the costs, ation and maintenance expenses category or that a more readily available base would must also include its allocable share of not increase the costs charged to Federal fringe benefit costs,depreciation,and inter- awards. The results of special cost studies e t costs. (such as an(4)General administration and general ex- not be used to de engineering utility study)must penes.The expenses under this heading are termlrae and allocate the in- those that have been incurred for the overall direct Deere co Federal awards. general executive and administrative offices must be allocated in the 1) Depreciation. fo Depreciationexpenses of the organization and other expenses of a (a)Depreciation on wing manner: general nature which do not relate solely to sively in the conduct ofbf buildings nefunction, any major function of the organization.This and on capital im single function, Category must also include its allocableused dings, must and equipment to share of fringe benefit costs, operation and that function. 'must be assigned to maintenance expense, depreciation, and in- (b)Depreciation on buildings used for more tercet costs. Examples of this category in- than one function,and on capital improve- dlude central offices, such as the director's meats and equipment used in such buildings, office, the office of finance, business serv- must be allocated to the individual functions ices, budget and planning,personnel,safety performed in each building on the basis of and risk management,general counsel,man- usable square feet of space, excluding com- costsagems� ent information systems, and library mon ,such as hallways,stairwells,and In developing this oast pool, special care (a)Depreciation on buildings, capital im- should be exercised to ensure that costs in- provements and equipment related space marred for the same purpose in like air_ (e.g., individual rooms, and laboratories) cumstanaes are treated consistently as ei- used jointly by more than one function(as then direct or Indirect costs. For example, determined by the users of the space)must salaries of technical staff, project supplies. be treated as follows.The cost of each joint- project publication, telephone toll charges, ly used unit of computer costa, travel costs, and specialized the benefitting apace must be functions on the ba asocases ed to of: 208 OMB Guidance Pt.200,App.IV (i)the employees and other users on a fall- common pool for that function.The casts in time equivalent(rig) basis or salaries and the common pool must then be distributed to wages of those individual functions benefit- individual Federal awards included in that tins from the use of that space;or function by use of a single indirect coat rate. (li) organization-wide employee FTEs or f. Distribution basis. Indirect costs must salaries and wages applicable to the benefit- be distributed to applicable Federal awards tins functions of the organisation. and other benetitting activities within each (d) Depreciation on certain capital im- major function on the basis of MTDC (see provements to land, such as paved parking drifinition in §200.88 Modified Total Direct areas,fences,sidewalks,and the like,not in- Oost(MTDC)of Part 200. eluded in the cost of buildings,must be allo- g. Individual Rate Components. An indi- cated to user categories on a FTE basis and root cost rate must be determined for each distributed to major functions in proportion separate indirect cost pool developed. The to the salaries and wages of all employees rate in each case must be stated as the per- applicable to the functions. cantata which the amount of the particular (2) Interest. Interest costs must be alio- indirect cost pool is of the distribution base sated in the same manner as the depreoia- identified with that pool.Each indirect cost • tion on the buildings,equipment and capital rate negotiation or determination agreement equipment to which the interest relates. must include development of the rate for (3) Operation and maintenance exPenaea each indirect cost pool as well as the overall Operation and maintenance expenses must indirect cost rate. The indirect cost pools be allocated in the same manner as the de- must be ctaaaified within two broad oat- pre Generaltin. administration and Fennel ex egories: "Facilities" and"Administration,,, as described in section A.3 of this Appendix. pauses. General administration and general expenses must be allocated to benefitting 4.Direct Allocation Method functions based on modified total caste WO).The MTC is the modified total direct a. Some nonprofit organizations treat all costs (MTDC), as described in Subpart A— costa as direct costs except general wlminir Acronyms and Definitions of Part 200;plus tration and general expenses.These organi- the allocated indirect cost proportion. The rations generally separate their costs into expenses included in this category could be three basic categories: (i) General adminis- grouped first according to major functions of tration and general expenses, (ii) fund- the organization to which they render eery- ram,and(iii) other direct functions(in- ices or provide benefits. The aggregate ex- eluding projects performed under Federal pauses of FkPrth group must then be allocated awards). Joint oasts, such as depreciation, to benefitting functions based on MTC. rental costs, operation and maintenance of d.Order of distribution. facilities, telephone expenses, and the like (1) Indirect cost categories consisting of are prorated individually as direct costs to depreciation,interest,operation and mainte- each category and to each Federal award or name, and general administration and gen other activity using a base most appropriate oral expenses must be allocated in that order to the particular cost being prorated. to the remaining indirect cost categories as b.This method is acceptable,provided each well as to the major functions of the organ- joint cost is prorated using a base which ao- zation.Other oast categories should be allo- eurately measures the benefits provided to cattt in the order determined to be most ap- each Federal award or other activity. The propriate by the organization.This order of bases must be established in accordance with allocation does not apply if cross allocation reasonable criteria,and be supported by cur- of caste is made as provided in section B.3.d.2 rent data. This method is compatible with of this Appendix. the Standards of Accounting and Financial (2)Normally,an indirect cost category will Organ tl d for Voluntary ol �Health by the Welfare be considered closed once it has been allo- sated to other cost objectives, and costs Health Council,Inc.,the National Assembly must not be subsequently allocated to it, of Voluntary Health and Social Welfare Or- However,a cross allocation of costs between ganizations,and the United Way of America. two or more indirect costs categories could 0. Under this method,indirect costs con- be used if such allocation will result in a stet exclusively of general administration more equitable allocation of costs.If a cross and general expenses. In all other respects, allocation is used, an appropriate madifioa- the organiz+-tion's indirect cost rates must tion to the composition of the indirect cost be computed in the same manner as that de- categories is required. scribed in section B.2 Simplified allocation e. Application of indirect cost rate or method of this Appendix. rates. Except where a special indirect coat 5.Special Indirect Cost Rates rate(s)is required in accordance with section B.5 of this Appendix,the separate groupings In some instances, a single indirect cost of indirect costs allocated to each major rate for all activities of an organization or function must be aggregated and treated as a for each major function of the organization Pt.200,App.IV 2 CFR Ch.II(1-1-14&Non) may not be appropriate, since it would not f. Indirect cost proposal means the dour- take into account those different factors mutation prepared by an organization to which may substantially affect the indirect substantiate its claim for the reimbursement work.For this to a particular segment of of indirect costs.This proposal provides the work be that a particular segment basis for the review and negotiation leading f Federal mayl be tad t performed under a sin- to this establishment of an organisation's in- gle amay consist of work direct cost rate. in undera cu groupor of Federal awards performed g.Cost objective means a fanetion,organize- environment. These factors tional subdivision, contract, Federal award, may include the physical location of the or other work unit for which cost data are work,the level of administr$tive support re- desired and for which provision is made to quired, the nature of the facilities or other accumulate and measure the cost of proc- resources employed,the scientific disciplines eases,projects,jobs and capitalized projects. or technical skills involved, the organiza- tional arrangements used, or any combine- 2.Negotiation and Approval of Rates tion thereof. When a particular segment of work is performed in an environment which a. Unless different agenciesarrangements Conte are appears to generate a significantly different agreedFto bylagencytge Fe withthe concerned, dollar level of indirect costs,provisions should be vavane Federal w the largest doter made for a separate indirect cost pool willlue of awards with an cognizant gency cable to such work. The separate indict be ect1 oetef as the agency cost pool should be developed during the for al of the e indirect for the oast rates and,rind eap- re course of the regular allocation process,and necessary,other lea of indrates es suct rates where theree the from 8hoa1 naeindire � rate resulting and rate compute ch�e-�asrate Once benefit an termtued that (I) the rate differs vided s eignifi- agencyis de- is assignedrofit organization,cognizance fore a ign- oantly from that which would have been ob- month willn not bechangedunless the esi a tallied under sections B.2,B.S,and B.4 of tide shit not dollar luof there isl Appendix, and (ii) the volume of work to shiftwa sn the organization volume the Federal which the rate would apply Is material. awards to the concerned tat de for at least three years. All concerned Federal agencies must C.NEGOTIATION AND APPROVAL OF INDIRECT be given the opportunity to participate in Cosy RATES the negotiation process but,after a rate bar been agreed upon,it will be accepted by all 1.Definitions Federal agencies.When a Federal agency has As used in this section,the following terms 'reason to believe that special operating fro- Fed have the meanings set forth in this section: tore affecting indirect its cost rates in necessitatedn a. Cognizant agency for indirect costs means with sectiono B.5 cost rates a ix, it will, the Federal agency responsible for negoti- time of the rrs es are negotiated.,it will, ating andapproving indirect cost rates for a notifyt the cognizant rates or direct nonprofitorganization on behalf of all Fed- oasts.(See also 1200.414 Indirect(F&A)costs eral agencies, of Part 200.) nab. redet to a e mined rate means an indirect cost b.Except as otherwise provided in 1200.414 specified current or in- Indirect (F&A) costs paragraph (e) of this tore period,usually the organization's fiscal Part,a nonprofit organization which has not year.The rate is based on an estimate of the previously established an indirect oast 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 cost proposal immediately after ment. the organization is advised that a Federal o. Fixed rate means an indirect cost rate award will be made and,in no event, later which has the same cbaracteristios 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 costs of the period covered by the rate is car- for indirect costs in accordance with 1200.414 ried forward as an adjustment to the rate Indirect (F&A) costs paragraph (B of this computation of a subsequent period. Part organizations thathave previously es- d. Final rate means an indirect cost rate imelished indirect cost rates must submit a • applicable to a specified past period which is new indirect cost proposal to the cognizant based on the actual costs of the period. A agency for indirect coats 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 inAireot cost rate applicable to a for use on Federal awards where there is rea- specified period which is used for funding,in- aonable assurance,based on past experience terim reimbursement,and reporting indirect and reliable projection of the organisation's costs on Federal awards pending the estab- costs,that the rate is not likely to exceed a liahment 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 H--- predetermined rates are not considered air Cost Principles of Part 200. propriaty,A fixed rate,however,must not be (3)This proposal does not include any costs negotiated if(i)all or a substantial portion which are unallowable under Subpart E— of f the pentad toorganization's Federal awards are ex- Cost Principles of Part 200 such as(without expire before the carry forward ad- limitation):public relations costs,contribu- justTnent can be made;(if)the mix of Federal tions and donations, entertainment oasts, and non-Federal work at the organization is fines and penalties, lobbying costs, and de- too erratic to permit an equitable carry--for- knee of fraud proceedings;and ward adjustment; or(iii) the organisation's (4)All'costs included in this proposal are operations fluctuate significantly from year properly allocable to Federal awards on the to year. baste of a beneficial or causal relationship L Provisional and final rates must be nego- between the expenses incurred and the Fed- tiated where neither predetermined nor fixed area awards to which they are allocated in rates are appropriate. Predetermined or accordance with applicable requirements. fixed rates may replace provisional rates at any time prior to the close of the organise_ I declare that the foregoing is tree and aort tion's fiscal year. If that event does not occur,al rate will be established and up- Nonprofit Organization: ward or-downward adjustments will be made Signature: based on the actual allowable costa incurred Name of Official: for the period.involved. Title: g.The results of each negotiation must be r formalized in a written agreement betweenDate of Ezeontion the cognizant agency for indirect coats and APPENDIX V TO PART 200—STATBlLOCAL the nonprofit organization. The cognizant GOVERNMENT AND INDIAN Tam- agency for copiesO for CENTRAL indirect coats must make avail- WIDE O SHR�RD COST A es agreement to all oonoeraed CATION PLANS Federal' h.If a dispute arises in a negotiation of an indirect cost rate between the cognizant A GBxsRei 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, pmohasing, accounting, eta.. to oper- the cognizant agency for indirect costs. acing agencies on a centralized basis. Since i.To the extent that problems are moony, federally-supported awards are performed tared among the Federal agencies in conned- within the-individual operating agencies, tion with the negotiation and approval prow there needs to be a process whereby these ass,OMB will lend assistance as required to central service costs can be identified and resolve such problems in a timely manner. assigned to benefitted activities on a reason- ableD.Certification of Indirect(F&A)Coate and consistent basis.The central service cost allocation plan provides that process. Required Certification.No proposal to ea- All costs and other data used to distribute tablish indirect(F&A)cost rates must be ao- the costs included in the plan should be sup- oeptable unless such costs have been car. ported by formal accounting end other tilled by the non-profit organization using records that will support the propriety of the the Certificate of Indirect (F&A) Costa set costa assigned to Federal awards. forth in section j.of this appendix.The car- 2. Guidelines and illustrations of central tificate 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 Gav- I.Each 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 form: Cost Rates for Agreements with the Federal Certificate of Indirect(F&A)Costs Government:"A copy of this brochure may be obtained from the Superintendent of Docu- This is to certify that to the best of my meats,U.S.Government Printing Office. knowledge and belief: (1)I have reviewed the indirect(F&A)cost B.DNFairtzoNe proposal submitted herewith; 1.Agency or operating agency means an or- (2)All costs included in this proposal[idea- ganizational unit or sub-division within a tify date) to establish billing or final indi- governmental snit that is responsible for the rest (FBrj coats rate for [identify period performance or administration of Federal covered by rate]are allowable in accordance awards or activities of the governmental with the requirements of the Federal awards unit. 2U EQUAL EMPLOYMENT OPPORTUNITY CLAUSE During the performance of this Contract,the Contractor agrees as follows: (1) The Contractor and its subcontractors shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, sexual orientation, gender identity, national origin, disability or familial status. As used herein, the work "treated" shall mean and include, without limitation, the following: Recruited, whether by advertising or by other means; compensated; selected for training, including apprenticeship; promoted; upgraded; demoted; downgraded; transferred; laid off; and terminated. The Contractor agrees to and shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officers setting forth the provisions of this nondiscrimination clause. (2) The Contractor and its subcontractors shall, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sexual orientation, gender identity, sex, national origin, age, disability or familial status. (3) The Contractor and its subcontractors shall send to each representative of workers with which he has a collective bargaining agreement or other contract or understanding a notice advising the labor union or worker's representative of the Contractor's commitments under the equal employment opportunity clause of the City and shall post copies of the notice in conspicuous places available to employees and applicants for employment. (4) The Contractor and its subcontractors shall furnish to the City's Human Rights and Relations Contract Compliance Officer all federal forms containing the information and reports required by the federal government for federal contracts under federal rules and regulations, including the information required by Omaha Municipal Code Sections 10-192 to 10-194, inclusive, and shall permit reasonable access to his records. Records accessible to the Human Rights and Relations Contract Compliance Officer shall be those which are related to Paragraphs (1) through (7) of this Exhibit and only after reasonable notice is given to the Contractor. The purpose for this provision is to provide for, investigation to ascertain compliance with the program provided for herein. (5) The Contractor and its subcontractors shall take such actions with respect to any subcontractor as the City may direct as a means of enforcing the provisions of Paragraphs (1) through (7) herein, including penalties and sanctions for noncompliance; however, in the event the Contractor becomes involved in or is threatened with litigation as the result of such directions by the City, the City will enter into such litigation as is necessary to protect the interests of the City and to Revised and approved 5/23/2012 effectuate the provisions of this division; and in the case of contracts receiving federal assistance, the Contractor or the City may request the United States to enter into such litigation to protect the interests of the United States. (6) The Contractor shall file and shall cause his subcontractors, if any, to file compliance reports with the Contractor in the same form and to the same extent as required by the federal government for federal contracts under federal rules and regulations. Such compliance reports shall be filed with the Human Rights and Relations Contract Compliance Officer. Compliance reports filed at such times as directed shall contain information as to the employment practices, policies, programs and statistics of the Contractor and his subcontractors. (7) The Contractor shall include the provisions of Paragraphs (1) through (7) of this Section, "Equal Employment Opportunity Clause", and Omaha Municipal Code Section 10-193 in every contract, subcontract or purchase order so that such provisions will be binding upon each subcontractor or vendor. (Code 1980, Section 10-192; Ordinance No. 35344, Sections 1, 9-26-00) Revised and approved 5/23/2012 SECTION 3 CLAUSE All Section 3 covered contracts shall include the following clause (referred to as the Section 3 clause): A. The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (Section 3). The purpose of Section 3 is to ensure that employment and'other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3 shall, to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing. B. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the part 135 regulations. C. The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this Section 3 clause, and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number and job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin. D. The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR part 135. The contractor will no6t subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 135. E. The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 CFR part 135 require employment opportunities to be directed were not filled to circumvent the contractor's obligations under 24 CFR part 135. F. Noncompliance with HUD's regulations in 24 CFR part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD- assisted contracts. G. With respect to work performed in connection with Section 3 covered Indian housing assistance, Section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises. Parties to this contract that are subject to the provisions of Section 8 and Section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with Section 87 (b). Providing Other Economic Opportunities. (a) General. In accordance with the findings of the Congress, as stated in Section 3, that other economic opportunities offer an effective means of empowering low- income persons, a recipient is encouraged to undertake efforts to provide to low- income persons economic opportunities other than training, employment and contract awards, in connection with Section 3 covered assistance. (b) Other training and employment-related opportunities. Other economic opportunities to train and employ Section 3 residents include, but need not be limited to, use of "upward mobility", "bridge" and trainee positions to fill vacancies; and hiring Section 3 residents in part-time positions. (c) Other business-related economic opportunities: (1) A recipient or contractor may provide economic opportunities to establish, stabilize or expand Section 3 business concerns, including micro-enterprises. Such opportunities include, but are not limited to formation of Section 3 joint ventures, financial support for affiliating with franchise development, use of labor only contracts for building trades, purchase of supplies and materials from housing authority resident-owned businesses, purchase of materials and supplies from PHA resident-owned businesses and use of procedures under 24 CFR part 963 regarding HA contracts to HA resident-owned businesses. A recipient or contractor may employ these methods directly or may provide incentives to non-Section 3 businesses to utilize such methods to provide other economic opportunities to low-income persons. (2) A Section 3 joint venture means an association of business concerns, one of which qualifies as a Section 3 business concern, formed by written joint venture agreement to engage in and carry out a specific business venture for which purpose the business concerns combine their efforts, resources and skills for joint profit, but not necessarily on a continuing or permanent basis for conducting business generally, and for which the Section 3 business concern: (i) Is responsible for a clearly defined portion of the work to be performed and holds management responsibilities in the joint venture; and (ii) Performs at least 25 percent of the work and is contractually entitled to compensation proportionate to its work. 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. O OPPORTUNITY Rev.5/7/08 Pt. 230 2 CFR Ch. II (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. mented, 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- cular 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- neous 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 ject of cost determination, and make accordance with applicable Federal agency no attempt to• identify the cir- regulations). cumstances 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 nection 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 stricted or prohibited by law. The prin- (OMB CIRCULAR A-122) ciples do not attempt to prescribe the extent of cost sharing or matching 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 230.15 Policy. arbitrary limitations on individual 230.20 Applicability. cost elements by Federal agencies. 230.25 Definitions §230.20 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- APPENDIX A To PART 230—GENERAL pnm- tive agreements, cost reimbursement CD?LEs contracts, and other contracts in which APPENDIX B TO PART 230—SELECTED 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 Tms PART - awards. The principles do not apply to AumonrrY: 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,1968-1970,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- ganization concerned. Thus, if a OMB may grant exceptions to the re- s- subaward is to a non-profit organiza- sible quia underents existingo this aw when However,per in tion, this part shall apply; if a sibl under law.. in pp y' the interest of achieving maximum subaward is to a commercial organiza- uniformity, exceptions will be per- tion, the cost principles applicable to mitted only in highly unusual cir- commercial concerns shall apply; if 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 ment,2 CFR part 225 shall apply, gr that awards and administers nty 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 prin- 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. cerns. 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 §230 25 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- zation 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-122 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 ment, OMB, Washington, DC 20503, specific costs must be scrutinized with par- telephone(202)395-3993. titular care in connection with organizations or separate divisions thereof which receive APPENDIX A TO PART 230—GENERAL 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 mice 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 ering their responsibilities to the organize- D. Allocation of Indirect Costs and Deter- tion, its members, employees, and clients, urination 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 unjustifiably 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 like cir- A.Basic Considerations cumstances 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 exclu- to overcome funding deficiencies,or to avoid sions 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 proce- 5. Applicable credits. a. The term applica- dures that apply uniformly to both federally- ble credits refers to those receipts, or reduce 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 erally 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 matching requirements of neous 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 penses 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). 1.Direct costs are those that can be identi- 6. Advance understandings. Under any fied specifically with a particular final cost given award, the reasonablenss maybe and objective, i.e., a particular award, project, difficult to determine. This is of certain items of costsparticularly allocabilityservice,or other direct activity of an organi- true in connection with organizations that zation. 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, in 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 specifi- 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 admire- 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- marily as a service to members, clients,,or entitlement grant programs from certain the general public when significant and nec- 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 tions. CFR part 215 (OMB Circular A-110) 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 organization. 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 ticular final cost objective. Direct cost of means of an de indirect cost rate(s). minor amounts may be treated as indirect c The determination of what constitutes. costs under the conditions described in sub- e p organization its purp major functions will de- paragraph B.2 of this appendix. After direct Pend es pose in being; the types of costs have been determined and assigned di- services it renders to the public, its clients, rectly to awards or other work as appro- and its members;and the amount of effort it priate, indirect costs are those remaining to devotes to such activities as fundraising, be allocated to benefiting cost objectives. A public information and membership activi- cost may not be allocated to an award as an ties. indirect cost if any other cost incurred for cd. Specific computingmethod for indirect allocating cost rates es the same purpose,in like circumstances,has along and i retch been assigned to an award as a direct cost. methode with the be used arens under which each sub- 2. Because of the diverse characteristics shouldD. h gh described in and accounting practices of non-profit orga- paragraphs base throughfr 5 theo this appendix.o nizations, it is not possible to specify the e.The period period which allocationccosts us types of cost which may be classified as indi- directarein costs is the sua edfor such rest cost in all situations. However, typical to incurred and accumulated allocation examples of indirect cost for many non-prof- periodo work normallyperformed should in that period. The base it organizations may include depreciation or ga n'sfiscal year coincide witd the eovent, use use allowances on buildings and equipment, shall ha'a a so as but, in e any evs in the costs of operating and maintaining fa- the allocation at on selected as to avoid inequities in cilities,and general administration and gen- the a im Simplified of the costs. oral expenses, such as the salaries and ex- 2. Simplified 's majorn method. a. Whet 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- nization'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 est 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 means in subparagraphs D.2.e and D.3.g of small. 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 organiza- eluded 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, c. The distribution base may be total di- the allocation of indirect costs and the corn- rest 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 admi ni stra- 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. alterations of buildings, furniture and equip- d. Except where a special rate(s) is re- ment; care of grounds; maintenance and op- quired in accordance with subparagraph 5 of eration of buildings and other plant facili- this appendix, the indirect cost rate devel- ties; security; earthquake and disaster pre- 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 shall also include its a. General. Where an organization's indi- allocable share of fringe benefit costs, oper- rect costs benefit its major functions in ation and maintenance expense,depreciation varying degrees,indirect costs shall be aeon- and use allowances, and interest costs. Ex- mulated into separate cost groupings,as de- amples of this category include central of- scribed in subparagraph D.3.b of this appen- fices, such as the director's office, the office dix. Each grouping shall then be allocated of finance, business services, budget and individually to benefiting functions 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. by cost pool are described in subparagraph (b) In developing this cost pool, special D.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 allocation of each grouping on the ther direct or indirect costs. For example, basis of benefits provided to the major func- 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 organizatior'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. II (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- meat of a cost grouping directly to the funs- penes. 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 in this category could be grouped first ac- 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 can be demonstrated group shall 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, d. Order of distribution. (1) Indirect cost or that a more readilyt available base would categories consisting of depreciation and use not increase resultsths coats chargedspci to sponsored allowances, interest, operation and mainte- awards. The of special cost studies (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- ciation and use allowances expenses shall be nation. Other cost categories could be alto- allocated in the following manner: cated 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 meats 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 (U) Depreciation or use allowances on be considered closed once it has been allo- buildings used for more than one function, cated to other cost objectives, and costs and on capital improvements and equipment shall not be subsequently allocated 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 shall 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 shall be aggregated and users on a fall-time equivalent (s'rti) basis treated as a common pool for that function. or salaries and wages of those individual The costs in the common pool shall then be functions benefiting from the use of that distributed to individual awards included in space; or organization-wide employee ]+"i'iis that function by use of a single indirect cost or salaries and wages applicable to the bene- fiting 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 l Ts, basis and distributed to major func- and subgrants and subcontracts up to the tions 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 $25,000 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 cluded 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 skills involved, the organiza- tribution of indirect costs. tional arrangements used, or any combina- g. Individual Rate Components. An indi- tion thereof. When a particular segment 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, provisions should be tentage 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 significantly shall be classified within two broad cat- from that which would have been obtained egories: "Facilities" and "Administration," under subparagraphs D.2, 3, and 4 of this ap- as described in subparagraph C.3 of this ap- pendix,and the volume of work to which the pendix. rate would apply is material. 4. Direct allocation method. a. Some non- 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 separate their costs into three basic cat- 1. 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- ciation, rental costs, operation and mainte- 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 Organiza- 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 Organiza- 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 zational 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. I1 (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-SMECrra) titular 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 bat, 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 fac- 5.Bad debts tors affecting its awards necessitate special 6.Bonding 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.Housing 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 cerned 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- 47.Taxes ters of public concern, such as notices of 48. Termination costs applicable to spon- Federal contract/grant awards, financial Bored agreements matters,etc. 49.Training costs e.Costs identified in subparagraphs c and d 50.Transportation costs if incurred for more than one Federal award 51.Travel costs or for both sponsored work and other work of 52.Trustees the non-profit organization, are allowable to APPENDIX B TO PART 230—SELECTED ITEMS OF the extent that the principles in Appendix A COST to this part, paragraphs B. ("Direct Costs") and C.("Indirect Costs")are observed. Paragraphs 1 through 52 of this appendix f. Unallowable advertising and public rela- provide principles to be applied in estab- tions costs include the following: lishing 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- graphs c,d,and e; tion a particular item of cost is not intended (2) Costs of meetings, conventions, con- to imply that it is unallowable; rather, de- vocations, or other events related to other termination as to allowability in each case activities of the non-profit organization, in- should be based on the treatment or prin- eluding: ciples provided for similar or related items (a) Costs of displays, demonstrations, and of cost, exhibits; 1.Advertising and public relations costs.a. (b) Costs of meeting rooms, hospitality The term advertising costs means the costs suites, and other special facilities used in of advertising media and corollary adminis- conjunction with shows and other special trative costs. Advertising media include events;and magazines,newspapers,radio and television, direct mail, exhibits,electronic or computer (c) Salaries and wages s emploexhi en- gaged in setting up and disp transmittals,and the like. laying exhibits, b.The term public relations includes com- making demonstrations,and providing brief- munity relations and means those activities ings' dedicated to maintaining the image of the (3) Costs of promotional items and memo- non-profit orga.ni7ation 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- c.The only allowable advertising costs are gapiyation. 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 organi- 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 organiza- 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 procedures en- (2)Costs of communicating with the public gagements to monitor subrecipients who are and press 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 ance 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 from (3)Costs of conducting general liaison with uncollectible 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 1 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 deter non-profit organization. They arise also in where aammoouunt costs under Federal ion ap- instances - where the non-profit organization types of compensation requires similar assurance.Included are such are the unreasonable. eo such conditions 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 com- 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- cumstancea. 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 organi7a- telephone calls, telegrams, postage, mes- 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 •8. Compensation for personal services. a. e.Unallowable costs.Costsi hich are unal- Definition. Compensation for personal sere- lowable under other paragraphs of this ap- ices includes all compensation paid cur- pendix 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, Iocation allowances, gencies, such as those resulting from acci- hardship pay,and cost of living differentials. dents, natural disasters, breakdowns of b. Allowability. Except as otherwise spe- 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 administration,main- (1) Total compensation to individual em- tenance,or accounting. ployees is reasonable for the services ren- (3)In the performance of tests, laboratory dered 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 com- (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 organiza- 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 nizatien'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 compensa- found in the organization's other activities, tion 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 are assignable are unallowable. to the individuals or group of employees (2) Pension plan termination insurance whose salaries and wages are chargeable 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 unaliow- 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, extent of coverage, and rates and j. Incentive compensation. Incentive com- 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. ment 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 wages, is vided they are allocated to all activities of a payment in addition to regular salaries and the organization. wages, by organizations to workers 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. fect, 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 costs regardless of wheth- (a)Actual normal turnover severance pay- er the cost is reported as taxable income to enshg be maallocated toall severance , the employees. These costs are allowable as menu shall aorganization provides for a activities;reserve direct costs to sponsored award when nee- for where the severances, h d will be 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. ations is reasonable in light ofpayments i. Pension plan costs.(1)Costs of the or a- g cesve a g tually made for normal severances over a nization's pension plan which are incurred in representative past period, and if amounts accordance with the established policies of charged are allocated to all activities of the the organization are allowable,provided: organization. (a) Such policies meet the test of reason- .(b) Abnormal or mass severance pay is of ableness; such a conjectural nature that measurement (b)The methods of cost allocation are not of costs by means of an accrual will not discriminatory; achieve equity to both parties. Thus, acorn- (c)The cost assigned to each fiscal year is als for this purpose are not allowable. 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 orga,ni7ation'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. tines for the organization in the United (3) Charges for the salaries and wages of States are unallowable, unless they are nee- 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- als 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 sala- 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- ante 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 diet 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 tom- (2) Costs include, but are 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 organza.- it; costs of employees, officers and trustees, tions to satisfy these requirements must and any similar 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 rect 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- chiding filing of a false certification) corn- able and allocable costs,is not prohibited by menced by the Federal Government, or a any other provision(s) 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 eral, 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 of 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 organira- 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 mone- 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 organs- ered this 80 percent limitation and permitted zation,to rescind or void an award,or to ter- a higher percentage, then the full amount of urinate an award for default by reason of a costs resulting from that agreement shall be violation or failure to comply with a law or allowable. regulation. f. Costs incurred by the organization in (e) A consent or corn- connection with the defense of suits brought. if the dispositionnn byyulc havee resulted i- by its employees or ex-employees under sec- promise,any of the dispositions described in subpara- tion100-700),2 o incthe Major Fraud Act of all relief(Pub.nec- graphsL. 10.b.(1)(a), (b), (c)or(d)of this appen- essaryincluding the cost a lewhere dix essary 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. consult- such proceedings shall be unallowable if any g Costs of legal, accounting,s and in one of them results in one of the dispositions ant services, and related costs, incurred l shown in subparagraph 10.b.(1)of this appen- connection with defenseoappeals,agal thrust Government claims or antitrust dix. suits,or the prosecution of'claims or appeals c. If a proceeding referred to in subpara- unp against the Federal Government, are unal- graph 10.b of this appendix is commenced by Towable. the Federal Government and is resolved by h. Costs of legal, accounting, and consult- consent or compromise pursuant to an agree- ant services, and related costs, incurred in ment entered into by the organization and connection with patent infringement litiga- the Federal Government, then the costs in- tion, are unallowable unless otherwise pro- curred by the org•niration 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 organization separately. During the d. If a proceeding referred to in subpara- pendency of any proceeding covered by sub- graph 10.b of this appendix is commenced by paragraphs 10.b and f of this appendix, the a State,local or foreign government,the au- Federal Government shall generally with- thorized Federal official may allow the costs hold payment of such costs. However, if in incurred by the organization for such pro- the best interests of the Federal 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- erally-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 unal- 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. II (1-1-12 Edition) paragraph 11.f of this appendix, a combina- under subparagraph il.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 cost of the assets involved.The acquisi- 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 spe- volved. The method of depreciation used to cialized purposes (e.g., dentist chairs and assign the coat 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 6%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: nents) 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 depreciation 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 as a direct or indirect cost. However, the b. Such costs will be equitably apportioned value 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 organizations. shall, when material in amount, be consid- 14. Entertainment costs. Costs of enter- ered in the determination of the non-profit tainment, including amusement, diversion, organization's indirect costs or rate(s) and, and social activities and any' costs directly accordingly, shall be allocated a propor- associated with such costs (such as tickets tionate share of applicable indirect costs to shows or sports events, meals, lodging, when the following exist: rentals, transportation, and gratuities) are (a) The aggregate value of the services is unallowable. material; (b)The services are supported by a signifi- 15. Equipment and other capital expendi- cant amount of the indirect costs incurred tares. 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 propriate 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 consid- fications,attachments,accessories,or anx;l- 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 ciliary 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 under conditions described in non-profit organization's regular accounting Section 215.23 of 2 CFR part 215 (OMB Cir- practices. cular A-110). Where donated services are non- treated as indirect costs, indirect cost rates "Equipment" means an article of will separate the value of the donations so expendable, tangible personal property hay- that reimbursement will not be made. ing 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 forfi- plies, and donated use of space may be fur- lished by the non-profit organization for - 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 in 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 organization'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 anal- 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. II (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 charge under the fol- to land,buildings,or equipment which mate- lowing conditions: rially increase their value or useful life are (a)The gain or loss is processed through a unallowable as a direct cost except with the depreciation account and is reflected in the prior approval of the awarding agency, depreciation allowable under (4)When approved as a direct charge pursu- this appendix. Paragraph 11 of ant to 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 loss is taken into account in or as otherwise determined appropriate by determining the depreciation cost basis of and negotiated with the awarding 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 para- costs of buildings and equipment, of this ap- graph 9 of this appendix. pencils for rules on the allowability of rental (e) Gains and losses arising from mass or costs for land,buildings,and equipment. extraordinary (6) The unamortized portion of anyequip- salee, retirements, case-by- ment -by- written off as a result of a change in case basis shall be considered on a 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. 16. Fines and penalties. Costs of fines and the torgan s of goods services for unallow- 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- Hance, utilities, furnishings, rent, etc.), sions of an award or instructions in writing housing allowances and personal living ex- from the awarding agency. 17. Fund raising and investment manage- penses for/of the r fringe zation's officers are meat costs. a. Costs of organized fund rais- unallowable as of benefit or indirect ir ing, including financial campaigns, costse regardless income whethero the cost is es- ment drives, solicitation ofP �' endow- ported as taxable to the employees. quests, and similari expenses incurred gitsnd be- These costs are allowable as direct costs to per- to raise capital or obtain contributions are sponsored ed of the when necessary ford and unallowable. rmance of sponsored award and ap- 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 c. Fund raising and investment activities the meanings set forth below: shall be allocated an appropriate following terms have pP priate share of in- (1) "Facilities" means land and buildings direct costs under the conditions described or any portion thereof, equipment individ- in subparagraph B.3 of Appendix A to this ually or collectively, or any other tangible Part. 18. Gains and losses on depreciable assets. capital asset,wherever located, and whether a a.(1)Gains and losses on sale,retirement,or tied or leased by the non-profit organize_ A other disposition of depreciable property (2) "Idle facilities" means completely un- shall be included in the year in which they used facilities that are excess to the non- i occur as credits or charges to cost group- profit organization's current needs. ing(s)in which the depreciation applicable to such property was included. The amount ofpacity"Idleof capacity"y used fac the unused ca- the gain or loss to be included as a credit or e c partially facilities. It is the charge to the appropriate costdifference between: That which a facility I grouping(s) could achieve under 100 percent operating 198 [ I 1 OMB Circulars and Guidance Pt. 230,App. B time on a one-shift basis less operating the rates and premiums shall be reasonable interruptions resulting from time lost for re- under the circumstances. pairs, setups, unsatisfactory materials, and (b) Costs allowed for business interruption other normal delays;and the extent to which or other similar insurance shall be limited to the facility was actually used to meet de- exclude coverage of management fees. wands during the accounting period. A (c) Costs of insurance or of any provisions multi-shift that basissamountl be usage woiuld no a for a reserve covering the risk of loss or wally this afor typedamage to Federal property are allowable volved. of facility in- only to the extent that the organization is (4) "Cost of idle facilities or idle capacity" liable for such loss or damage. costs such maintenance,eor capacity" (d)Provisions for a reserve under a self-in- meansgcostsand ashes related costs,repair,. surance program are allowable to the extent housing, our g, rent, ang., that types of coverage, extent of coverage, insurance, or interest,e st property y taxes and de- rates, and premiums would have been al- b. The costs of idle facilities are unallow- the lowerdisk$However, been pnrharedno n or able except to the extent that: reasonably estimated self-insured li abilities, illitie, (1)They are necessary to meet fluctuations which do not become payable for more than in workload;or one year after the provigion is made,(2) Although not necessary to meet flue- not exceed the present value of the liability. tuations in workload, they were necessary (e)Costs of insurance on the lives of trust- when acquired and are now idle because of ees, officers, or other employees holding po- changes in program requirements, efforts to sitions of similar responsibilities are allow- achieve more economical operations,reorga- able only to the extent that the insurance 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 workmanship are unallowable. costs doing business idles and area factorin (g) Medical liability (malpractice) allow- theinsur- normaloffluctuations of usageance.Medical liability insurance is an cost rates from period to period. Such indirectsts toabl the e oextent st of Fthat the Federal ederal research researrcch pro- 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 to was originally reasonable and is not subject liability insurance costs shall be treated as a Federal awards, subletting, ration enting,on stale dual projec direct cost ts based on he mannerd shall be in whi h in accordance with sound business, eco- the insurer allocates the risk to the popu- nomic,or security practices.Widespread idle lation covered by the insurance. capacity throughout an entire facility or (3) Actual losses which could have been among a group of assets having substantially covered by permissible insurance (through the same function may be considered idle fa- the purchase of insurance or a self-insurance cilities. 22.Insurance and indemnification.a.Insur- program) are unallowable unless expressly ance includes insurance which the organiza- (a)provided ffor in the award,except: tion is required to carry, or which is a covered Costs incurred because of losses note proved, under the terms of the award and cover under nominald in keeping deductible insurance any other insurance which the organization business practicee eare llowab e. with sound maintains in connection with the general (b) Minor losses not covered by insurance, conduct of its operations. This paragraph such as spoilage, breakage, and disappear- does not apply to insurance which represents ance of supplies,which occur in the ordinary fringe benefits for employees (see subpara- course of operations,are allowable. graphs 8.g and 8.i(2)of this appendix). b. Indemnification includes securing the (1)Costs of insurance required or a and maintained, pursuant toapproved, organization against liabilities to third per- allowable. the award are sons and any other loss or damage,not comom- (2)Costs of other insurance maintained b pensated by insurance or otherwise.The Fed- Y eral Government is obligated to indemnify the organization in connection with the gen- the organization only to the extent expressly eral conduct of its operations are allowable provided in the award. subject to the following limitations: 23. Interest. a. incurredinteres (a)Types and extent of coverage shall be in on orrowed capital Costs temporaryf use of en- accordance with sound business practice and dowment funds, or the use of the non-profit 199 Pt. 230, App. B 2 CFR Ch.II (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 lished 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 acquisi- (3) The actual interest cost claimed is tion or replacementof 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-spon- 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 elated 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 pur- 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 pease 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-prof- 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- uting to, or paying the expenses of a polit- ings on excess cash flows shall be the three ical party, campaign, political action com- 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 orga.niza- 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 to"full coverage" under the Cost Accounting ocmarch,participaten any mass drive, demonstration, Standards (CAS) as defined at 48 CFR cpi rally,l fundraising drive, lobbying cam- 9903.201, the interest allowability provisions paign;or or letter writing or telephone of subparagraph a do not apply. Instead, (5)paign; these organizations' sponsored agreements attendance dan at legislativee liaison session icluding are subject to CAS 414(48 CFR 9903.414),cost mittee hearings, theisenor or core- of money as an element of the cost of facili- puttee legislation,gathering information theon re- of ties capital, and CAS 417 (48 CFR 9903.417), of legislation,ding when and analyzing car- costeffect of money as an element of the cost of of d support such activitiesknowing are capital assets under construction. lion foron inianeff toof engageo in unallowable c. The followingloon an effort to in unallowable definitions are to be used lobbying. for purposes of this paragraph: b. The following activities are excepted (1)Re-acquired assets means assets held by from the coverage of subparagraph 25.a of the non-profit organization prior to Sep- this appendix: tember 29, 1995 that have again come to be (1)Providing a technical and factual pres- 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 facilf- 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.B 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- eminent 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- ment of the orgarl,ation's authority to per- fluence means any influence that induces or form the grant, contract, or other agree- tends to induce a Federal employee or officer ment. 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 then the merits of the grant,contract,or other agreement. the matter. c. (1) When an organization seeks reim- bursement for indirect costs, total lobbying Losses on other sponsored agreementsn costs shall be separately identified in the in- or contracts. Any excess of costs over oat direct cost rate proposal, and thereafter ocomeany othern any award is unallowable but a coot treated as other unallowable activity costs limited award. anizs includes,oscontributed is not in accordance with the procedures of sub- to, the of cost sharing s paragraph B.3 of Appendix A to this part. portion by reason of cost sharing agreements (2) Organizations shell 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 shall maintain adequate upkeep of buildings and equipment (includ- records to demonstrate that the determine- nag Federal property unless otherwise pro- tion of costs as being allowable or unallow- vided for) which neither add to the perme- able pursuant to paragraph 25 complies with nent value of the property nor appreciably the requirements of this Appendix. prolong its intended life,but 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 pur- 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 charged at their actual prices, net of ap- scribed in this subparagraph are met,organi- plicable credits. Withdrawals from general zations are not required to establish records stores or stockrooms should be charged at to support the allowability of claimed costs their actual net cost under any recognized in addition to records already required or method of pricing inventory withdrawals, maintained. Also, when the conditions de- scribed in this subparagraph are met, the ab- consistently applied. Incoming transpor- sence of time logs, calendars, or similar Cation 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 shall 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 pur- nical information, are allowable. This in- poses of interpretation of this Appendix;pro- chides costs of meals, transportation,rental vided, however, that this shall 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 pendix. 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 organi- 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 au- 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 fil- 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 laxly 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). ness 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 Iationship 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 com- 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 rest 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 new 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 an- this appendix,provided that: thors. (1) The move is for the benefit of the em- 39. Rearrangement and alteration costs. plover. 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 poi- lowable. 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, floe 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. II (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 cies, when they are necessary for the per- termination situations. formance of Federal programs. a. The cost of items reasonably usable on 46. Specialized 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 taining 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 titles 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- mination,such costs are generally allowable eration over/under applied costs of the pre- within the limitations set forth in this ap- vious period(s). pendix, 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. cumstances, 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- urinated 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 taxes,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 Bored 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 rea- (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 1215.61 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, cular 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 48.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 com- 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 pars- 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 elation 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 organi7a- 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 trav- 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- grain, 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. pected to work. (2) Unless a 50. Transportation costs: Transportation pattern of avoidancementwillis ende- P tected, the Federal Government 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 costs and airfare or other discount airfare is un- are allowable. When such costs can readily available for specific trips if the non-profit be identified with the items involved, they organization can demonstrate either of the may be directly charged as transportation following: that such airfare was not avail- costs or added to the cost of such items (see able in the specific case; or that it is the paragraph 28 of this appendix).Where identi- non-profit organization's overall practice to fication with the materials received cannot make routine use of such airfare. readily be made,transportation costs may be d. Air travel by other than commercial charged to the appropriate indirect cost ac- carrier. Costs of travel by non-profit organi- counts if the organization follows a con- zation-owned, -leased, or-chartered aircraft sistent,equitable procedure in this respect. include the cost of lease, charter, operation 51.Travel costs. (including a. General. Travel costs are the expenses personnel costs),maintenance,de- for transportation, lodging, subsistence, and predation, insurance,n and other relatedd related items incurred by employees who are costs.h cost o portion allowableof such costs that exceeds in travel status on official business of the the of commercial air travel, non-profit organisation. 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 lieu 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 Mg costs of lodging, other subsistence, and .a foreign country means travel outside 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-PROl'1'1' 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 fornia 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, U- 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 circui- 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, II- 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- porated (National Acceleration Lab), Ar- setts gone,Illinois 18. Mitretek Systems, Inc., Falls Church, 31.Urban Institute,Washington DC Virginia 32. Non-profit insurance companies, such as 19.National Radiological Astronomy Observ- Blue Cross and Blue Shield Organizations story,Green Bank,West Virginia 33. Other non-profit organizations as nego- 20. National Renewable Energy Laboratory, tinted with awarding agencies Golden,Colorado 21. Oak Ridge Associated Universities, Oak Ridge,TennesseePARTS 231-299 [RESERVED] 209 vs can sur,.e .i��Vo., 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. TIONS OF HIGHER EDUCATION, 215.42 Codes of conduct. HOSPITALS, AND OTHER NON- 215.44 Prmpetitionrocurement. 215.44 P procedures. PROFIT ORGANIZATIONS (OMB 215.45 Cost and price 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- 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 215.72 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 215-CONTRACT PROVI- s1ONs 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, uniess 215.22 Payment. otherwise noted. 215.23 Cost sharing or matching. 215.24 Program income. §215.0 About this part. 215.25 Revision of budget and program 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 Real property. 215.33 Federally-owned and exempt prop- (b)erty. (b) Applicability. (1) Except as pro- 215.34 Equipment. vided herein, the standards set forth in 215.35 Supplies and other expendable prop- this part are applicable to all Federal erty. agencies. If any statute specifically 77 §215.1 2 CFR Ch. II (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" (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 D 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 suance. by this part. However, this part applies (e) Relationship to previousparteviously to subawards made by State and local The guidance in this r previously 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- tained by contacting the Office of Fed- tions. eral Financial Management, Office of (c) OMB responsibilities. + MIi I' rc Management and Budget, Washington, sponsible for: DC 20503, telephone(202)395-3993. (1) Issuing and maintaining the guid- ance in this part. (g) Termination Review Date. This part (2) Interpreting the policy require- will have a policy review three years ments in this part and providing assist- from the date of issuance. ance to ensure effective and efficient implementation. Subpart A—General (3) Reviewing Federal agency regula §215.1 Pose. tions implementing the guidance in P 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- eral 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 tions. Federal awarding agencies shall not impose additional or inconsistent 1 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 cordancb 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 §215.24(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 plishing 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- ments. BO 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= ment 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 men- 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 ment 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 ternatic 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 CFR, 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. II (1-1-12 Edition) and specifically identifiable t4':, thr. 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 tally 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 :i n work under awards if such subrecipi- outlay has not been recorded. ents 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 cumu- the grants management common rule, lative obligations from the cumulative "Uniform Administrative Require- funds authorized. ments 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. 111, 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 CFR 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, FR 51880,Aug.31,2005] p g g program manuals, handbooks and other non- regulatory materials which are incon- Subpart B-Pre-Award 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 pre-award matters to be used in apply- §215.4 Deviations. big 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.C. 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 82 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 Lain 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 FR 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 con- established by Federal statute. formed to the terms and conditions of §215.12 Forms for applying for Fed- a previous award, or is not otherwise eral assistance. responsible, Federal awarding agencies (a) Federal awarding agencies shall may impose additional requirements as with the applicable report needed, provided that such applicant or comply clearance requirements of 5 CFR part recipienthenatures ofn the in writing as to: require- 1320, "Controlling Paperwork Burdens the a additionalhyhe additional on the Public," with regard to all rre the reason why the forms used by the Federal awarding requirements are being imposed, the agency in place of or as a supplement nature ofthe corrective action needed, theetime 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 cial 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 meat. 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- blares 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 ment 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). 82 §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. oral 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 ment programs funded with Federal analysis of the documentation on hand. funds to the purchase of recycled prod- (2) Records that identify adequately ucts 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- fied 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- tion 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' compli- 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 §215.20 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 Federal Grant and Other Programs." §215.21 Standards for financial man- (6) Written procedures for deter- agement systems. mining the reasonableness, allocability (a) Federal awarding agencies shall and allowability of costs in accordance require recipients to relate financial with the provisions of the applicable 8,1 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. (c) 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- elude, but are not 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 check 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- §215.22 Payment. 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. 11 (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 ments. 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 ents 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 tories 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 ments. 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 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 integral and necessary part of an ap- §215.23 Cost sharing or 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, teria. 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 use 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 tions. 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 recipient. accordance with paragraph (b)(3) of 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- regulations or the terms and condi- dition at the time of donation. tions of the award how program income (3) The value of donated space shall is to be used, paragraph (b)(3) of this not exceed the fair rental value of corn- section shall apply automatically to parable space as established by an inde- all projects or programs except re- pendent appraisal of comparable space search. For awards that support re- and facilities in a privately-owned search, paragraph (b)(1) of this section building 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 taro 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 §215.24 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. 1*1 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." §215.25 Revision of budget and 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 sec- (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- tive 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- ing 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 speci- OMB cost principles listed in§215.27. fled in the award. This one-time exten- (1) No other prior approval require- sion may not be exercised merely for ments for specific items may be im- the purpose of using unobligated bat- posed unless a deviation has been ap- ances. 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- (iii) 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 (1) 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 ents 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 i]fl 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 [70 FR 51880,Aug.31,2005} 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 rind and any pre-award costs author- by the audit provisions of revised OMB ized by the Federal awarding agency. Circular A-133 shall be subject to the §215.29 Conditional exemptions. audit requirements of the Federal awarding agencies. (a) OMB authorizes conditional ex- (d) Commercial organizations shall emption from OMB administrative re- be subject to the audit requirements of quirements and cost principles circu- the Federal awarding agency or the lars 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 chic statutorily-authorized consoli- accordance with the provisions of 2 dated planning and consolidated ad- CFR part 225, "Cost Principles for ministrative 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 Prin- 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- C.4 in section C of the appendix to that curred by commercial organizations part; and those non-profit organizations list- (3) 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. I1 (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 nec- 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 projects shall be limited to those under [69 FR 26281, May 11, 2004, as amended at 70 federally-sponsored projects (i.e., FR 51881,Aug.31,2005J awards) or programs that have pur- PROPERTY STANDARDS poses consistent 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 para- 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 ment whose cost was charged to a agency or its successor Federal award- ing agency. The Federal awarding project supported by a Federal award. agency shall observe one or more of the Federal awarding agencies shall re- 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. 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 proce- erty upon acquisition shall vest in the dures 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 (c)interest in the equipment. ip- vested in the Federal Government. Re- mon The recipient shall use the for cipients shall submit annually an in- which in the acquiredprojec or programngasneed- ventory listing of federally-owned it wwhether oro as long o pro- property in their custody to the Fed- ed,rcontinuesnotbe project byr ed- eral awarding agency. Upon completion gram and ho ll supportedtencumber the of the award or when the property is no eral funds and shall not the Fed- longer needed, the recipient shall re- eraproperty dwing agency.ut approvalWhenof not le nger port the property to the Federal award- needed awarding loo pro- ing agency for further Federal agency ram, for ecith original project ore uiutilization. gram, the recipient shall use the equip- ment in connection with its other fed- (2) If the Federal awarding agency erally-sponsored activities, in the fol- 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 era!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. 1I (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- m.ent 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, damage, 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- equipment in good condition. lowing: (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 (i)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, incluci- 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 nished 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- onciled 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- 4215.35 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 - recipient's heproceeds,selling ander is less, for the erally-sponsored project or program, handling ex- 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 ernment 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 4215.36 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 agency(ies) reserve a Such transfer shall be subject to the royalty-free, nonexclusive and irrev- following standards. ocable right to reproduce, publish, or (i) The equipment shall be appro- otherwise use the work for Federal pur- priately identified in the award or oth- 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 ments." 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 lished 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- vide, within a reasonable time, the re (e) Title to intangible property anti 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 nally-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- fleet costs incurred by the agency, the pose,disposition of the intangible prop- recipient, and the applicable subrecipi- erty shall occur in accordance with the ents. 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, 2009, as amended at 70 (5 U.S.C.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 ceptedin the scientific community 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: P pa- the i of the project or program under which nary analyses, drafts ofes scientific re property was acquired or improved. pers, plans for future research, peer re Agencies may require recipients to views, or communications with col- p leagues. This "recorded" material ex- record liens or other appropriate no eludes physical objects(e.g., laboratory ex- twos 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 PROCUREMENT STANDARDS are published, or similar information which is protected under law; and (B) Personnel and medical informa- §215.40 Purpose of 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 ment 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 cifically required by Federal statute or shall be alert to organizational con- executive order or approved by OMB. flicts of interest as well as noncompeti- §215.41 Recipient responsibilities. tive practices among contractors that Themay restrict or eliminate competition standards contained in this sec- or otherwise restrain trade. In order to tion do not relieve the recipient of the ensure objective contractor perform- contractual responsibilities arising ance 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 from competing for such tive issues arising out of procurements entered into in support of an award or the bidder or Awards whoseshall bid made etr the bidder or offeror 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 fulfill in order for the ity as may have proper jurisdiction. bid or offer to be evaluated by the§215.42 Codes of conduct. 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 shall 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 un- 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- family, 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 curement 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 corn- 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 offs- (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 suc- the metric system of measurement. cessfully under the terms and condi- (vi) 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 contractor 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 buss- ment 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 procurement is expected to (3) Consider in the contract process exceed the small purchase threshold whether firms competing for larger fixed at 41 U.S.C. 403 (11) (currently contracts intend to subcontract with $25,000) and is to be awarded without small businesses, minority-owned competition or only one bid or offer is firms, and women's business enter- received in response to a solicitation. prises. (4) Encourage contracting with con- (3) The procurement, which is ex- sortfums of small businesses, minority- thresh 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 ually. small purchase threshold is to be (5)Use the services and assistance, as awarded to other than the apparent appropriate, of such organizations as low bidder under a sealed bid procure- the Small Business Administration and ment. 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 PS OMB Circulars and Guidance §215.48 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 fol- 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 ute 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 9�} §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 thorized 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 corn- 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 215.51 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 tify 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 statement of the action taken or con- managing and monitoring each project, templated, and any assistance needed program, subaward, function or activ- to resolve the situation. ity supported by the award. Recipients (g) Federal awarding agencies may shall monitor subawards to ensure sub- make site visits, as needed. recipients have met the audit require- (h) Federal awarding agencies shall ments as delineated in§215.26. 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 days following the end of each quarter. Federal awarding agency requires ac- The Federal awarding agencies may re- crual 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 ac- (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 325,000 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 (B) If, in the Federal awarding agen- project or program. However, the re- cy's opinion, the recipient's accounting port shall not be required more fre- quently than quarterly or less fre- controls are adequate minimize ex- quently than annually. A final report cessive Federal advancess;;or, 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 (111) When practical and deemed nec- 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. I1 (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 uments, statistical records, and all access in this paragraph are not lim- 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.C. 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 alloca- 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 he (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-year retention period whether stated in a Federal statute, for the proposal, plan, or other corn- regulation, assurance, application, or putation 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 computa- in §215.14, take one or more of the fol- tion. lowing actions, as appropriate in the circumstances. TERMINATION AND ENFORCEMENT (1) Temporarily withhold cash pay- ments pending correction of the defi- 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), induct- 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 103 §215.70 2 CFR Ch. II (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 dis- awarding agency implementing regula- allowed costs resulting from the final tions(see§215.13). audit. Subpart D—After-the-Award §215.72 Subsequent adjustments and Requirements continuing responsibilities. (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 proce- 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. require- formance, and other reports as required ments(4) Property management by the terms and conditions of the (5) ei o§ds5re.31 throughntionas2 required. award. The Federal awarding agency (5) Records retention a §215.53. may approve extensions when re- quested by the recipient. (b)After closeout of an award, a rela- (b)Unless the Federal awarding agen- cy authorizes an extension, a recipient be modified or ended in whole or in shall liquidate all obligations incurred part with the 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 the terms and conditions of the award this section, including those for prop 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 ments. 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 101 OMB Circulars and Guidance Pt. 215, App.A charge interest on an overdue debt in port all suspected or reported violations 000 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 107 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- ment 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 12 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." plicable 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, Con- 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 for the performance of experimental. devel- Part by Loans States"). The A or orct provides Grants from omtha the each ct United opmental, or research work shall provide for tractor or subrecipient shall be prohibited n- tthe rights of the Federal Government and in from inducing, by any means, any person ace recipient withh7 any resulting ppart 4 invention, Rigtto accordance 37 CFR part 401, "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 ment 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-7) 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. II (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- tern 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 under statutory or regulatory authority petted to place additional restrictions other than E.O.12549. on individual items of cost. Theesuc 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 Lion. EDUCATIONAL INSTITUTIONS §220.20 Applicability. (OMB CIRCULAR A-21) (a) All Federal agencies that sponsor Sec. research and development, training, Sec. and other work at educational institu- 220.5 Purpose. 0.10 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—PRINCIPLES FOR DE- ally Funded Research and Development TERMINING COSTS APPLICABLE TO GRANTS, Center (FFRDC) associated with an CONTRACTS,AND OTHER AGREEMENTS WITH educational institution shall require EDUCATIONAL INSTITUTIONS the FFRDC to comply with the Cost Accounting Standards and with the AUTHORITY: 31 U.S.C. 503: 31 U.S.C. 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.b 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 ante to ensure effective and efficient educational institutions. implementation. 106 EXHIBIT " Use of Debarred, Suspended or Ineligible Contractors Subject to CFR part 24, , a subgrantee to the City of Omaha, hereby certifies that all contractors, subcontractors and suppliers to be used are eligible to participate in the and that they are not on any debarred, suspended or ineligible list. COMPANY CERTIFICATION Date: Signature: Typed Name and Title: Company: UNITED STATES CITIZENSHIP ATTESTATION FORM FOR PUBLIC BENEFIT For the purposes of complying with Neb. Rev. Stat. §§ 4-108 through 4-114, I attest as follows: ❑ I am a citizen of the United States. OR ❑ I am a qualified alien under the Federal Immigration and Nationality Act. My immigration status and alien number as follows: , and I agree to provide a copy of my USCIS (United States Citizenship and Immigration Services) documentation upon request. I hereby attest that my response and the information provided on this form and any related application for public benefits are true, complete and accurate and I understand that this information may be used to verify my lawful presence in the United States. PRINT NAME: By: SIGNATURE: DATE: O NORM Q:Library/HCD Forms/Citizenship-Attestation Form for Public Benefit 10/26/2009 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 OPPO ,N'm Approved 6/1/10 Federal Sub-award Reporting System(FSRS) 9 Digit DUNS Number: Organization Name: Address:.__ , i Stole`` Zip code+4 ' Question 1:During your organizations preceding completed fiscal year,did the legal entity to which the DUNS,number f belongs receive(1)80 percent or more of its annual gross revenues in U.S.federal contracts,subcontracts, loans,grants, r subgrants,and/or cooperative agreements;and(2)S25,000,000 or more in annual gross revenues from U.S.federal P contracts;subcontracts,loans,grants,subgrants,and/or cooperative agreements? 4 0.YES: Q NO t If YES please answer Question 2 , r . j Question 2:Does the public have access to information about the compensation of the executives in your organization (the legal entity to which.the DUNS number provided belongs)through periodic reports filed under section 13(a)or 15(d)of the Securities Exchange Act of 1934(15 U.S.C.78m(a),78o(d)or section 6104 of the Internal Revenue Code of 1986? 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: 1. >: Signature of Authorized Official r Requirements for Federal Funding Accountability and Transparency Act Implementation In September 20101 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 Funding Accountability and Transparency Act Subaward Reporting System(FSRS) ii. 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.) 8: 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), 7d 80( )) 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: L 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. 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, f you shall report the names and total compensation of each of the subrecipients most highly compensated executives for the fiscal year, preceding completed year, if— t 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 70 320 (and subawards); and B.,$125:000,000 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 ublic 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 RevenueCod. e of 198. 6. (To determine if has accesst the compensation information, see the U.S. the public o Security and Exchange Commission total compensation filings at the Executive Compensation page of the SEC website.) 2. Wwhen to report. You must report subrecipient executive total compensationhere ad n-w described in paragraph c.1. of this award term: '1, To the recipient. By the end of the month.following the month onduring 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: 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: t. A Governmental organization, which is a State, local government, or Indian tribe; II. A foreign public entity; ill 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. IL 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"). ill, 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 11: 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. 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. tv, 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. c Asa CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: WHEREAS, the City of Omaha applied for Emergency Solutions Grant Program funds from the U.S. Department of Housing and Urban Development, as stated in the Omaha- Council Bluffs Consortium Consolidated Submission for Community Development Programs:2015 Action Plan approved by the City Council on February, 24, 2015, Resolution No. 127, and as amended by City Council on December 8, 2015, Resolution No. 1462, and received a$392,397.00 grant; and, WHEREAS, the Metro Area Continuum of Care for the Homeless identified emergency shelter as a funding priority for the 2015 Emergency Solutions Grant Program; and, WHEREAS, Siena/Francis House, through its emergency shelter facilities (Francis House and Siena House), will provide shelter for homeless persons, as provided in the grant application submitted to the City of Omaha in response to the FY 2015 Emergency Solutions Grant Program Request for Proposals; and, WHEREAS,the City of Omaha has allocated$155,000.00 to the Siena/Francis House to continue to provide shelter for homeless persons and families through its Francis House and Siena House facilities; and, WHEREAS, the Planning Department and the Mayor recommend approval of this grant; and, WHEREAS, it is beneficial and desirable to continue to provide shelter to homeless persons and families through the Siena/Francis House emergency shelter facilities (Francis House and Siena House) for a twelve-month period. By Councilmember Adopted City Clerk Approved Mayor CD c.n I(7) •t .0. (1- C-25A CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska PAGE 2 NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF TIFIE CITY OF OMAHA: 4.0 THAT,the attached Agreement,as recommended by the Mayor,between the City of Omaha and Siena/Francis House, a Nebraska Non-profit Corporation, P.O. Box 217 DTS, Omaha, Nebraska 68101, in the amount of$155,000.00 for the purpose of providing shelter to homeless persons and families at its emergency shelter facilities (Francis House, located at 1111 North 17th Street,Omaha,NE 68102,and Siena House,located at 1702 Nicholas Street,Omaha,NE 68102)for approximately 3,400 homeless persons over the course of the one year period of said Agreement,is hereby approved. Funds shall be paid from the City of Omaha FY 2015 Emergency Solutions Grant, Fund No. 12139, Organization No. 129028. APPROVED AS TO FORM: CITY A I ORNEY DATE 2325 dlh By i/tifr 1)47 Courttilmember Adopted A 7 City Clerk 7/7 71d/� Approv )--a--12 e Mayor l NO Resolution by Res. that, the attached Agreement. as recommended by the Mayor,between the City of Omaha and Siena/Francis House. a Nebraska Non-profit Corporation, P.O. Box 217 DTS, Omaha, Nebraska 68101, in the amount of $155,000.00 for the purpose of • providing shelter to homeless persons and families at its emergency shelter facilities (Francis House, located at 1111 North 17`h Street. Omaha, NE 68102, and Siena House, located at 1702 Nicholas Street, Omaha, NE 68102) for approximately 3,400 homeless persons over the course of the one year period of said Agreement,is hereby approved. Funds shall be paid from the City of Omaha FY 2015 Emergency Solutions Grant, Fund No. 12139, Organization No. 129028. 2325 dlh Presented to City Council APR 5...20.16......... Adopted (l.[titer PP° City Clerk