The URL can be used to link to this page

RES 2015-1490 - Agmt with League of Human Dignity Inc for barrier removal services for housing units ISHA'n'k'o Plannin De artment �,-� I S g P'r ��v i._ .f Omaha/Douglas Civic Center 71■::1 "" t= 1819 Farnam Street,Suite 1100 T5 ,Cl��!. � Omaha,Nebraska 68183 O.7r'-2-1. `a_�' ,,-• A 1�^tj (402)444-5150 (4 i• N0 13 Pi I: 51 Telefax(402)444-6140 44i3 FEBR0n James R.Thele City of Omaha C I ; Y v -- Director Jean Stothert,Mayor ')P,,( e R November 24, 2015 Honorable President And Members of the City Council, The attached Resolution approves an Agreement with the League of Human Dignity, Inc. ("LHD"), 5513 Center Street, Omaha, Nebraska 68106, a Nebraska Non-profit Corporation, for the operation of a barrier removal program. This Agreement is comprised of $50,000.00 in Community Development Block Grant funds from FY 2015 and will supplement $75,349.00 in other funding sources for a total program budget of $125,349.00, and provides funding for the eligible activities from January 1, 2016, through December 31, 2016. The Project is included in the FY 2015 Consolidated Submission for Community Planning Programs approved by the City Council on February 24, 2015, by Resolution No. 127 and as amended on July 14, 2015, by Resolution No. 729. Funds shall be payable from the FY 2015 Housing Development Program, Fund No. 12186, Organization No. 128072. Under the agreement, the LHD Barrier Removal Program will provide residential barrier removal accessibility modifications for low- and moderate-income homeowner or rental households that have a physically disabled family member. In addition, the LHD conducts needs assessments and provides technical assistance to qualifying households in coordination with related programs offered by the Department of Health and Human Services, Vocational Rehabilitation Services, and the Eastern Nebraska Office on Aging. The LHD will provide barrier removal services for approximately nine (9) housing units on scattered sites within the city limits of the City of Omaha. The contractor has on file a current Annual Contract Compliance Report Form (CC-1). As is City policy, the Human Rights and Relations Department will review the Contractor to ensure compliance with the Contract Compliance Ordinance. The accessibility modification projects offered by the League of Human Dignity are an important element of the City's overall affordable housing development effort. Honorable President and Members of the City Council Page 2 Your favorable consideration of this Resolution will be appreciated. • Respectfully submitted, Referred to City Council for Consideration: . . i t ►ft/,5 1/1/6_, // J es R. Thele Date Mayor's, ffice Date Planning Director Approved: /1/5 lI la it Steph B. Curtiss ,gry,4.1 ate Finance Director 2270 dlh TABLE OF CONTENTS SECTION 1 DEFINITIONS AND ABBREVIATIONS SECTION 2 RESPONSIBILITIES OF OWNER(S) 2.01 Overall Project Performance 2.02 Project Budget 2.03 Term of the Agreement SECTION 3 CONDITIONS FOR RECEIPT OF CITY FINANCING 3.01 Documents Required by City 3.01.1 Property Insurance 3.01.2 Contracts 3.01.3 Performance and Labor Material Payment Bond and/or an Irrevocable Letter of Credit 3.01.4 Plan Submissions 3.01.5 Minority/Women Owned Business Enterprise Plan 3.01.6 Eligible Contractors 3.01.7 Security for Deferred Payment Loan 3.01.8 Section 504 3.01.9 Contractor's Insurance and Workers' Compensation 3.01.10 Funding Compliance Deadline SECTION 4 PROJECT RESPONSIBILITIES OF THE OWNER(S) 4.01 Eligible Use of Funds 4.02 Terms and Conditions 4.03 Breach of Agreement 4.04 Lien Waivers 4.05 Ineligible Costs 4.05.1 Eligible Costs 4.06 Lead-Based Paint Prohibition 4.07 Ongoing Property Restrictions 4.08 Davis-Bacon Labor Standards 4.09 Property Standards (24 CFR 92.251) 4.10 Affirmative Marketing Policy (2 CFR 92.351) 4.11 Maintenance of Property SECTION 5 GENERAL ADMINISTRATION REQUIREMENTS OF OWNER(S) 5.01 Financial Management 5.01.1 Accounting Standards 5.01.2 Cost Principles 5.01.3 Audits Q:Library/Forms/Rental Rehab over 20,000 1 10/23/2015 5.02 Documentation and Record-Keeping (24 CFR 92.508) 5.03 Reports 5.03.1 Construction Progress Reports 5.03.2 Occupancy Report 5.04 Financial Status Report 5.05 Record Retention 5.06 Personnel and Participant Conditions 5.06.1 Contract Compliance Clause 5.06.2 Workers' Compensation 5.06.3 Employment Insurance and Bonding 5.06.4 Section 3 —Employment of Low-Income Persons 5.06.5 Conflict of Interest 5.06.6 Attestation of Citizenship 5.07 Limited English Proficiency (LEP) SECTION 6 OWNER(S) COMPLIANCE WITH OTHER FEDERAL REGULATIONS 6.01 Environmental Review 6.02 Uniform Relocation Act 6.03 Soil Work Policy 6.04 Federal Funding Accountability and Transparency Act SECTION 7 RESPONSIBILITIES OF THE CITY 7.01 Performance Monitoring 7.02 Payments 7.02.1 Funds Allocated to the Owner 7.02.2 Obligation for Payment 7.03 Progress Payments 7.04 Inspections 7.05 Technical Assistance SECTION 8 MUTUAL AGREEMENTS BETWEEN CITY AND OWNER(S) 8.01 Release of Information Laws 8.02 Applicable Laws 8.03 Interest of the City 8.04 Independent Contractor 8.05 Project Roles 8.06 Captions 8.07 Merger 8.08 Modification 8.09 Assignment 8.10 Strict Compliance 8.11 Termination 8.12 Reversion of Assets Q:Library/Forms/Rental Rehab over 20,000 2 10/23/2015 8.13 Indemnification 8.14 Unenforceable Provisions 8.15 Disclosure of Lobbying 8.16 Notices 8.17 Applicability SECTION 9 DEFAULT PROVISIONS 9.01 Remedies SCHEDULE OF EXHIBITS AND ATTACHMENTS Q:Library/Forms/Rental Rehab over 20,000 3 10/23/2015 RENTAL REHABILITATION PROGRAM AGREEMENT HOME FUNDS THIS AGREEMENT is entered into between the City of Omaha (hereinafter referred to as "the City") and Bojan Ninkovic (sometimes hereinafter referred to as "Owner, based on terms, conditions and provisions as set forth below. RECITALS: WHEREAS, the City is a municipal corporation located in Douglas County, Nebraska, and is organized and existing under the laws of the State of Nebraska, and is authorized and empowered to exercise all powers conferred by the State constitutions, laws, Home Rule Charter of the City of Omaha, 1956, as amended, and local ordinances, including but not limited to, the power to contract; and, WHEREAS, the City has applied for and received HOME Investment Partnerships Program (hereinafter referred to as "HOME") Funds under Title II of the National Affordable Housing Act of 1990, for the purpose of providing affordable housing opportunities benefiting low- and moderate-income residents; and, WHEREAS, the City's FY 2014 Consolidated Submission for Community Planning and Development Programs (hereinafter referred to as "Consolidated Plan"), outlining priorities, programs and funding allocations for the 2014 program year, that included the Rental Rehabilitation Program, was approved by City Council Resolution No. 1413 on October 22, 2014 as amended by Resolution No. 790 July 15,2014; and, WHEREAS, the City's HOME Rental Rehabilitation Program funds for a two-bedroom unit may not exceed $11,000.00 for rehabilitation work and include a grant up to $12,500.00 for the lead hazard work, and a grant up to $1,000.00 for radon services; and, Q:Library/Forms/Rental Rehab over 20,000 4 10/23/2015 WHEREAS, the Owner submitted a preliminary application which indicated the total estimated project cost of the two-bedroom property, located at 4336 North 41st Street, Omaha, NE 68111, to be $45,684.00, comprised of $24,500.00 from FY 2014 HOME Rental Rehabilitation Program funds, which are provided in the form of a Deferred Payment Loan of which $11,000.00 is for rehabilitation work and a grant for $13,500.00 for lead hazard work and radon services, and $21,184.00 in private matching funds for the rehabilitation of the vacant two- bedroom property located at 4336 North 41st Street, Omaha, NE 68111, which is to be occupied by a qualified low- and moderate-income family whose annual household income is 80% and below the Median Income by Family Size (hereinafter referred to as the "Project"); and, WHEREAS, the Consolidated Plan identified that the HOME Rental Rehabilitation Program Project provides or improves housing which is determined to benefit qualified low- and moderate-income persons and therefore this Project is consistent with the Consolidated Plan and is eligible for funding; and, WHEREAS, the City wishes to enter into an Agreement with the Owner(s) to assist the City in utilizing such HOME funds; and, WHEREAS, the Project is eligible for funding under the FY 2014 HOME Rental Rehabilitation Program, and $24,500.00 as identified above was allocated to the Project; and, WHEREAS, it is in the best interest of the City and the residents thereof that the City enter into an Agreement with the Owner to provide partial funding for the Project. NOW, THEREFORE, IN CONSIDERATION OF THESE MUTUAL COVENANTS, the parties do hereby agree as follows: SECTION 1. DEFINITIONS AND ABBREVIATIONS. Q:Library/Forms/Rental Rehab over 20,000 5 10/23/2015 The following terms shall have the following meanings for all purposes in this Agreement: 1.01 "City" shall mean—the City of Omaha, a Nebraska Municipal Corporation. 1.02 "Owner" shall mean—Bojan Ninkovic (sometimes hereinafter referred to as the " Owner"), 2105 Childs Rd, E #1705, Bellevue, Nebraska 68005, as evidenced by the attached Warranty Deed. (Exhibit"A"). 1.03 "Director" shall mean—the Planning Director of the City of Omaha. 1.04 "Recipient" shall mean—the City of Omaha. 1.05 "Subrecipient" — shall mean — a public or private non-profit agency, authority or organization receiving HOME funds to undertake eligible activities. Not applicable for this project. 1.06 "HUD" shall mean—the U.S. Department of Housing and Urban Development. 1.07 "HOME Funds" shall mean — that portion of the HOME Investment Partnerships Program funds awarded to the City, subject to and conditioned upon actual receipt of same by the City of Omaha, as may be available to loan during the program year for the use specified herein in an amount not to exceed $24,500.00, plus reasonable and eligible closing costs payable from the HOME Fund No. 12179, Rental Rehabilitation Program Organization No. 12071, subject to the terms, conditions and requirements of said Loan Fund Agreement. 1.08 "HOME Rental Rehabilitation Program Deferred Payment Loan (DPL)" shall mean — a loan without interest in FY 2014 HOME funds to the Owner(s) in an amount not to exceed $24,500.00, plus reasonable and eligible closing costs, for the rehabilitation of the two-bedroom property located at 4336 North 41st Street, Omaha, NE 68111, legally described in Section 1.14, made subject to the terms, conditions and provisions of the loan agreement under which said loan is made, secured by no less than a 2nd mortgage/deed of trust subordinate to Deeds of Trust in amounts not to exceed the existing balance of any existing liens filed against the property and the owner's matching funds of$21,184.00 plus reasonable and eligible project-related closing costs, which shall provide, inter-alia, that same shall become due and payable without interest upon the sale or transfer of ownership of the property within Ten (10) years from the date of the Project Close Out as describe herein in Section 1.12. 1.08.1 Owner(s) shall execute an Acknowledgement of Covenant Running with Land on the property located at 4336 North 41st Street, Omaha, NE 68111 that requires that the present use of the property be maintained as Q:Library/Forms/Rental Rehab over 20,000 6 10/23/2015 a rental property throughout the term of the Affordability Period as outlined in Section 1.13. A copy of the covenant in substantial form is attached as Exhibit"B". 1.09 "Rehabilitation/Construction Financing" shall mean, but is not limited to — billings for construction/rehabilitation, closing costs, profit and overhead, predevelopment and public improvement costs, financing, legal accounting, architectural or project supervision costs, costs for materials, labor, utility hookups and site preparation associated with the Project. 1.09.1 The Owner(s) subcontractor's profit and overhead shall not exceed 15% of hard cost. 1.10 "Rehabilitation/Construction Completion" shall mean — the date the Project has been certified by the City as meeting all State, Federal and Local laws, ordinances, regulations and codes, including, but not limited to, Property Standards for Existing Homes as established by HUD, the City of Omaha Property Rehabilitation Standards, and accessibility requirements, where applicable. 1.11 "Project Completion" shall mean—the date all leveraged funds have been paid by the Owner and allocated to the Project, Rehabilitation/Construction Completion has been certified and approved by the City, all HOME funds have been disbursed, all units have been rented by qualified low- and moderate-income families, and all Occupancy Report requirements, as stated in Section 5, Paragraph 5.03.2 are satisfied. 1.12 "Project Close Out" shall mean — the dates all project HOME funds have been disbursed and City has completed HUD close-out procedures (24 CFR 92.507 and 2 CFR, Part 215) (Exhibit "C"). The distinction between Project Close Out and Project Completion is that tenant occupancy requirements are required to be satisfied for Project Completion. As a result, Project Close Out shall typically occur after Project Completion. 1.13 "Affordability Period" (24 CFR 92.252(e)) shall mean—that time period ten (10) years after Project Close Out in which the Owner shall keep assisted properties affordable. During the Affordability Period, the Owner must ensure that HOME- assisted units continue to meet rent restrictions, occupancy requirements and property standards as described in Section 4.09 herein. For this Agreement, the Affordability Period shall commence at Project Close Out and continue for ten (10) years. In the event the term of the Agreement would be extended, the Affordability Period would be extended correspondingly. 1.14 "Property" or "Project" shall mean - Lot Four (4), Block One (1), Graves Park, an addition to the City of Omaha, in Douglas County, Nebraska, as surveyed, platted and recorded in Douglas County, Nebraska (commonly known as 4336 Q:Library/Forms/Rental Rehab over 20,000 7 10/23/2015 North 41st Street, Omaha, NE 68111) and which during the Affordability Period shall be occupied by a qualified low- and moderate-income family whose annual household income is 80% and below the Median Income by Family Size. 1.15 "Low- and Moderate-Income Household" shall mean— a household whose annual household income does not exceed 80% of the median income for the Omaha NE- IA Metropolitan Statistical Area as determined by HUD (Exhibit"D"). 1.15.1 "Rents" (24 C.F.F. 92.252) shall mean — the maximum rents (including utilities) for the Omaha, NE-IA Metropolitan Statistical Area as established by HUD as of the effective date of the lease. These rents shall be HOME rents as established by HUD ("Exhibit "D"). In no event shall rents be required to be lower than the HOME rent limit in effect for Project at time of project commitment. The current High HOME Rent for a single-family two-bedroom unit is $807.00. If the lease converts to a month-to-month lease after the initial 12-month lease, the rent limit and utility allowance in effect for each separate month apply. If the unit receives Federal or State project-based rental subsidy and the very low-income family pays a contribution toward rent not more than 30 percent of the family's adjusted income, then the maximum rent (i.e., tenant contribution plus project-based subsidy) is the rent allowable under the Federal or State project-based rental subsidy program (24 CFR 92.252(b)(2)). 1.16 "HOME shall mean—that portion of the FY 2014 HOME Investment Partnerships Program entitlement awarded to the City, subject to and conditioned upon actual receipt of same by the City of Omaha, as may be available to loan during the program FY 2014 for the use specified herein in an amount not to exceed $24,500.00, plus reasonable and eligible closing costs subject to the terms, conditions and requirements of said Loan Fund Agreement. 1.17 "Client" shall mean—a qualified participant making application to the Owner(s). 1.18 "Program Income" shall mean—the gross income received by the Owner directly generated from the use of HOME Funds (24 CFR 92.503). When such income is generated by an activity that is only partially assisted with HOME Funds, the income shall be prorated to reflect the percentage of HOME Funds used (see Exhibit "E"), attached hereto and incorporated herein by this reference as though fully set forth. Any program income funds received during the term of this Agreement shall be returned to the City within thirty (30) days prior to any additional distribution of HOME Funds. SECTION 2. RESPONSIBILITIES OF OWNER(S) Q:Library/Forms/Rental Rehab over 20,000 8 10/23/2015 2.01 Overall Project Performance 2.01.1 The Owner shall use the $24,500.00 plus reasonable and eligible closing costs in HOME Rental Rehabilitation Program Funds as partial financing to complete the rehabilitation of the two-bedroom property located at 4336 North 41st Street, Omaha, NE 68111 to be occupied by a qualified low- and moderate-income family whose annual household income is 80% or below the Median Family Income (MFI) (Exhibit"D"). 2.01.2 Total Project Total Assisted Total Fixed Total Low/Moderate Units Rental Units Rental Units Income Units 1 1 1 1 2.01.3 Number of Low/Moderate Maximum Percent of Area Households Median Income Permitted 1 80% 2.01.4 Number of Above Low/Moderate Maximum Percent of Area Households Median Income Permitted 0 80% 2.02 Project Budget The Owner asserts that the funding sources and amounts listed below are committed as of the date of loan closing. The Owner further asserts that upon approval by the City, the Owner's funds shall be paid first toward the rehabilitation of this project and any cost that exceeds the project cost of$ shall be the Owner's responsibility. Total FY 2014 HOME RRP $24,500.00 54% Bank Loan/Owner's Cash $21,184.00 46% Total Estimated Project Cost $45,684.00 100% 2.03 Term of the Agreement This Agreement shall be in full force and effect and shall end on August 1, 2026. Services of the Owner will start effective the date of the proceed order issued by the City and Levels of Project Performance stated in Section 2.01 herein shall be completed as of August 1, 2016. Upon written request, date to complete the Levels of Project Performance may be extended by the Planning Director. In the event Project Close Out would change before or after August 1, 2016, the Q:Library/Forms/Rental Rehab over 20,000 9 10/23/2015 Agreement and Affordability Periods will change correspondingly. After the Project Close Out, the City will notify the Owner of the begin date of the Affordability Period. SECTION 3. CONDITIONS FOR RECEIPT OF CITY FINANCING. 3.01 Documents Required by City. In no event shall the City assume any obligation to make any or all of the above-referenced funding available, nor shall the City incur any liability hereunder, unless and until the Owner has submitted for and received the prior approval of the Director of all of the documents listed below. 3.01.1 Property Insurance. Owner shall procure and maintain, at a minimum, fire and extended coverage insurance in an amount sufficient to protect the City's interest in the property during the term of the Agreement and financing security documents (2 CFR, Part 215) (Exhibit "C"). The insurance policy shall include the City of Omaha, Planning Department, 1819 Farnam Street, Suite 1100, Omaha, Nebraska 68183 as no less than a 2nd Mortgagee. Written evidence of such insurance shall be submitted to the Director for approval. In the event of damage of the property, any insurance proceeds are to be applied, at the discretion of the Director, to the reconstruction of the property or repayment, in full, of the funding. 3.01.2 Contracts. The Owner shall submit duly executed contracts for all Construction Work to the Director for approval prior to the start of construction. 3.01.3 Performance and Labor Material Payment Bond and/or an Irrevocable Letter of Credit. In the event the Contractor is not on the Planning Department's certified contractor's list, the Owner's General Contractor shall acquire and maintain performance bond and/or letter of credit in force for one year following the completion of the Construction Work from the General Contractor and all subcontractors in an aggregate amount of the contract bid. The Bonds and/or Letters of Credit shall be in favor of the City and shall be submitted to the Director for review and approval. The Director reserves the right to reject the Letters of Credit and Choice of Surety of the Bonds. 3.01.4 Plan Submissions. Owner shall submit all plans, working drawings and/or specifications necessary or incidental to this Project to the Director for review and approval prior to the commencement of any construction work. 3.01.5 Minority/Women Owned Business Enterprise Plan. Owner shall submit to the Director for his Review and approval a minority and women business participation plan, which discusses economic development and Q:Library/Forms/Rental Rehab over 20,000 10 10/23/2015 employment opportunities. These plans shall ensure that the Owner and its subcontractors will make their best efforts to ensure that construction services, contracts and employment opportunities are affirmatively marketed to women and members of minority groups (Attachment 4). 3.01.6 Eligible Contractors. Owner shall obtain a certificate from each contractor or subcontractor to be used on this Project to the effect that each contractor or subcontractor has not been disbarred or disqualified by HUD (24 CFR Part 5). The Director shall approve all contractors and subcontractors prior to being hired by the Owner. 3.01.7 Security for Deferred Payment Loan. Owner shall execute for the benefit of the City an Acknowledgement of Covenant Running with Land, a Deed of Trust and a Deferred Payment Loan Promissory Note in an amount not to exceed $24,500.00 plus reasonable and eligible project-related closing costs secured by no less than a 2nd mortgage/deed of trust subordinate to amounts not to exceed any existing liens filed against the property and the Owner's matching funds of$21,184.00 plus reasonable and eligible project-related closing costs. The covenant and note in substantial form are attached hereto as Exhibit "B" and incorporated herein by this reference as though fully set forth and are similar in content to the documents to be secured. 3.01.8 Section 504. Section 504 applies to alterations to dwelling units in multi-family housing projects. This Project is exempt as a single-family unit. 3.01.9 Contractor's Insurance and Workers' Compensation. The Developer or its contractors and subcontractors shall submit Certificates of Insurance in favor of the City for review and approval by the Director. The insurance coverage shall include pollutant liability for lead reduction work if applicable, Workers' Compensation and, at a minimum, the following amount of coverage: • Contractor's Personal Liability $1,000,000.00 • Combined Bodily Injury and Property Damage $2,000,000.00 ($1,000,000.00 each occurrence) • Product, including Completed Operations $1,000,000.00 3.01.10 Funding Compliance Deadline. In the event that all conditions of funding are not met on or before Febrauary 1, 2016, then this Agreement shall automatically become null and void and the City shall not be deemed to have assumed any obligation or liability hereunder. The Director may extend this date. Q:Library/Forms/Rental Rehab over 20,000 11 10/23/2015 SECTION 4. PROJECT RESPONSIBILITIES OF THE OWNER(S). 4.01 Eligible Use of Funds. The Owner hereby certifies, contracts and agrees that any and all funding obtained or made available hereunder shall be used solely and exclusively for the purposes described herein. 4.02 Terms and Conditions. The Owner shall abide by all terms and conditions of this Agreement and shall be responsible for the security and maintenance of the sites described in Section 1.14 herein. 4.03 Breach of Agreement. If through breach of this Agreement, the Owner fails to maintain the occupancy, affordability and use restrictions as described herein, all HOME funds previously provided to the Owner through fulfillment of this Agreement shall promptly be returned to the City. 4.04 Lien Waivers. Owner agrees to obtain and submit the appropriate lien waivers with each construction payment. 4.05 Ineligible Costs. The Owner shall be responsible for payment of any Project costs that exceed those specified in this Agreement. 4.05.1 Eligible Costs. The Owner shall not request disbursement of funds under this Agreement until the funds are needed for payment of eligible costs as described in Section 1.09 herein. 4.05.1.1 Luxury Items. Property amenities shall be those amenities reasonably anticipated in comparable properties. Any items determined by the City as luxury items shall not be considered an eligible cost for construction. 4.06 Lead-Based Paint Prohibition. Owner shall not use lead-based paint in the performance of this Agreement, including the performance of any subcontractor (42 USC 4821 et seq., 24 CFR 92.355 and 24 CFR art 35). "Lead-based Paint" means any paint containing more than six one-hundredths of one (1) per centum of lead by weight (calculated as lead metal) in the total nonvolatile content of the paint, or the equivalent measure of lead in the dried film of paint already applied. The Owner further agree(s) to abide by federal requirements regarding lead-based paint poison prevention. 4.07 Ongoing Property Restrictions. During the construction period of the term of this Agreement and that of any grant, deed of trust/mortgage, covenant documents, the Owner(s) shall: 4.07.1 maintain the Property in a safe and sanitary condition at all times. Q:Library/Forms/Rental Rehab over 20,000 12 10/23/2015 4.07.2 ensure that all real estate taxes and special assessments are paid and kept current. 4.07.3 maintain insurance against loss or damage to the Property in an aggregate amount sufficient to protect the City's interest in the Property. Such property insurance policy must be properly endorsed showing the City as an additional insured. In the event of loss or damage, the Owner shall provide immediate written notification to the City of any loss. Proceeds from any claim under this policy may, at the discretion of the Director, be either applied to restore or replace the improvements damaged or be paid to the City to satisfy the Owner's obligation to the City under the terms of this Agreement. 4.08 Davis-Bacon Labor Standards. Not required — see Exhibit "F", Exemption Checklist. 4.09 Property Standards (24 CFR 92.251). During the construction period, the Owner shall ensure that all work performed and the Construction Work meets all state, federal, and local laws, ordinances, regulations and codes, including but not limited to, Property Standards for Existing Homes as established by HUD, the City of Omaha Property Rehabilitation Standards, and accessibility requirements, where applicable. 4.09.1 After completion of Construction Work, the Property must comply with all appropriate City codes and ordinances, Federal Property Standards for Existing Homes as established by HUD and with fire safety codes (24 CFR 570.02), City of Omaha Property Rehabilitation Standards and accessibility requirements, if applicable. 4.10 Affirmative Marketing Policy (24 CFR 92.351). The Owner agrees to comply with the City's Affirmative Marketing Policy, attached hereto as Exhibit "G" and incorporated herein by this reference as though fully set forth. These affirmative marketing procedures must be employed in the advertising and marketing of this Project for the Affordability Period and must be submitted on an annual basis in accordance with Section 5.03.2 herein. In marketing, the Owner shall also conform to the nondiscrimination provisions hereinafter set forth in Section 5.06.1.2. 4.11 Maintenance of Property. The Owner shall maintain the Property in a safe and sanitary condition to the extent possible during the construction phase of the Project. SECTION 5. GENERAL ADMINISTRATIVE REQUIREMENTS OF OWNER(S). Owner(s) agree(s)to comply with the following requirements: Q:Library/Forms/Rental Rehab over 20,000 13 10/23/2015 5.01 Financial Management. 5.01.1 Accounting Standards. The Owner agrees to comply with OMB Circular A-110 and agrees to adhere to the accounting principles and procedures required therein, utilize adequate internal controls and maintain necessary source documentation for all costs incurred. (Exhibit "C", attached hereto and incorporated herein as though fully set forth). 5.01.2 Cost Principles. The Owner shall comply with the requirements and the standards of 2 CFR, Part 230, "Cost Principles for Nonprofit Organizations" (Exhibit "H"), and with the requirements of 2 CFR, Part 215 (Exhibit "C"). Both exhibits are attached hereto and incorporated herein as though fully set forth. 5.01.3 Audits. The Owner shall comply with all provisions and regulations of the Program and have an annual audit completed in compliance with 2 CFR, Part 200.5, attached hereto as Exhibit "I", and incorporated herein as though fully set forth. A copy of the audit shall be provided to the Director. The auditor shall determine the appropriate type of audit to be conducted; i.e., limited scope or full compliance. A single audit is not an allowable expense unless the Owner expends total federal funds over $750,000.00 in each fiscal year. A limited-scope audit may be allowable provided the auditor conducts the audit in accordance with generally accepted auditing standards and the Owner expends less than $750,000.00 in each fiscal year. 5.01.3.1 Any deficiencies noted in audit reports must be fully cleared by the Owner within 30 days after receipt of audit by the Owner. Failure of the Owner to comply with the above audit requirements will constitute a violation of this Agreement and may result in the withholding of future payments and may constitute a default subject to default remedies referenced herein in Section 9. 5.02 Documentation and Record-Keeping (24 CFR 92.508). All Owner's records with respect to any matters covered in this Agreement shall be made available to the City, its designees or the federal government at any time during normal business hours, as often as the City deems necessary, to audit, examine, and make excerpts or transcripts of all relevant data. Any contract entered into by the Owner with any contractor or subcontractors shall include this Section to ensure said access. 5.03. Reports. The Owner shall submit to the City the following reports with the submission timelines as specified: 5.03.1 Construction Progress Reports. The Owner shall provide reports to the Director (AIA G702 Form or comparable document) describing the Q:Library/Forms/Rental Rehab over 20,000 14 10/23/2015 progress of construction and any significant problems and/or delays in construction on this project. Reports will be submitted at the time of each pay request, or by the 15th day of each month if no pay request is made before the 15th day of the month (or upon written request from the Director, but no more frequently than monthly). The progress reports are required until such time as all Construction Work is completed and the City issues the final payment of construction to the Owner. 5.03.2 Occupancy Report. The Owner shall provide the Director an initial tenant survey and utility allowance forms, a copy of the executed lease agreement between the occupant and the Owner,and an asset income computation form at the time of initial lease execution for each tenant occupying the property. The Owner shall also provide annual reports during the Affordability Period, identifying the occupants of the Property. Subsequent annual reports shall be due January 31 and shall include all information up to and including the end of the previous calendar year. Attached as Exhibit "J", and incorporated herein by this reference as though fully set forth, is a copy of requisite forms. For each household or individual occupying a unit/bedroom in the Property, the Owner shall retain the following records for five (5) years after the required Affordability Period as specified in Section 1.13 of this Agreement. In the event the Term of the Agreement would be extended, the timeframe for record retention would be extended correspondingly: 5.03.2.1 name of tenant 5.03.2.2 address of unit 5.03.2.3 household income as a percent of Median Family Income (MFI) as determined by HUD, income verification forms used in determining MFI including the City's Computing Annual Income Form (Exhibit"D") 5.03.2.4 household size 5.03.2.5 gender of head of household member 5.03.2.6 name and age of each household member 5.03.2.7 race/ethnicity of head of household (Exhibit"J") 5.03.2.8 disability status of any household member 5.03.2.9 annual lease agreement 5.03.2.10 evidence of affirmative marketing efforts 5.03.2.11 income determination of occupants (Exhibit"J") 5.03.2.12 tenant income (Exhibit"J") 5.03.2.13 over-income tenants 5.03.2.14 tenant and participant protections (Exhibit"J") 5.04 Financial Status Reports. Owner shall submit financial status reports (2 CFR, Part 215) (Exhibit "C") along with pay requests. These reports shall accompany pay Q:Library/Forms/Rental Rehab over 20,000 15 10/23/2015 requests. In the event pay requests are not submitted for ninety (90) days, a financial status report shall be due, at a minimum, 15 calendar days from the end of the calendar year quarter. Attached as Exhibit "K" and incorporated herein by this reference as though fully set forth, is a sample financial status report. 5.05 Record Retention. The Owner, its contractors and its subcontractors shall maintain such records and accounts, including property, personnel and financial records, as are deemed necessary by the City to assure a proper accounting for all expenses. The Comptroller General of the United States, or any of their duly authorized representatives, or any duly authorized representatives of the City, as approved by the Director, shall have access to any books, documents, papers, records and accounts of the Owner, Contractor, or subcontractors which are directly pertinent to this Project for the purpose of making audit, examination, excerpts and transcriptions. Such records and accounts shall be retained for five (5) years after expiration of the Affordability Period (2 CFR, Part 215) (Exhibit "C"). In the event the Term of the Agreement would be extended, the timeframe for record retention would be extended correspondingly. 5.06 Personnel and Participant Conditions. 5.06.1 Contract Compliance Clause. 5.06.1.1 Section 10-192 of the Omaha Municipal Code, Equal Employment Opportunity Clause (Attachment 2). The contractor and its sub-contractor shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, sexual orientation, gender identity, national origin, familial or handicap status. As used herein,the word "treated" shall mean and include, without limitation, the following: recruited, whether by advertising or by other means; compensated; selected for training, including apprenticeship; promoted; upgraded; demoted; downgraded; transferred; laid off; and terminated. The contractor and its sub-contractor agree to and shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officers setting forth the provisions of this nondiscrimination clause. 5.06.1.2 The contractors and its subcontractors shall, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, age, sexual orientation, gender identity, national origin, familial or handicap status. Q:Library/Forms/Rental Rehab over 20,000 16 10/23/2015 5.06.1.3 The contractors or its subcontractors shall send to each representative of workers with which he has a collective bargaining agreement or other contract or understanding a notice advising the labor union or workers' representative of the contractor's commitments under the equal employment opportunity clause of the City and shall post copies of the notice in conspicuous places available to employees and applicants for employment. 5.06.1.4 The contractors or its subcontractors shall furnish to the Human Rights and Relations Department all federal forms containing the information and reports required by the federal government for federal contracts under federal rules and regulations, including the information required by Sections 10- 192 to 10-194, inclusive, of the Omaha Municipal Code and shall permit reasonable access to his/her/its records. Records accessible to the Human Rights and Relations Department shall be those which related to Paragraphs 5.06.1.1 through 5.06.1.7 of this subsection and only after reasonable notice is given to the contractor. The purpose of this provision is to provide for investigation to ascertain compliance with the program provided herein. 5.06.1.5 The contractors or its subcontractors shall take such actions with respect to any subcontractor as the City may direct as a means of enforcing the provisions of Paragraphs 5.06.1.1 through 5.06.1.7 herein, including penalties and sanctions for noncompliance; however, in the event the contractor becomes involved in or is threatened with litigation as the result of such directions by the City, the City will enter into such litigation as is necessary to protect the interests of the City and to effectuate the provisions of this division, and, in the case of contracts receiving federal assistance, the contractor or the City may request the United States to enter into such litigation t protect the interests of the United States. 5.06.1.6 The contractors shall file and shall cause his subcontractors, if any, to file compliance reports with the contractor in the same form and to the extent as required by the federal government for federal contracts under federal rules and regulations. Such compliance reports shall be filed with the City Human Relations Department. Compliance reports filed at such times as directed shall contain information as to the employment practices, policies, programs and statistics of the contractor and his subcontractors. Q:Library/Forms/Rental Rehab over 20,000 17 10/23/2015 5.06.1.7 The contractors or its subcontractors shall include the provisions of Paragraph 5.06.1.1 through 5.06.1.7 of this section, "Equal Employment Opportunity Clause", and Section 10-193 in every contract, subcontract or purchase order so that such provisions will be binding upon each subcontractor or vendor. (Code 1980, Section 10-192; Ord.No. 35344, Sections 1, 9-26-00) 5.06.2 Workers' Compensation. The Owner shall provide Workers' Compensation Insurance coverage in accordance with the requirements of the State of Nebraska for all employees involved in the performance of this Agreement. 5.06.3 Employment Insurance and Bonding. The Owner shall purchase a blanket fidelity bond covering all employees, at a minimum, in an amount equal to cash advances from the City. The Owner shall comply with bonding and insurance requirements of 2 CFR, Part 215 (Exhibit "C"), Bonding and Insurance. 5.06.4 Section 3 — Employment of Low-Income Persons (Section 3 of HUD Act of'68 as Amended, 1 U.S.C. 1701u). The Owner shall make its best efforts to comply with Section 3. The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing (Attachment 3). 5.06.5 Conflict of Interest. The Owner agrees to abide by the provisions of 24 CFR 92.356 with respect to conflict of interest, and covenants that it presently has financial interest and shall not acquire any financial interest, direct or indirect, which would conflict in any manner or degree with the performance of services required under this Agreement. The Owner further covenants that in the performance of this Agreement no person having such a financial interest shall be employed or retained by the Owner hereunder. These conflict of interest provisions apply to any person who is an employee, agent, consultant, officer or elected official or appointed official of the City or any designated public agencies or Owner which are receiving funds under the entitlement program. 5.06.6 Attestation of Citizenship. To comply with Neb. Rev. Stat. 4-108 through 4-114, the Developer/Owner/Subrecipient agrees to comply with the requirements of 5.06.6 and 5.06.7. The Developer/Owner/Subrecipient shall include the following language in all contracts and subcontracts for the physical performance of Q:Library/Forms/Rental Rehab over 20,000 18 10/23/2015 services: "The Contractor is required and hereby agrees to use a federal immigration verification system to determine the work eligibility status of new employees physically performing services within the State of Nebraska. A federal immigration verification system means the electronic verification of the work authorization program authorized by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, 8 U.S.0 1324a, known as the E-verify Program, or an equivalent federal program designated by the United States Department of Homeland Security or other federal agency authorized to verify the work eligibility status of a newly hired employee. If the Contractor is an individual or sole proprietorship, the following applies: a) The Contractor must complete the United States Citizenship Attestation form available on the Department of Administrative Services website at www.das.state.ne.us. b) If the Contractor indicates on such attestation form that he or she is a qualified alien, the Contractor agrees to provide the U.S. Citizenship and Immigration Services documentation required to verify the Contractor's lawful presence in the United States using the Systematic Alien Verification for Entitlements (SAVE) Program. c) The Contractor understands and agrees that lawful presence in the United States is required and the Contractor may be disqualified or the contract terminated if such lawful presence cannot be verified as required by Neb. Rev. Stat. 4-108." The Developer/Owner/Subrecipient shall have each person/applicant signing the application for a benefit under this agreement execute a United States Citizenship Attestation Form for Public Benefit (Exhibit "M") verifying eligibility status for the purposes of receiving a public benefit. 5.06.7 Employee Classification Act. To comply with the Nebraska Employee Classification Act, all general contractors and subcontractors who perform construction or delivery service pursuant to this contract shall submit to the City an Affidavit for Employee Classification Act (Exhibit "N") attesting that (1) each individual performing services for such contractor is properly classified under the Nebraska Employee 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 Q:Library/Forms/Rental Rehab over 20,000 19 10/23/2015 worker, and (5) as of the time of the contract, such contractor is not barred from contracting with the state or any political subdivision pursuant to the Act. The contractor shall follow the provisions of the Act. A violation of the Act by a contractor is grounds for rescission of the contract by the City. 5.07 Limited English Proficiency (LEP). It is the policy of the City to take reasonable steps to provide meaningful access to its programs and activities for persons with Limited English Proficiency (LEP) in accord with Executive Order 13166 titled, "Improving Access to Services by Persons with Limited English Proficiency". The City's policy is to ensure that staff and subrecipients will communicate effectively with LEP individuals, and LEP individuals will have access to programs and information. The City is committed to complying with federal and state requirements in providing access to this program and its activities for LEP persons. SECTION 6. OWNER(S) COMPLIANCE WITH OTHER FEDERAL REGULATIONS. 6.01. Environmental Review. The Owner agrees to comply with the following regulations insofar as they apply to the performance of this Agreement: 6.01.1 Clean Air Act, 42, U.S.C., 1857 et seq. 6.01.2 Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251, et seq., as amended 1318 relating to inspection, monitoring entry, reports and information, as well as other requirements specified in Section 114 and Section 308, and all regulations and guidelines issued thereunder. 6.01.3 Environmental Protection Agency (EPA) regulations pursuant to 40 CFR Part 50, as amended. 6.01.4 National Environmental Policy Act of 1969. 6.01.5 HUD Environmental Review Procedures (24 CFR Part 58). 6.01.6 Flood Disaster Protection Act of 1973 (24 U.S.C. 4106 and P.L. 2234) in regard to the sale, lease or other transfer of land acquired, cleared or improved under the terms of the Agreement as it may apply to provisions of this Agreement. 6.01.7 Historic Preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. 470) and the procedures set forth in 36 CFR, Part 800, Advisory Council on Historic Preservation Procedures for Protection of Historic Properties, insofar as they apply to the performance of this Agreement. In general, this requires concurrence from the State Historic Preservation Office for all Q:Library/Forms/Rental Rehab over 20,000 20 10/23/2015 rehabilitation and demolition of historic properties that are 45 years old or older or that are included on a federal, state or local historic property list. 6.02 Uniform Relocation Act. The Owner shall comply with the applicable regulations of the Uniform Relocation Act of 1970, as amended (URA) (42 U.S.C. 4601- 4655), or Section 104 (d) of the Housing and Community Development Act of 1974, as amended (Section 104 (d)), which requires relocation assistance be provided to resident owners, tenants, businesses and other occupants that are displaced as a result of a federally-assisted project. In the event that the Owner or its agent displaces any tenant-occupant of the property, it shall immediately notify the City in writing of the circumstances surrounding said displacement and comply with 24 CFR 92.353. 6.03 Soil Work Policy. The Owner will comply with the Soil Work Policy for Housing Development Program projects that may involve the removal of structures, installation of public infrastructure and site preparation work prior to the construction of new residential structures (Attachment 5). 6.04 Federal Funding Accountability and Transparency Act. The Developer shall comply with the applicable regulations of the Federal Funding Accountability and Transparency Act (FAFTA) (75 Fed RgSS663) (September 14, 2010) (to be codified at 2 CFR, Part 170). Developer shall complete and provide to the City (Exhibit"0"). SECTION 7. RESPONSIBILITIES OF THE CITY. 7.01 Performance Monitoring. The City will monitor the performance standards of the Owner as stated herein. Substandard performance as determined by the City will constitute non-compliance with this Agreement. If action to correct such substandard performance is not taken by the Owner within a reasonable period of time after being notified by the City, contract suspension or termination procedures may be initiated. 7.02 Payments. It is expressly agreed and understood that the total amount to be paid by the City under this Agreement shall not exceed $13,500.00 in HOME RRP funds, plus reasonable and eligible closing costs. The payment of these funds is subject to and conditioned upon actual receipt by the City of the same. Should adequate funding not be available to the City, the City shall notify the Owner as soon as reasonably possible and the Agreement will be terminated. 7.02.1 Funds Allocated to the Owner. Funds allocated to the Owner shall be in the form of a deferred payment loan for the purposes set forth in this Agreement. Payments will be contingent on Duties and Conditions specified herein. Draw-downs for the payment of eligible expenses shall not be made until the funds are needed based upon the value of the Q:Library/Forms/Rental Rehab over 20,000 21 10/23/2015 construction, administration, or professional service work completed at the time the payment request is made. 7.02.2 Obligation for Payment. In no event shall the City become obligated to make any payments for any work performed, materials furnished, expense incurred, or any other expenditure of any kind whatsoever, unless same is expressly included in this Agreement; nor shall the City incur any liability hereunder, unless and until the Owner has timely and fully complied with its duties and obligation hereunder. No payments shall be made for any work, labor, material or expenses incurred in which the Director deems it to be: 7.02.2.1 not in conformance with applicable state, federal and/or local laws, including but not limited to, the building, plumbing and/or electrical codes; or, 7.02.2.2 not in conformance with all plans, working drawings and/or specifications as approved; or, 7.02.2.3 unacceptable or substandard; or, 7.02.2.4 not in accordance with this Agreement or related contracts as approved for this Project. 7.03 Progress Payments. Progress payments and final payment, as may be authorized by the Director or his designated representative, are subject to: 7.03.1 Receipt, verification and approval of a lien waiver and an AIA Document G702 "Application and Certificate for Payment" or comparable document, such document being prepared by the Owner's architect or authorized person and approved by the Owner and the City Construction Specialist before being submitted to the Planning Department for payment. All documents for each pay request submission must be forwarded directly to the Planning Department Construction Specialist assigned to the Project. This shall include all Application and Certificate for Payment (AIA Document G702 or comparable document) for the entire Project. This also includes pay requests that do not require City funds. 7.03.2 Receipt of requisite financial status reports. 7.03.3 The Owner is required to pay out the entire portion of the Owner cash according to Section 2, Paragraph 2.02 during construction before the City will disburse the HOME RRP funds. The Owner must comply with requirements referenced in Paragraph 7.03.1 above, submitting AIA Documents G702 "Application and Certificate for payment" or Q:Library/Forms/Rental Rehab over 20,000 22 10/23/2015 comparable document, as well as other supporting payment request documents. The City will review these documents to ensure that the Owner has paid its portion of the project costs as indicated in Section 2, Paragraph 2.02. Upon verification by the City that all of the Owner's funds have been paid, the City can disburse HOME RRP funds according to completion of construction work as evidenced by the payment request documents submitted by the Owner. 7.03.4 A 10% retainage of City HOME RRP funds will be held by the City until all punch list items have been corrected to the satisfaction of the Owner and the City Construction Specialist assigned to this project, and until the Project Completion requirements as stated in Section 1, Paragraph 1.11 are satisfied. 7.04 Inspections. The City may perform periodic inspections at any reasonable time to ensure compliance with this Agreement. The City shall perform final inspection to certify Project completion prior to final disbursement of HOME proceeds. In addition, the City shall perform on-site inspections of Property every three years for projects containing 1 to 4 units; every two years for projects containing 5 to 25 units; and every year for projects containing 26 or more units. Inspections must be based on a sufficient sample of units. 7.05 Technical Assistance. The Director shall assist the Owner in the same manner the Director provides technical assistance to other Owners during the construction phase to ensure compliance with such housing quality standards and property rehabilitation standards. SECTION 8. MUTUAL AGREEMENTS BETWEEN CITY AND OWNER(S). 8.01 Release of Information Laws. The Owner specifically hereby states, agrees and certifies that it is familiar with the limited purpose set forth in the Federal Laws, Rules and Regulations, and in the laws of the State of Nebraska, for which personal information requested may be used and that the information received will be used solely for those limited purposes and not to harass, degrade or humiliate any person. The information released shall be used for the limited purposes stated, and the Owner further agrees to indemnify and hold harmless the City of Omaha for any liability arising out of the improper use by the Owner of information provided. 8.02 Applicable Laws. Parties to this Agreement shall conform with all existing and applicable City ordinances, resolutions, state laws, federal laws, and all existing and applicable rules and regulations. Nebraska law will govern the term and the performance under this Agreement. 8.03 Interest of the City. Pursuant to Section 8.05 of the Home Rule Charter, no elected official or any officer or employee of the City shall have a financial Q:Library/Forms/Rental Rehab over 20,000 23 10/23/2015 interest, direct or indirect, in any City agreement. Any violation of this section with the knowledge of the person or corporation contracting with the City shall render the Agreement voidable by the Mayor or Council. 8.04 Independent Contractor. Nothing contained in this Agreement is intended to, or shall be construed in any manner, as creating or establishing the relationship of employer/employee between the parties. The Owner shall at all times remain an independent contractor with respect to the services to be performed under this Agreement. The City shall be exempt from payment of all Unemployment Compensation, FICA, retirement, life and/or medical insurance and Worker's Compensation Insurance as the Owner is an Independent Contractor. 8.05 Project Roles. The Owner shall ensure that the Project meets the objectives stated herein. The City has selected the Owner to assist in the Project since it is consistent with the Consolidated Plans. With respect to this Project, the City is not acting as the Owner's architect or engineer. The City makes no warranties, express or implied, as to the Construction Work. The City owes no duty to the Owner or any other persons that shall arise because of any inspection of the premises by the City's agents or employees. 8.06 Captions. Captions used in this Agreement are for convenience and are not used in the construction of this Agreement. 8.07 Merger. This Agreement shall not be merged into any other oral or written agreement, lease or deed of any type. 8.08 Modification. This Agreement and any related documents securing the financing contain the entire agreement of the parties. No representations were made or relied upon by either party other than those that are expressly set forth herein. No agent, employee, or other representative of either party is empowered to alter any of the terms herein unless done in writing and signed by an authorized officer of the respective parties, pursuant to Section 10-142 of the Omaha Municipal Code. 8.09 Assignment. The Owner may not assign its rights or obligations under this Agreement without the express prior written consent of the City Department; except that the Mayor may, without City Council approval, approve, in writing, the assignment to a limited partnership so long as the Owner is and remains a general partner. 8.10 Strict Compliance. All provisions of this Agreement and each and every document that shall be attached shall be strictly complied with as written, and no substitution or change shall be made without written direction from authorized representatives of the parties. 8.11 Termination. This Agreement may be suspended or terminated in accordance with 24 CFR 85.43, Enforcement or CFR 85.44, Termination for Convenience Q:Library/Forms/Rental Rehab over 20,000 24 10/23/2015 (Exhibit"L"), attached hereto and incorporated herein by this reference as though fully set forth). Upon termination of this Agreement, all funds and interest in any account hereunder shall become the property of the City and shall be returned to the City. 8.12 Reversion of Assets. Upon the expiration of this Agreement, the Owner shall transfer to the City of Omaha any HOME funds on hand at the time of expiration and any accounts receivable attributable to the use of HOME funds (24 CFR 92.504 (c)(2)(vii)). 8.13 Indemnification. The Owner shall indemnify and hold the City harmless from and against: 1) any and all claims arising from contracts between the Owner and third parties made to effectuate the purposes of this Agreement; and 2) any and all claims, liabilities or damages arising from the preparation or presentation of any of the work covered by this Agreement. 8.14 Unenforceable Provisions. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be in effect to the extent of such prohibition or enforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 8.15 Disclosure of Lobbying. The Owner shall certify and disclose, to the best of its knowledge and belief, that: 8.15.1 No federal appropriated funds have been paid or will be paid, by or on behalf of the Owner, to any person for influencing or attempting to influence an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment or modification of any federal contract, grant, loan or cooperative agreement. 8.15.2 If any funds other than federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this federal contract, grant, loan or cooperative agreement, the Owner shall complete and submit standard Form LLL, "Disclosure Form to Report Lobbying", in accordance with its instructions. 8.15.3 The language of this certification be included in the award documents for all subawards at all tiers, (including subcontracts, subgrants and Q:Library/Forms/Rental Rehab over 20,000 25 10/23/2015 contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. 8.16 Notices. The City and the Owner hereby expressly agrees that for purposes of notice, including legal service or process, during the term of this Agreement, and for the period of any applicable statute of limitations thereafter, the following named individuals shall be authorized representatives of the parties: 1) City 2) Owner: City of Omaha Bojan Ninkovic, a single person Planning Department 2105 Childs Rd E #1705 1819 Farnam Street, Suite 1100 Bellevue,Nebraska, 68005 Omaha,NE 68183 In the event the authorized representative changes during the term of this Agreement, prior written notice will be given to the respective party at the address noted above. 8.17 Applicability. This Agreement shall be binding upon the parties hereto and shall run with the Property. SECTION 9. DEFAULT PROVISIONS. 9.01 Remedies. If, through any cause, the Owner shall fail to fulfill in a timely and proper manner any obligations under this Agreement, or violate any of the covenants, representations or agreements hereof, the City may upon written notice, terminate this Agreement or such parts thereof as to this Agreement, and may initiate foreclosure proceedings for any damages caused to the City by reason of such default and termination. Q:Library/Forms/Rental Rehab over 20,000 26 10/23/2015 SECTION 9. DEFAULT PROVISIONS. 9.01 Remedies. If, through any cause,the Contractor shall fail to fulfill in a timely and proper manner any obligations under this Agreement, or violate any of the covenants, representations or agreements hereof, the City may upon written notice terminate this Agreement or such parts thereof as to this Agreement, and may initiate foreclosure proceedings for any damages caused to the City by reasons of such default and termination. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated below: LEAGUE OF HUMAN DIGNITY, INC., WITNESS: a Nebraska Non-profit Corporation 4 By: P14,friii -42 (� Michael Schafer, C • Executive Officer Whie4/4" Date Date ATTES CITY OF OMAHA: i/Pg? Clerk of the ity of Omaha ate Mayor of the City of Omaha ate APPROVED AS TO FORM: ,A61/ �(S ASSISTA T CITY ATTORNEY Date 2270 dlh 26 SCHEDULE OF EXHIBITS Agreement Exhibit Location Description A 1.02 Warranty Deed to Property B 1.08.1, 3.01.7 HOME Deferred Payment Loan (DPL) Promissory Note and Acknowledgement of Covenant Running with the Land for HOME Rental Rehabilitation Program Loan Agreement C 1.12, 3.01.1, 5.01.1 2 CFR, Part 215 5.01.2, 5.04, 5.05, 5.06.3 D 1.15, 1.15.1, 2.01.1, Median Family Income Chart and 5.03.2.3 HOME Program Rents E 1.18 Definition—Program Income F 4.08 Davis-Bacon Exemption Checklist G 4.10 Affirmative Marketing Policy H 5.01.2 2 CFR, Part 230 I 5.01.3 2 CFR, Part 200.5 J 5.03.2 Occupancy Report (Tenant Survey, Utility Allowance, Computing Annual Income Form, Definitions for Race, Ethnicity, Income Determinations, and Tenant and Participant Protections) K 5.04 Financial Status Reports L 8.11 Termination—24 CFR 85.43 —85.44 M 5.06.6 United States Citizenship Attestation Form for Public Benefit N 5.06.7 Employee Certification Act Affidavit O 6.04 Federal Funding Accountability and Transparency Act Q:Library/Forms/Rental Rehab over 20,000 28 10/23/2015 ATTACHMENTS: 1 City of Omaha Definition of Income 2 Equal Employment Opportunity Clause 3 Section 3 Clause 4 Minority/Women Owned Business Enterprise Plan 5 Soil Work Policy 6 Cost Certification 7 HOME Subsidy Layering Q:Library/Forms/Rental Rehab over 20,000 29 10/23/2015 IIIIU I IIHIOIIllHUhIRIIHHhIIIIIJIHI11111111111111111111111 Nebr Doc DEED 2015077892 Stamp Tax Fee amount: 16.00 FB: 01-11700 11111111111111111111111111 11111 09D Date COMP: BW $ 191.25 Received-DIANE L BATTIATO Register of feeds,Douglas County,NE SEP 15 2015 17:14 P 2 09/15/2015 n:1a:z7.00 By BW IIIIIIIIIIIIIIIIII 2015077802 WARRANTY DEED KNOW THAT ALL MEN BY THESE PRESENTS THAT ZAS Corp.,L.L.C.,a Nebraska Limited Liability Company,herein called the grantor whether one or more,in consideration of One Dollar and other valuable consideration received from grantees,do hereby bargain, sell,convey,and confirm unto Bojan Ninkovic,a single person,the following described real property in Douglas County,Nebraska: See Attached Exhibit"A" To have and hold above described premises together with all tenements,hereditaments and appurtenances thereto belonging unto the grantees and their assigns. And the grantor does hereby covenant with the grantees and their assigns that grantor Is lawfully seized of said premises;that they are free from any encumbrance except covenants, easements and restrictions of record;all regular taxes and special assessments, except those levied or assessed subsequent to date hereof;that grantor has good right and lawful authority to convey the same;and that grantor warrants and will defend the title to said premises against the lawful claims of all persons whomsoever. Executed 6 9.- I c/ , 9,4)` ZAS Corp.,L.L.C.,a Nebraska Limited Liability Company By Zaher A.Serhan,Member State of r it v cksk L, c� § County of ° -)ve)ke.1/4, e forAg9oing instrument was acknowledged before me this 1 C1 day of %')4 T't . , lc Gl'S,by Zaher A.Serhan,Member of ZAS Corp.,L.L.C.,a Nebraska Limited Liability Company,on behalf of the company. 2. 0264555 IF-.1:1341." INCIal79411:16/27:31,MT Please Return recorded document to: Nebraska Title Company 14680 West Dodge Road,Suite 1 Omaha,NE 68154 File No.: 0264555 EXHIBIT"A" Parcel 1: Lot Four Hundred Forty-Four(444),Fairfax Addition,an addition to the City of Omaha, in Douglas County,Nebraska 01-11700 Parcel 2: The West 62 feet of Lots Three Hundred Fifty-Nine(359)and Three Hundred Sixty(360), together with the West 62 feet of the North 25 feet of Lot Three Hundred Fifty-Eight(358), in Kenwood Addition,an addition to the City of Omaha,in Douglas County,Nebraska 4gt• Parcel3: 04-19920 Lot Four(4),Block One(1),Graves Park,an addition to the City of Omaha, in Douglas County,Nebraska. 01-14160 Parcel 4: Lot Forty-Two(42),Block Three(3),Irene Place,an addition to the City of Omaha,in Douglas County, Nebraska,together with the North Half of the vacated alley adjoining on the South 30-18360 24504 RENTAL REHABILITATION PROGRAM DEFERRED LOAN PROMISSORY NOTE APPLICANT: Bojan Ninkovic,a single person PROPERTY ADDRESS: 4336 North 41st Street, Omaha,NE 68111 Project No. 24504 DATE: FOR VALUE RECEIVED, the Undersigned, jointly and severally, hereby promises to pay to the order of the CITY OF OMAHA (hereinafter referred to as, the "City"), acting by and through the Director of the Planning Department (hereinafter referred to as "Director") or its successors, the principal sum of$11,000.00 deferred payment loan and $13,500.00 grant. The Principal on this Note is payable on the first day after the Undersigned conveys, grants, mortgages, assigns or otherwise transfers their interest or a portion thereof within Ten (10) years from the date of Project Close Out, in the property or improvements at 5719 North 33rd Avenue, Omaha,Ne 68111 and legally described as: Lot Four (4), Block One (1), Graves Park, an addition to the City of Omaha, in Douglas County, Nebraska, (commonly known as 4336 North 41st Street, Omaha, NE 68111) without the prior written consent of the said Director, in lawful money of the United States at the principal office of the City of Omaha, Planning Department, 1819 Farnam Street, Omaha, Nebraska, 68183 or at such other places as shall be designated by the City. The Undersigned reserve(s) the right to prepay at any time all or any part of the principal amount of this Note without the payment of penalties or premiums. If the Undersigned does not convey, grant, mortgage, assign or otherwise transfer said property for a period of Ten (10) years from the date of Project Close Out, this Note shall be considered paid-in-full and will be released from said property. IN THE EVENT that the Undersigned shall fail to pay the principal amount of this Note on the due date, the Undersigned shall pay to the CITY a late charge of 9% per calendar month, or fraction thereof, on the amount past due and remaining unpaid. If this Note is reduced to judgment, such judgment should bear the statutory interest rate on judgments, but not to exceed 9%per annum. O OPPORTUNITY Page 1 of 2 Revised and approved 12/28/2009 PROMISSORY NOTE 4336 North 41st Street Proj ect No. 24504 PAGE 2 IF suit is instituted by the CITY to recover this Note, the Undersigned agree(s) to pay all costs of such collection including reasonable attorneys' fees and court costs. THIS NOTE is secured by no less than a second or third mortgage/deed of trust subordinate to Deed(s) of Trust in an aggregate amount not to exceed any existing liens filed against the property and the Undersigned's matching funds totaling $21,184.00 plus eligible reasonable closing costs, and duly filed for record in the Office of the Register of Deeds, Douglas County,Nebraska. DEMAND, protest and notice of demand and protest are hereby waived, and the Undersigned hereby waives, to the extent authorized by law, any and all homestead and other exemption rights which otherwise would apply to the debt evidenced by this Note. IN WITNESS WHEREOF, this Note has been duly executed by the Undersigned, as of the day and year above set forth. By: Bojan Ninkovic, a single person Date O O ORTU'NITY Page 2 of 2 Revised and approved 12/28/2009 24504 Schedule A RENTAL REHABILITATION PROGRAM DEFERRED LOAN PROMISSORY NOTE APPLICANT: Bojan Ninkovic, a single person PROPERTY ADDRESS: 4336 North 41st Street, Omaha,NE 68111 Project No. 24504 DATE: FOR VALUE RECEIVED, the Undersigned, jointly and severally, hereby promises to pay to the order of the CITY OF OMAHA (hereinafter referred to as, the "City"), acting by and through the Director of the Planning Department (hereinafter referred to as "Director") or its successors,the principal sum of$11,000.00 deferred payment loan and $13,500.00 grant. The Principal on this Note is payable on the first day after the Undersigned conveys, grants, mortgages, assigns or otherwise transfers their interest or a portion thereof within Ten (10) years from the date of Project Close Out, in the property or improvements at 5719 North 33rd Avenue, Omaha,Ne 68111 and legally described as: Lot Four (4), Block One (1), Graves Park, an addition to the City of Omaha, in Douglas County, Nebraska, (commonly known as 4336 North 41st Street, Omaha, NE 68111) without the prior written consent of the said Director, in lawful money of the United States at the principal office of the City of Omaha, Planning Department, 1819 Farnam Street, Omaha, Nebraska, 68183 or at such other places as shall be designated by the City. The Undersigned reserve(s) the right to prepay at any time all or any part of the principal amount of this Note without the payment of penalties or premiums. If the Undersigned does not convey, grant, mortgage, assign or otherwise transfer said property for a period of Ten (10) years from the date of Project Close Out, this Note shall be considered paid-in-full and will be released from said property. IN THE EVENT that the Undersigned shall fail to pay the principal amount of this Note on the due date, the Undersigned shall pay to the CITY a late charge of 9% per calendar month, or fraction thereof, on the amount past due and remaining unpaid. If this Note is reduced to judgment, such judgment should bear the statutory interest rate on judgments, but not to exceed 9%per annum. EQUALO HOUSIN OPPORTUNITY Page 1 of 2 Revised and approved 12/28/2009 PROMISSORY NOTE 4336 North 41st Street Project No. 24504 PAGE 2 IF suit is instituted by the CITY to recover this Note, the Undersigned agree(s) to pay all costs of such collection including reasonable attorneys' fees and court costs. THIS NOTE is secured by no less than a second or third mortgage/deed of trust subordinate to Deed(s) of Trust in an aggregate amount not to exceed any existing liens filed against the property and the Undersigned's matching funds totaling $21,184.00 plus eligible reasonable closing costs, and duly filed for record in the Office of the Register of Deeds, Douglas County,Nebraska. DEMAND, protest and notice of demand and protest are hereby waived, and the Undersigned hereby waives, to the extent authorized by law, any and all homestead and other exemption rights which otherwise would apply to the debt evidenced by this Note. IN WITNESS WHEREOF, this Note has been duly executed by the Undersigned, as of the day and year above set forth. By: Bojan Ninkovic, a single person Date O OPPORTUNITY Page 2 of 2 Revised and approved 12/28/2009 ACKNOWLEDGEMENT OF COVENANT RUNNING WITH LAND WHEREAS, an Agreement dated , 2015 (hereafter referred to as "the Agreement") was entered into by and between the City of Omaha, a Municipal Corporation of the Metropolitan class in the State of Nebraska (hereafter referred to as "the City") and Bojan Ninkovic, a single person, wherein the City would provide a loan/grant in an amount of $24,500.00 to assist in the rehabilitiation of the property and improvements thereon, and legally described as: Lot Four (4), Block One (1), Graves Park, an addition to the City of Omaha, as surveyed, platted and recorded in Douglas County, Nebraska (commonly known as 4336 North 41st Street, Omaha,NE 68111). NOW, THEREFORE, Bojan Ninkovic, a single person, (hereinafter referred to as the "Owner"), for himself, his successors and assigns, agrees that the restrictions and covenants in the Agreement shall be covenants running with the land, and that it, in any event and without regard to technical classification and designation, legal or otherwise, shall be binding, to the fullest extent permitted by law and equity, and enforceable by the City, its successors and assigns, against the Owner, his successors and assigns, to any part of the property that is the subject of the Agreement, or any interest therein and any party in the possession or occupancy of any part of said property. The Owner, for himself, his successors and assigns, further covenants and agrees, that without regard to whether the City or the United States is an owner of any interest in the land to which the covenants relate, the covenants running with the land shall remain in effect for Ten (10) years after the date of Project Close Out of the project, the period specified or referred to in Section 1.13 in the Agreement, or until such date thereafter to which it may be modified by proper amendment of the Agreement, on which date such covenants may terminate. The Owner, for himself, his successors and assigns, further covenants and agrees that this property shall continue to be used as rental for qualified low to moderate income families, as described in Section 1.15 in the Agreement, for the term of this covenant. In the event of default, gross negligence or other substantial noncompliance, the outstanding amount of the loan at the time of default shall be due and payable immediately from the Owner, his successors and assigns,to the City. O OPPORTUNITY Page 1 of 2 Revised and ap proved pproved 12/2/2009 COVENANT 4336 North 41St Street Project No. 24504 PAGE 2 By: Bojan Ninkovic, a single person By: STATE OF NEBRASKA ) ) § COUNTY OF DOUGLAS ) On this day of , , before me, the undersigned, a Notary Public duly commissioned and qualified in and for said county, personally came Bojan Ninkovic, a single person, to me known to be the person(s) named in and who executed the foregoing instrument, and acknowledged that he executed the same as his voluntary act and deed for the purposes therein stated. Witness my hand and notarial seal the day and year last above written. Notary Public My Commission expires O EQUAL ORUNT Page 2 of 2 Revised and approved 12/2/2009 • • • • PARR 2001214[RESERV ?I21537 relationship. PART 21 A Peo r Staammun • TMVE REQUIREMENTS FOR GRAMS 215.45 Pmpoee.ofprocarament standards. • MD: S WIGI.It IfN- IthiAl BaDiSigni HORS OF • EDUCATION. 215.42 Oakes of oomduct: • HOSPITALS. :�11�i.A11RR .1001M- :�44 procedu . • . WIRT ' OMB •215.45 oast as ptioe,aaalyaia. ( l tR A 110) . 215.48 :pioateemi1t reooee.. • ALIT„Contact ads tration. Sec. 215.0 ih mtraat pr+ovieions.215.0 About this pert. R»s AND Ram • • . rt A-Galletal 215.50 Porpose.of rap6ete and records. mid alozdtoring and repmfiing program 215. IParpo®e. 215.52 ispartag 215.2 2l5.53 Retention and aeon req in 215.8 Fl�at�om.otSser9�oanoas. �r 215.4 Deviations. records. • 816 b &bawards' SOW'B-P1e AwI ld RE�1 21b.W .purpose of termination and emta�- 2510 Purpose. 21531 termination. . - Pre-award Polides. • 215.52 fit. 215.12 Forms ibr applying for Federal as • anie. Soaped D-Allerlhe-Polard Regiments SL5]S Debarment and ensieolon. 81514 Speaial,award omations. .215.70 Peyote. • • 55.15 Metric,system of measurement. 215.71 Moon procedures. S15.15 8sacairce Oonservatimn and Recovery 215.98. Sizbeegaent adjustments and OR- 215.1.7 Certification and representations. S>&RS•causation ofamounte due. • • c,po t-Awed Requiem ArtIemix A iv Paw P- i FINANCIAL.AilD P 61c lianactlemarr An acre r:Si U.S.O.501t;31 II.S.0.1111;41 mud mime. f�net■1.and program U.S.C.905:8eorganisatian Plan No.2 of 1270management. '•. ILO. 11541,85 F8 10787, 8 CFR,15664210,P. 215.81. Standards for financial management 931i• Wig. Sea:69 FR 26251, Nay 11,3004, nnlos • 215.21 Pay . • otherwlae noted. 215.28 Oast altering or matching. • 215.X Program income. $815.9 About this park S15M Revision of budget and pmgram gem (a) OMB This Part cantatas O 215.89 Nan-Federal audits. guidance to Federal agencies on the ad- 215.27 Allowable costs. ID7nistraticm of grants to and .agree- 21.5.2 Period of availability of funds. mentq with institutions of bdgher edu- 215.29 Conditional eons. cation, Maras's,•and other nonprofit Poor Amnasns organisations.The guidance seta forth standards for obtaining consisteiwur 215.80 Purpose of property standards. and utiferea.ity In the agencies'admire • 215.81. Ise coverage. istraation of those grants and agree- . 21512 Real property."215.88 Federally-owned and exempt prop- �• (1) Except as pro. 34 215 Equipment. videdherein,the standards set forth is 215.86 Supplies and other expendable prop- this Part are aPPble to all Federal arty. agencies. If any statute speofccal]y 77 • • . §215.1 2 CFR Ch N(1-1-12 EdMan) • prescribes policies or specific require- where adequate justification is pre- • meats that differ from the standards seated. provided in this part,the provisions of (5) Conducting broad oversight of • the statute shall govern. CO • The•provisions of subparts A guidance in this with the through D of this part shall be/applied (d)Federal ammo responsibilities.The by Federal agencies to recipient& Re- head of each Federal. agency that • • oWent 'shall apply the provisions of awards and administers grants and those subparts to subrealfdeuts per- agreements subject to the guidance in. forming substantive work under grants this part le reepausibleter. • • and agreements. that are passed (j :.impiammung. the guidance in through or awarded by the primacy re-. subparts A through D of this part by aipient,if each subreoipdents are osga- adopting the language in those sub- ablations described in paragraph(a)of parts imless dffibrent paovisiOms are re- this section. mitred by Federal statute or are ap • - (8)This part does not apply to grants, proms by 0MB. centracts, or other agreements be- CO that the agency's cam tweed the Federal G1over ment and Innards and inthoomponents comply • unite of State or local governments -with the agency's implementation of covered by 0MB Circular A-102, the guidance in subparts A through D "Grants and Cooperative Agreements of this p art With State and Local Glove rents"1 (8) Begawan approval from 011dB and the Federal agencies' grants man- far deviatkes from the guidance in ageateat common rule (see i21ra) subparts A through D of this part in which standardise the administrative dams where the guidance mores requirements Federal agencies wee that:approvat. an State and local grate. In addi- ('A other 5mations sped Lion,eubaawards and contracts to State fled#n this part. or local governments are net covered (e).gelatioashipto previous issuance. by this part.However,this Part applies The Rue= in this part previously to eabawsads made by State and local vas haat as OMB CfrcularA-110:Sub- governments ve Micas covered parts A through D of this part Main by this ' • the guidance that was in the attach- (4) Federal agencies may apply the meant to the 0MB circular.Appendix A provlsiams of subparts A through D of to this part contains the William that this part to commercial argaaimtione, was in the appendix to the attachment foreign goo ta, cations (f)Inforaaation Contact.Further.infor- under the jarlsdiatioi°, of threign goo- motion acomemciftle this put may be ob- ernments, and international organiser tailed by contacting.•thee 01fice of Fed- Mal Financial Memagement,tiAne. _ of • (o) OMB respomibibiles. OMB is re- Management end Budget,Washington, sponsible for: D0 205011,telephone( )895-8998. (1)Taming and maintaining the Wald- (g)Termination Review Date.This part ante is this past. will have a policy review three years (2) Interpretingthe P °F require- ' from the date of issuance. meats in this part and providing ambit,- am to ensure effective and efficient implementation. Subpart A--General • tionsimplementing the danReviewing*Federal agew regula-in 58151 Faepoae. this part, as required by Executive This part establishes uniform admire- • Order]2886. • istrative requirements for. Federal (4) Granting any deviations to Fed- grants and agreements awarded to in- • oral agencies from the guidance in this stitattons of higher education, hos- part, as provided in 5215.4. Exceptions pule, and other non-profit organiser will only be made in particular cases lions.Federal awarding agencies shall not impose additional or inconsistent 'see a ass 1ffia9 for avidlabilitg of O11LB requfremente except as provided in =ban. 55215.4,and 215.14 or unless specifically 78 • • OMB Mars and Guidance §2152 required by Federal statute or emu- money;other assistance in the form of tive order. Non-profit organisations loans,.loan'guarantees, interest sub- that implement Federal programs for sidles,'or*awe;direct payments of • the States are also subject to State re= any kind to bdividuats;and,contracts • quirements. which are required to be entered into and administered under (1115.2 Definitions. charges creed ( • incurred(a) means the laws and regulations. means the re- tou(1) ( .contributions means by the recipient dur- o scent's ash outlay, including the • lag a given period regoirhig the Prod" outlay of money contributed to the re- sion of finds for: °tient by third parties. (1)Goods and other.tangible property (g) Cleeeout in the process by received; which a Federal awarding agency de- (2)Services by employees, termines that all apiatoable adminis- end, whceafpote®ts, and other trative actions and all required.wark of cm other amounts becoming oared the.award have been completed by the under programs for which•no current recipient and Federal awarding agency. services or performance is required. (h) 'Contract' means a procurement (b)Accrued income mesas the sum of contract odder.an.award or aubaward, • (1) Earnings during a given Period and a procurement subcontract under a from recipient's or ent's contract.. eat)Services performed by the recipi- tit Cart or maidtiag means (,andGoods and otter won of project or program tangTle prop- costs not borne.by the Federal Govern- erty delivered-to p nichaems,and ment.. (2) Amoonte becoming owed to the (j)Date of capon means the date recipient far which no current services An which all work Under an award is or peritormanoe is.required by the re- menpleted or the date on the award cipient document, or any supplement or (c)Aeguls ton coat ofe(PdPmeuf mesas amendment thereto, an which Federal the net invoice price of the equipment, sponsersbip end& including the cost of modifications,at- . (k) Disallowed coats means those taabments, scceeearies, ar auxiliary charges to an award that the Federal . apparatus necessary.to make the prop- awarding s determines to be nnnp-- - ertyUsable for the purpose for which it ,tamable,in accordance with the pd�loabhr Federal cat principlesbr was acquired. Other charges, snob as • the cost of installation,transportation,. other terms and conditions oontain'sd taxes,duty or protective in-transit in:- in the award. surance, shall be included or a tchided (1) means t• angible non_ from the Unit acquisition cost it so- __ accounting practices,cords/toe with the• is regular eft..property charged. directly to (d) ndianPe means a payment made the award having a useful life of more by Treasury aide&or other appropriate than one year and an acquisition'cost payment mechanism to a recipient of adoo or more per unit. However, upon its request either before outlays oonsistmt with recipient•policy, lower are made by the recipient or through limits mar be established. the use of predetermined payment (m)•&costa property means property schedules- under the control of any .Federal (e)Award means financial aesistanoe awarding agency that, as determined that provides support or stimulation to b.P the head thereof, is no longer re- accomplish a public.purpose. Awards Cared for its needs or the discharge of include grants and other agreements in its resPonsibilitlea the form of money or property in lieu (n) &eealt 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 {�I §215.2 2 CFR Ch.N(1-1-12 EcSion) without further mai obligation to the Fed- b �,direct chatges�goods ptve m4 t. nezemple of en- and.seevices,the aneount of indirect ex- empt the Federal authoritynt nd iscontained pewee incurred, the value of in-kind went Act (8i tr aC.Cooperative siontribatioes and thehe net it- • conduct baspreperty ic oed r under as award to decrease) in goods owed recipienteceiv ,f and cation nonprofit institution of higher �°' performed by contractors,br services whoseo principalornon-profit tdau payees sei p. • pose is conducting other amounts becoming owed under (o)scientific real programs for which.no ooa+eat services agency means or • the that provides an (v).Anna! exist- totalFederal funds amomit of Federal obl means�ii- once.mayr intangible; e;having g no W It gated by the Federal.f ov t for �'��° ts,patens, use by the recipient.This amount may sties as copy tights,patents, • include airy authorised carryover. obligated ikmds from prior ftmding pe- mail of tn- (w).Prior:approval means written ap • rbidew�hea,permitted by.ag Y regal ' dsog prior consentby au - Mans oifldal licns. agena8 inetrao ( pry income means gross �_ • (ci Federal share of real property, comeearned recipient that is iv- equfpment,or supplies means thatby generated a ltoarbed awa d cordage of the property's nisi on (s(se or earned as a result (e the award costs and any meat, expend- Pee am. inOos.iu e and (n)t tares paid With Federal fines. Program.I income includes,.f but is not (_') a period limited to, lee from fees for sere- Federaltime eriomeaner the Period of ices permaeed,the use or rental of real when adingis available or for obligation by the recipient Pema�1 ts, thead sale of (a)Intangible property'and debt baba- d projects, of means,meats but is not limited to, an�commodities or n limos aald royeei under patenta trademarks,ea la and patents and its,and intent on as loans, acts and other 'debuch t bane made with attest a funds.Interest is manta, lease agreements, stock and noeasaedt got Of Federal funds s other- other instruments.of property owner- wise provided ram in'Except al Federal .awarding stip,whether tangible. • considered tangible or in- agency regulations o the n erms and • (t)Obti ions means the amounts ofcom etions Of the award, in- • e-orders placed, contracsts andgrants one does not include �die- a ved asimilar a -, or interest on anytransactions during a given -; of them. require payment by the recipient dter- (y) Project means all allowable lug the same or a fature.period. • costs, as set forth in the applicable (u) Outlays. or . means charges made to the project or pro- �ma and the value de of gram.They may be reported on a cash the contailm- reports prepared third panties is snood or accrual basis. For. objectives of the award on a cash basis,outlays are the sum of during project period. cash its for direct charges (s)Project period means the period es- indirect for goods and services, the amount of tablished in the award document dnr- tbirdexpense contributionsrged, the value of ing which Parietal sponsorship begins party in-kind ap- and ends. plied and the end PaYments made to amount of cashadvances (aa)Property means,unless otherwise For reports prepared on stated, real perty a fit. i - basis, outlays are the sum of cash dis- m e debt fasts¢ OM Cicalas and Guidance §2152 •(bb)Beal 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 subreciydent or by: a sub- movable machinery and means equn n incipient to a lower tier Wit. receiving financial assistance � The term includes financial assistance When provided by any legal agreement, from Federal awarding agenci a to even if the agreement is called a.con • carry includes i out a project or program. The tract, bat does not"include procure • - pablio and pahe:ate fast-- mernt of goods and services nor does it talons of higher education,public and include any haute of assistance'which is private hospitals,and other quasi-ab-" esnin8ed .from the .definition of Ho and private non-pin/t organisations "award"in 1 15.9(e). such as,but ant limited to,sty (gg)Subreelpfeet means the legal emit- action agencies, research iastitates, ty to which a.sabaward is made and educational sesoaiatdame, and health which is accountable to the recipient centers. The term may include cams- fir the use of the funds provided:The mercial OrgallittaidOng.tbrelgn'or Inter- term ma, include bodge; or inter- national Minns (M, as agar- national•or ons (such as agen- cies of the United Nations)Which are cies Of'the,United Nations).at the die- recipients, subrecipients, or. contrao- oration of the,Federal awarding agen- tare or subcontrisotors of recipients or ay. • subrecipieats at the discretion.of the (hb)Sapplia.means all personal prop- Federal awarding agency, •The term arty excluding.OquiPment, intangible • does not in ludo property, and debt instruments as de- oont -operated inoilitles or re- ice,in this section,and Inventions of search centers providing mission-oriented,•continued a contractor conceived or first actually support Sar large- reduced to practice in the peranoe scale programs that are government of work under! a funding agreement owned or.controlled, or are designated ("subject inventions"), as defined in 87 as • oh and drivel- OFR pert 401, "plights to Inventions opne andt centers. Made•by Nonprofit . and development(cid) Research means Small.Business Firms Under" Govern- all research activities, both basic and. ment G ante, Contracts, and Coopers- applied,and all development activities tive Agreements."' that• �a andsu at.universities,col- (ii) a n an action by a other non-prot. institu- Federal awarding Money that temPo- time. "Research" is defined as a ays- racily withdraws Federal.sponsorship tematic Study directed toward faller under an award,pending corrective ao. scientific knowledge or Imderetanding, tdon by the recipient or pending a dad- of the subject:studied, "Development" don to terminate••the awwardd 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 recited toward the production of.useful suspension under Federal agency rem- materials, devices, systems, or meth- •lations implementing E.O. 1 (51 FR ode,including design and development 6870,8 CFR,1986 Comp.,:p..189)•and E.O. of prototypes and promisees. The term WIWI FR 84181,8 OFR,19g9 Comp p• research also includes:activities in- affi),"Debark and Suspension." volving the training of individuals m ( ) Termbtation.means the c ancella- research techniques where such activi- tion of Federal sponsorship,in whole or ties utilise the same facilities as other in part, under an agreement at any andreswhere and ndoh development activities t��to the date of completion, eluded in tbe.instiuction function,e not m (kk) Third paxig ifs-kind contributions used in th fineawar u means a means the value of non-cash oontribn- grant or trans provided by non-Federal third cooperative agreement not exceeding parties. Third party in--kind contrrbu- the small purchase threshold fixed at trams may be in the form of real prop- 41 U.S.C.4ee m (currently$25,000). arty,equipment,supplies and other ex- (ff) Subawnrd means an award of fi- pemdable property, and the value of nancial assistance in the form of goods and services directly benefiting 81 • • • §215.3 2 CFR Ch.11(1-1-12&Nan) and wally identifiable to the story. Exceptions on a case-by-ease• project or prOgrar+ • (11) d basis may also be made by Federal otea, for finan- atgarding agencies. oral reports prepared.on a gash basis, means the amount of obligations hi- -*215.5 8atbawarda cured by been ladd; For rePartethe recipient that have not sacs of this part specifi. beerued PsePared on an y exclude from aov resent endaat aft try rnp� wage,the provisions of this part shall the the'recipident aidons in- be tD ate performing outlay has not been recorded. eats re h dbawabb if such Boer odd. �) Uflobligated balance means the, cat are ii►a&or other of higher edn portion of the Bards authorized by the catkin,hoe:Sta a lPr'aflt.n- Federal a . motions: 81�ate and local been ante�. t�sffi� meat agbi+ is are subject to.the ulaidons implementing determined by deducting the omen- provisionse gra of an gement lative obligation the cumulativearei common�, fends authorized. • m far :cIs and Cooperative (mt) 17� indire t coat means AtioeIts to State and Local the memos awarded between t which-could amount e wg en to"published at 7 G�'B parts have been awarded under the reel '- tar a43 10 CFr part )a.Ig pF8 east's approved negotiated Indirect coat Part 15 a t i psr4.,.84, gp its part rate. • 487,28 CF$part isb,24 OF'B parts 44,86, (cc)Wonting capd;ai adsafece means a 111', 5U' 570, 57, 875,.580,:850, 852,.985, • procedure whereby fiends are advanced m'a' and 2 C past t,278, to the recipient to cover its estimated • al C parts awl"0, 0,36 part part disbm t needs for a given initial • i CM parts 74 sad,88,.88 fits art period. 1807,•88(Impart 48, ant parts 80,gp, . . and;88,48 CFB.pant 12,44 CF8 part 18, 9216.8 Meet another iasosae 45 CFR pests 74,_82,GE,1157,11T4,UM, For awards subject to this part, all 'and and 48 al'R part 18. administrative its of oodt- 019 PR 24281.May 11,2004.as amemded at 70 lied program regulations, program FR MO,Aft„81.200b]• Manuals, handbooks and other non =tory materials which are-juror Subpart B-40-Award with the requiremeata of this part shall be sapped,except to the aTtenauthorizedthe required by statute,or 4 0 Pmrpoee. . accordance with the devi- Sections 215.11 through 21517 ations provision in 9215.4. scribe forms and instaactions and other §gam oar. Prn-award matters to be need in apply- The Omer of Management and ingfour Federal awards. • Budg- et (OMB) may grant exceptions4215.11 Pee-awardpolkiee, classes of grants or teoipdents subject (a) Use of Grants and Cooperative to the requirements of this part when Agreements,and Contracts.In each in- emeptions are not•Prohibited•by scat- stance, the Federal awarding agency ate. However, in the interest of max- shall decide on the appropriate award imam. ty,.bons from the instrument (i.e., grant, cooperative requirements of this part shall be per- agreement, or contract). The Federal milted only in unusual circumstances.. Grant and Cooperative Agreement Act Federal awarding agencies may apply (81 U.S.O. 6301-08) governs the use of more restrictive requirements to a grants, cooperative agreemen• class of recipients•when armed by coataa .cts. A grant or � ding apply less restrictive agencies may agreement shall be used only when the when awarding small.awards,requirementsal a Hof a rasatraise saofisupportis to for those requirements which are stet- or stimulation authorized by Federal 82 OMB Circulars and Guidance 9215.15 statute. The statutory criterion for agency regulations i+ ++*"enti1Ig E.O.s choosing between grants and coopers- 12549 and 12e89, "Debarment and Sus- • time'agreements is that for the latter, pension."Under those regulations,cer- "substantial involvement is expected tutu parties.who are debarred, sues- between the ezeoative agency and the ponied or otherwise excluded may not .State, local government, or other re- be participants or principals in Federal ardent when carrying out the activity assistance awards.and subawards, and contemplated in the agreement." Con- in Certain °antraots under those tracts shall be used when thre.priaoipel .awards and sabawarda • purpose is acquisition of prcpei y os D0.51E51919.Ariz 81. 1 ' services for the direct benefit or use of • the Federal Government. 421514 Special award cored tio_a (b) Public Notice and Priority Set- it aII applicant ar recipient has a his- ting• Federal awarding agenDas shall 9 of poor performance,is not firm- . notify the public of its intended fend- do*stable, has a management eye- ing priorities for discretionary groat tem that does not meet the standards • •programs,unless feuding priorities are pram:weed in this peat, hue not con- establlshed by Federal statute. toed to the terms and conditions of • • nun wastes foe .appb,gag fee Fed; a previous award, or is not otherwise maktenee. responsible;Federal awarding agencies ies (a) Federal awarding agencies shall mayadditional requirements as comply with the applicable. report idea,provided that in applicant o: clearance requirements of 5 CFB part **ant e f notifiedein Writing as re: 1>i 0, "Controlling Paperwork Burdens mamathe nature of the wh theeal additional _enon. the public," witht regard to all requirements the reason why additional farms used by the Federal a are tdd, • agency in place of or as a sa�t of the action corrective needed, to the Standard Form.424.(SF-424)se- toe time allowed for completing ho the rim. cmrtective cottons,and the method far (e. Applicants shall use the 8F requesting reconsideration of the addi- • series or those farms.and instructions. onalrequiteMents imposed.Any ere- preemdbed by the Federal awarding • dal emotions siscll be conditions promptly re_ the that • ▪ . prompted them have been corrected. • • (c)For Federal programs covered by • E.O.12872, "Intergovernmental Review 5215.15 Metric system of m ,e- of Federal Programs," (47 FR 80859, 8 great. CF$ 1988 Comp., p• 197) the applicant The Metric Conversion Act, as shall complete the appropriate sections amended.by the Omnibus Trade and • of the 4 (Ap B wen forher Federal a tiveness Act(l5 U.S.O.205)de- Assistance) Zr glares that the metric system is the plicat ion 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 co nultation with the see- the.Federal awarding agency or the rotary of Cam, when the metric Catalog of.Federal Doneatic 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 applies- other business-related activities. Met. tton is made has been selected by that rick .implementation may take longer State for review. where the use Qf the system is initially (d)Federal awarding agencies that do impractical or:likely to cause swan - not use the SF-424 form should WI- cant inefficiencies in the accomplish- cats whether the application is subject meat of federally-funded federally-funded activities. to review by the State under 15.0.12372. Federal awarding agencies shall follow l2151S Deba®e�and eaupeao.' the provisions of E.O. 12770, "Metric Usage in Federal Government Pro- Federal awarding agencies and re- grams"(58 FR 85801,8 CFR,1991 Comp., cipients shall comply with Federal p.848). 133 • §215.16 2 CFR Ch.N(1-1-12 Mon) 5216r16 Resource Conservation and• data to performance data, and develop Recovery Act. unit cost information whenever peso- •Under the Act any State agency or thud. agency of a political subdivision of a (b)Recipients'financial managerneat State which is using appropriated.Fed- provide the following. oral funds must comply with notices (1) 9ccu ate, cannel sad complete BOOS. Section 8002 regaires that prep_ disclosure of the financial results of erence be given in procurement pro- each fedBrallY-sponsored pit or grams to the purchase of specific prod- Program is accordance with the Mort' note containing recycled materials ing requirements set forth in 5215.52.If identified in gaideliaee developed by a Federal awarding agency requires re- the Environmental protection Agency porting on an accrual basis from a re- • (EPA) (40 CFR parts 21-254). Accord. alpdaut that maintains its records•on ;ugly, State and local insidtiattons of other than an acc teal basis,the recipi- higher education, hospitals, and non- out shall not be required to establish profit organiaatioms that receive direct an accrual accounting agatem. These Federal awards or other Federal funds recipients may develop such accrual shall give preference in their McClure- data its reports on the baste of an meat programs ,nmded with•Federal anelials of the documentation on head. • finds to the purchase of recycled prod- OD Reocads that idantif adequately note pursuant to the EPA guidelines. the source and application of fluids for ibderally• f Certd'�odicoe and -sponsored activities. These ems- records shall contain information por- tions. Mining to Federal awards, authorise- Unless prohibited by statute or coda- time,ms, obligations, unobligated bat fled regulation,each Federal awarding antes, assets, outlays, income and in- agency is authorised end encouraged to .terest. allow recipients to Submit oeetifi (3) Effective control over and ao- cations and representations required conatability for all finds,property and by statute,executive Order,.or regale- other assets. Recipients shall ads- tion on an annual basis, if the eyelid- quately safeguard all such assets and • • eats have ongoing and continuing rela- assure they are used•solely for author- tionehipe with the agency.Annual car- iced purposes. tifications and representations shall be (4)Comparison of outlays with buds- signed by responsible Confab with the et amounts for each award. Whenever authority to ensure recipients'oompli- appropriate, financial hibernation ance with the pertinent requirements. should be related to performance and wait cost data. Surat C—Past Awed (5) Written procedures to minimise the time elapsing between the transfer of funds to the recipient from the U.S. Fin ssacei.AND Pnornan[MANAGEMENT Treasury and the issuance or redeem- . ir81$.!0 Paepose of Romania' l and tion of checks, Warrants or payments pro' by other means for program purposes gram mansgement. by the recipient.To the extent that the • Sections 61521 through 215.28 pre- provisions of the Cash Management Im- sc ribe standards for financial manage- provement Act(MIA)(Pub.L.101-453) meat systems, methods for making govern, payment methods of State • payments and rules for.satisfying cost agencies, instrumentalities, and fiscal sharing and matching requirements, raga to shall.. be consistent with CILIA accounting for program income,budget Treasury-State Agreements or the revision approvals, making audits, de- ChM default procedures codified at 31 • tmmiatng allowability of cost, and es- CFR part 205, "Withdrawal of Cash • toduesiiig fond availability. from the Treasury for Advances under Federal Grant and Other Programs." far Snakaial man- (8) Written procedures for deter- armload system& • (a) Federal awarding agencies shall �and�all the ince require recipients to relate financial with e provisionsis of costs the accordanceppbl of applicable • 84 • • OMB Circulars and Guidance 621522 Federal cost principles the terms the aotual diebm by the and conditions of 0 (7)Accountingre oordi including t Prdjeat oasts and r the proportio direct program nate accounting reoords that are supported share of any allowable indirect costs. by the °a advances shallQ� l Governmentbe goaasntees or insures the repayment of cash needs for all awards made by hoe • money borrowed by the recipient, the Federal awarding agency to the reo[pd awarding.Federal agency,at itsdisore- ' exist • lion, may require adequate bonding (u.Advance pent mechanisms in- . and insurance if the banding and inane- elude,bat are not limited to, Treasury ance requirements or the recipient ate check and electronic fonds transfer. not deemed adequate to protect the in- Advance payment mechanisms are tarest of the Federal Goverment. subject to 81 CIS part 205. (d)The Federal awarding agency may ,(8) shall be authorized to require adequate fidelity nand avverage submit regimes for advances and reim- where the recipient laalos event lmreements at lent monthly when • coverage to protect the Federal Gov- -electronic itmd.transfers are not used. momenta intm+esst. .(d).Bequeetas row:`Treasury ry check ad • - (e)Where honk are required in the vaaee.payment shell be submitted on situations fcasa desmthed �� bonds ,"Battiest for Advance or Reim- shalldes hold- buraenient," or other forms as may be mg certificates of authority as'accept- anthinized by 00 B.This farm is not to able sureties, as prescribed in 81 OFR be used when Treasury check advance • Part Z8, "Surety Comrades hiving payments are made to the recipient Business with'the United States." automatically through the use of a pre- UMW.pap .. • determined peyme®t schedule or if pre • - al (a)Payment methods shall minimios agen �ein ctio Federal awarding . • the time elapsing between the transfer transfer. electronic of fonds from the United States neas- (e) Reimbursement is the preftrred my and the Issuance or redemption of method: when the requirements in • checks,warrants;or payment by other §815.12(b) cannot be met. Federal . Methods means by the recipients. Payment awarding agencies may also use this agendas or intro- method on any construction agree_ mentalities shall be consistent with meat, or if the major portion of the Treasury-State Q11UA agreements or construction project is wed • default procedures codified at 81 CFR through private market financing or Part 205. (b) Recipients are to be paid in ad- Moe ems a.minor portion of the vance,provided'they maintain or dem- project. onetrate the willingness to maintain: (1) When the reimbursement method (1)Written procedures that minimise is used, the Federal awarding agency the time.elapsing e between the transfer shall make payment within 80 days of fend and disbursement by the re- after receipt of the billing, unless the • billing Is improper. meet management Finansial systems (2) tas shall be authorized to trol and accountability as established least monthlycon- submit for reimbursement electronicfends at in Mal.flash.advances to a recipient transfers �'electronic funds organization shall be limited to the (f)If'a recipient cannot meet the cri.- minimum amounts needed and be terra for advance payments and the timed to be in accordance with the ac- Federal awarding agency has deter- teal, immediate cash requirements of mined that reimbursement is not ba- the recipient organization in carrying sible because the recipient lacks snffi out the purpose of the approved pro- dent working capital, the Federal gram or project. The timing and awarding agency.may provide cash on a amount of cash advances shall be as working capital advance basis.'Under close as is administratively feasible to this procedure, the Federal awarding 85 • • §215.22 2 CFR Ch.II(1-1-12 Ec on) • -agency shall advance cash to the re- (2)Advances of Federal funds shall.be cipleat to coverts estimated disburse- deposited and maintained in insured meat needs for an initial period get- accounts whenever possible. eat geared to the awardee's die- (j)Consistent with the national goal bearing cycle. Thereafter, the Federal of expanding the opportunities for awarding agency shall reimburse the and minority-owned • recipient for its actual cash disburse- business etterpclies,reoipttents shall be manta. 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.pement by women-or provide timely advances to their sub- .minority g p members). recipientto east's so- 4k Beeipients shall maintain ad- usages of Federal 'funds in interest • (g) To the extent available, twig- bearing accounts, unless paragraphs eats shall disburse fends available from (k)(1.),(2)or(g)of this section apply. • repayments to and interest earned on a (1) The reopbmt receives less than • revolving fund, program income,. re- •31120,000 in Federal awards per year. bates, refunds, contsa:A eetUemeolta,. (2)The best reaaamably available in- audit recoveries and interest earned on tared bearing.account would not be en each lands beibre cashrequesting additional • petted to earn interest in excess of ism rec�nired by slat- Per year on Federal cash balances. • (h)Unless otherwise i (8)The depository would require an ate, 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 everted Federal and nonFederal cash daring the project period unless pate- reaomoes. graphs (hX1) or (2) Of this seclaou (1) For those entities where CHIA aPPly" and its implementing regulations at.31 • • (]) A recipient has failed to comply CFR part 215 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 amivally to Department of • (2) The recipient or subrecipient is Health and Human Services, Payment • delinquent in a debt to the United Management Sys , Rockville, MD States as defined in OMB Mauler A— toe 'interest amounts up-to S250 per 112. "Man g Federal Credit Pro- year may be retained by the recipient grallns." Under such conditions, the for administrative expense. State eni- Federal awarding agency may, upon versifies and hospitals shall comply reasonable notice,inform the recipient with ChM,as it pertains to interest.If that payments shall not be made for an entity subject to MIA.uses its own obligations incurred after a spatted 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 ernmeat is liquidated. agency, it waives its right to recover (i) Standards governing the use of the interest under C1U&. banks and other institutions as deposi- (m)Esbept as noted.elsewhere in this tories of funds advanced under awards part,only the following forms shall be • are as follows: authorised for the recipients in re- (1)Except for situations described in questing advances and reimburse- paragraph(i)(2)of this section,Federal meats. Federal agencies shall not re- awarding agencies shall not require quire more than an original and two• • separate depository accounts for funds copies of these forms. provided to a refit 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. !mg agency shall adopt the SF-270 as a However,recipients must be able to ac- standard form for all nonconstraction count for the receipt, obligation and programs when electronic funds trans- expenditure of funds. far or predetermined advance methods I • • OMB c culars and GUida ce §215.23 • • are no waver.used.F the awarding � (1)The certified value of the remain- alese,fhrm using ing life of the property recorded in the lieu of the EIF4t1 and time programa in donation. accounting records at the Request t for Con- (a) -The current Bair market value. ('u 8F-$7r : However,when there is sufficient jos- que) fbrSF Outlay Report and Be- tiflcation, the Federal awarding agen- • fo'.Construe- ay may approve the use of the current. tion Programs.Each Federral awarding fair market value of the donated prop- agency Mall standard Ram to be need!kW requissting adopt. as the ems, even if it exceeds the certified reimbursement for value at the time of donation to the grams. However, a Federal awarding • (d) Volunteer services iirrnished by agenoy may substitute the SF-410 proitantodal and technical when the Federal awarding agency de- , and other skilled un_laminas that it provides adequate in- skilled labor may be counted as cost formation to meet Federal needs. shag or matching if.the service ie an $� tore ex . integral and neoeeear8 part of an op- - third Con proved'project or proem:. Rates fbr•(a) and tip' including cash vo�'teer services shall be consistentparty in-kind, shall be no- with those paid for similar work in the cepted as part of the.recipient's Cost. recipient's orgaufsition. In those'in- sharing or matching when such con- ,stances in winch the required skills are terbutions meet an of the following.ori- unbound tithe ent o�ition, verifiable from the recipient's airs shall lar Con in with .those recipient paid far siadlar work in the labor mar- records. ket Air not included as ket in which the recipient competes for ibr any other contributions the kind'Of services involved:In either federally-assisted project 0ase,paid fringe benefits that are rea- or (1h.Areamiable, allowable, and allocable may necessary and reasonable for be included in the valuation. proper and efficient accomplishm®t of (e)When an employer other than the (4), project or praetor!'• objectives.uun the applies- recipient the services s of l- . theee'`eerviaes shall be va1- (�Are inby the iged• •(lot �at the employee's regular rate of er(5 Are notund paidr pay(plus an amount of fringe benefits another award, except that are reasonable,allowable, and sl- ithers be a by Federal atatate to • looabie.. but exclusive of overhead (6)used for Are provided sharing costs), provided•these services are in n the approved the same.skill for which the . a by the Federal is normally paid. Ployee • agency. (1) Donated (7) Conform to other provisions of ch items es supplieses may include su tins part,as applicable. office supplies, laboratoryequpijes or (b)Unrecover+ed indirect costs may be workshop and or onlymatching with the sharing*eluded as pert of cost or Value amend to donated supp in_ cif prior approval eluded in the cost sharing or matching (thetFederalawardingage ncy.. share shall be reasonable and.shall not recipient contribuidons. exceed the fair market value of the of services and properly shall be estab- property at the,time of the donation. *shed in accordance with the applfca- (g)The method used far determining bie cost priactples.If a,Federal award- cast sharing or matching for donated Mg agency authorizes nate buildings or land Mr ents to do- equipment, buildings and land for aonstruotion/ which title f o hies or long- differ acoordfrig passes to the purpose of may term .ues, the donated to the purpose the properly for cost sharing or matching section apply. or(2)of this shall be the lesser of paragraphs (cxl.) (l.)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.0(1-1-12 of for land, the related to projects financed 1n whole or may be claimed cost property in part with Federal feuds. sharing or (b) ePt as provided in paragraph (2)If the purpose of the award is to (h) of this section, program income • earned duringsupport activities that require the Use be retainedthe recipient period shall b by the • mafl tflg or or land, nor- o rdaIlci with Federal awar+dingg agency . for and buildings ,�.be ti orregulatione :the terms and. (Sandi- . • "' + However,the ibII value of equip- or move of shallard, be need in one • meat or other capital assets and fair ways listed in the ibl- rg. ental ebereee for land may edthat be allowed, (1).Added to hinds Federal award ng project by the.Federral t ted to the agency has approved the charges, awarding agemay (h) The value of .donated property halep project or program or and used to b eb vas.eligi • - shall e�accounting polkdes of in with GO Geed to the non-Federal withgna the of the project or program, time. (S)tweeted from the total project or .. progiam allowable cost in determining.' (1) The valve of demoted land and the t allowable oasts on buildings shall not emceed its iair mar- beta.abate of 'add& the het value at the time of donation' to poatc y authorises the recipient as established by an lade- (e) as agency and the • pew ' (�9•. car tfiied real disposition of lea iaoOme as de- property apprai� �� Bathed se ti paragraphs(b or(bets.ss Administration represemtaee) and the•yl Prowl income bein red in certified by a respc�it official of the °f any limitsstipulated shall (used f recipient. • ., . a«sarnanhe with paragraph (b)(S) of The value of donated eq�pmnent the section. • shall not exceed the ilsir market value (d) in a In ce ey do that thei y in its of equipment of the•same age and can- awarding agency does not specify in Wadi- • dition at the time of donjon, regulations or the terms and camdi- (8)The value of donated space:shall It of the award how Program income not exceed the fair rental value of cow is to be used, paragraph (b)(g) of this parable space as establ�d by.an it de- station shall apply Tanis exceptly to Pendent appraisal Of le apace all pr o For orw programs re- and facilities in a Privately-ownedsearch. awaadt•that support n building in the same search, { (4) The value of lshall (b)ic l this.=lassectione shall not exceed its fair rantalval equipment aging agency in ten (5) The following requirementn and caul:ward or the another alternative on to thin to the recipient's Per- the special d orcrecipient is subject to records for in-kind contributions in award swnditiona, as Indicated third parties. ag in f 2L514 (i) Volunteer services shall be (e) Unless Federal awarding punted aunt to the extent feasible, regulations or the � .ions of the award provide off, ported by the same methods IIsed by the recipient for its own employees the Federal have no ega ding to o- (ii) The basis for determining the the Government regarding Prof • valuation for personal service, mate- the j� after the end of rill, equipment, buildings and land (fl shall be docnmeated. If authorised by Federal awarding agency regulations or the terms and • • i215.24 Pa�o�raa condition of the award,casts incident (a) Federal awarding agencies shall to the 'geneted from gross ration tioa of income to ; apply the standards set forth in this determineincome,Pr d tion toseatton in requiring recipient these awl have not been charged to • • . ORM Circulars arid Guidance • §215.25 (g)Proceeds from the sale of property (6) The inclusion, unless waived by shall be handled in acccirdance with the the Federal awarding agency, Of costs requirements� of the Property Stand- that prior approval in accord- §215.87)• awe with any of the following,as ap- (h) Unless Federal awarding agency p7ioahle: regulations or the terms and condition qJ 8 cos part 220, "Cost Principles obligation. of the award provide ,red far l t[onal Institu ions(Olds Cir- ents ehall have no Federal Government wi respect to culler 2 CF . ` • program income earned I licenseNon-Profit$CFB part ani `Cost Principles • filee and royalties fin• cur 22);" tiaus•(01018 Cir- copyrigisted.ma- cular�� terial, patens, patent appllcaticua, ( 45 CMS part 74, Appendix B, trademarks, and inventions produced "piles for Determining Costs AP- under an award. However, Patent and ptintaelhi to Research and Development • Trademark Amendments(H II.&C. 18) wid r(bunts and Contracts with Hoa- apply to inventions made under an ea- gleam"and • award. ' 'or research (iv) "contract Cost Principles and Procedares." ISMS Revision of budget and pro- train trans r of finds allotted for gramplena ingallowances(direct payment to (a)The budget plan is the financial trainees) to other categories of sa e. mpreeion of the project or program as 00 approved daring'the award Process. It • Unless in.the apply d may include either the Federal and a as. and fended ubw d, the approved ac�Federal.share,or only the Federal ate'the snoa an transfer or. • �. depe .> Federal award- ios ofv iOn work under an tag agency its.It shall be re- apt'r provieidn dose not apply to -rated to performance for program o the Pai'aheae of es, '.malm3at, nation appropriate. he pried (b) are required,to (d) Ro other prier-ap s may rbeufre- deviations from report manta for epedfic items may be im ap- plans, and request.prior approvals for ogram posed preyed hg tless o deviation has been bsdget and program Plan:revisions, in (e) Except for accordance with this section. Wit-listed in (o) For awards, Paragraphs(c D and(oX4).of this sec- oipieats shall request prior a a s >l awardingoption, ai are as cost- from Federal awarding agencies for onere alienedand their o to waivewrit- or more.of the following program or administrative dby 'prior s budget related reasons. 229 22m approvals required by 81-21 and A- (1)Change in the scope or the objeo- and (�Circulars inc A-81 A- thor- (l)of the project or program(even if recipients aln e r more there is no associated budget revision of the to do any one or more requiring pry written approval).' (�,) �m pre-awardcosts 90 calendar • (2) Mange in a key Person specified days prior to award or more than 90 • in the application or award doourimnt, calendar doge with the prior approval (3) The absence for more than'-three of the months, or a 25 percent reduction in Federalsts awarding eincur.any. All the re- time devoted to the project,by the ap- (Agent's risk risk (Le., theat award- proved project director or principal in- fag agency is under no obligation to re- vestigator.• imburse such costs if far any reason (4) The need for additional Federal the recipient does not receive an award fnn • or if the award is less than anticipated (5)The transfer of amounts budgeted and inadequate to cover such costa). 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 18 months unless one or more of the agency, following conditions apply. For one- 89 • • • §215.26 2 CFR Ch.p(1-1-12 Man) time extensions,the recipient must no- (3) A revision is desired which in- idly the Federal awarding agency in volves spedific 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 beibre the expiration date spent OMB cost principles listed in§215.57. fled in the award.This one-time ezt n- (1) No Other prior approval.require • - aion may not be exercised merely for meats for specific items may be ifa- • the purpose of using nnobligated bal- posed anise a deviation has been ap- proved by OMB. (i)The terms and conditions of award (j) When a Federal awarding agency • . prohibit the eat lion. makes an award that provides support at The extension requires additional for both won and nanoonst rue- Federal finds. • tion work,the Federal awarding agen- MO The' extension involves any oY may regaire the recipient to request • change in the approved objectives or prior approval from the Federal award- scope of the project. tag agency before malting'any fund or . (3) Carry forward unobligated bat budget trend rs between the two types . aloes to subsequent funding periods. . of work eopportsd. • (4)le For a ards that rd research, awards,Fedth eral.awarding providesnon- unless the Federal awarding agency provides otherwise is the award or in agencies ides shall require recipients to no- • the ageoci's regulations,the prior apt- tip.the. Federal awarding agency in Prowa meats described.in this writieg promptly whenever the amount paragraph(e)are aatomatin•1y waived of Federal authorized fonds is expected • (i.e., recipients need not obtain snob to exceed the needs of the reclPient for prior approvals) naleae one of the con- the project,period by more than.i5000 dittoes included in paragraph(e)((2))ap-. or five peresert 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 far additional is submitted for of fends among direct cost categories a � apgaoval for or prop , functions and activities (1). for awards in which the Federal share • of the Project a 00 and the t rWhen evisions, farms thatthe _ neeMess the were used award cumulative amount of$100,0 such transfers cn exceeds or is expected to exceed l0 per- >e 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 : the • oy. No Federal awarding agency shall date of receipt of the request .1 budg- permit a taansthr that.would cause any et revisions.Federal awarding Federal appropriation or part thereof shall review the request and the to be used nsi furen i thse other l in- have approved. If revision Is thosehether the budget revisions en the appropriation. with the original.ia- stall under consideration at the end of • teat'A theeher changes t 30 mar days,the Federal awarding fg)'All other changes to•noncanstati� lion budgets,except fir the changes de- egefOY shall inform the reeipient in scribed in paragraph(l')of this section., writing of the date when the recipient do not require prior.aptaoval. may expect the decision. (h) For construction awards, recipe.- 019 FE 20211t,May U.2004,as amended at 70 eats shall request prior written ap- FE 51E80,Aug.21,2005] proval promptly from.Federal awarding §ffiSu86 NotFlaleatel aaditls. ages for budget revisions whenever paragraphs(h)a), (2) or(3) of this sec- (a)Recipients and subrecipients that tion apply. are inat€tatdone of higher education or (1)The revision results from.changes other am-profit organisations (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. 75�7507) and revised OMB 90 • OMB hulas and Guidance §215.29 Circular A-188, "Audits of States, visions of the Federal Acquisition Rag- Local Governments,and Non-Profit Or- elation(FAR)at 48.CFR part 81. • •ganhiations." Ile Me 51880• (b)State and local governments shall 'Aug ffil • be subject to the audit requirements $S15.28 period of availlability of funds. contained in the Single Audit Act • Amendments of 1096. (81 U.S.C. 75 Where a funding period is Waffled,a 7507) and revised OMB Circular A-188, recipient may charge to the grant only . • Loma "Audits of States. sove ts, allowable costs resulting from-oblige- and Non-Profit tiona." tiome marred�rlug the faadil �" (c} For-profit hospitals not covered riod and aayf•pre-aaward costs autthor • - by the audit provisions of revised OMB Ia..,by the Fedeal awarding agency. Circular A-138 shall be subject to the §g1r,49 candiliowdezeinplions. audit requirement's of the Federal awarding agencies. (a) 0MB authurizas conditional ex- (d) Commercial argticns shall e®ptian from OMB administrative•ro- be MOWS to the audit regnireMmeats of gviremenis and oast paiacdples alma the Federal awarding meow or the tars`ib r Certain. Federal programs with • prime reafp t' es imccrpmated fats p ..and consolidated administra- the award document. • five funding, that are identified by a 6816,27 Allowable costar • • Federal agency.and approved by the For each kind of recipient,there is a . head of the Executive department or agency.0am set of Federal principles for deter- c consdme tin alt with h A Federal OMB during its consider- mining allowable costs.Allowability of scion of whether to grant such an costa shall be deter in accord- won. anoe with the cost pimples applicable (b) To promote efficiency in State to the entity mourning the costs.Thus, sue local program administration, • aliowabllit y of coats*mired by State, When Federal, con-entitlement pro- local or federally-recognized Indian gas With colninon segposes have ape_ tribal governments is determined in oific statutorC,g-aatharbpd oonsoli- • accordance With the provisions of 2 dated ylanntig and consolidated ad- CFR part 215, "Cost Principles for ministrative funding and*here most of State,Local,and Indian Tribal Govern- the State .agency's resources come meats(OMB Circular A-87."The allow from non-Federal sources, Federal ability of costs incurred by nOUprofit agencies may exempt these covered organisations is determined in accord- non-entitlement • ance with the provisions of 2 CFR part grant programs from certain •OMB • 280,"Cost Principles for•Non-Profit Or- grants management requirements.The ganistatians(OMB Circular A-122)."The exemptions would be from: allowability of costs incurred by insti- • (1) The requirements in 2 CFR part nation of higher education is deter '225, "Cost Principles for State, Local, mined in accordance with the provi- and Indian Tribal Governments (01133 lions of 2 CFR part 22), "Cost Prig- Circular A-87)" other than the • stiles for Educational Institutions allocabdlity of costs provisions that;are (OMB Circular A-21)."The allowabflity contained in subseotion.C.8 of appendix of costs incurred by hospitals is deter- A to that part mined in accordance with the provi- CO The requirements in 2 CFR part done of appendix E of 45 CIS 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 Contiaats with Hos- visions that are contained in paragraph pitals." The allowability of costs in- C.4 in section C of the appendix to that carred by commercial organisations pert; ' • and those non-profit organizations list- (8) The requirements in 2 CFR part ed in Attaobmeat C to Circular A-128 is 280,"Cost Principles for Non-Profit Or- determined in accordance with the pro- ganizations (OMB Circular A-128)" 91 • • • • ¢215.30 2 CFR Ch.0(1-1-12 Mon) • other than the alloaability of costs pro- m216.31 begrame coverage. . visions that are in paragraph A.4 is • section A of appendix A to that part; valvn at a r ncen,ov,p� (4)The administrative requiirements for reej.vide equivalen end t insoranoe trege •provisions of part 215(0MB'�rw]ar A— 4uired with Federal "limiest ao- �," .Adquaistrative Begnire. mend for Grants and Agreemea�with pederanto Proper owned by the recipient. . Institutions of Higher Education,Hos- ineereq v-owned rewired by need not be vitals,, andOther Non-Profit Organiaaand �of mien meaw the farms ard. MOM );and (5)The agencies'grants management 11211L33 Heck property. ca mnion rale(see§ 15.5). (c) When a Federal agency provides .Each.Federal awarding agency shall this ity, ae a p�'equisite to a P ate for recipients of State'son, a a++nn�+�inR the use sad must adopt its own writtenfiscal and partSlate unsay awards.� fn • .administrative requirements ibr es- provided iw statue, such which are with the.provi- tPending and accounting ler ell Sind% he fl aowing. II Myles for �art 225, "OastI (a)Title to real property shall vest is Trabai Governments (OMB Circular A. and 'Indian the t subject tol the otheireal 87)"and extend snot policies to all sub- thatpr recipient shall use the real recipients.These fiscal and admiaistra- the Pere for the aa as i Is neededmimeo of • tive requirements must be snffioien the Ob144 ject encumber as Long ae it is and specific to seams that:finds are used a the Federal awarding rding in with all a of the Federal awarding • oral statutory and'regulatory provi- (b)The recipiient shall obtain written OnTin, coats are reasonable and nec- essary far operating�these cy the pertymg'other • and fonds are not be used federally-sponsored forhe use real 1 the Federal 4 is othee expenses required to carry out other projects when the rersfpi�t deters that the property responsibilities of a State or its sib- le no longer'needed for the purpose of the Original project. Use in other • [w n.aoo4,as amassed at we projects shall be limited to those under FR.51891,Aug.ffi,90851 11>.4-spomsored prcj (ie., awards) or programs that have pur- OPREETf STANDARDS poem oamsistent with.those authorised . for support Mute Purpose or property stand- agencY. • by the Federal awarding aids. (o) When the real property is no Sections 215.31 through 215.37 set longer needed as provided in Para- fasth uniform standards governing • graphs (a)and(b) of this sectlam, the management and disposition of prop- staari at Si an the Beitign ia- erly furnished by the Federal Govern- strurstione firms the Federal avd�ward- meat whose cost was charged to a away or r Federal ahvard project supported by a Federal award. a agency. The Federal awapli e Federal awarding agencies shall re- a€eam 1°fie one re more or df the quire recipients to observe these stand- following.ecp ieition iy btlee adtbontpermitt ards under awards and shall not impose retam co The t 'be permitted to sanY required farther obligati . i Fents,unless liveulfi- ta the Federalti Go t r it . recipient may use its ownubatate. The ter the Federal tna it management standards and oced�es mfoarket that percentage of the current fair • ' provided it observes the provisionsmarket value a the property aoIn §2��through 1215.37. the to the Federal participation in the project. 92 • • • 0116 Madan and Guidance §215.34 12)The recipient may be directed to (b) Exempt propel..When statutory sell the property under.guidelines'p o- • authority exists, the Federal awarding vided by the Federal awarding agency agent*has the option to vest title to and pay the Federal Government for properly acquired.with Federal funds . . that percentage..cif the current fair in the recipient without further oblige- market value of the property attrlb tiom to the Federal Government and • • stable to the Federal:Eton in .under conditlecs the Federal awarding the.project(after deducting Waal and •agency considers aopriate. Such • • reasonable selling and fix-up expenses, Property is"exempt per.".Should if any,from the sake.proceeds).When a Federal awarding agency not estab- the recipient is ant iced or required lish conditions, title to asempa:Frog. to sell the property,proper Isles proce- envy upon acquisition shall vest in the dures shall be eshablished that provide 'recipient Without der obligation to for competitien tO. the extent pram- the'Federal Government ticable and tibia return.serai•l in the highest"Poo- f SlS�t4 (3)The recipient may be directed to •(a)Title•to equipment acquired by a transfer title to the property to the ***dent with Feder!a1 rands shall vest Federal'Government or to an eligible in-'tom.recipient, subject to condition third party provided that, in :each• og dire section• • oases,the recipient shall be.untitled to (b)'The recipient shall not use equip- compensation for its.attributable per- met acquired with "awn'. funds to centime of tare om9.+ent fair .market provide sa vioes to non-Federal outside value of the.property. organisatidns for a flee that is lees than private,dies charge for:aquiver M Fedeeaizowned mad eft lent services, Nees specifically au • - ProPeiy tbomlaed by Federal statute,fix•aa•long ((a hj-w Property. (i)Title as `F retains• an • interest iu riseeguipmant. in the _ re a s (c)The recspler t shall use the equip- vestedveatory listing S of annually an i� which it the cproject or program wougrariy-owned which it was • property in their, aastody to the Fed- gr whether or not the projectsupported by Fed- Fed- eral awarding-agency Upon t pletion gram continue to be not encumber e he of the award or when tb<e.property is no property rat s and shall the longer needed, the recipient shall re- e�awardingarmy.Wh°°t n W l of then ngdr port the property to the Federal award- en no r pro- lug agency for farther Federal agency needed fins.eci mat;tha project oe pip- utilisation. gram:the recipient;than use the equip- (2) If the Federal awarding agency meat-Im connection With its fol- hasother.fed- CO no further need for.the property,iter activities, in the shall be declared excess and reported to (1) Activities sponsored by the Fed- the General Services A bi aistratimn, eral awarding agency which funded the unless the Federal awarding. agency edema project,then has statutory authority to dispose of (2)Activities sponsored by other Fed • - • the property by.alternative methods era a (e.g., the authority provided by the (d) During the time that equipment • Federal Technology Transfer Aot (15 is used on the project or program for U.S.C. 8739 (I)) to donate research which it was•loquired, the recipient .: egniprnert to educational and non-Prof- shall make it available for use on other it organisations in accordance with projects or programs if such other use E.O. 12en, "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 54295, 3 (3FR, 1982 Camp., p. 328)). Ap- preferencefor such other use shall be propriate fastracttons 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 • I 1 - • §215.34 2 CFR Ch.II(1-1-12 Edtin) second preference shall be given to females between quantities deter;. projects or 'engrains Sponsored by mined by the physical Inspection and other Federal warding agencies.If the those sheen in the accounting records ' • • _callnPment is owned by the Federal shall be investipstei to determine the Iscrounment use On other acthdlies causes of the iffierence. The recipient not aPonsorei by the Federal einem- wan, in roimection with the kee - ment shall be permiesible If authorised ory,-verity the eniebence,current nbi- . by the Federal awarding.agency User fixatio , and•continued need for the charges shall be treated as come. e program in- uipment. . ' (4)A witted system shall be In effect • ......4..... ....._(e) When aaciakimic....4..,...._ rePleoemeaP to. Insure adequate safeguards to Pre- I .........„bumut:may UM the vent lois, damage, or tete of the . equipment-to be replaced as trade-in or equipment Any bee, damage, or theft sall the eqzdnutent.and use the pro- of emdpmentiban be investigated and meth;to ofbet the costs of the replace- in -documented;if the equipment was plant eguiPment sablect to the an- owned by the Federal Goverzunent,the Frond of the Federal-griming agency. recigient shall proMptly notii'y the (f)The recipient's propertw Manage- Federal award*agency. • meat standards for equipment acquired (5)Adequate maintenance procedures with Federal fends and federally-owned 'then _he.koseemented te keep the • equipment shall include all of lowing: fel- • ' equipment' in good condition. . . . . (1)Equipment records shall he Main- ( .Where the recipient is authorised tallied accurately and shall latitude the or.XeCtelred te Bell the leleipmelit'Prep- teller/Mg information. males procedures shall be established • (I)A description Of the equipment. ., ..,..,„whiPh Provide forcompetitionto.the (ii) manvbatuzeros aerial number wauFfau, practicable and result in the • model namber, Federal'stock number. hilageat national en*number,or other lienti- (g) When the recipient no longer Dation number. needs- the equipment, the emdpinent (iit)Source of the egomania,incand- may be used for other activities in go- ing the awardnmnber. • credence with the following standards. . , (iv)Wletherlitle vests in the reelpi- For egutment with a current per unit ant or the Federal Governmeht. fair market value of 0000 or more, the (v) Acmdsition date (or date re- recipient may retain the equipment for calved,if the equipment was famished other uses provided that compensation by the Federal Goverment)and cost. Is'made to the original Federal award- (vl)lubrication from which one can leg agency or its summer. The calculate the percentage of Federal amount of conmensatIon shall be COM- participation in the coat of the equip, ported by applying the percentage of went(not applicable to equipment far- 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 infmma- meat. If the recipient bae no need for on was reported. • the equipment, the resilient shall re- ; . (viii)Mitt acquisition cast quest iispositian instructions from the • (ln) ultimate dispredthm data, in- Federal awarding age*. The Federal 1 eluding date of disposal.and sales price awarding agency shall ietemdne or the method used to determine cur- whether the equipment can be used to ' '1 • • rent fair market value where a recipi- meet the agency's requirements. If no . : . , ant 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 Service;Ad- Government shall be identified to Judi- ministration by the Federal awarding - oate Federal ownership. agency to determine whether a require- .(3)A physical inventory of equipment meat for the equipment exists in other • shall be taken and the results ma- Federal agencies..The Federal award- Quelled-with the equipment records at lug agency shall lame instructions to • least once every two years. Any dif- the recipient no later than no calendar 94 .. • . , • • MAI arcukrs and Guidance 1215.36 • ' days after the recipient's request and the equipment shall be subject to the the owing procedures shall govern, provisions for federally-owned equip- (1) If so instructed or if disposition mont. instructions are not lasted Within no calendar days after the reolpieat's re- 1212.85 8sppiiea sad other ezpead- quest, the recipient shall sell the aide i-w' y • equipment and itimharsethe Feral (a) Title to sopiies and other ea • awarding agent*an amount coated pendabie property od a».vest in the re • - 1►* applying to_ _the axles proceeds the °Went Ivan acgaisitkai. If tie is a �'�Be of. ederal_on in residual try a.unitised =miles tdie cost of the original prOjeat Or pro- exc • eeding' in total aggregate gram.However, the reedident shall be value sir perndtsed to dednafr and retain $tm ° tin the Federal share iB00 sir ten pei+Cent of the or�'� and the sup- the preeeeda,whichever i8ieee,floc the plies are not nooks'kr any Other fed- recipient's•Po1wug and baranb ig es- craIlrelacioled tiniest or program, 'Ti • o recipient shall retain.the supplies • en If the recipient is instructed to ibr. e•on non-Federal. sponsored ship the equipment elsewhere, the re- tivities us or sell them, but mall; co- in er • Oiprient Owl be reimbursed by the Fed- am case,aappeneate.the Federal Gov- oral Government by an amount which ernment kr its share. The amount of ounmated by applying the'p t- compensation shall be computed In the. age of the.recipient's participation in same matter as for Wit. the cost of the Original project or pro- (b) The reclp'ent shall not use sap- gram to'the current flair market value plies acquired with Federal funds to of the equipment,plus any reasonable provide services to non-Federal outside shipping or interim storage Costa in- Orgaaisathius for a fee that is less then • • s private conies charge for equ va- (3) If the recipient is instructed to lent services,'unless specifically an- • otherwise dispose of the equipment,the Marked by Federal statute as long as recipient shall be reimbursed by the the Federal"Govemment retains an in- Federal.awarding agency for such costs target in the'mpplies. • incurred inks disposition. (4)The Federal awarding agency may §216.36• Idagdble pacpr49- reserve the right to transfer the title (a)The recipient may copyright any • to the Federal Government or .to a work that is sadject to copyright and third party named by the Federal Gov- was developed, or'for which ownership emmont when such third party is oth- erwise eligible under sainting statutes. was p0T° ' uge as award. The Such transfer shall be subject to the Federal awar&ngexclusiv es)reserve a • following standaraB. royalty-free, nonexclusive and irrew (f) The equipment shall be.appro- male right to reproduce, publish, sir priately identified in the award or oth- otherwise use the work far Federal pro- erwiae made known to the recipient in �,and.to authorise others to do so. writing. (b) aipieats are subject to applidar (if) The Federal awarding agency ble regulations governing patents and Fowl issue .diapoeit n instructions inventions,including go'ver nt-Wide • within ]a0 calendar days after receipt regulations issued by the Department • of•a final inventory. Tile *nal rover- of Commerce at 87 CPR part 401, tory shall fiat an equipment acquired "Righin to Inventions Made by Non- with.grant funds and federally-owned profit .Organic tions and Small Buss- equipment. If the Federal awarding nem Firms Under Government Grants, agency fails to issue disposition in . Contracts and Cooperative Agree- structions within the 120 calendar day menu." period, the recipient shall apply the (a) The Federal Government has the standards of this section, as appro- right to: th (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.d(1-1-12 Eamon) • 0)Authorise others to receive,repro- (B)A Federal agency publicly and of-dues, Publish, or otherwise use-mach axially cites the research findings in data for Federal purposes. support(d) (1)In addition, in response to a of an agency action that has • - Freedom of Information Act(FOIL)re= the force d by of Federal quest far research date,relating to pub- m)Vend g the agency that findings developing an agency actiona that award neared hat try�the eFFeunder rat has a whe and *not Of law is ae • - developing an agency f�aed as when an scuba haws t force and effect °� citesresearch findieds - law,the Federal a of an agency action that has ream* and the Promo- the florae and effect of law. • vide,within e,reasonalge time,.the re- (e) Title to Intangible property and search data sc that can be made debt eta acquired under en available to the public through the Pro- award or sabaward vests Upon acquist cedars established under the FOIL If lion in the recipient. The recipient the Federal awarding.• the research data .agency obtains shall.use that Property for the orig- eoleo9 in to � re" a FOIA request,the now y charge � the*amber a reasonable ibe equaling arty without approval of the Federal the fun incremental.cost of•obtaining awarding agency.When no longer need- the research data. This fee should re- ' ed Thr the ariginait7y authorised per- fleet poets hummed by the agency,the pose.disposition of the intangible.prop. feerecipient,and it the applicable seh ecdpt. erty shall occur in accordance with the • ants.This any fees Provisions of§215.84(g1 the agency may assess under the POIA OP Firmer,May ii,met as amended at 7o (5 V.S.Q 50a)(4XA)). Fie 51810,Aeg.SI,Mogi (2) The following definitions apply • section:Purposes of of max .Propeaety fruitp. (i)Research data fs defined as the re- Real PmDerty,equipment,intangible carded factual material common ae_ly. Property and debt instruments:that are muted in the scientific nnummaity as a or improved with Federal re- necessary to validate research fiadiaga, funds mall be held in trust by.the re- but not any of the hollowing: preiimi_ eipient as trustee for the beneficiaries nary analyses, drafts of scientific par of the prviect or Pa agram ander which Pere,plans for future research,peer re- theinuPerqrwas acquired or improved. views, or communications with col- Agencies may require recipients to leagues. This "recorded" material ex record liens or'other appropriate ne- chides physical objects(e g.,laboratory time of record i to indicate that per- samples).Research data also do not in. Banal or real property has been so- mitred or improved with Federal funds (co Trade secrets, comameroial infor= and that use and disposition conditions motion,materials necessary to be held aPPl9 to the property. confitdential by a researcher until they are published, or siifilar information Pnoconssima STANDARDS which is protected under law;and (B) Personnel and;iyerak.t infonear $815 l9 Parpese of procurementLion and similar tlon the die- awe. • • closure of which woUld constitute a Sections 215.41 through 21B.4B set • clearly unwarranted invasion of per- forth standards for use by recipients in soma privacy,such as information that establishing Procedures for the pro- could be used to identify a partlonlaa curement of suppliee and other expend- person in a research study. able property,Wit,real property (ii) Published is defined as either and other services with Federal funds. when; (A) Research findings are published sure thatmaterials and serrvic in al peer-reviewed scientific or tech- are obtained in an of active en mpr • and in compliance with the provisions OMB°dinars and Guidance §215114 of applicable Federal statutes and ex- ;glass caapeadam. •native orders. No additional procure- din procurement amneaotions shall meat standards or regairements shall be conducted fa a manner to provide, be imposed by the Federal awarding - to the maximum extent practical,mien age ties upon recipients, unless ape-. aid free corapetition. me recipient • adflcal>y required by Federal fdiatnte ur eat be alert to orgauistional.. non- • executive order or approved by OMt flirts of interest as weld as nonoompeti- fgl5.41, Recipient:eapa■sibiitiee. tive*nod*among contractors that The standards contained is this fled- restrict or eliminate competition tram.do not relieve the reagent of the or ndese•ter trade:In ordorm- eusat<+e objective Octoiaaalhr Perform- contractual • responsibilities &Maiag anoe and eliminate uniefr competitive ender its aoatraot(s).The recipient is advantage,coatradto s that develop or the reapongible authority,.without•re- draft -specifications, requirements, . Course to the Federal awarding-agency, meter of wuth, invitatkins for regarding the settlement and satiehle- bids.and/or requeti ibrinoposals shall lion of all•contaactnsl and administrar be excinad•flrom competing. i r such tive isms edging oat of procarements procurementaAwards shall be tirade to • entered into in support of an award or the bidder or repo,*idiom bid or offer other agreement-. This includes'Ms' Is r an to the solicitation midis pates,claims,protests of award,source most„advantageous•to the recipient, evaluation or. mattes on of a cm" price,,quality and other motors cC�id- tractaad nature. Matter concerning eyed. soileitathms shut} dearly set violation of statute are to be referred limb.an Vitas that the bidder • to such Federal, State or local author- or offeror shall fulfill in order for the ittiy as may have proper jurisdiction- bid or offer to.be evaluated by the re- t:gl5.s Codes ateaodocft. oft. and all bids or offers may be rejected when it.is in the recipient's The recipient shall maintain written interest to do soa, • standards of conduct governing the • performance of its employees engaged 1215A4 Procurement procedures. in the award and administration of (a) recisissits shall establish writ_ • contracts. No employee, oMeer, or ten, prooarameat procedures. These agent shall participate in the selection, procedures shall provide for,at a min- • award,or administration of a-copotract mum, that paragraphs (aXi), (2) and supported by Federal fends if a real or (g)of this seatim apply. apparent conflict of interest would be (1) Recipients avoid purchasing un- involved. Such a conflict would arise nary items. when the employee, °fader, or agent, (g)Where appropriate,an analysis is • any member of his .or her immediate made of lease and purchase alter- srmilly,his or her partner, or an Mgt- natives to determine which would be ideation which employs or is about to the Most econendcal and practical pro- employ any of the parties indicated armament for the Federal Government. herein,has a financial or other interest (H) Solicitstiions for goods and eery- ' 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 • Capt gratuities, flavors, or anything of material,product or service to be pro- monetary value from contractors, or cared. In competitive yrocaremente, parties to sabagreements.However,re- such a description shall;not contain • cipients may set standards for situ,- features which unduly restrict com- tions in which the financial interest is petition, not substantial or the gift is an nano- (fi) Requirements which the bidder/ licited item of nnr+ieai value. The Offeror must fulfill'and all other far- . standards of conduct shall provide for tars to be used in evaluating bids or disciplinary actions to be applied for proposals.. violations of such standards by off- (iii) A description, whenever pram- • cars, employees, or agents of the re- ticable, of technical requirements in cipient. . • terms of functions to be performed or 97 • • • • f 215.d5 • 2 CFR Ch.N(1-1-12 t un) required,performance including the pro to for the particular prod. acceptable ctanacter. •' or project involved acceptable or mend and for promoting the best inter- . (iv) The specific of. "brand The "o name or equal" deectiPtions that bid- or "peroentage of construction cost" dere are required to meet when such methods .of contracting shall not be items are included in the solicitation. used. • (v) The arceptaace, to the extent (d)COMracta shall be made only with of products and fie' ale contractors who pose services dimensioned in the potential ability to•peribbn sac, the metric system of�sur t. oefinfally v>sipr•the terms and condi- (vi) Pre renoe, to the Octant prao- lions of the proposed•procurement. • ticable and economically feasible, for considenatkin lbw be given tc nab products and services that. conserve matters as contractor integrity,record natural and pr'.otsot the aryl- cf.past prirei,,,nar financial and ronment and are energy efficient. technical resources or accessibility to (b)Positive etharts shall be made by ' other necesery resources. In certain recipients to utilise small busing, contracts with certain Milliffitar-owned firms, and women's paw by agencies'E.D 3m • - Recipients of• shall,take all of the Federal •awards "Debarment and Suspansion,',IMO ]2889, • farther this goal. following steps to• 00.Becipients shall,on request,make ml available for the Federal awarding . • CO Ensure that small businesses, nority-owned firms,and women's burr- mem•9,pro_lo revh.a and procure_ nose enterprises are need to the tallest - documents,s orinvitations. roan .f i far extent practicable. proposals or im►itatione.tier bids,rode- (8)Make information on foarthconring pendent cost estimates,etc.,when any opportoaitfes available. and cfthe wowing museums apply. .time framer for purchases con- (� A n ans to comply with tracts to eausonrage and facilitate par- turps or operation fsiid to Fed- ticipatian by small businesses,minor- end ere Pit agency's p in file tion ity-owned firms,and women's busineffi ma's i*"Dtn",�"m tbispart enterprises. of (i).Consider in the contract process (2) 'The Procurement is effected to exceed the small purchase threshold whether rums oompermg for contracts intend. to subcontractmwi�th fixed at aDAD. (currently- small $ and is to be awarded without firms, and women's business enter • • or only one bid or ofihr is per, received in response to a solicitation. • • (4) Encourage c ntaacting with The •t, which is ex- sortiums of small bum,minority- Pealed to exceed the toned' pmrohase owned firms and women's business en- tbraebcid,'specifies a "brand name" • terprises when a contract is too large PCt. for one of these firms to harate individ- ( The propoged award over the • °ally. small purchase•;threshold is to be (5)Use the serviced and assistance,as awarded to other than the apparent • appropriate, of such organisations es low bidder under a sealed bid procure- • the Small Business�. and meat. the Department of Commerce's low- (5).A proposed contract modification ity Business Development Agency in changes the scopei of a contract or in- • the solicitation and utilisation of creases the contract-amount by more wan women's businessfirms amount Of the small purchase andenterprises. threshold. (c)The type of procuring tnstauments used(e.g.,fixed price contracts,cost re- F>1t6'78 Cast aid pace"mirth- • • 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. • • • • • OMB arcularsand Guidance • psis may beevegy �11�� anal-action. Price }i ons where §2�5.4 ' in various because of circumstances wen, including the ison of beyond the control of quot tions ed by es statate, an the contractor. pricesubmitted, market (c) as otherwise requfrpcandmar Wide, togetherdtat rewires the� is the re- cont i (award h ) ovf� evaluation element of onstraction or � tooet to r c allocabili ty and.aliowab ty. shall provide for the recipient to follow 1a1 Preamement its own relati> bid �+eceeda, guarantees, p �, and t retards and fPaYmeniles far t bonds m+less the oo Procuremensmall pa. eaboantraot exceeds purchases in excess of the s chasethreshold shall include the fol- '�' ' those contracts or minimum.: exceeding $100,000, the Fed-lowing at a (a)Basis for contractor selection; oral aglowmay accept. the provided the Federal award- id policy ed regain/mate of the s) tion for lack of� bondi recipient, • are not competitive bids or rife s lug made a determinates (a)Baste for award cost or price. that east's interest adequately $gl6rgl Caa4aat is protected. If wait a de- m has not been made, the minimum aquirements A system for coniasot administration lows. shs11 be as foI- shsll be maintained .to ensure can- t tractor ass withconibrmance equivalent to percento � contract and to mitre adequate and rmatirms of the �The "bid guarantee" shallarch as a ' commitment timely follow up of all purchases.Be- bid bond, ed orne- , oil:dents shall evaluate contractor per- Eotiable other forforma, whether Wit' as bid as thata the terms, conditions and specifics,have•met [Limn ore of his bid, may execute tlons of the tract, within t doh as d required within the.time , § 411 bond on the part of ! Therecipient shall rude, in addi- contract price. A"erPerce t of the the contractor ", complete tion to provisions to define a sound and is one executed in�bond" agreement,the following pro- contract to secure fulfillment connection with a all the visions in all der such tans shall also be armed to Contractor's obligati of confronts. contract. • (a) Contracts in excess of the entail ooa01)A payment band'on the part of the p100 percent Of the con- tual P�cvisiao threshold shall contain eon- tract cepri actor for A "payment bond" is one allow for ov dims shCondit hms that in connection with a contract five, can or legal remedies in instances in to paymentpersons as supplying by rant- a contractor violates or breaches the mat�3al in �ork contract terms, and provide for such provided for in the contract,of work real actions an may be amen- ('i) Whereh Priate. situations bonds are in the (b) All contracts is excess of the shall be obtaineddescribed from companies the bonds ' ssuitable ll purchase sprovieihr threshold shall contain tag certificates of a> ro � , the'recipient,including termination by by ,"Scantye Pm to in Bu ness and a b which nr shall be edlbCompanies Doing Business tion,such contracts shall describe con- (d) All negotiated.than the smale United States." l (except ditions under which the contract may those ofar less than recipient* mansell be terminated for default as Well as include�) swat led by recfipientg shall a Pox to the eftbat that . 99 ' I • • • • • §215.50 • 2 CFR Ch.9(1-1--12 Edon) the recipient, the Federal awarding (d) When.required, performance re- agenay,the Comptroller General of the ports shall generally contain,for each 'United States,or any of their duly an- award,brief information on each of the thorlxed representatives,.shall have ao- following, ems to any books, documents, papers (1) A comparison of actual mom- • and records of the contractor which are plislrmenis with the goals and Wee- directly pertinent to-a specific pro- fives established for the period, the gram for the purpose of making audits, findings of the investigator, or both. examinations, excerpts and treat- Whenever appropriate and the output. fie. of-programs or projects can be reaab7y . (e) All contracts, including small quantified, such quantitative data parchastes, awarded by recipients and should he related to cost data for Coin- their contractors shall contain the pro- Potation of unit costs.' • oarement provisions of appendix A to (2 peons why established goals • •this part,as applicable. were not met,if appropriate. (8) Other Pertinent information to- REPORTS AND 8saa$Ds • eluding, When appropriate, analysis and esplanaticn of cost overruns or 5215.119 Purpose of 'reports cad high.unit casts. (e).Recipients shall not be required to Sections P]5.51 through n5.53 set submit mare than the Original and two forth the procedures fin inm,itoring wee.Of perch mane reports. and reporting on the recipient's fluan (f)Reeilleate shall immediately no- aial and program performance and the tifY the Federal awarding agency cf de- neoessary standard reporting forms, velopsaents that have:a significant ink •also set forth record retention re- Peet on the award'eaPpertal activities. • quiremnts. Also,notification,shall be given in the case of problems, delays, or adverse 92111.51 Masiiormg and reporting pro- conditians which materially finals the gam pedometers. ability to meet the objectives of the • (a) 7$ .are responsmle far award.This notification shall include a managing and monitoring each project, teniplated statPmegmet of the action term.or con • program, subaward, function or activ- hexed' e s any a needed ity supported by the award.Recipients tog) Federalrgre l s m. shall monitor eubbawards to ensure sub- make. awardingnagencies may • re eats have met the audit require- (h) site FederalAgra,as needed. mInts°� as delineated m$i415�L �comply1 with clearance awarding er shall per- shall prescribe the The _Feaeral a frequency withenvyrequesting t which the pie reports shall be face data from recipients. submitted. Except as provided in 1215.52 Facial repeating. §215.51(f), performancc reports shall (a)The followMg forms or.such other not be required more frequently than forms as.may be approved by OldB are quarterly pr. less frequently than an authorised for obtaining ffnanr cal in- nasally.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-cannel reports shall ins Report. be due 30 days after the reporting Pe- (1) Each Federal awarding agency riod.The Federal awarding agency may shall require recipients to use the SF- require annual reports before the and- 269 or SF-269A to report the status of versary dates of multIple year awards fonds for all nonconstruction projects in lieu of these requirements.The final or=grams,A Federal awarding ages performance reports are due 90 cal-' qy may. fir. have the option of endar days after the expiration or ter- not requiring the SF-969 or SF-269A mination of the award. when the SF-1/0, Request for Advance (o)If inappropriate,a final technical or Reimbursement, or SF-212, 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. 100 otm Circulars and Guidance 1215.52 to meet Its needs, except that a final. days. Recipients shall provide shoot SF--X9 or SF- A.shall be required at narrative explanations of actions taken • • the completion of the project when the to reduce the excess balances. 81a'-4l0 is used only for advances. (ivy Recipients shall be required to 00 The Federal awn' agency submit not more than the original and • shall pr+eeariibe whether the report shall two copies of the 8aa-gig 15 calendar .be on a cash ar accrual.basis. If the days homing the ifs of stall quarter. • Federal awarding agency *equine an- The Federal awarding agendas may re- canal infi rmation and the recipient's quire a monody report from those re- records are not normally cipienia receiving advances totaling la kept on the.accrual basis,•the reaipdent miIIian ur nuts per year. shall not be-required to convert its an- •(v) Federal awarding agencies may counting eyste u, but shall develop waive the requirement for s_bmtudon such accrual f ormation best of the 8F-272 for any one of the fb)._. estimates based on an analysis or the lowingreasana: doaamentatfjan on.hand, (A) When.monthly advances do not (ii0 The Federal awarding agency emceed 125,000 per recipient, provided shaII determine the fregnenay of the that such advances ma are nitor+ed • limn" antis Repent • jar snob through other forms.contained in this a project or program, .oansiderIng the etas and complexity of the 'particular �1 in the Federal a project or program. However, the re- warding agen- port shaII not be required more ire- °y'a°> n,the ma's acoonai3ng • quaintly than quarterly or lees ire- controls are adequate to minimize.ex- quently than annually. A final report �, shall be required at the completion of wi When the electronic payment • the agreement, moop imams provide adequate data. (iv) The Federal awarding agency (b)When the Federal awarding age e/'al require recipients to submit the: oy needs additional Information or 8F-2 9 or SF-269A(an original and no s rep , the following more than two copies)no later than 30 snail be obeerved. days atilt*the end of each specified re_ (1) When .additional information is porting period for quarterly ad semi seeded i y with legislative re- annual reports, and 80 Calendar days q�emants;Federal awarding agencies for annual sad final reports. Nickell. shall lens instructions to require re- done of reporting due dates.may be ap- m to submit such information proved by the Federal awarding agency rater the"Remarks"section of the re- upon request of the recipient. -Ports. Go SF-2U, Report of Federal Cash W When a Federal awarding agency determines that a recipient's acaount- (i) When funds are advanced to re- lug system does not meet the standards cipients the Federal awarding agency in 0215.21,_additional pertinent infer- shall require each recipient to submit mation to further meaner awards may the 8F-272 and, when neoesser*, its be obtained upon written notice to the con I :thin sheet, 8F-272a. me Fed- recipient until such time as the system erd ay :. .11 _ agency men shgall.��use�thie re- IS bb ought up t/o�standard.�The Federal port o�tor c sh adva ceLL to re- awarding agelenri In ob 6 his in- mpienie and to obtain disbursement in- formation, shall comply with report formation .for each agreement with the clearance requirements of 5 GTE part • recipients um. (ii) Federal awarding agencies may (5)Federal awarding agencies are en- • require!forecasts of Federal cash re- warned to shade out any line item on quirements in the `Remarks" section any report if not neck• of the report. (4) Federal awarding agencies may MD When practical and deemed nee- accept the identical information iron eseasy,Federal awarding agencies may the recipients in machine readable for- require recipients to report in the mat or .computer printouts or oleo- "Remarks"section the amount of cash tronio outputs in lien of prescribed for- advances received in excess of three mats. • 101 • §215.53 • 2 CFR Ch.p(1-1-12 (5) Federal awarding agencies may (e) computer • provide eleotranto oatpats InspectorGeneral, Compeer Sethen- • to recipients when such expedites or eras of the United States, Or any of contributes to the aaonraoy of report- their duly authorised representatives, have the right of timely and unre, t:S16 Hete�oa and access striated access to any books. doou- "' ' awns Lae regards, , papers, or other records of re • - • ientu that are pertinent to the (a) This section sets forth meats for record zetention and access alnlaatialla.require- awards, in order to make audits, ex to records and Federal awarding agencies shall not also includes ire.�ar�ght �e and other record retention or cues to afinely so- access requirements upon recipients. recipient's Peel for the and discussion• (b)Financial records,supporting doo- lar of documents:The rights of n , statistical records,. and all mane In this Paragraph are not liar 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 tailed the final expenditure revert 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 sabers- restrictions on recipients that limit sin of the quarterly or annual Gann- public aooese to the records of reoipi- . alai oral report, as authorised by the Fed- ex- awarding enis that are pertinent to an award, time . The only comp- cept when.theFederal awarding agency are the following. can dernonattate that such records . '(!.)If any litigation,claim,or audit is shall be kept ooaSdeatial and would started before the expiration of the 8- have been .from.disclosure year period, the records shall be re- _persuant to the Freedom of Informer tailed until all litigaliion, claims or then Act (5 ELM 55) if the records audit findings involving the records had•belonged to the Federal awarding have been resolved and final action agency. (g)Indirect cost rate (2) Records for real property and aragrapfia'cost a • equipment acquired with„Federal fundss s apply tog the shall be retained,for 8 years after final disposition. sapPorting types of dobamen (8)When records are records: indirect cost rate • �e(8)When transferred to or com tuns or proposals,cost allode,- by the Federal awarding tion plans,and any dill ar accounting agency, the 8-year retention require- computations of the rate at which a �t is not pDlicable to the recipient Particular group of costs is chargeable allocations(4)Indirect cost rate os, etc. proposals, (such,cost (su as co usage a�geback specified in rates or composite fringebenefit 1215. rates). (c)Copies of original records substituted for the may be a) if subsided forn�otiaiiaa. �the original records if recipient submits to the Federal authorised by the Federal awarding awarding agency or the sobrecipie t agency sh(d)all The`. Federal awarding . submits to the recipient the proposal, • agency Plan,ce other oonmputatioai to form the reqUest transfer of certain basis for negotiation of the rate, then records to ita custody from recipients the 8-year retention period for its sup- when ittermines that the records Porting records starts on the date of pow long term retention value. such submission. However, in order to avoid duplicate (2) If not submitted for negotiation. if recardkeepft g, a Federal awarding the.recipient is not required to submit • agency may make its for re- to the Federal awarding agency or the (*dent s to retain y tainnee aed y records that aresubrem�,t is not required to submit continuousto the recipient the proposal, plan, or 102 • OMB Maids and Guidance §215.62 other computation for negotiation per- the terms and conditions of an award, poses,then the 8-year retention period whether stated in a Federal statute, for the Proposal, plan, or'other cam- halation; ate, application, ar potation and its supporting surds notice of award, the Federal awarding starts at the end of the fiscal year'(or ageec® may, in addition to imposing • other accounting period) covered by any of the special conditions outlined the proposal, plan, or other armpits-its- in 1121514,take one or more of the fol- tion. lowing notias, as appropriate t the O Temporarily withhold cash pay- •$815.� fitness of termination mete pending correction of the deft- eaferament atenaybythe recipient or more severe enthrament Sections 215.61 and 215.62 set forth wraith* actionagency. the Federal uniform suspension,' termination and- Disallow(that is,deny both use Of enforcement procedures. funds and any applicable matching eSY� credit:for)all or part of the cost of the ersdnidiem activity or actiannot in compliance. (a) Awards may be.terminated in (g) Wholly or ply suspend or ter- whole or in part only if paragraphs miaate the current award. • • (ax1),W or(3)of this section apply. (4) Withhold further awards for the pJ B8 the Federal awarding agency, proieotorprogram. if a recipient materially fails to coca- (b).Take other remedies that may be ply with the terms and conditions of an legally ate, award. (b)Swings and appeals.In taking an (2) By the Federal awarding agency enftanement action, the awarding with the-consent of the recipient, in agimoy shall provide the recipient an which case the'two parties shall agree opportunity for Wig, appeal, or upon the termination conditions, in- cam` adminititrative proceeding to eluding the effective date and, in the which the recipient is entitled under • . case of partial t at1on,the portion any statute or regulation applicable to to he terminated. the action involved. (3)By the recipient upon sending to (a) of. suspension and brad - the Federal awarding agency written won. Oasts of a reoradent resulting . notification setting forth the reasons iirom obligations incurred by the re- for' such termination, the effective Wit, during a suspend= or after date,and,in the case of partial terms- termination of an*sad are not allow- nation,'the portion to be terminated. .able union the awarding agency ea • However,if the Federral awarding agen- ply anglicizes them in the notice ay determines in the case of partial of sum or termination or salsa- termination that the reduced.or modi- quently. Other recipient costs during fled portion-of the grant will not ac- sespenson or after termination which oomph& the purposes for which the are necessary and. not reasonably grant was made,it may terminate the avoidable ate allowable if paragraphs grant in its entirety under either pars- (CXI)andi(2)of this section apply. graphs(an)or(B'of this section. a)The!costs result from obligations (b) If Costs are allowed under an which we!re'properly incurred by the re- award, the responsiblities of the re- cipieat Won the effective date of sus- oipient referred to in.§215.71(a),inclnd- pension or termination, are not in w- ing those for property management as ticipatical of it,and in.the case of a ter- applicable, shall be aamsidered In the mination;are nours:m m ble. termination.of-the award, and provi- (2) The,costa would-be allowable if sion shall be made for continuing re- the award were not suspended or es- sponsibilities of the redolent after ter- pired normally at the end of the fond mination,as appropriate. big period in which the termination dS15�i8 > oaa®eait. takes effect. (d)Relationship to debut 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 2215.70 2 CRt Ci.®(1-1-12 Eclikir0 won and tenninatiwu, 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 folly conmd- E.O.e ]o99 and l25119 and the Federal snug the recommendations on dis- awarding agency implementing regale-. allowed costs resulting from the final tions(see§ 51s)• a1 . • wit. SubpartD—After-theAward11i6didisegiantueepead=sstscad • §ffiS.7d Parma. (tea)The closeout of an award does not any of the folloWing: Sections 21511 Omagh 215.73 contain. CO The right ofthe Peden&awarding closeout procedures and other prone- agenag to disallow costs and recover . tp � basis of a later audit as other review. . (2)The'obligation of the recipient to ESii.71 tlleseoatpioeednaies, return any hinds due as a result of (a)2sn1pienia shall submit,within 90 latercos' ar other calendar days after the date of oomple tralmeatiewa - tion of the award, all finamial pet"- ()Audit iegniremeuta in(515.a6, ihrmance,and other reports as required (4) management re4."."' • by the terms and conditions of the mentn is 5815.31 through MN' award. The Federal.awarding agency (5) Records retention as required in • may approve edensions when re- i215. . . qu by recipient. . (b)after closeout of as award,a refer (b)Unless the Federal:awarding agen- —ended i under n wholes may in 07 authorises an; m man a.recipient Rs m°dified or duo liquidate all.obligatwaebummedPart with the consent of the Federal under the award not later than 90 cal- awarding .boy and the rent, • maw*days after the:eenimE Period or providedthe Mies of the re- the date of completion as meowed in (a) of the terms and conditions of the award Prof- or in agency imp7nman�,ing inst roc- arty .management as applicable, are time considered and provisions made for (o) The 'Federal awarding agency Mies of the re- shall make prontpt payments to a re- Wit,es appropriate. • ciplent for allowable reimbursable LW FR Met,May 11,2004, es amended at 70 costs under the award being closed Out. 373 51381,•Aug.31,20051 (d) The recipient shall promptly re- fund any balances of unobligat ed cash §215.73 Collection of aammris ie that the Federal awarding agency has (a) Any funds paid to a recipient in advanced or paid and that is not our excess of the amount to which the re- thorised to be retained by the recipient cipient is finally determined to be enti- i=r 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 delingquent debts. eral Government. If not paid within a (e)When authorised by the terms and reasonable period after the darnnnd for • conditions of the award, the Federal payment,the Federal awarding agency awarding agency shall make. a settle- may reduce the debt by paragraphs • meat for any upward,or downward ad- (a)(1),(2)or(3)of this.section. justments to the Federal share of molts .(1) Ong an administrative offset after closeout reports are received. , against other requests for reimburse- (f) The recipient shall account for meats. any real and personal property no- ($) Witidinldwng advance "payments quired with Federal funds or received otherwise due to the recipient. from the Federal Government in an- (3)Taking other action permitted by • cordance with§215.S1 through§275.37. statute. • ' (g)In the event a final audit has not (b) Except as otherwise provided by • been performed prior to the closeout of law,the Federal awarding agency shall 104 • OMB Madam and Guidance Pt 215.App.A charge interest on an overdue debt in Port all snaleoted or reported violations to accordance with 4 CFR Chapter II, the Fedsial awarding agar. • "Federal Claims Collection stand. 4:Con act Work Hoary and Soar Standards aria" Act(40 D.B.C. )---Where applicable,ell °entracte awarded by recipients hi excess of AP A Ta PABT 215--(a01VTgs� 32000 Sr and is Paavanaaa Gees at leant for otter coat wota that involve the eloPlo8maat of mechanics or Morena All�mbaats, awarded by a recipientin shad include a provision ibr compliance with • small poems, shall. caedak the sections 118 and 107 of the Contract Work following Dune as applicable: Boma and 1111 sa 30Y Act (40 110Mallted try Department U.S.C. • 1.1 Oppo rid g—Ali con- �y part 5).Under sec- traits shall Contain a provision requiring. tion 106 of thedat,each contractor shall be romance with R.O.11916, "squid Smplgv_ required to compute the wages of every me' meet Opp " (ID F8 19319, 12985, 3 ahanio and laborer on the bads of a standard CFR,'199i-1886 CoMv.,p.09),as amended by work week of40 hours.Work in epees of the R.O.11!]b.".Amending Attentive Order 1184E standard work week is perm le provided Relating to Equal Employment Oppor- that the worker is meted at a rate of • tunity"and as supplemented by regulations not lees than Pa times the basic rate of pay at 41 CFR part 60, "Moe of Fedaral Con- ibr all hours worked is OZONE of 40 haoo:S in tract Comnlianoe prrlerams,Equal Employ the work week.Section 107 of thee.Act is ap- meat sty,Depart of Labor." pandas to court uc a work and provides 2.Com a Wit"Act alD.B.C. that no laborer or mechanic shall be required 874 awl 40 D.S.C.31 P —AA sots and gab. to work is worowlastis or ands warkiag grants is atoms of s8100 iir construction or ooadttda®which are amsmGary,ham repair awarded by reolydeate and. or drmgerom. Those, requirements do not • eats shall ienlude a provision ibr amnpllanoe oat,to the Posibases of aliPlifleft or mate- with the Copeland"Ante riek6aok"Lot as rials or arm ordinarily available on the 17.S.C.W4),assupplemented by Department cam market,or aantsaate for traneportatiam of Labor regulations(M CFR Part S."Cam- or t of intelligence. tractors and Subs aobors on Public Sawa- s 1 to br entioas Made Under a Can- tag or Public Work Minced,in Whole or in inor Apreenent—Contracts or agreements Part by Loan or Granlu from the Untied mall or research work stall pro dervel; vide Sr Eta W The Act provides that each Cam- the iights of the Federal Government and tractor orsehreldPieldelmll be prohibited the recipient in any resulting invention in thefrom indooloe. h9, _oaf mesas. as7 Person ac coo dance with S7•CFR part 401,`Bights to repair cmidoyed Public op=I Part ofMade1W Nonprofit CAS Govern- the Minn to which he is otherwise and Scarps, Con Firms and co entitled.The iea�ent shall report an BOB' Agreementssent „' Cooperative . violations to the Federal and iunedbyawerdms. regula- (42and S. Daottiaoho Act, as amended (40 D.B.C. the Federal Water 7 Control � h a tD s-7)—When required by Federal pro- CAC. 1251 et seq.), as • Mon legislation,all construction contemns and migrants of amounts in excess of • awarded by the recipients and subreciplents $100.101) shall ordain a provision that re- of more than$2000 shall include a provision quires the recipient to agree to comply with for tonne with the Davis-Bacon Act(40 all applicable standards, orders or meek- B.S.C.298a to a-7)and as supplemented by trans famed pursuant to the Clean Air Act Department of Labor regulations (29 CFR (42 U.S.C.7401 et seq.)and the Federal Water part S,"Labor Standards Provisions Angles- Pollutiom.Control Act as amended(33 U.S.C. ble'to Contracts Govmning Federally Si- 1251 et req.).Violations shall be reported to named and Assisted ").Under the Federal awarding agency and the Re- this Act,contractors shall be required to pay clonal Office of the libmiromients1 Protec- wages to laborers and mechanics at a rate tion Agency(EPA). • • not lea than the minimum wages specified 7.Byrd And-lobbying Amendment(31 D,B.c • in a wage determination made by the Sec- /352)—Contanstcas who apply or bid for an rotary of Labor. 1n addition, contractors award of$100,000 or more obeli file the re- • shalt be required to pay wages not lees than mired certification. Each tier certifies to ofonce the a week.The recipient shall current prevailing wage deter used Federal the tier above that it appropriatedwil and and has not issued by the Department of Labor in each influundsencing ci g O a� at- solicitation and the award of a contract shall person for oreee tempting to influence an aim as employee be motioned upon the acceptance of the of any agency,a member of Cangr+e,officer wage determination.The recipient shall re- or employee of Conger,or an employee of a 105 • • Median Family Income Chart 11/5/2015 MFI Year Fam size 100% MFI Amount Start Date End Date 2015 1 $51,000.00 1/1/2015 12/31/2015 2015 2 $58,300.00 1/1/2015 12/31/2015 2015 3 $65,600.00 1/1/2015 12/31/2015 2015 4 $72,800.00 1/1/2015 12/31/2015 2015 5 $78,700.00 1/1/2015 12/31/2015 2015 6 $84,500.00 1/1/2015 12/31/2015 2015 7 $90,300.00 1/1/2015 12/31/2015 2015 8 $96,100.00 1/1/2015 12/31/2015 11/5/2015 HOME Rents Bedroom Effective Effective Size Start Date End Date Low HOME High HOME 2 6/1/2015 5/31/2016 $807.00 $807.00 EXHIBIT DEFINITION OF PROGRAM INCOME "Program income" means gross income received by the Recipient or a Subrecipient directly generated from the uses of CDBG/HOME/NSP and other federal funds. When such income is generated by an activity that is only partially assisted with CDBG/HOME/NSP and other federal funds, the income shall be prorated to reflect the percentage of CDBG/HOME/NSP and other federal funds used. (1) Program income includes,but is not limited to the following: (i) Proceeds from the disposition by sale or long term lease of real property purchased or improved with CDBG/HOME/NSP and other federal funds; (ii) Proceeds from the disposition of equipment purchased with CDBG/HOME/NSP and other federal funds; (iii) Gross income from the use or rental of real or personal property acquired by the Recipient or a Subrecipient with CDBG/HOME/NSP and other federal funds, less the costs incidental to the generation of such income; (iv) Gross income from the use or rental of real property owned by the Recipient or a Subrecipient that was constructed or improved with CDBG/HOME/NSP and other federal funds, less the costs incidental to the generation of such income; (v) Payments of principal and interest on loans made using CDBG/HOME/NSP and other federal funds; (vi) Proceeds from the sale of loans made with CDBG/HOME/NSP and other federal funds; (vii) Proceeds from the sale of obligations secured by loans made with CDBG/HOME/NSP and other federal funds; (\'iii) Interest earned on funds held in a revolving fund account; (ix) Interest earned on program income pending disposition of such income; and (x) Funds collected through special assessments made against properties owned and occupied by households not of low- and moderate-income, where such assessments are used to recover all or part of the CDBG/HOME/NSP and other federal portion of a public improvement. (2) Program income does not include interest earned (except for interest described in §570.513) on cash advances from the US Treasury. Such interest shall be remitted to HUD for transmittal to the US Treasury and will not be reallocated under Section 106(c) or (d) of the Act. Examples of other receipts that are not considered program income are proceeds from fundraising activities carried out by Subrecipients receiving CDBG/HOME/NSP and other federal assistance; funds collected through special assessments used to recover the non-CDBG/HOME/NSP and other federal portion of a public improvement; and proceeds from the disposition of real property acquired or improved with CDBG/HOME/NSP and other federal funds when such disposition occurs after the applicable time period specified in §570.503(b)(8) for Subrecipient-controlled property or §570.505 for Recipient-controlled property for CDBG program funds and §92.503 for HOME/NSP program funds. (3) Any program income generated by NSP funds through March 31, 2013 shall be used to construct housing units east of 72nd Street affordable to low-, moderate-, and middle-income (LMMI)households. After March 31, 2013, all program income generated by NSP funds will be limited to eligible CDBG activities, including the benefit to low- and moderate-income (LMI) (not LMMI) households during the term of this Agreement, the program income shall be returned to the City within thirty(30)days. A MA AR Revised and approved 12/3/2009 EXHIBIT DAVIS BACON EXEMPTION CHECKLIST Project Name: Rental Rehabilitation Project Address: 4336 N 41 ST Project No. It is determined that the above project is exempt from Davis-Bacon Prevailing Wage Rate Provisions because: Residential rehabilitation or new construction project is funded in whole or in part with CDBG funds and such residential property contains less than 8 units. Residential rehabilitation or new construction contract, including construction and non- construction costs, is funded with HOME funds and such residential property contains less than 12 assisted units. Proceeds of award of federal funds are solely for the acquisition of real property(land, pre-existing buildings and improvements). The entire project consists of demolitions and no construction is imminent on site. Funding solely for demolition to be completed by City or its contractor before transfer of land to developer. Funding for on-site improvements only. On-site improvements are completed on land owned by the City and improvements are completed before transfer of land to developer. Funding for off-site improvements that are separately owned. Off-site and on-site construction are provided for in separate construction contracts. Project funding is for infrastructure improvements owned and operated by utility company. The prime construction contract financed in whole or part with CDBG or HOME funds is incidental and the amount is less than $2,000. Funding for professional services only (legal/acct/architectural/engineering). These services are funded under a separate contract from any construction contract. Funding source is Emergency Shelter Grant (ESG) or Supportive Housing Grant (SHP), which are exempt from Davis/Bacon. The project will be done through a force account. There is no federal money in the construction contract. Other—Explain: 2Ctatttei &cow Date: /4/oxis Signature of Responsible Administrator A description of the scope of the project is attached. Revised and approved 7/12/2011 CITY OF OMAHA AFFIRMATIVE MARKETING POLICY AND MONITORING PROCEDURES Effective: October 1, 1999 Revised: November 10,2011 • Affirmative Marketing Policy In furtherance of the City of Omaha's commitment to non-discrimination and equal opportunity in housing, the City of Omaha establishes procedures to affirmatively market units constructed or rehabilitated under any City- assisted program or project. These procedures are intended to further the objectives of Title VTTT of the Civil Rights Act of 1968 and Executive Order 11063. It is the affirmative marketing goal of the City of Omaha to assure that individuals who normally might not apply for vacant rehabilitated or constructed units because of their race or ethnicity: • know about the vacancies • feel welcome to apply • have the opportunity to rent or purchase the units This policy will be carried out through the following procedures: 1. Informing the public, potential tenants and owners about federal fair housing laws and affirmative marketing policies • The City of Omaha will inform the public, potential tenants, purchasers and owners about its affirmative marketing policy, Title VIII and Executive Order 11063. • The City will place public notices in the Omaha World Herald and the community media serving minority groups to inform owners of the program. • City representatives will meet with property owners and assist them in preparing program applications as requested and necessary. • Owners selected for a rehabilitation .program shall notify in-place tenants in writing of their involvement in the program and provide them with the following options in accordance with provisions of the Uniform Relocation Act; 1. Remain in the present unit during rehabilitation. 2. Move temporarily to another unit within the project while his/her unit is being rehabilitated. 3. Permanently relocate or voluntarily abandon the unit during the rehabilitation. • Owners shall post the HUD Equal Housing Opportunity Logo in the project building and display the Fair Housing Poster in their rental office and on all application and documents/forms. • Owners shall use media accessible to minorities when advertising the availability of units. • Owners shall use the Equal Housing Opportunity logo, slogan or statement in all advertising. ® Owners shall maintain a non-discriminatory hiring policy. 1 Reviewed and revised 11/10/2011 Owners shall adopt a fair housing policy. 2. Informing low-and moderate-income persons about available units Property Owners having vacant units may contact the Omaha Housing Authority (OHA) at 402-444- 6900 and place units on OHA's "Available Unit" list. This list is distributed to families who have received Certificates of Family Participation and are looking for units to rent. The listing will remain on the"Available"list for 35 calendar days, then be removed. If still vacant, the property may be relisted. Property Owners must document any conversation/notification regarding posting of vacancies. If the property is not listed with OHA when rehabilitated or constructed units are available for initial occupancy, the owner shall inform the following outreach agencies and/or other agencies of this fact in writing and submit a copy of the letters to the City of Omaha, Planning Department, Housing and Community Development Division, Loan Section, 1819 Farnam Street, Room 1111, Omaha, Nebraska, 68183. Chicano Awareness Center,Inc. Urban League of Nebraska 4821 South 24th Street 3022 North 24th Street Omaha,NE 68107 Omaha,NE 68111 Family Housing Advisory Services Community Alliance 2401 Lake Street 4001 Leavenworth Street Omaha,NE 68111 Omaha,NE 68105 Eastern Nebraska Human Services Heartland Family Service 900 South 741 Plaza,Suite 200 2101 South 42nd Street Omaha,NE 68114 Omaha,NE 68105 Greater Omaha Community Action Heartland Family Service 2406 Fowler Avenue 6720 North 30th Street Omaha,NE 68111 Omaha,NE 68112 Greater Omaha Community Action Heartland Family Service 5002 South 24th Street, Suite 203 2580 South 90th Street Omaha,NE 68111 Omaha,NE 68124 League of Human Dignity Heartland Family Service 5513 Center Street 11212 Davenport Street Omaha,NE 68106 Omaha,NE 68154 Heartland Family Service Nebraska Commission for the Deaf 116 E. Mission Avenue 1313 Farnam on the Mall Bellevue,NE 68005 Omaha,NE 68102 Heartland Family Service Omaha Association for the Blind 302 American.Parkway 1024 South 32nd Street Papillion,NE 68046 Omaha,NE 68105 Holy Name Housing Corporation Great Plains Chapter 3014 North 45th Street Paralyzed Veterans of America Omaha,NE 68104 7612 Maple Street Omaha,NE 68134 Mayor's Commission for Citizens with Disabilities 1819 Famam Street, Room 304 Omaha,NE 68183 2 Reviewed and revised 11/10/2011 3. Record Keepmg The Owner shall keep records of the following: ■ Local media advertisements of the vacant unit • Contact dates with outreach agencies and Omaha Housing Authority • Correspondence informing outreach agencies of vacancies • Race and other demographic data of occupants and persons inquiring about availability of units • Tenant Survey,utility allowance and income determination forms signed and dated by Owner • Name and age of all household members • Verified income for each household • Copy of lease • U.S. Citizenship Attestation Form for Public Benefit 4. Assessment of Actions The Owner's affirmative marketing efforts will be assessed by the City to: • determine whether Owners have affirmatively marketed vacant units to individuals who normally might not apply; and, ■ determine whether a sufficient number of racial and ethnic families have applied for vacant units The City will take corrective action if it is found that property owners are not carrying out established procedures of the City's Affirmative Marketing Policy and Monitoring Procedures. Affirmative Marketing Policy Monitoring Procedures 1. Duties and Responsibilities of the Owner a) The Owner shall post the HUD Equal Housing Opportunity Logo in the project building and in the rental or sales office. b) The Owner shall submit to the City a copy of all letters notifying the outreach agencies of vacancies. Outreach agencies may include, but are not limited to, the agencies listed in Item 2, Page 2. c) The Owner shall submit to the City a copy of all advertisements placed in the local newspapers. All advertisements must include the Equal Housing Opportunity Logo, Slogan or Statement. d) The Owner shall submit to the City a Demographics Form for Applicants, attached as Exhibit 1, which includes the name, racial/ethnic characteristics, income and family size for each person responding to the advertisement. e) Prior to the start of the project, the Owner shall meet with each in-place tenants of the occupied units and complete a Tenant Survey, utility allowance, City of Omaha Definition of Income Affidavit, computing annual income form, and U.S. Citizenship Attestation for Public Benefit form. Owner shall submit these properly completed forms to the City, as well as a copy of the dated and signed lease agreement, and retain the original lease for proper record keeping. Forms must be updated on lease anniversary date and submitted to the City during the period of affordability. A copy of each form is attached and marked Exhibit 2. 3 Reviewed and revised 11/10/2011 II t) The owner snamm provide eacn m-place tenant m the project with a copy or the Lay or omaha's written Tenant Assistance Policy (TAP) and shall advise said tenant(s) of the impact of the project on him or her. The Owner shall provide the TAP to the tenant immediately after submission of the Owner's application for participation in the City's program. g) After completion of the project, the Owner shall submit a Tenant Survey Form, utility allowance, Computing Annual Income Form, U.S. Attestation of Citizenship for Public Benefit, and other reporting forms as required by the terms of the Agreement, for each occupied unit,as well as a copy of the lease agreement. All documents must be properly executed and dated. h) Owner shall insure that the rents, including utilities and Median Family Income, are consistent with the terms and conditions in the approved Agreement between the Owner and the City of Omaha 2. Duties and Responsibilities of the City a) The City shall assess the affirmative marketing procedures to determine whether the Owner has affirmatively marketed the vacant units by monitoring the Owner's performance in carrying out the Duties and Responsibilities of the Owner as outlined in Section 1. b) The City shall assess the affirmative marketing efforts of the Owner to determine whether a sufficient number of racial and ethnic families have applied for vacant units. This determination will be made by reviewing the information provided on the Demographics Form for Applicant and Tenant Survey Form to determine the proportion of racial/gender participation versus overall participation. c) The City shall take the following corrective action if it is found that the Owner is not carrying out established procedures of affirmatively marketing units: • Notify the Owner in writing of any violations of the Owner's Duties and Responsibilities. • The Owner will be given thirty(30)days upon receipt of written notification to provide evidence of compliance. Upon the Owner's request,the City will provide technical assistance. • If the Owner fails to comply with the Affirmative Marketing Policy and Monitoring Procedures,the City may declare the loan/grant in default. • 4 Reviewed and revised 11/10/2011 EXHIBIT 1 CITY OF OMAHA DEMOGRAPHICS FORM FOR APPLICANTS Loan No. Date No. of Vacant Units Owner Project Address Person Completing Person's Phone No. This Report Home: Work Race/Ethnicity Family Monthly Of Head of Applicant Size Income Household • NOTE: This form is a list of everyone who inquired about renting or purchasing the unit(s). 5 Reviewed and revised 11/10/2011 Arrmiv1H.IIV i 1v1Ai isi IirurVL1Lx rLliiv 6- ^ The Undersigned does/do hereby agree to comply with all terms and conditions of and adopt the City of Omaha's Affirmative Marketing Policy (attached hereto and incorporated herein by this reference as though fully set forth)for the Project located at as approved by on Date: Name of Business or Corporation: (if applicable) By: Signature Printed Name: • 6 Reviewed and revised 11/10/2011 AUTHENTICATED U.S.GOVERNMENT INFORMATION GPO 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, ,lms part establishes principles for because of the nature of its awards, may be 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, (a) This part does not apply to col re appropriate, the cognizantagency for leges and universities which are cov- review,negotiation,and approval. 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 goy- 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 cular A-87);or hospitals. as unallowable and charged to Federal 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). cumstnces 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 e with the negotiation and approval other increment above cost is outside process, OMB will lend assistance, as re- quired,to resolve such problems in a timely 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- ciples do not attempt to prescribe the (OMB CIRCULAR A-122) extent of cost sharing or matching on grants,contracts, or other agreements. Sec. However, such cost sharing or match- 230.5 Purpose. ing shall not be accomplished through 230.10 Scope. arbitrary limitations on individual 230.15 Policy. cost elements by Federal agencies. 230.20 Applicability. 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 PRa1- tive contracts,ments, cost anement d other contracts in8 which CIPLES 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 THIS PART awards. The principles do not apply to AUTHORITY: 31 U.S.C. 503; 31 U.S.C. 1111; 41 awards under which an organization is U.S.C.405;Reorganization Plan No.2 of 1970; not required to account to the Federal E.O.11541,35 FR 10737,3 CFR,1966-1970,p.939 Government for actual costs incurred. SOURCE: 70 FR 51927, Aug. 31, 2005, unless (b) All cost reimbursement sub- otherwise noted. awards (subgrants, subcontracts, etc.) 182 OMB Circulars and Guidance §230.50 are subject to those Federal cost prin- §230.30 OMB responsibilities. ciples applicable to the particular or- OMB may grant exceptions to the re- ganization concerned. Thus, if a quirements of this part when permis- subaward is to a non-profit organiza- sible under existing law. However, in tion, this part shall apply; if a. 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 agency that ment,2 CFR part 225 shall apply. awards and administers grants and (c) Exclusion of some non-profit or- agreements subject to this part is re- ganizations. Some non-profit organiza- sponsible for requesting approval from tions, because of their size and nature and/or consulting with OMB (as appli- of operations, can be considered to be cable)for deviations from the guidance similar to commercial concerns for in the appendices to this part and per- purpose of applicability of cost prin- forming the applicable functions speci- ciples. Such non-profit organizations fied in the appendices to this part. shall operate under Federal cost prin- ciples applicable to commercial con- §230.40 Effective date of changes terns. A listing of these organizations The provisions of this part are effec- is contained in appendix C to this part. tive August 31, 2005. Implementation Other organizations may be added from shall be phased in by incorporating the time to time. provisions into new awards made after Definitions the start of the organization's next fis- §230.25cal 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 §230.45 Relationship to previous profit;and issuance. (3)Uses its net proceeds to maintain, 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; ppt ndix B wdi in containsAttachm thent Bidganizations which are excluded from (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 ance 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 organiza- 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- cumstances and if it: A.Basic Considerations (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 reduc- financed and other activities of the organiza- 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. iced 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- 8. Advance understandings. Under any fled specifically with a particular final cost given award, the reasonableness and objective, i.e., a particular award, project, allocabilityo determine.certain items of costsarmay be service,or other direct activity of an organi- true difficultnto This is particularly zation.However, a cost may not be assigned rec in a preponderance with organizations ofitthat to an award as a direct cost if any other cost fromve a preg ncies.In order thou supportid - incurred for the same purpose, in like cir- sequent nit Federala low nes.In to avoid sub- cumstance, has been allocated to an award unreasonableness disallowance or dispute based on as an indirect cost. Costs identified specifi- often desirabne to or no written agreement it is cally with awards are direct costs of the often theescognizant seek a a written awards and are to be assigned directly there- vanceof or awardispncialg agency in ad- to. Costs identified specifically with other The the incurrence of advance agreemento t final cost objectives of the organization are oonats. absence of an direct costs of those cost objectives and are fect the reasonableness cost will not,in itself,or allocability a off any elementnot to be assigned to other awards directly or indirectly. 7. Conditionale exemptions. a. OMB author- that element. 2.Any direct cost of a minor amount may izes conditional exemption from OMB admin- be treated as an indirect cost for reasons of istrative requirements and cost principles practicality where the accounting treatment for certain Federal programs with statu- for such cost is consistently applied to all torily-authorized consolidated planning and final cost objectives. consolidated administrative funding, that 3.The cost of certain activities are not al- are identified by a Federal agency and ap- lowable as charges to Federal awards (see, proved by the head of the Executive depart- for example, flondraising 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 organi7ation'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 nee- OMB grants management requirements.The essary to the organization's mission must be exemptions would be from all but the treated as direct costs whether or not allow- allocability of costs provisions of Appendix able and be allocated an equitable share of A, subsection C.e. of 2 CFR part 225 (OMB indirect costs.Some examples of these types Circular A-87);Appendix A, Section C.4. of 2 of activities include: CFR part 220 (OMB Circular A-21); Section a. Maintenance of membership rolls, sub- A.4. of this appendix;and from all of the ad- scriptions, publications, and related func- ministrative requirements provisions of 2 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- c. When a Federal agency provides this iee,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 rect 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 titular final cost objective. Direct cost of means of an indirect cost rate(s). minor amounts may be treated as indirect c. The determination of what constitutes an organization's major functions will de- costs under the conditions described in sub- pend on its purpose in being; the types of paragraph B.2 of this appendix. After direct services it renders to the public, its clients, costs have been determined and assigned di- and its members;and the amount of effort it rattly to awards or other work as appro- devotes to such activities as fundraising, priate,indirect costs are those remaining to public information and membership activi- be allocated to benefiting cost objectives. A ties. cost may not be allocated to an award as an d. Specific methods for allocating indirect indirect cost if any other cost incurred for costs and computing indirect cost rates the same purpose,in like circumstances,has along with the conditions under which each been assigned to an award as a direct cost. method should be used are described in sub- 2. Because of the diverse characteristics paragraphs D.2 through 5 of this appendix. and accounting practices of non-profit orga- e.The base period for the allocation of in- nizations, it is not possible to specify the direct costs is the period in which such costs types of cost which may be classified as indi- are incurred and accumulated for allocation rect cost in all situations. However, typical to work performed in that period. The base examples of indirect cost for many non-prof- period normally should coincide with the or- it organizations may include depreciation or ganization's fiscal year but, in any event, use allowances on buildings and equipment, shall be so selected as to avoid inequities in the costs of operating and maintaining fa- the allocation of the costs. cilities,and general administration and gen- 2. Simplified allocation method. a. Where eral expenses, such as the salaries and ex- an organization's major functions benefit penses of executive officers, personnel ad- from its indirect costs to approximately the ministration,and accounting. same degree, the allocation of indirect costs 3. Indirect costs shall be classified within may be accomplished by separating the orga- two broad categories: "Facilities"and"Ad- nization's total costs for the base period as ministration." "Facilities" is defined as de- either direct or indirect, and dividing the preciation 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 ments 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- rect costs (excluding capital expenditures 186 OMB Circulars and Guidance Pt.230,App.A and other distorting items, such as major that have been incurred for the administra- subcontracts or subgrants), direct salaries tion, operation, maintenance, preservation, and wages,or other base which results in an and protection of the organization's physical equitable distribution.The distribution base plant. They include expenses normally in- shall generally exclude participant support curred for such items as:Janitorial and util- costs as defined in paragraph 32 of Appendix ity services;repairs and ordinary or normal B 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 accu- 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- fives, such as the director's office, the office dix. Each grouping shall then be allocated of finance, business services, budget and individually to benefiting 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 oration 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- molly be treated as indirect costs. Direct ministration," as described in subparagraph charging of these costs may be appropriate C.3 of this appendix.The indirect cost pools where a major project or activity explicitly are defined as follows: requires and budgets for administrative or (1) Depreciation and use allowances. The clerical services and other individuals in- expenses under this heading are the portion volved can be identified with the program or of the costs of the organization's buildings, activity. Items such as office supplies,post- capital improvements to land and buildings, age, local telephone costs, periodicals and and equipment which are computed in ac- memberships should normally be treated as cordance with paragraph 11 of Appendix B to indirect costs. this part ("Depreciation and use allow- c.Allocation bases.Actual conditions shall antes"). 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. elation and use allowances. When an allocation can be made by assign- (4)General administration and general ex- ment of a cost grouping directly to the func- 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 orgriniza- 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 readily available base would categories consisting of depreciation and use awnot increase the costs charged to sponsored allowances, interest, operation and mainte- (such ass. The results no special itl ctd study) shallies nance, and general administration and gen- not b an engineering anda allocatety t Rush eral expenses shall be allocated in that order dot bet used to sponsoredtermine w the in- to the remaining indirect cost categories as direct costs to sponsored awards. (1)Depreciation and use allowances.Depre- well as to the major functions of the organi- ciation and use allowances expenses shall be zation. Other cost categories could be allo- 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 ments and equipment used in such buildings, order of allocation does not apply. shall be assigned to that function. (2)Normally,an indirect cost category will (b) Depreciation or use allowances on be considered closed once it has been allo- buildings used for more than one function, 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 halt- 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 paragraph D.5 of this appendix,the separate coat of each jointly used unit of space shall groupings of indirect costs allocated to each be allocated to the benefiting functions on major function shall be aggregated and the basis of either the employees and other treated as a common pool for that function. users on a full-time equivalent (Iris) basis The costs in the common pool shall then be or salaries and wages of those individual distributed to individual awards included in functions benefiting from the use of that space; or organization-wide employee FTEs that function by use of a single indirect cost ate. or salaries and wages applicable to the bene- r fiting functions of the organization. f.Distribution basis.Indirect costs shall be (d) Depreciation or use allowances on cer- distributed to applicable sponsored awards tarn capital improvements to land, such as and other benefiting activities within each paved parking areas, fences, sidewalks, and major function on the basis of MTDC. MTDC the like, not included in the cost of build- consists of all salaries and wages,fringe ben- ings,shall be allocated to user categories on efits,materials and supplies,services,travel, a FTE basis and distributed to 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 eluded when the Federal cost cognizant 188 OMB Circulars and Guidance Pt.230,App.A agency determines that an exclusion is nec- resources employed,the scientific disciplines essary to avoid a serious inequity in the dis- or technical 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 centage which the amount of the particular made for a separate indirect cost pool appli- indirect cost pool is of the distribution base cable to such work. The separate indirect identified with that pool.Each indirect cost cost pool should be developed during the rate negotiation or determination agreement course of the regular allocation process,and shall include development of the rate for the separate indirect cost rate resulting each indirect cost pool as well as the overall therefrom should be used, provided it is de- indirect cost rate. The indirect cost pools termined that the rate differs 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 1. Definitions. As used in this section, the. separate their costs into three basic cat following terms have the meanings set forth egories: General administration and general below: expenses, fundraising, and other direct font-a Cognizant agency means the Federal tions (including projects performed under 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 ried 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 Pl.230,App. B 2 CFR Ch. II(1-1-12 Edition) 2.Negotiation and approval of rates.a.Un- dispute shall be resolved in accordance with less different arrangements are agreed to by the appeals procedures of the cognizant the agencies concerned, the Federal agency agency. with the largest dollar value of awards with i.To the extent that problems are encoun- an organization will be designated as the tered among the Federal agencies in connec- cognizant agency for the negotiation and ap- tion with the negotiation and approval proc- proval of the indirect cost rates and, where ess, OMB will lend assistance as required to necessary, other rates such as fringe benefit resolve such problems in a timely manner. and computer charge-out rates. Once an agency is assigned cognizance for a par- APPENDIX B TO PART 230-SELECTED ticular non-profit organization, the assign- ITEMS OF COST ment will not be changed unless there is a SELECTED ITEMS OF COST major long-term shift in the dollar volume of the Federal awards to the organization. All TABLE OF CONTENTS concerned Federal agencies shall be given the opportunity to participate in the nego- 1.Advertising and public relations costs tiation process but, after a rate has been 2.Advisory councils agreed upon, it will be accepted by all Fed- 3.Alcoholic beverages eral agencies. When a Federal agency has 4.Audit costs and related services reason to believe that special operating 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: lashing 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 adminas- conjunction with shows and other special trative costs. Advertising media include events;and magazines,newspapers,radio and television, (c) Salaries and wages of employees en- direct mail,exhibits,electronic or computer gaged in setting up and displaying exhibits, transmittals,and the like. making demonstrations,and providing brief- b. The term public relations includes corn- ings; munity relations and means those activities (3) Costs of promotional items and memo- dedicated to maintaining the image of the rabilia, including models, gifts, and sou- non-profit organization or maintaining or venirs; promoting understanding and favorable role- (4)Costs of advertising and public relations tions with the community or public at large designed solely to promote the non-profit or- or any segment of the public. ganization. c.The only allowable advertising costs are 2.Advisory Councils.Costs incurred by ad- those which are solely for: visory councils or committees are allowable (1) The recruitment of personnel required as a direct cost where authorized by the Fed- for the performance by the non-profit organi- zation oral awarding agency or as an indirect cost of obligations arising under a Federal where allocable to Federal awards. award (See alsoa paragraphR 41, Recruitings 3. Alcoholic beverages. Costs of alcoholic costs,appendix);and paragraph 42,Relocation costs, of beverages are unallowable. thishprocurement 4. Audit costs and related services. a. The (2)The of goods and services 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 Orga.nirations" 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 ante of Federal awards (these costs are con- A-133,section 230(b)(2). sidered necessary as part of the outreach ef- 5. Bad debts. Bad debts, including losses fort for the Federal award);or (whether actual or estimated) arising 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 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 ape- surance against financial loss to itself or cial consideration and possible limitations in others by reason of the act or default of the determining costs under Federal awards non-profit organization. They arise also in where amounts or types of compensation ap- instances where the non-profit organization pear unreasonable. Among such conditions requires similar assurance.Included are such are the following: bonds as bid,performance,payment,advance (1)Compensation to members of non-profit payment,infringement,and fidelity bonds. organizations,trustees,directors,associates, b. Costs of bonding required pursuant to officers, or the immediate families thereof. the terms of the award are allowable. Determination should be made that such c. Costs of bonding required by the non- compensation is reasonable for the actual profit organization in the general conduct of personal services rendered rather than a dis- its operations are allowable to the extent tribution of earnings in excess of costs. that such bonding is in accordance with (2) Any change in an organization's 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 corn- cumstances. pensation, particularly when it was concur- 7.Communication costs.Costs incurred for rent with an increase in the ratio of Federal telephone services, local and long distance awards to other activities of the organiza- 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 in Federal policy. 8. Compensation for personal services. a. e.Unallowable costs.Costs which are unal- Definition. Compensation for personal serv- lowable under other paragraphs of this ap- ices includes all compensation paid cur- 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,location allowances, genies, such as those resulting from acci- hardship pay,and cost of living differentials. dents, natural disasters, breakdowns of b. Allowability. Except as otherwise 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: rect 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 corn- (2) Charges to awards whether treated as pleted. direct or indirect costs are determined and (4)When lower overall cost to the Federal supported as required in this paragraph. Government will result. c. Reasonableness. (1) When the 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 nization's other activities. to the relative amount of time or effort actu- (2)When the organization is predominantly ally devoted to each. engaged in federally-sponsored activities and (2)Fringe benefits in the form of employer in cases where the kind of employees re- contributions or expenses for social security, quired for the Federal activities are not employee insurance, workmen's 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 prememeIl Iid do peursuant to A the ct(ERSSEmployee such awards and other activities. f (3)(a)Provisions for a reserve under a self- 1974(Pub.L.93-406)are allowable.Late pay- insurance program for unemployment coin- ment charges on such premiums are unallow- pensation or workers' compensation are al- able. lowable to the extent that the provisions (3) Excise taxes on accumulated funding represent reasonable estimates of the liabil- deficiencies and other penalties imposed ities for such compensation,and the types of under ERISA are unallowable. coverage, extent of coverage, and rates and j. Incentive compensation. Incentive corn- premiums would have been allowable had in- pensation to employees based on cost reduc- surance been purchased to cover the risks. tion, or efficient performance, suggestion However, provisions for self-insured liabil- awards,safety awards, etc.,are allowable to ities which do not become payable for more the extent that the overall compensation is than one year after the provision is made determined to be reasonable and such costs shall not exceed the present value of the li- are paid or accrued pursuant to an agree- ability. went 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. feet, an implied agreement on the organi- h. Organization-furnished automobiles. zation's part,or That portion of the cost of organization-fur- (d) Circumstances of the particular employ- nished automobiles that relates to personal ment. use by employees (including transportation (2)Costs of severance payments are divided to and from work) is unallowable as fringe into two categories as follows: benefit or indirect costs regardless of wheth- (a)Actual normal turnover severance pay- er the cost is reported as taxable income to ments shall be allocated to all activities;or, the employees. These costs are allowable as where the organization provides for a reserve direct costs to sponsored award when nee- 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 of payments ac- i.Pension plan costs.(1)Costs of the orga- 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, accru- (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 organization's assets are unal- reasonable estimate of the actual work per- lowable. formed by the employee during the periods (d) Severance payments to foreign nation- covered by the reports. als employed by the organization outside the (d) The reports must be prepared at least United States,to the extent that the amount monthly and must coincide with one or more exceeds the customary or prevailing prac- pay periods. tices for the organization in the United (3) Charges for the salaries and wages of States are unallowable, unless they are Dec- 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- ale 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 organiza- 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- ance reserves (see Appendix B to this part, proved in writing by the cognizant agency. paragraphs 8.g.(3) and 22.a(2)(d)); pension (See subparagraph E.2 of Appendix A to this funds (see paragraph 8.i): and reserves for part.) normal severance pay(see paragraph 8.k.) (2) Reports reflecting the distribution of 10.Defense and prosecution of criminal and activity of each employee must be main- civil proceedings,claims,appeals and patent tailed for all staff members (professionals infringement. and nonprofessionals)whose compensation is a.Definitions.(1)Conviction,as used here- charged, in whole or in part, directly to in, means a judgment or a conviction of a awards. In addition, in order to support the criminal offense by any court of competent allocation of indirect costs, such reports jurisdiction, whether entered upon as a ver- must also be maintained for other employees 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 com- (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 gani7ation's indirect cost rate(s)(e.g.,an em- in-house or private counsel; and the costs of ployee engaged part-time in indirect cost ac- the services of accountants, consultants, or tivities and part-time in a direct function). others retained by the organization to assist Reports maintained by non-profit organiza- it; costs of employees, officers and trustees, tions to satisfy these requirements must and any 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- eluding 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 from the costsFed arel not otherwisent or recovered third lation of, or failure to comply with, a Fed- eral, State, local or foreign statute or regu- Party, o herhdrwei lyaansda result of the pro- lation by the organization (including its ceeding(4) The percentage of costs allowed does agentsh and following dispositions:ss and results in any of not exceed the percentage determined by an the l authorized Federal official to be appropriate, (a)In a criminal proceeding, a conviction. considering the complexity of the litigation, (b)In a civil oradministrative proceeding generally accepted principles governing the involving an allegation of fraud or similar award of legal fees in civil actions involving misconduct, a determination of organiza- the United States as a party,and such other tonal liability. factors as may be appropriate.Such percent- (c) In the case of any civil or administra- age shall not exceed 80 percent. However, if tive proceeding, the imposition of a mole- an agreement reached under subparagraph tary penalty. 10.c of this appendix has explicitly consid- (d)A final decision by an appropriate Fed- ered this 80 percent limitation and permitted eral official to debar or suspend the organi- a higher percentage,then the full amount of zation,to rescind or void an award,or to ter- costs resulting from that agreement shall be minate an award for default by reason of a allowable. violation or failure to comply with a law or f. Costs incurred by the organization in regulation. connection with the defense of suits brought (e) A disposition by consent or corn- by its employees or ex-employees under sec- promise,if the action could have resulted in tion 2 of the Major Fraud Act of 1988(Pub.L. any of the dispositions described in subpara- 100_400) including the cost of all relief nec- graphs 10.b.(1)(a),(b),(c)or(d)of this appen- essary to make such employee whole,where dix. the organization was found liable or settled, (2) If more than one proceeding involves are unallowable. the same alleged misconduct,the costs of all g. Costs of legal, accounting, and consult- such proceedings shall be unallowable if any ant services, and related costs, incurred in one of them results in one of the dispositions connection with defense against Federal shown in subparagraph 10.b.(1)of this appen- Government claims or appeals, antitrust dix. suits,or the prosecution of claims or appeals c. If a proceeding referred to in subpara- against the Federal Government, are unal- graph 10.b of this appendix is commenced by lowable. 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 organization in connection vided for in the sponsored awards. with such proceedings that are otherwise not i. Costs which may be unallowable under allowable under subparagraph 10.b of this ap- this paragraph,including directly associated pendix may be allowed to the extent specifi- costs, shall be segregated and accounted for cally provided in such agreement. by the organization separately. Daring 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 ance,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 combine- under subparagraph 11.d of this appendix, tion of the two methods may not be used in would be viewed as fully depreciated. How- connection with a single class of fixed assets ever, a reasonable use allowance may be ne- (e.g., buildings, office equipment, computer gotiated for such assets if warranted after equipment,etc.). taking into consideration the amount of de- b. The computation of use allowances or preciation 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 organisation 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 corn- (1)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 newel 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 cost of an asset (or group of as- dental treatment units,counters,laboratory sets) to accounting periods shall reflect the benches bolted to the floor, dishwashers, pattern of consumption of the asset during modular furniture, carpeting, etc.). Such its useful life. equipment will be considered as not being (2) In the absence of clear evidence indi.- permanently fixed to the building if it can be sating 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 62/3 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, ances 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; 15. Equipment and other capital expendi- (b)The services are supported by a signifi- tares. cant amount of the indirect costs incurred by the non-profit organization;and a. iFor purposes of this subparagraph, the (c)The direct cost activity is not pursued following definitions apply: primarily for the benefit of the Federal Gov- tures(1) for"Capitali acquisition Expenditures" mt eans s exp 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 auxil- ered as a part of the total costs of the iary apparatus necessary to make it usable project. Such indirect costs may be reim- for the purpose for which it is acquired.An- bursed under the award or used to meet cost 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 (2) "Equipment" means an article of non- treated as indirect costs, indirect cost rates expendable, tangible personal property hav- will separate the value of the donations so ing a useful life of more than one year and that reimbursement will not be made. an acquisition cost which equals or exceeds c. Donated goods or space. (1) Donated the lesser of the capitalization level estab- goods;i.e., expendable personal property/sup—fished by the non-profit organization for fi- plies, and donated use of space may be fur- nancial statement purposes,or$5000. Wished to a non-profit organization. The (3) "Special purpose equipment" means value of the goods and space is not reimburs- able equipment which is used only for research, either as aa of the or indirectnncast. medical,scientific,or other technical activi- to(2 meetTh value sharingf g or mat h may be used ties. Examples of special purpose equipment quirements cost under o matching share ine- include microscopes, x-ray machines, sur- 2CRpa the conditions described re gical instruments,and spectrometers. 2 CFR part 215(OMB Circular A-110).Where 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 unal- 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 paragraph 11 ot (4)When approved as a direct charge pursu- this appendix. 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- tain 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. pendix for rules on the allowability of rental (e) Gains and losses arising from mass or costs for land,buildings,and equipment. extraordinary sales, retirements, or other (6)The unamortized portion of any equip- dispositions shall be considered on a case-by- ment written off as a result of a change in case basis. capitalization levels may be recovered by b. Gains or losses of any nature arising continuing to claim the otherwise allowable from the sale or exchange of property other use allowances or depreciation on the equip- than the property covered in subparagraph a ment, or by amortizing the amount to be shall be excluded in computing award costs. written off over a period of years negotiated 19. Goods or services for personal use. with the cognizant agency. Costs of goods or services for personal use of 16. Fines and penalties. Costs of fines and the organization's employees are 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- nance, utilities, furnishings, rent, etc.), sions of an award or instructions in writing housing allowances and personal living ex- from the awarding agency. penses for/of the orga,ni7ation's officers are 17. Fund raising and investment manage- unallowable as fringe benefit or indirect ment costs. a. Costs of organized fund rais- costs regardless of whether the cost is re- ing, including financial campaigns, endow- ported as taxable income to the employees. ment drives, solicitation of gifts and be- These costs are allowable as direct costs to quests, and similar expenses incurred solely sponsored award when necessary for the per- to raise capital or obtain contributions are formance of the sponsored award and ap- unallowable. proved by awarding agencies. b. Costs of investment counsel and staff b.The term`officers"includes current and and similar expenses incurred solely to en- past officers and employees. hance income from investments are unallow- 21. Idle facilities and idle capacity. a. As able. used in this section the following terms have c. Fund raising and investment activities the meanings set forth below: shall be allocated an appropriate 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 wally or collectively, or any other tangible part. capital asset,wherever located, and whether 18. Gains and losses on depreciable assets. owned or leased by the non-profit organi7a- a.(1)Gains and losses on sale,retirement,or tion. 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- occur as credits or charges to cost group- profit organization's current needs. ing(s)in which the depreciation applicable to (3) "Idle capacity" means the unused ca- such property was included. The amount of pacity of partially used facilities. It is the the gain or loss to be included as a credit or difference between: That which a facility charge to the appropriate cost grouping(s) could achieve under 100 percent operating 198 OMB Circulars and Guidance 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. mands during the accounting period. A (c)Costs of insurance or of any provisions multi-shift basis should be used if it can be for a reserve covering the risk of loss or shown that this amount of usage would nor- damage to Federal property are allowable mally be expected for the type of facility in- only to the extent that the organization is volved. liable for such loss or damage. (4)"Cost of idle facilities or idle capacity" (d)Provisions for a reserve under a self-in- means costs such as maintenance, repair, surance program are allowable to the extent housing, rent, and other related costs, e.g., that types of coverage, extent of coverage, insurance, interest, property taxes and de- rates, and premiums would have been al- predation or use allowances. lowed had insurance been purchased to cover b. The costs of idle facilities are unallow- the risks. However, provision for known or able except to the extent that: reasonably estimated self-insured liabilities, (1)They are necessary to meet fluctuations which do not become payable for more than in workload;or one year after the provision is made, shall (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. rials or workmanship are unallowable. c. The costs of idle capacity are normal (g) Medical liability (malpractice) insur- costs of doing business and are a factor in ance.Medical liability insurance is an allow- the normal fluctuations of usage or indirect able cost of Federal research programs only cost rates from period to period. Such costs to the extent that the Federal research 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 was originally reasonable and is not subject liability insurance costs shall be treated as a to reduction or elimination by use on other direct cost and shall be assigned to indi- Federal awards, subletting, renting, or sale, vidual projects based on the manner in which in accordance with sound business, eco- the insurer allocates the risk to the popu- nosnic,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. program) are unallowable unless expressly 22.Insurance and indemnification.a.Insur- provided for in the award,except: ance includes insurance which the organza- (a) Costs incurred because of losses not tion is required to carry, or which is ap- covered under nominal deductible insurance proved, under the terms of the award and coverage provided in keeping with sound any other insurance which the organization business practice are allowable. 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 approved, organization against liabilities to third per- and maintained, pursuant to the award are sons and any other loss or damage,not com- allowable. pensated by insurance or otherwise.The Fed- (2)Costs of other insurance maintained by 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. Costs incurred for interest (a)Types and extent of coverage shall be in on borrowed capital, temporary 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 replacement of the capital asset(s), a predicated upon interest rates that are no justification that demonstrates the need for higher than the fair market rate available to the facility in the conduct of federally-span- the non-profit organization from an unre- Bored 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 ciated 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 pense by an amount equal to imputed inter- length") third-party. The lease/purchase est earnings on excess cash flow,which is to analysis shall include a comparison of the be calculated as follows.Annually,non-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 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 ioal party, campaign, political action corn- • month Treasury Bill closing rate as of the mittee,or other organization established for last business day of that month. the purpose of influencing the outcomes of (d) Substantial relocation of federally- elections;sponsored activities from a facility financed tion(3) Any of Federal ort to tr State influence:legislation;The tort c- by indebtedness,the cost of which was fund- e 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 Government official or employee in con- may require negotiation and/or downward nection with a decision to sign or veto en- adjustments of replacement space charged to rolled legislation; Federal programs in the future. (4)Any attempt to influence:The introduc- (e)The allowable costs to acquire facilities tion of Federal or State legislation; or the and equipment are limited to a fair market enactment or modification of any pending value available to the non-profit organiza- tion from an unrelated ("arm's length") distributing or using publicity or propa- ganda,or by urging members of the general third party. b. public or any segment thereof to contribute For non-profit organizations subject to "full coverage" under the Cost Accounting mto or ,participatey, in any mass ri e,demonstration, Standards (CAS) as defined at 48 CFR march, rally, fundraising drive, lobbying cam- 9903.201, the interest allowability provisions campaign or letter writing or telephone of subparagraph a do not apply. Instead, paigner (5) Legislative liaison activities,including these organizations' sponsored agreementsaor are subject to CAS 414(48 CFR 9903.414),cost attendance legislativeatherisessions ti corn- of money as an element of the cost of facili- mittee hearings, gathering information effectret ties capital, and CAS 417 (48 CFR 9903.417), garding legislation,tinwheand activitiesi the ar- of legislation, when such are car- cost of money as an element of the cost of reed on in support of or in knowing prepara- capital assets under construction. tion for an effort to engage in unallowable c.The following 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 grass 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 faclli- 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- ernment to give consideration or to act re- ence State legislation in order to directly re- garding a sponsored agreement or a regu- duce the cost, or to avoid material impair- latory matter are unallowable. Improper in- ment of the organi7ation'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 than the merits of the grant,contract,or other agreement. the matter. c. (1) When an organization seeks reim- 26. Losses on other sponsored agreements bursement for indirect costs, total lobbying or contracts. Any excess of costs over in- costs shall be separately identified in the in- come on any award is unallowable as a cost direct cost rate proposal, and thereafter of any other award.This includes,but is not treated as other unallowable activity costs limited to, the orgariration's contributed in accordance with the procedures of sub- portion by reason of cost sharing agreements paragraph B.3 of Appendix A to this part. or any under-recoveries through negotiation (2) Organizations shall submit, as part of of lump sums for, or ceilings on, indirect the annual indirect cost rate proposal,a cer- costs. tification that the requirements and stand- 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 determina- ing Federal property unless otherwise pro- tion of costs as being allowable or unallow- vided for) which neither add to the perma- able pursuant to paragraph 25 complies with 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 coin- 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- consistently applied. Incoming transpor- scribed in this subparagraph are met,the ab- tation charges are a proper part of materials Bence of time logs, calendars, or similar and supplies costs. records will not serve as a basis for dis- c. Only materials and supplies actually allowing costs by contesting estimates of used for the performance of a Federal award lobbying time spent by employees during a 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- Meal information, are allowable. This in- poses of interpretation of this Appendix;pro- eludes 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 pendia. 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, fes 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 meat counselors, whether or not employees to paragraph 15., Equipment and other cap- of the organization, in connection with es- ital expenditures,of this appendix. tablishment or reorganization of an organ- 36. Pre-agreement costs. Pre-award costs zation,are unallowable except with prior ap- are those incurred prior to the effective date proval of the awarding agency. of the award directly pursuant to the nego- 32. Page charges in professional journals. tiation and in anticipation of the award Page charges for professional journal publi- where such costs are necessary to comply cations are allowable as a necessary part of with the proposed delivery schedule or period research costs,where: of performance. Such costs are allowable a. The research papers report work sup- only to the extent that they would have been ported by the Federal Government;and allowable if incurred after the date of the b.The charges are levied impartially on all award and only with the written approval of research papers published by the journal, the awarding agency. whether or not by federally-sponsored au- 37. Professional services costs. a. Costs of thorn. 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 lationship to work under Federal grants and art to the extent necessary to make disclo- contracts. sures not required by the award. (6) Whether the service can be performed (2) Costs in connection with filing and more economically by direct employment prosecuting any foreign patent application, rather than contracting. 203 Pt.230,App.B 2 CFR Ch. II (1-1-12 Edition) (7) The qualifications of the individual or b.In publications, costs of help wanted ad- concern rendering the service and the cus- vertising that includes color, includes adver- tomary fees charged, especially on non-Fed- tising material for other than recruitment eral awards. purposes, or is excessive in size (taking into (8)Adequacy of the contractual agreement consideration recruitment purposes for for the service(e.g., description of the serv- which intended and normal organizational ice, estimate of time required, rate of corn- practices in this respect),are unallowable. pensation,and termination provisions). c.Costs of help wanted advertising,special c. In addition to the factors in subpara- emoluments, fringe benefits, and salary al- graph 37.b of this appendix, retainer fees to lowances incurred to attract professional be allowable must be supported by evidence personnel from other organizations that do of bona fide services available or rendered not meet the test of reasonableness or do not 38.Publication and printing costs.a.Publi- conform with the established practices of the cation costs include the costs of printing(in- organization,are unallowable. eluding the processes of composition, plate- d.Where relocation costs incurred incident making, press work, binding, and the end to recruitment of a new employee have been products produced by such processes), dis- allowed either as an allocable direct or indi- tribution, promotion, mailing, and general rect cost, and the newly hired employee re- handling.Publication costs also include page signs for reasons within his control within charges in professional publications. twelve months after being hired, the organi- b.If these costs are not identifiable with a zation will be required to refund or credit particular cost objective, they should be al- such relocation costs to the Federal Govern- located as indirect costs to all benefiting ac- ment. tivities of the non-profit organization. 42. Relocation costs. a. Relocation costs c. Page charges for professional journal are costs incident to the permanent change publications are allowable as a necessary of duty assignment (for an indefinite period part of research costs where: or for a stated period of not less than 12 (1) The research papers report work sup- months)of an existing employee or upon re- ported by the Federal Government:and cruitment of a 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 au- this appendix,provided that: thors. (1) The move is for the benefit of the em- 39. Rearrangement and alteration costs. ployer. Costs incurred for ordinary or normal rear- (2) Reimbursement to the employee is in rangement and alteration of facilities are al- accordance with an established written pol- 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, five 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 OMB Circulars and Guidance Pt.230,App. B as the costs of canceling an unexpired lease, or key employee of the non-profit organiza- disconnecting and reinstalling household ap- tion or his immediate family,either directly pliances, and purchasing insurance against or through corporations, trusts, or similar loss of or damages to personal property.The arrangements in which they hold a control- cost of canceling an unexpired lease is lim- ling interest.For example,a non-profit orga- ited to three times the monthly rental. nization may establish a separate corpora- c. Allowable relocation costs for new em- tion for the sole purpose of owning property ployees are limited to those described in sub- and leasing it back to the non-profit organi- paragraph 42.b(1) and (2) of this appendix. zation. When relocation costs incurred incident to d. Rental costs under leases which are re- the recruitment of new employees have been quired to be treated as capital leases under allowed either as a direct or indirect cost GAAP are allowable only up to the amount and the employee resigns for reasons within (as explained in subparagraph b)that would his control within 12 months after hire, the be allowed had the non-profit organization organization shall refund or credit the Fed- purchased the property on the date the lease eral Government for its share of the cost. agreement was executed. The provisions of However, the costs of travel to an overseas Financial Accounting Standards Board location shall be considered travel costs in Statement 13, Accounting for Leases, shall accordance with paragraph 50 and not reloca- be used to determine whether a lease is a tion costs for the purpose of this paragraph capital lease. Interest costs related to cap- if dependents are not permitted at the loca- ital leases are allowable to the extent they tion for any reason and the costs do not in- meet the criteria in paragraph 23 of this ap- elude costs of transporting household goods. pendix. Unallowable costs include amounts d.The following costs related to relocation paid for profit, management fees, and taxes are unallowable: that would not have been incurred had the (1)Fees and other costs associated with ac- non-profit organization purchased the facil- quiring a new home. ity. (2)A loss on the sale of a former home. 44.Royalties and other costs for use of pat- (3) Continuing mortgage principal and in- ents and copyrights.a.Royalties on a patent terest payments on a home being sold. or copyright or amortization of the cost of (4) Income taxes paid by an employee re- acquiring by purchase a copyright,patent,or lated to reimbursed relocation costs. rights thereto,necessary for the proper per- 43. Rental costs of buildings and equip- formance of the award are allowable unless: ment.a.Subject to the limitations described (1) The Federal Government has a license in subparagraphs 43.b. through d. of this ap- or the right to free use of the patent or copy- pendix,rental costs are allowable to the ex- right. tent that the rates are reasonable in light of (2)The patent or copyright has been adju- such factors as: Rental costs of comparable dicated to be invalid,or has been administra- property, if any; market conditions in the tively determined to be invalid. area; alternatives available; and, the type, (3)The patent or copyright is considered to life expectancy, condition, and value of the be unenforceable. property leased.Rental arrangements should (4)The patent or copyright is expired. be reviewed periodically to determine if cir- b. Special care should be exercised in de • - cumstances have changed and other options termining reasonableness where the royal- are available. ties may have arrived at as a result of less- b.Rental costs under"sale and lease back" than-arm's-length bargaining,e.g.: arrangements are allowable only up to the (1) Royalties paid to persons, including amount that would be allowed had the non- corporations, affiliated with the non-profit profit organization continued to own the organization. property. This amount would include ex- (2) Royalties paid to unaffiliated parties, penses such as depreciation or use allowance, including corporations, under an agreement maintenance,taxes,and insurance. entered into in contemplation that a Federal c. Rental costs under "less-than-arms- award would be made. length" leases are allowable only up to the (3) Royalties paid under an agreement en- amount (as explained in subparagraph 43.b. tered into after an award is made to a non- of this appendix) that would be allowed had profit organization. title to the property vested in the non-profit c. In any case involving a patent or copy- organization. For this purpose, a less-than- right formerly owned by the non-profit orga- arms-length lease is one under which one nization, the amount of royalty allowed party to the lease agreement is able to con- should not exceed the cost which would have trol or substantially influence the actions of been allowed had the non-profit organization the other. Such leases include, but are not retained title thereto. limited to those between divisions of a non- 45. Selling and marketing. Costs of selling profit organization; non-profit organizations and marketing any products or services of under common control through common offi- the non-profit organization are unallowable cers,directors,or members;and a non-profit (unless allowed under paragraph 1.of this ap- organization and a director, trustee, officer, pendix as allowable public relations cost. 205 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 ties, 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 organisation,such as computers,wind not retain such items at cost without sus- tunnels,and reactors are allowable,provided taming a loss. In deciding whether such the charges for the services meet the condi- items are reasonably usable on other work of tions of either paragraph 46 b. or c. of this the non-profit organization, the awarding appendix and,in addition, take into account agency should consider the non-profit orga- any items of income or Federal financing nization's plans and orders for current and that qualify as applicable credits under sub- scheduled activity. Contemporaneous pur- paragraph A.5.of Appendix A to this part. chases of common items by the non-profit b. The costs of such services, when mate- organization shall be regarded as evidence rial, must be charged directly to applicable that such items are reasonably usable on the awards based on actual usage of the services non-profit organization's other work. Any on the basis of a schedule of rates or estab- acceptance of common items as allocable to lished methodology that does not discrimi- the terminated portion of the Federal award nate against federally-supported activities of shall be limited to the extent that the quan- the non-profit organization, including usage 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). pendia, except that any such costs con- c. Where the costs incurred for a service tinning after termination due to the neg- are not material, they may be allocated as agent 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- minated 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 organi- 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§215.61 of (5)Salaries and related costs of instructors 2 CFR part 215(OMB Circular A-110));and who are employees of the organization. (b)The termination and settlement of sub- (6) Straight-time compensation of each awards. employee for time spent attending classes (2)Reasonable costs for the storage,trans- during working hours not in excess of 156 portation, protection, and disposition of hours per year and only to the extent that property provided by the Federal Govern- circumstances do not permit the operation of ment or acquired or produced for the Federal classes or attendance at classes after regular award, except when grantees or contractors working hours; otherwise, such compensa- are reimbursed for disposals at a predeter- tion is unallowable. mined amount in accordance with §215.32 c.Costs of tuition,fees,training materials, through 215.37 of 2 CFR part 215 (OMB Cir- and textbooks (but not subsistence, salary, 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 corn- only where the costs receive the prior ap- mon to the Federal award,and to other work proval of the awarding agency. Such costs of the non-profit organization are generally are limited to the costs attributable to a allowable. total period not to exceed one school year for An appropriate share of the non-profit or- each employee so trained. In unusual cases ganization's indirect expense may be allo- the period may be extended. cated to the amount of settlements with sub- d.Costs of attendance of up to 16 weeks per contractors and/or subgrantees, provided employee per year at specialized programs that the amount allocated is otherwise con- specifically designed to enhance the effec- sistent with the basic guidelines contained tiveness of executives or managers or to pre- in Appendix A.The indirect expense so allo- pare employees for such positions are allow- cated shall exclude the same and similar able. Such costs include enrollment fees, costs claimed directly or indirectly as settle- training materials, textbooks and related ment expenses. charges, employees' salaries, subsistence, 49. Training costs. a. Costs of preparation and travel. Costs allowable under this para- and maintenance of a program of instruction graph do not include those for courses that including but not limited to on-the-job, are part of a degree-oriented curriculum, classroom, and apprenticeship training, de- which are allowable only to the extent set signed to increase the vocational effective- forth in subparagraphs b and c. ness of employees, including training mate- e.Maintenance expense,and normal depre- rials,textbooks,salaries or wages of trainees ciation or fair rental, on facilities owned or (excluding overtime compensation which leased by the organization for training pur- might arise therefrom),and(i)salaries of the poses are allowable to the extent set forth in director of training and staff when the train- paragraphs 11,27,and 50 of this appendix. ing program is conducted by the orga,ni7a- f. Contributions or donations to edu- tion; or(ii)tuition and fees when the train- cational or training institutions, including ing is in an institution not operated by the the donation of facilities or other properties, organization,are allowable. and scholarships or fellowships,are unallow- b. Costs of part-time education, at an un- able. dergraduate or post-graduate college level, g. Training and education costs in excess including that provided at the organization's of those otherwise allowable under subpara- own facilities, are allowable only when the graphs 49.b and c of this appendix may be al- course or degree pursued is relative to the lowed with prior approval of the awarding 207 Pt.230,App.C 2 CFR Ch. II (1-1-12 Edition) agency. To be considered for approval, the transportation savings; or offer accommoda- organization must demonstrate that such tions not reasonably adequate for the tray- costs are consistently incurred pursuant to eler's medical needs. The non-profit organi- an established training and education pro- zation must justify and document these con- gram,and that the course or degree pursued ditions on a case-by-case basis in order for is relative to the field in which the employee the use of first-class airfare to be allowable is now working or may reasonably be ex- in such cases. petted to work. (2) Unless a pattern of avoidance is de- 50. Transportation costs. Transportation tected, the Federal Government will gen- costs include freight, express, cartage, and erally not question a non-profit organiza- postage charges relating either to goods pur- tion's determinations that customary stand- chased, in process, or delivered.These 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 personnel costs),maintenance,de- a. General. Travel costs are the expenses preciation, insurance, and other related for transportation, lodging, subsistence, and costs.The portion of such costs that exceeds related items incurred by employees who are the cost of allowable commercial air travel, in travel status on official business of the as provided for in subparagraph] c., is unal- non-profit organization. Such costs may be lowable. charged on an actual cost basis, on a per e. Foreign travel. Direct charges for for- diem or mileage basis in lieu of actual costs eign travel costs are allowable only when the incurred, or on a combination of the two, travel has received prior approval of the provided the method used is applied to an en- awarding agency. Each separate foreign trip tire trip and not to selected days of the trip, must receive such approval. For purposes of and results in charges consistent with those this provision,"foreign travel" includes any normally allowed in like circumstances in travel outside Canada, Mexico, the United the non-profit organization's non-federally- 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- ing costs of lodging, other subsistence, and in 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 organisation policy regarding travel APPENDIX C TO PART 230—NON-PROFIT costs, the rates and amounts established ORGANIZATIONS NOT SUBJECT TO under subchapter I of Chapter 57, Title 5, THIS PART United States Code("Travel and Subsistence Expenses; Mileage Allowances"), or by the 1. Advance Technology Institute (ATI), Administrator of General Services,or by the Charleston,South Carolina President (or his or her designee) pursuant 2. Aerospace Corporation, El Segundo, Cali- to any provisions of such subchapter shall forma apply to travel under Federal awards(48 CFR 3. American Institutes of Research (AIR), 31.205-46(a)). Washington DC c. Commercial air travel. (1) Airfare costs 4.Argonne National Laboratory,Chicago,Il- in excess of the customary standard commer- linois cial airfare (coach or equivalent), Federal 5. Atomic Casualty Commission, Wash- Government contract airfare (where author- ington,DC ized and available),or the lowest commercial 6. Battelle Memorial Institute, discount airfare are unallowable except when Headquartered in Columbus,Ohio such accommodations would: require 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 Founds- 26. Southern Research Institute, Bir- tion,Richland,Washington mingham,Alabama 13.lIT Research Institute,Chicago,Illinois 27. Southwest Research Institute, San Anto- 14.Institute of Gas Technology, Chicago,Il- nio,Texas linois 28.SRI International,Menlo Park,California 15. Institute for Defense Analysis, Alexan- 29. Syracuse Research Corporation, Syra- dria,Virginia cuse,New York 16.LMI,McLean,Virginia 30. Universities Research Association,Incor- 17. Mitre Corporation, Bedford, Massachu- porated (National Acceleration Lab), Ar- setts gonne,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 atory,Green Bank,West Virginia 33. Other non-profit organizations as nego- 20. National Renewable Energy Laboratory, tiated with awarding agencies Golden,Colorado 21. Oak Ridge Associated Universities, Oak Ridge,Tennessee PARTS 231-299 [RESERVED] 209 2 CFR Part 215 Page 1 of 3 U.S.Department of Health&Human Services(http:l/www.hhs.govl) Administration for Children&Families(http:llwww.acf.hhs.govl) (/hsic) Search this website Espanol (/hslc/Espanol) About Head Start Grants&Oversight Policy&Regulation T/TA Resources Collaboration&Partnerships Data&Reports ECLKC Home(/hsic)»Policy&Regulation(/hslc/standards)r.Fiscal Regulations(/hsic/standards/fiscal-rags)s Title 2 CFR Part 215(/hslc/standards/fiscal-rags/part215).2 CFR Part 215 Print Navigation Get Connected About Head Start(/hsic/hs) Grants&Oversight (https://www ---• - . . ..... .. ew- {/hsk/grants} prsrc=.3) - madialmoblle- Poll &Regulation Fat-amok 7wlav oosale+ Contact Us eagle, lnl) 2 ciNgtuartsgi5 T/TA Resources(/hslc/tta- UnifoiAdministrative Realiseetiitgt&FtditgiEdlifirJ f ements with Institutions of ;+°-Sehtittitit,PHospitals,and otherrigmelkedbarganizations(O Seir l r A-1 �Ic/states) . &Reports(Nit/data) 2 cg. S eplaces the OMB Circular A- isdP blis es principles for determining costs applicable to grants, con an o er agreements with institlt i Iwq �g t i als,and otbnrinzigofit organizationssgaiimrri directErang44.MINiclaWaitiAr to this regulation when determining costs. Employment Opportunities (/hslc/hs/careers)�vh TITLE 2--GRANTS AND AGREEMENTS CHAPTER II-=OFFICE OF MANAGEMENT AND BUDGET CIRCULARS AND GUIDANCE (/hslc/customerservice/new- PART& 1 NIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCR drl6 bfetAikCe&THER NON-PROFIT ORGANIZATIONS(OMB CIRCULAR A-110) p(/hslcldatafflv/ scal_pub_00151_080405.htm l) 215.0 a PaiV part (/hslc/customerservice/Privacy_PoI icy.html) Disclairt9abpart A_General(/hsk/standards/fKcal-regs/part215/flscal_tar_2002_042706_a.html) 4(hslcJcustomerservice/Disclaimer.html) 215.1 e&Players 215.2 Zen, erservice/information/viewer- 215.3 on er issuances. 215.4 UEvla BI s. 215.5 d ®rds. (/ECLKC/wc/welcome2c.html) Subpart B_Pre-Award Requirements(/hsic/standards/flscal-regs/part215/fiscal far_2002_042706_b.html) 215.10 Purpose. 215.11 Pre-award policies. 215.12 Forms for applying for Federal assistance. 215.13 Debarment and suspension. 215.14 Special award conditions. 215.15 Metric system of measurement. 215.16 Resource Conservation and Recovery Act. 215.17 Certifications and representations. Subpart C_Post-Award Requirements(/hsic/Standards/fiscal-regs/part215/fis®I_far_2002_042706_c.html) Financial and Program Management 215.20 Purpose of financial and program management. 215.21 Standards for financial management systems. 215.22 Payment. 215.23 Cost sharing or matching. • 215.24 Program income. 215.25 Revision of budget and program plans. 215.26 Non-Federal audits. Share 215.27 Allowable costs. 215.28 Period of availability of funds. �r 215.29 Conditional exemptions. Property Standards 111 215.30 Purpose of property standards. 215.31 Insurance coverage. 215.32 Real property. -� 215.33 Federally-owned and exempt property. i, M 215.34 Equipment. 215.35 Supplies and other expendable property. 215.36 Intangible property. 215.37 Property trust relationship. Procurement Standards - 1 215.40 Purpose of procurement standards. 1 215.41 Recipient responsibilities. 215.42 Codes of conduct. http://eclkc.ohs.acf.hhs.gov/hslc/standards/fiscal-regs/part215/fiscal_far 2002_042706.html 8/26/2015 2 CFR Part 215 Page2of3 215.43 Competition. 215.44 Procurement procedures. 215.45 Cost and price analysis. 215.46 Procurement records. 215.47 Contract administration. 215.48 Contract provisions. Reports and Records 215.50 Purpose of reports and records. 215.51 Monitoring and reporting program performance. 215.52 Finandal reporting. 215.53 Retention and access requirements for records. Termination and Enforcement 215.60 Purpose of termination and enforcement. 215.61 Termination. 215.62 Enforcement. Subpart D_After-the-Award Requirements(/hslc/standards/fiscal- regs/pa rt215/flscal_fa r_2002_042706_d.html) 215.70 Purpose. 215.71 Closeout procedures. 215.72 Subsequent adjustments and continuing responsibilities. 215.73 Collection of amounts due. Appendix A to Part 215—Contract Provisions(/hslc/standards/fiscal- regs/part215/fiscaI_far_2002_042706_e.ht n1) Sec.215.0 About this part. (a)Purpose.This part contains OMB guidance to Federal agencies on the administration of grants to and agreements with institutions of higher education,hospitals,and other non-profit organizations.The guidance sets forth standards for obtaining consistency and uniformity in the agencies'administration of those grants and agreements. (b)Applicability.(1)Except as provided herein,the standards set forth in this part are applicable to all Federal agencies.If any statute specifically prescribes policies or specific requirements that differ from the standards provided in this part,the provisions of the statute shall govern. (2)The provisions of subparts A through D of this part shall be applied by Federal agencies to recipients.Recipients shall apply the provisions of those subparts to subreclpients performing substantive work under grants and agreements that are passed through or awarded by the primary recipient,If such subrecipients are organizations described in paragraph(a)of this section. (3)This part does not apply to grants,contracts,or other agreements between the Federal Government and units of State or local governments covered by.OMB Circular A-102,"Grants and Cooperative Agreements with State and Local Govemments"\1 \and the Federal agendas'grants management common rule(see Sec.215.5)which standardize the administrative requirements Federal agencies impose on State and local grantees.In addition,subawards and contracts to State or local govemments are not covered by this part.However,this part applies to subawards made by State and local governments to organizations covered by this part. (4)Federal agencies may apply the provisions of subparts A through D of this part to commercial organizations,foreign govemments,organizations under the jurisdiction of foreign governments,and international organizations. (c)OMB responsibilities.OMB is responsible for: (1)Issuing and maintaining the guidance in this part. (2)Interpreting the policy requirements in this part and providing assistance to ensure effective and efficient implementation. (3)Reviewing Federal agency regulations implementing the guidance in this part,as required by Executive Order 12866. (4)Granting any deviations to Federal agencies from the guidance in this part,as provided in Sec.215.4.Exceptions will only be made in particular cases where adequate justification is presented. (5)Conducting broad oversight of government-wide compliance with the guidance in this part. (d)Federal agency responsibilities.The head of each Federal agency that awards and administers grants and agreements subject to the guidance in this part is responsible for: (1)Implementing the guidance in subparts A through D of this part by adopting the language in those subparts unless different provisions are required by Federal statute or are approved by OMB. (2)Ensuring that the agency's components and subcomponents comply with the agency's implementation of the guidance in subparts A through D of this part. (3)Requesting approval from OMB for deviations from the guidance in subparts A through D of this part in situations where the guidance requires that approval. (4)Performing other functions specified in this part. (e)Relationship to previous issuance.The guidance in this part previously was issued as OMB Circular A-110.Subparts A through D of this part contain the guidance that was in the attachment to the OMB circular.Appendix A to this part contains the guidance that was in the appendix to the attachment. (f)Information Contact.Further information concerning this part may be obtained by contacting the Office of Federal Financial Management,Office of Management and Budget,Washington,DC 20503,telephone(202)395-3993. (g)Termination Review Date.This part will have a policy review three years from the date of issuance. See also: 2 CFR Part 215:Subpart A (/hsic/standards/fiscal-reps/part215/flscal_far 2002_042706_a.html) 2 CFR Part 215:Subpart B http://eclkc.ohs.acf.hhs.gov/hslc/standards/fiscal-regs/part215/fiscal_far 2002_042706.htm1 8/26/2015 2 CFR Part 215 Page 3 of 3 (/hsic/standards/fiscal-reps/part215/fiscal Tar_2002_042706_b.html) 2 CFR Part 215:Subpart C(/hsic/standards/fiscal-reps/Part215/fiscal far_2002_042706_ahtml) 2 CFR Part 215:Subpart D(/hsic/standards/flsal-reps/part215/flscal_far 2002_042706_d.html) Appendix A to Part 215-Contract Provisions(/hsic/standards/flscal- reps/part215/flscal_fa r_2002_042706_e.html) 2 CFR Part 215.Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals,and other Non-Profit Organizations(OMB Circular A-110).OMB.2006.English. • http://eclkc.ohs.acf.hhs.gov/hslc/standards/fiscal-regs/part215/fiscal_far 2002_042706.html 8/26/2015 OMB Guidance §200.501 5701-11, ("Travel and Subsistence Ex- Subpart F—Audit Requirements penes; Mileage Allowances"), or by the Administrator of General Services, GENERAL or by the President (or his or her des- ignee) pursuant to any provisions of §200-500 Purpose. such subchapter must apply to travel This part sets forth standards for ob- under Federal awards (48 CFR 31.205- taming consistency and uniformity 46(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 expen- eral awards. sive unrestricted accommodations class offered by commercial airlines AUDITS are unallowable except when such ac- commodations would: §200.501 Audit requirements. (i)Require circuitous routing; (a)Audit required..A non-Federal enti- (ii) Require travel during unreason- ty that expends V50,000 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 offset the transportation say- that year in accordance with the provi- ings;or sion of this part. (v)Offer accommodations not reason- (b)Single audit.A non-Federal entity ably adequate for the traveler's med- that expends $750,000 or more during the non-Federal entity's fiscal year in ical needs. The non-Federal entity Federal awards must have a single must justify and document these condi- audit conducted in accordance with tions on a case-by-case basis in order §200.514 Scope of audit except when it for the use of first-class or business- elects to have a program-specific audit class airfare to be allowable in such conducted in accordance with para- cases. graph(c)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 cus- 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 ment audit of the auditee, the auditee available in the specific case. may elect to have a program-specific (e) Air travel by other than commercial audit conducted in accordance with carrier. Costs of travel by non-Federal §200.507 Program-specific audits.A pro- entity-owned, -leased, or -chartered gram-specific audit may not be elected aircraft include the cost of lease, char- for R&D unless all of the Federal ter, operation (including personnel awards expended were received from costs), maintenance, depreciation, in- the same Federal agency, or the same surance, and other related costs. The Federal agency and the same pass portion of such costs that exceeds the through entity,and that Federal agen- cost of airfare as provided for in para- cy, or pass-through entity in the case graph (d) of this section, is nnallow- of a subrecipient, approves in advance able. a program-specific audit. (d)Exemption when Federal awards ex- §200.475 Trustees. pended are less than$750,000.A non-Fed- eral entity that expends less than Travel and subsistence costs of trust- ees(or directors)at IHEs and nonprofit fiscal0y during the non-Federal e xem t year in Federal awards is exempt organizations 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 §200.502 2 CFR Ch. II (1-1-14 Edition) but records must be available for re- sponsibility.Methods to ensure oompli- view or audit by appropriate officials anoe for Federal awards made to for- of the Federal agency,pass-through en- profit subrecipients may include pre- tity, and Government Accountability award audits, monitoring during the Office(GAO). agreement, and post-award audits. See (e) Federally Funded Research and De- also §200.331 Requirements for pass- velopment Centers (FFRDC). Manage- through entities. ment of an auditee that owns or oper- ates a FFRDC may elect to treat the §200.502 Basis for determining Fed- FFRDC as a separate entity for pur- eral awards expended. poses of this part. (a) Determining Federal awards ex- (I) Subrecipients and Contractors. An pended. The determination of when a auditee may simultaneously be a re- Federal award is expended should be cipient, a subrecipient, and a con- based on when the activity related to tractor. Federal awards expended as a the Federal award occurs. Generally, recipient or a subrecipient are subject the activity pertains to events that re- to audit under this part.The payments quire the non-Federal entity to comply received for goods or services provided with Federal statutes,regulations, and as a contractor are not Federal awards. the terms and conditions of Federal Section §200.330 Subrecipient and con- awards, such as: expenditure/expense tractor determinations should be con- transactions associated with awards in- sidered in determining whether pay- eluding grants, cost-reimbursement ments constitute a Federal award or a contracts under the FAR, compacts payment for goods or services provided with Indian Tribes, cooperative agree- as a contractor. ments, and direct appropriations; the (g) Compliance responsibility for con- disbursement of funds to subrecipients; tractors. In most cases, the auditee's the use of loan proceeds under loan and compliance responsibility for contrac- loan guarantee programs;the receipt of tors is only to ensure that the procure- property; the receipt of surplus prop- ment, receipt,.and payment for goods erty; the receipt or use of program in- and services comply with Federal stat- come; the distribution or use of food utes, regulations, and the terms and commodities; the disbursement of conditions of Federal awards. Federal amounts entitling the non-Federal en- award compliance requirements nor- tity to an interest subsidy; and the pe- mally do not pass through to contrac- riod when insurance is in force. tors. However, the auditee is respon- (b) Loan and loan guarantees (loans). sible for ensuring compliance for pro- Since the Federal government is at curement tramowtions which are struc- risk for loans until the debt is repaid, tuned such that the contractor is re- the following guidelines must be used sponsible for program.compliance or to calculate the value of Federal the contractor's records must be re- awards expended under loan programs, viewed to determine program compli- except as noted in paragraphs (c) and ance. Also, when these procurement (d)of this section: transactions relate to a major pro- (1) Value of new loans made or re- gram, the scope of the audit must in- ceived during the audit period;plus elude determining whether these trans- (2) Beginning of the audit period bal- actions are in compliance with Federal ance of loans from previous years for statutes, regulations, and the terms which the Federal government imposes and conditions of Federal awards. continuing compliance requirements; (h) For-profit subrecipient. Since this plus part does not apply to for-profit sub- (3) Any interest subsidy, cash, or ad- recipients, the pass-through entity is ministrative cost allowance received. responsible for establishing require- (c)Loan and loan guarantees(loans)at ments, as necessary, to ensure compli- IHEs. When loans are made to students ance by for-profit subrecipients. The of an IHE but the IHE does not make agreement with the for-profit sub- the loans, then only the value of loans recipient should describe applicable made during the audit period must be compliance requirements and the for- considered Federal awards expended in profit subrecipient's compliance re- that audit period.The balance of loans 172 • OMB Guidance §200.503 for previous audit periods is not in- *200,503 Relation to other audit re- eluded as Federal awards expended be- quirements. cause the lender accounts for the prior balances. (a)An audit conducted in accordance (d) Prior loan and loan guarantees with this part must be in lieu of any fi- (loans). Loans, the proceeds of which nancial audit of Federal awards-which were received and expended in prior a non-Federal entity is required to un- years, are not considered Federal dergo under any other Federal statute awards expended under 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 ments other than to repay the loans. must rely upon and use that informa- (e)Endowment funds. The cumulative tion. balance of Federal awards for endow- (b)Notwithstanding subsection(a), a ment funds that are federally re- Federal agency, Inspectors General, or stricted 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 oat its responsibilities under (f) 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 under this part.However,free any non-Federal entity to constrain,in rent received as part of a Federal any manner,such Federal agency from award to carry out a Federal program carrying out or arranging for such ad- must be included in determining Fed- ditional audits,except that the Federal eral awards expended and subject to agency must plan such audits to not be audit under this part. duplicative of other audits of Federal (g) Valuing non-cash assistance. Fed- awards. Prior to commencing such an eral non-cash assistance, such as free audit, the Federal agency or pass- rent, food commodities, donated prop- through entity must review the FAC erty,or donated surplus property,must for recent audits submitted by the non- be valued at fair market value at the Federal entity, and to the extent such time of receipt or the assessed value audits meet a Federal agency or pass- provided by the Federal agency. through entity's needs, the Federal (h)Medicare. Medicare payments to a agency or pass-through entity must non-Federal entity for providing pa- rely upon and use such audits.Any ad- tient care services to Medicare-eligible ditional audits must be planned and individuals are not considered Federal performed in such a way as to build awards expended under this part. upon work performed, including the (i) Medicaid. Medicaid payments to a audit documentation, sampling, and subrecipient for providing patient care testing already performed, by other services to Medicaid-eligible individ- auditors. 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 eral awards expended because reim- of, audits and evaluations of Federal bursement is on a cost-reimbursement awards,nor limit the authority of any basis. Federal agency Inspector General or (j) Certain loans provided by the Na- other Federal official. For example,re- tional Credit Union Administration. For quirements that may be applicable purposes of this part, loans made from under the FAR or CAS and the terms the National Credit Union Share Insur- and conditions of a cost-reimbursement ance Fund and the Central Liquidity contract may include additional appli- Facility that are funded by contribu- cable audits to be conducted or ac- 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 §200.504 2 CFR Ch.1I (1-1-14 Edition) conducts or arranges for additional au- go its audits pursuant to this part bi- dits must, consistent with other appli- ennially. cable Federal statutes and regulations, arrange for funding the full cost of §200.E Sanctions. such additional audits. In cases of continued inability or un- (e) Request for a program to be au- willingness to have an audit conducted dited as a major program. A Federal in accordance with this part, Federal awarding agency may request that an agencies and pass-through entities auditee have a particular Federal pro- must take appropriate action as pro- gram audited as a major program in vided in §200.338 Remedies for non- lieu of the Federal awarding agency compliance. conducting or arranging for the addi- tional audits. To allow for planning, §800,506 Audit costs. such requests should be made at least See§200.425 Audit services. 180 calendar days prior to the end of the fiscal year to be audited. The §ii00.b07 Program-specific audits. auditee, after consultation with its auditor, should promptly respond to (a) Program-specific audit guide avail- such a request by informing the Fed- able.In many cases, a program-specific eral awarding agency whether the pro- audit guide will be available to provide gram would otherwise be audited as a specific guidance to the auditor with major program using the risk-based respect to internal controls, oompli- audit approach described in §200.518 ance requirements, suggested audit Major program determination and, if procedures, and audit reporting re- not, the estimated incremental cost. quirements. A listing of current pro- The Federal awarding agency must gram-specific audit guides can be found then promptly confirm to the auditee in the compliance supplement begin- whether it wants the program audited ning with the 2014 supplement includ- as a major program. If the program is ing Federal awarding agency contact to be audited as a major program based information and a Web site where a upon this Federal awarding agency re- copy of the guide can be obtained. quest, and the Federal awarding agen- When a current program-specific audit cy agrees to pay the full incremental guide is available, the auditor must costs, then the auditee must have the follow GAGAS and the guide when per- program audited as a major program.A forming a program-specific audit. pass-through entity may use the provi- (b) Program-specific audit guide not sions of this paragraph for a sub- available. (1) When a program-specific recipient. audit guide is not available, the auditee and auditor must have basi- §200.504 Frequency of audits. cally the same responsibilities for the Except for the provisions for biennial Federal program as they would have audits provided in paragraphs (a) and for an audit of a major program in a (b) of this section, audits required by single audit. this part must be performed annually. (2) The auditee must prepare the fi- Any biennial audit must cover both nancial statement(s) for the Federal years within the biennial period. program that includes, at a minimum, (a) A state, local government, or In- a schedule of expenditures of Federal dian tribe that is required by constitu- awards for the program and notes that tion or statute, in effect on January 1, describe the significant accounting 1987, to undergo its audits less fre- policies used in preparing the schedule, quently than annually, is permitted to a summary schedule of prior audit find- undergo its audits pursuant to this ings consistent with the requirements part biennially.This requirement must of §200.511 Audit findings follow-up, still be in effect for the biennial period. paragraph (b), and a corrective action (b) Any nonprofit organization that plan consistent with the requirements had biennial audits for all biennial pe- of §200.511 Audit findings follow-up, riods ending between July 1, 1992, and paragraph(c). January 1, 1995, is permitted to under- (3)The auditor must: 174 OMB Guidance §200.507 (i) Perform an audit of the financial material effect on the Federal pro- statement(s) for the Federal program gram;and in accordance with GAGAS; (iv) A schedule of findings and ques- (ii)Obtain an understanding of inter- tioned costs for the Federal program nal controls and perform tests of inter- that includes a summary of the audi- nal controls over the Federal program tor's results relative to the Federal consistent with the requirements of program in a format consistent with §200.514 Scope of audit, paragraph (c) §200.515 Audit reporting, paragraph for a major program; (d)(1)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 (c) Report submission for program-spe- that could have a direct and material cific audits. (1)The audit must be com- effect on the Federal program con- pleted and the reporting required by sistent with the requirements of paragraph(c)(2) or(c)(3) of this section §200.514 Scope of audit, paragraph (d) submitted within the earlier of 30 cal- for a major program; endar 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- stricted 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- Bents the status of any prior audit find- teeted personally identifiable informa- 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 FAC the (4) The auditor's report(s) may be in data collection form prepared in ac- the form of either combined or sepa- cordance with §200.512 Report submis- rate reports and may be organized dif- sion, paragraph (b), as applicable to a ferently from the manner presented in program-specific audit, and the report- this section. The auditor's report(s) ing required by the program-specific must state that the audit was con- audit guide. ducted in accordance with this part (3) 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 sum- sented fairly in all material respects in mary 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- lated to the Federal program, which scribed in paragraph (b)(4) of this sec- must describe the scope of testing of tion.The data collection form prepared internal control and the results of the in accordance with§200.512 Report sub- tests; mission,paragraph(b),as applicable to (iii)A report on compliance which in- a program-specific audit, and one copy eludes an opinion (or disclaimer of of this reporting package must be eleo- opinion) as to whether the auditee Ironically submitted to the FAC. 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.)I(1-1-14 Edition) (1)200.500 Purpose through 200.503 Re- Subpart D- Post Federal Award Re- lation to other audit requirements, quirements of this part or the FAR (48 paragraph(d); CFR part 42), as applicable. When pro- (2) 200.504 Frequency of audits curing audit services, the objective is through 200.506 Audit costs; to obtain high-quality audits. In re- (3) 200.508 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 organization'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 con- 200.517 Audit documentation; sidered in evaluating each proposal for (8)200.521 Management decision,and audit services include the responsive- (9)Other referenced provisions of this ness to the request for proposal, rel- part unless contrary to the provisions evant experience, availability of staff of this section, a program-specific with professional qualifications and audit guide, or program statutes and technical abilities, the results of peer regulations. and external quality control reviews, and price. Whenever possible, the AUDITEES auditee must make positive efforts to §800.bt18 Auditee responsibilities. utilize small businesses, minority- owned firms, and women's business en- The auditee must: terprises,in procuring audit services as (a) Procure or otherwise arrange for stated in §200.321 Contracting with the audit required by this part in ac- small and minority businesses, worn- cordance 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. eordance 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- lected to perform the audit required by cordance with§200.510 Financial state- this part when the indirect costs recov- meats. ered by the auditee during the prior (c) Promptly follow up and take cor- year exceeded $1 million. This restric- rective action on audit findings, in- tion applies to 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 or cost paragraph (b) and §200.511 Audit find- allocation plan is used to recover costs. ings follow-up, paragraph (c), respec- (a) Use of Federal auditors. Federal tively. auditors may perform all or part of the (d)Provide the auditor with access to work required under this part if they personnel, accounts, books, records, comply fully with the requirements of supporting documentation, and other this part. information as needed for the auditor to perform the audit required by this §200.510 Financial statements. part. (a) Financial statements. The auditee §200.609 Auditor selection. must prepare financial statements that reflect its financial position, results of (a) Auditor 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 nizational 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 chide departments, agencies, and other in addition to including the total Fed- organizational units that have separate eral awards expended for loan or loan audits in accordance with §200.514 guarantee programs in the schedule. Scope of audit, paragraph (a) and pre- (6) Include notes that describe that pare separate financial statements. significant accounting policies used in (b)Schedule of expenditures of Federal preparing the schedule, and note awards. The auditee must also prepare whether or not the non-Federal entity a schedule of expenditures of Federal elected to use the 10% de minimis cost awards for the period covered by the rate as covered in §200.414 Indirect auditee's financial statements which (F&A)costs. must include the total Federal awards expended as determined in accordance §200.511 Audit findings follow-op. 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 quired, the auditee may choose to pro- all audit findings. As part of this re- vide information requested by Federal sponsibility, the auditee must prepare awarding agencies and pass-through a summary schedule of prior audit find- entities to make the schedule easier to hags. The auditee must also prepare a use. For example, when a Federal pro- corrective action plan for current year gram has multiple Federal award audit findings. The summary schedule years, the auditee may list the amount of prior audit findings and the correc- of Federal awards expended for each tive action plan must include the ref- Federal award year separately. At a erence numbers the auditor assigns to minimum,the schedule must: audit findings under §200.516 Audit (1) List individual Federal programs findings,paragraph (c). Since the sum- by Federal agency.For a cluster of pro- mary schedule may include audit find- grams, provide the cluster name, list ings from multiple years, it must in- individual Federal programs within the dude 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 ings 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- assigned by the pass-through entity ings reported in the prior audit's sum- must be included. mary schedule of prior audit findings (3) Provide total Federal awards ex- except audit findings listed as cor- pended for each individual Federal pro- rected 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 ac- formation is not available. For a clus- cordance 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 subrecipients from each Federal pro- only list the audit findings and state gram. that corrective action was taken. (5) For loan or loan guarantee pro- (2)When audit findings were not cor- grams described in §200.502 Basis for rected or were only partially corrected, determining Federal awards expended, the summary schedule must describe paragraph (b), identify in the notes to the reasons for the finding's recurrence 177 §200.512 2 CFR Ch.II(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 infor- plan or in the Federal agency's or pass- mation. through entity's management decision, (b)Data Collection.The FAC is the re- the summary schedule must provide an pository of record for Subpart F—Audit explanation. Requirements of this part reporting (3) When the auditee believes the packages and the data collection form. audit findings are no longer valid or do All Federal agencies, pass-through en- not warrant further action,the reasons tities 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 oc- the audit was completed in accordance curred was submitted to the FAC; with this part and provides informa- (ii) The Federal, agency or pass- tion about the auditee, its Federal pro- through entity is not currently fol- grams, and the results of the audit. lowing up with the auditee on the audit The data must include information 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- (e) Corrective action plan. At the com- tegrity for Federal programs. The data pletion of the audit, the auditee must elements and format must be approved prepare, in a document separate from by OMB, available from the FAC, and the auditor's findings described in include collections of information from §200.516 Audit findings,a corrective ac- the reporting package described in tion plan to address each audit finding paragraph (c) of this section. A senior included in the current year auditor's level representative of the auditee reports. The corrective action plan (e.g., state controller, director of fi- must provide the name(s) of the con- Hance, chief executive officer, or chief tact person(s) responsible for comet- financial officer) must sign a state- Live action, the corrective action ment to be included as part of the data planned, and the anticipated comple- collection that says that the auditee tion date.If the auditee does not agree complied with the requirements of this with the audit findings or believes cor- part, the data were prepared in accord- rective action is not required, then the ance with this part (and the instruc- corrective action plan must include an tions accompanying the form), the re- explanation and specific reasons. porting package does not include pro- tected personally identifiable informa- p° tion, the information included in its (a) General. (1) The audit must be entirety is accurate and complete, and completed and the data collection form that the FAC is authorized to make the described in paragraph (b) of this.sec- reporting package and the form pub- tion and reporting package described in licly available on a Web site. paragraph (c) 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 endar 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 ization 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 +16 OMB Guidance §200.513 directly to any pass-through entities graph (b) of this section and one copy through which it has received a Fed- of the reporting package described in eral 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 FAC. of any findings related to Federal (g)FAC responsibilities.The FAC must awards that the pass-through entity make available the reporting packages provided. Unless restricted by Federal received in 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 copies of the reporting the public, except for Indian tribes ex- package available for public inspect ercising the option in(b)(2) of this sec- tion. tion, and maintain a data base of corn- (3)Using the information included in pleted audits, provide appropriate in- the reporting package described in formation to Federal agencies, and fol- • paragraph (c) of this section, the audi- low up with known auditees that have tor must complete the applicable data not submitted the required data collec- 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 collec- part must preclude electronic submis- tion form that indicates, at a min- sions to the FAC in such 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 §200S13 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 ex- 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 include 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 ments, paragraphs (a) and (b), respec- 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); nizance, 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, paragraph(c). 2019 and every fifth year thereafter. (d) Submission to FAC. The auditee For example,audit cognizance for peri- must electronically submit to the FAC ods ending in 2011 through,2015 will be • the data collection form described in determined based on Federal awards paragraph (b) of this section and the expended in 2009. reporting package described in para- (3) Notwithstanding the manner in graph(c)of this section. which audit cognizance is determined, (e) Requests for management letters a Federal awarding agency with cog- issued by the auditor. In response to re- nizance for an auditee may reassign quests by a Federal agency or pass- cognizance to another Federal award- through entity,auditees must submit a ing agency that provides substantial copy of any management letters issued funding and agrees to be the cognizant by the auditor. agency for audit. Within 30 calendar (f) Report retention requirements. days after any reassignment, both the Auditees must keep one copy of the old and the new cognizant agency for data collection form described in para- audit must provide notice of the 179 §200.513 2 CFR Ch.I1(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 licens- 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 organiza- 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 (vii) Coordinate a management deci- determine the quality of single audits sion for cross-cutting audit findings(as by providing a statistically reliable es- defined in §200.30 Cross-cutting audit timate of the extent that single audits finding) that affect the Federal pro- conform to applicable requirements, grams of more than one agency when standards,and procedures;and to make requested by any Federal awarding recommendations to address noted audit quality issues, including rec- agency whose awards are included in ommendations for any changes to ap- (viiithe audit firdin of the auditee. plicable requirements, standards and reportingi Coordinatesi the audit work and procedures indicated by the results of responsibilities among audi- procedures the project.This governmentwide audit tors 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 public. (b) Oversight agency for audit re- (iii) Promptly inform other affected sponsibilities. An auditee who does not Federal agencies and appropriate Fed- have a designated cognizant agency for eral law enforcement officials of any audit will be under the general over- direct reporting by the auditee or its sight of the Federal agency determined auditor required by GAGAS or statutes in accordance with §200.73 Oversight and regulations. agency for audit. A Federal agency (iv) Advise the community of inde- with oversight for an auditee may real- pendent auditors of any noteworthy or sign oversight to another Federal agen- important factual trends related to the cy that agrees to be the oversight quality of audits stemming from qual- 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 auditee,and, if to appropriate state licensing agencies known, the auditor. The oversight and professional bodies. agency for audit: (v) Advise the auditor, Federal (1) Must provide technical advice to awarding agencies, and, where appro- auditees and auditors as requested. priate, the auditee of any deficiencies (2)May assume all or some of the re- found in the audits when the deft- sponsibilities normally performed by a ciencies require corrective action by cognizant agency for audit. the auditor. When advised of defi- (c) Federal awarding agency respon- ciencies, 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. 180 OMB Guidance §200.514 (2) Provide technical advice and for the single audit process both within counsel to auditees and auditors as re- and outside the Federal government. quested. (ii) Promote interagency coordina- (3)Follow-up on audit findings to en- tion, consistency, and sharing in areas sure that the recipient takes appro- such as coordinating audit follow-up; priate and timely corrective action.As identifying higher-risk non-Federal en- part of audit follow-up, the Federal tities; providing input on single audit awarding agency must: and follow-up policy; enhancing the (i) Issue a management decision as utility of the FAG; and studying ways prescribed in §200.521 Management de- to use single audit results to improve cision; Federal award accountability and best (ii) 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 reso- 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 appro- tiveness of the Federal agency's proc- priate and timely follow-up and correc- 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 deci- Federal programs of more than one sions. 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 OMB to ensure that the compli7 compliance supplement to OMB. ance 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 AunrroRs agency will take sanctions. (5) Provide OMB with the name of a §200.b14 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- eral program outcomes. ministered Federal awards during such (ii) Held accountable to improve the audit period, provided that each such effectiveness of the single audit process audit must encompass the financial based upon metrics as described in statements and schedule of expendi- paragraph(c)(3)(iv)of this section. tures of Federal awards for each such (iii) 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 §200.515 2 CFR Ch. II (1-1-14 Edtlion) statements of the auditee are presented tions of Federal awards that may have fairly in all material respects in ac- a direct and material effect on each of 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 stat- grams and the compliance require- ed fairly in all material respects in re- ments of the largest Federal programs lation to the auditee's financial state- are included in the compliance supple- ments as a whole. ment. (c) Internal control. (1) The oomph- (3) For the compliance requirements ance supplement provides guidance on related to Federal programs contained internal controls over Federal pro- in the compliance supplement,an audit grams based upon the guidance in of these compliance requirements will Standards for Internal Control in the meet the requirements of this part. Federal Government issued by the Where there have been changes to the Comptroller General of the United compliance requirements and the States and the Internal Control—Inte- changes are not reflected in the com- grated Framework, issued by the Com- pliance supplement, the auditor must mittee of Sponsoring Organizations of determine the current compliance re- the Treadway Commission(COSO). quirements and modify the audit proce- (2)In addition to the requirements of dures accordingly. For those Federal GAGAS, the auditor must perform pro- cedures to obtain an understanding of programs not covered in the c should internal control over Federal programs ance supplement, the auditor should sufficient to plan the audit to support follow the compliance supplement's a low assessed level of control risk of upguidance for programs not included in thes noncompliance for major programs. supplement. (3) Except as provided in paragraph (4) The compliance testing must in- (c)(4) of this section, the auditor must: elude tests of transactions and such (i) Plan the testing of internal con- other auditing procedures necessary to trol over compliance for major provide the auditor sufficient appro- grams to support a low assessed level priate audit evidence to support an of control risk for the assertions rel- opinion on compliance. evant 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)(i) 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 program are likely to be in- and report, as a current year audit effective in preventing or detecting when the auditor concludes noncompliance, the planning and per- that the summary schedule of prior forming of testing described in para- audit findings materially misrepre- graph (c)(3) of this section are not re- sents the status of any prior audit find- quired for those compliance require- ing. The auditor must perform audit ments. However, the auditor must re- follow-up procedures regardless of port a significant deficiency or mate- whether a prior audit finding relates to rial weakness in accordance with a major program in the current year. §200.516 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 corn- graph(b)(3),the auditor must complete pliance tests are required because of and sign specified sections of the data ineffective internal control. collection form. (d) Compliance. (1) In addition to the §800.fi1fi Audit reporting. requirements of GAGAS, the auditor 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 financial state- cordance with this part and include the ments 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- ments are presented fairly in all mate- trol over major programs were die- rial respects in accordance with gen- closed by the audit; erally 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 ex- grams (i.e., unmodified opinion, quali- penditures of Federal awards is fairly fled opinion, adverse opinion, or dis- stated in all material respects in rela- claimer of opinion); tion to the financial statements as a (vi) A statement as to whether the whole. audit disclosed (b)A report on internal control over any audit findings her financial reporting and compliance the auditor is frindings t paragraph report under ); with Federal statutes, regulations, and §200ii) AnA identificatione findings ofmajor(a pro- the terms and conditions of the Federal (vii) of award, noncompliance with which grams by listing each individual major could have a material effect on the fi- teprogram;however inthe case to a dose nancial statements. This report must as of programs onlyScthe cluster name describe the scope of testing of internal to essho of d the wards is of requiExpered; - control and compliance and the results tares Federal Awards is required; of the tests, and, where applicable, it (viii) The dollar threshold used to will refer to the separate schedule 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 para- (c) 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 gaited for large loan or loan guaran must describe the scope of testing of tees;and internal control over compliance, in- (ix) A statement a to whether the elude an 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 (3) 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 ques- Audit findings,paragraph(a). tioned costs which must include the (i) Audit findings (e.g., internal con- following three components: trol findings, compliance findings, (1) A summary of the auditor's re- questioned costs, or fraud) that relate sults,which must include: to the same issue should be presented (i) The type of report the auditor as a single audit finding. Where prac- issued on whether the financial state- tical, audit findings should be orga- ments audited were prepared in accord- nized by Federal agency or pass- ance with GAAP(i.e., unmodified opin- through entity. ion, qualified opinion, adverse opinion, (ii)Audit findings that relate to both or disclaimer of opinion); the financial statements and Federal (ii) Where applicable, a statement awards, as reported under paragraphs about whether significant deficiencies (d)(2) and (d)(3) of this section, respec- 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 183 I §200.516 2 CFR Ch.II(1-1-14 Edition) may be in summary form with a ref- the auditor must include information erence to a detailed reporting in the to provide proper perspective for judg- other section of the schedule. (e) Nothing in this part precludes theng qtuestioned prevalenceno and consequences of combining of the audit reporting the questioned costs. cored by this sectionh with pee sperm- (4) Known questioned costs that are pro- ing required by§200.512 Report submis- greater than s not00 for a Federal j sion, paragraph (b) Data Collection grampr which c for audit as a majfollow-up,or when allowed by GALAS and Appendix theeg auditor is sent deris X to Part 200—Data Collection Form o not requiredito under this (Form SF-SAC). part to perform audit procedures for such a Federal program; therefore, the §200.616 Audit findings, auditor will normally not find ques- (a) Audit findings reported. The andi_ tinned costs for a program that is not tor must report the following as audit audited as a major program However, findings in a schedule of findi and ngs if the auditor does become aware of questioned costs: questioned costs for a Federal program (1) Significant deficiencies and mate- that is not audited as a major program rial weaknesses in internal control (e.g part of audit follow-up or other over major programs and significant audit procedures)and the known ques- tioned costs are greater than $25,000, instances of abuse relating to major programs. The auditor's determination then the auditor must report this as an of whether a deficiency in internal con- audit finding. trol is a significant deficiency or mate- (5) The circumstances concerning rial weakness for the purpose of report- why the auditor's report on compliance ing an audit finding is in relation to a for each major program is other than type of compliance requirement for a an unmodified opinion,unless such cir- major program identified in the Cora- cumstances are otherwise reported as pliance Supplement. audit find- (2) Material noncompliance with the anddfl�a ioin the costs Federalf provisions of Federal statutes, re lugs questioned costs for tions, or the terms and conditions of awards. Federal awards related to a major pro- (6) Known or likely fraud affecting a gram. The auditor's determination of Federal award, unless such fraud is whether a noncompliance with the pro- otherwise reported as an audit finding visions of Federal statutes, regnla- in the so for Federalof findings and guess tions, or the terms and conditions of -louse costs awards. This Federal awards is material for the our- paragraph does not require the auditor pose of reporting an audit findingto reportd publicly information investigative which relation to a type is e- could compromise of compliance re- ding investigative - quirement for a major program,identi- legal proceedings or to make an addi- fled in the compliance supplement. tional reporting when the auditor con- Known questioned costs that are firms that the fraud was reported out- (3) than $25,000 for a type of com- side the auditor's reports under the di- greaterpliance requirement for a major pro_ sect reporting requirements of GAG-AS. gram. Known questioned costs are (7) Instances where the results of those specifically identified by the audit follow-up procedures disclosed auditor. In evaluating the effect of that the summary schedule of prior questioned costs on the opinion on audit findings prepared by the auditee compliance, the auditor considers the in accordance with §200.511 Audit find- best estimate of total costs questioned lags follow-up, paragraph (b) materi- (likely questioned costs), not just the ally misrepresents the status of any questioned costs specifically identified Prior audit finding. (known questioned costs). The auditor (b) Audit finding detail and clarity. must also report known questioned Audit findings must be presented in costs when likely questioned costs are sufficient detail and clarity for the greater than$25,000 for a type of com- auditee to prepare a corrective action pliance requirement for a major pro- plan and take corrective action, and gram. In reporting questioned costs, 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 informa- temic problem. Where appropriate, in- tion must be included,as applicable,in stances identified must be related to audit findings: the universe and the number of cases (1) Federal program and specific Fed- examined and be quantified in terms of eral award identification including the dollar value.The auditor should report CFDA title and number,Federal award whether the sampling was a statis- identification number and year, name tically valid sample. of Federal agency,and name of the ap- (8) Identification of whether the plicable pass-through entity. When in- audit finding was a repeat of a finding formation, such as the CFDA title and in the immediately prior audit and if number or Federal award identification so any applicable prior year audit find- number, is not available, the auditor ing numbers. must provide the best information (9) Recommendations to prevent fu- available to describe the Federal fire occurrences of the deficiency iden- award. tified in the audit finding. (2) The criteria or specific require- (10) Views of responsible officials of ment upon which the audit finding is the auditee. based, including the Federal statutes, (c) Reference numbers. Each audit regulations, or the terms and condi- finding is the schedule of findings and tions of the Federal awards. Criteria .questioned costs must include a ref- generally identify the required or de- erence number in the format meeting sired state or expectation with respect the requirements of the data collection to the program or operation. Criteria form submission required by §200.512 provide a context for evaluating evi- Report submission, paragraph (b) to dence and understanding findings. allow for easy referencing of the audit (3) The condition found, including findings during follow-up. facts that support the deficiency iden- tified in the audit finding. §200.517 Audit documentation. (4) A statement of cause that identi- (a) Retention of audit documentation. fies 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 cognizant agency for indirect costs, or provide sufficient information to the pass-through entity to extend the re- auditee and Federal agency, or pass- tendon period. When the auditor is through entity in the case of a sub- aware that the Federal agency, pass- recipient, to permit them to determine through entity, or auditee is con- the cause and effect to facilitate testing an audit finding, the auditor prompt and proper corrective action.A must contact the parties contesting statement of the effect or potential ef- the audit finding for guidance prior to feet should provide a clear,logical link destruction of the audit documentation to establish the impact or potential and reports. impact of the difference between the (b) Access to audit documentation. condition and the criteria. Audit documentation must be made (6) 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 respon- 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 Edition) agencies to obtain copies of audit docu- loans if the value of Federal awards ex- mentation, as is reasonable and nec- pended for loans within the program essary. comprises fifty percent or more of the §200.618 or total Federal awards expended for the Major Program determine- program. A cluster of programs is tion. 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§200.504 Frequency of audits, the Federal agencies and pass-through en- determination of Type A and Type B tities,and the inherent risk of the Fed- programs must be based upon the Fed- eral program. The process in para- eral awards expended during the two- graphs (b) through (i) of this section year period. must be followed. (c) 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 determina- 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(c), 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): ing the program indicate significantly increased risk and preclude the pro- Total Federal awards ex- Type NB threshold gram from being low risk. For a Type pendedA program to be considered low-risk,it Equal to$750,000 but less $750,000. must have been audited as a major pro- than or equal to$25 million. Exceed$25 million but less Total Federal awards ex- gram in at least one of the two most than or equal to$100 mil- pended times.03. recent audit periods (in the most re- lion. cent audit period in the case of a bien- Exceed$100 million but less $3 million. nial audit), and, in the most recent than or equal to$1 billion. Exceed$1 billion but less Total Federal awards ex- audit period, the program must have than or equal to$10 billion. pended times.003. not had: Exceed$10 billion but less $30 million. (i) Internal control deficiencies than or equal to$20 billion which were identified as material Exceed$20 billion Total Federal awards ex- pended 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(c); section must be labeled Type B pro- (ii) A modified opinion on the pro- grams. gram in the auditor's report on major (3) The inclusion of large loan and programs as required under §200.515 loan guarantees (loans) should not re- Audit reporting,paragraph(c);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 (c)(1) the auditor must consider this Federal of this section, OMB may approve a program as a Type A program and ex- Federal awarding agency's request that elude its values in determining other a Type A program may not be consid- Type A programs.This recalculation of 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 ticular recipient to allow the Federal to be a Federal program providing awarding agency to comply with 31 186 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 180 calendar days prior least 20 percent (0.20) of total Federal to the end of the fiscal year to be au- awards expended. Otherwise, the audi- dited. tor must audit the major programs (d) Step three. (1) The auditor must identified in Step 4 (paragraphs (e)(1) identify Type B programs which are and (2) of this section) and such adds- high-risk using professional judgment tonal 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- teria for Federal program risk pars.- formed and documented in accordance graphs (b)(1), (b)(2), and (c)(1), a single with this Subpart, the auditor's judg- criteria in risk would seldom cause a ment in applying the risk-based ap- Type B program to be considered high- proach 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 au- part. However, Federal agencies and dited as major over a period of time. e (2)The auditor is not expected to per- pass-throughuditorsguidance entities may riskproofda form risk assessments on relatively auditors about the 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 dete*►r+•• major programs in audits exceed twenty-five percent (0.25) of the not yet completed. Type A threshold determined in Step 1 §200.519 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 determina- as major programs: tion should be based on an overall eval- (1) All Type A programs not identi- uation of the risk of noncompliance w- iled as low risk under step two (para- curring that could be material to the graph(c)(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 sec- (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, 187 §200.520 2 CFR Ch.II(1-1-14 Edition) and the terms and conditions of Fed- personal services, but otherwise be at eral awards and the competence and low risk. experience of personnel who administer (2)The phase of a Federal program in the Federal programs, its life cycle at the Federal (i) A Federal program administered ma y indicate agency risk. For example, a new under multiple internal control struc- Federal program with new or interim tures may have higher risk. When as- regulations may have higher risk than sessing risk in a large single audit, the an established program with time-test- auditor must consider whether weak- ed regulations. Also, significant nesses are isolated in a single oper- changes in Federal programs, statutes, ating unit(e.g., one college campus) or regulations, or the terms and condi- pervasive throughout the entity. tions of Federal awards may increase (ii) When significant parts of a Fed- risk. eral program are passed through to (3)The phase of a Federal program in subrecipients,a weak system for moni- its life cycle at the auditee may indi- toring subrecipients would indicate cate risk. For example, during the first higher risk. and last years that an auditee partici- (2) Prior audit findings would indi- pates in a Federal program, the risk cate higher risk,particularly when the may be higher due to start-up or close- situations identified in the audit find- out of program activities and staff. ings could have a significant impact on (4)Type B programs with larger Fed- a Federal program or have not been eral awards expended would be of high- corrected. er risk than programs with substan- (3)Federal programs not recently an- tally smaller Federal awards ex- dited as major programs may be of pended. higher risk than Federal programs re- cently audited as major programs with- §200.520 Criteria for a low-risk out audit findings. auditee, (c)Oversight exercised by Federal agen- An auditee that meets all of the fol- cies and pass-through entities. (1) Over- lowing conditions for each of the pre- sight exercised by Federal agencies or ceding two audit periods mast qualify pass-through entities could be used to as a low-risk auditee and be eligible for assess risk. For example, recent moni- reduced audit coverage in accordance toring or other reviews performed by with §200.518 Major program deter- an oversight entity that disclosed no mination. significant problems would indicate (a) Single audits were performed on lower risk, whereas monitoring that an annual basis in accordance with the disclosed significant problems would provisions of this Subpart, including indicate higher risk. submitting the data collection form (2)Federal agencies,with the concur- and the reporting package to the FAC rence of OMB, may identify Federal within the timeframe specified in programs that are higher risk. OMB §200.512 Report submission. A non-Fed- will provide this identification in the eral entity that has biennial audits compliance supplement. does not qualify as a low-risk auditee. (d) Inherent risk of the Federal pro- (b) The auditor's opinion on whether gram. (1) The nature of a Federal pro- the financial statements were prepared gram may indicate risk. Consideration in accordance with GAAP, or a basis of should be given to the complexity of accounting required by state law, and the program and the extent to which the auditor's in relation to opinion on the Federal program contracts for the schedule of expenditures of Federal goods and services. For example, Fed- awards were unmodified. eral programs that disburse funds (c) There were no deficiencies in in- through third party contracts or have ternal control which were identified as eligibility criteria may be of higher material weaknesses ander the require- risk. Federal programs primarily in- ments of GAGAS. volving staff payroll costs may have (d) The auditor did not report a sub- high risk for noncompliance with re- stantial doubt about the auditee's abil- quirements of§200.430 Compensation— ity to continue as a going concern. 188 • OMB Guidance Pt.200,App.I (e)None of the Federal programs had cision 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 classi- (c)Pass-through entity.As provided in fied 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 on internal con- issuing a management decision for trol for major programs as required audit findings that relate to Federal under §200.515 Audit reporting, 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- or port by the FAC.The auditee must ini- (3) Known or likely questioned costs tiate and proceed with corrective ac- that exceeded five percent of the total tion as rapidly as possible and correc- Federal awards expended for a Type A tive action should begin no later than program during the audit period, upon receipt of the audit report. (e) Reference numbers. Management MANAGEMENT DECISIONS decisions must include the reference numbers the auditor assigned to each §200.521 Management decision. audit finding in accordance with (a) General. The rwuiagement deci- §200.516 Audit findings paragraph(c). Slon must clearly state whether or not APPENDIX I To PART 200—FULL TEXT OF the audit finding is sustained, the rea- NOTICE OF FUNDING OPPORTUNITY sons for the decision, and the expected auditee action to repay disallowed The fall text of the notice of funding op- costs, make financial adjustments, or portunity is organised in sections. The re- take other action. If the auditee has quired format outlined in this appendix indi- not completed corrective action, a cates immediately following the title of each timetable for follow-up should be section whether that section is required in Prior to issuing the manage- every announcement or is a Federal award- given.ment decision, the Federal agencyMg agency option.The format 3s designed so or that stmitsr types of information will appear pass-through entity may request add!- in the same sections in announcements of tional information or documentation different Federal funding 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 in- formation that a Federal awarding agency would include in that section of an actual disallowed costs. The management de- announcement. cision should describe any appeal proc- A Federal awarding agency that wishes to ess available to the auditee. While not include information that the format does not required, the Federal agency or pass- specifically discuss may address that subject through entity may also issue a man- in whatever section(s) is most appropriate. agement decision on findings relating For example, if a Federal awarding agency to the financial statements which are chooses to address performance goals in the required to be reported in accordance announcement,it might do so in the funding with GAGAS. opportunity description,the application con- tent,or the reporting requirements. (b) Federal agency. As provided in Similarly, when this format calls for a §200.513 Responsibilities, paragraph type of information to be in a particular sec- (a)(7), the cognizant agency for audit tion, a Federal awarding agency wishing to must be responsible for coordinating a address that subject in other sections may management decision for audit fmd- elect to repeat the information in those sec- ings that affect the programs of more tions or use cross references between the sec than one Federal agency. As provided tions (there should be hyperlinks for cross in §200.513 Responsibilities, paragraph references in any electronic versions of the announcement). For example, a Federal (c)(3), a Federal awarding agency is re- awarding agency may want to include in sponsible for issuing a management de- Section I information about the types of 189 Pt.200,App.I 2 CFR Ch.1i (1-1-14 Edition) non-Federal entities who 'are eligible to quired or Federal award administration in- apply. The format specifies a standard loca- formation in section D.Application and Sub- tion for that information in Section DI.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. erence between Sections I and III.1, as long as a potential applicant can fmd the infor- C.ELIGIBILITY INFORMATION matron quickly and easily from the standard This section addresses the considerations location. or factors that determine applicant or appli- The sections of the full text of the an- cation eligibility. This includes the eligi- nouncement are described in the following bflity of particular types of applicant organi- paragraphs. zations,any factors affecting the eligibility A.PROGRAM DESCRIPTION—REQun?.ED of the principal investigator or project direc- tor, and any criteria that make particular This section contains the fall program de- projects ineligible. Federal agencies should scription of the funding 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 are: is a new program or a new or changed area of 1. Eligible Applicants—Required. Announce- program emphasis). This section may corn- meats must clearly identify the types of en- municate indicators of successful projects titles that are eligible to apply.If there are (e.g., if the program encourages collabo- no restrictions on eligibility, this section rative efforts) and may include examples of may simply indicate that all potential appli- projects that have been funded previously. cants are eligible.If there are restrictions on This section also may include other informa- eligibility, it is important to be clear about tion the Federal awarding agency deems nec- the specific types of entities that are eligi- essary,and must at a minimum include cite- ble, not just the types that are ineligible. tions for authorizing statutes and regula- For example, if the program is limited to tions for the funding opportunity. nonprofit organizations subject to 26 U.S.C. B.FEDERAL AWARD INFORMATION—REQUIRED the of.the tax code(26 U.S.C.501(0)(3)), the announcement should say so. Similarly, 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- viduals). 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 lion that must be submitted to support an award, on average, experienced in previous eligibility determination (e.g., proof of years; and the anticipated start dates and 501(c)(3)status as determined by the Internal periods of performance for new Federal Revenue Service or an authorizing tribal res- awards. This section also should address olution).To the extent that any funding re- whether applications for renewal or sap- striation in Section IV.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. lion in this section or provide a cross-ref- This section also must indicate the type(s) erence to its description in Section 1V.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 oost nouncement 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 bility criterion includes requirements based content and form or format requirements in statute or regulation, as described in for: §200.306 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 IV.3), including any limitations on and Submission Information stating any pre- the number of pages or other formatting re- award requirements for submission of letters quirements similar to those for full applica- or other documentation to verify commit- tions, ments to meet cost-sharing requirements if a ii,The application as a whole.For all sub- Federal award is made. missions,this would include any limitations 3.Other—Required,if applicable.If there are on the number of pages,font size and type- other eligibility criteria (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- er referred to as "responsiveness" criteria, quired, this could include special require- "go-no go" criteria, "threshold" criteria, or ments for formatting or signatures. in other ways), must be clearly stated and fig. Component pieces of the application must include a reference to the regulation of (e.g., if all copies of the application must requirement that describes the restriction, bear original signatures on the 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 titular 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- meats from third parties that will be con- tions an applicant may submit under the an- tributing a portion of any required cost shar- 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,but prior to a Federal eligibility 'criteria for beneficiaries or for award. This could include evidence of corn- program participants other than Federal pliance 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.4321-4370h). 1. Address to Request Application Package— 3. Dun and Bradstreet Universal Numbering Required. Potential applicants must be told System(DUNS)Number and System for Award how to get application forms, kits, or other Management(SAM)—Required. materials needed to apply(if this announce- This paragraph must state clearly that ment 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 SAM 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(iii)continue to main- such as a U.S. Postal Service mailing ad- taro 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. ing agency.It also must state that the Fed- 2. Content and Form of Application Submis- eral awarding agency may not make a Fed- non—Required. This section must identify eral award to an applicant until the appli- the required content of an application and cant has complied with all applicable DUNS the forms 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 comply 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 potential applicants that the names white papers,or pre-applications).It also in- and addresses of the SPOCs are listed in the eludes any other submissions of information Office of Management and Budget's Web site. before Federal award that are separate from www.whitehouse.gov/ombigrants/spoc.html. the full application. If the funding oppor- 6 Funding Restrictions—Required. Notices tunity is a general announcement that is must include information on funrestrio- dates for applications, open for period of time with no specific due bons in order to allow an applicant to de- this section should velop an application and budget consistent say so. Note that the information on dates program requirements. Examples are that included vn thrvis section also must ap- with whether construction is an allowable activ- pear with other overview information in a lo- cation preceding the full text of the an- ity, if there are any limitations on direct nouncement(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 sub+nis- should be specified.The announcement must sion requirements not included in the other state(or provide a reference to another docu- paragraphs of this section. This might in- ment that states): elude the format of submission,i.e.,paper or I.Any deadline in terms of a date and local electronic,for each type of required submis- time. If the due date falls on a Saturday, sion. Applicants should not be required to Sunday, or Federal holiday, the reporting submit in more than one format and this sec- package is due the next business day. tion should indicate whether they may it What the deadline means (e.g.,whether choose whether to submit applications in it is the date and time by which the Federal hard copy or electronically,may submit only awarding agency must receive the applies- in hard copy, or may submit only electroni- tion,the date by which the application must sally be postmarked, or something else) and how that depends, if at all, on the submission This section also must indicate where ap- method (e.g., mail, electronic, or personal/ plications(and any pre-applications)must be courier delivery). submitted if sent by postal mail, electronic iii. The effect of missing a deadline (e.g., means, or hand delivery. For postal mail whether late applications are neither re- submission,this must include the name of an viewed nor considered or are reviewed and 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-applica- this must include the URL or email address; tion 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 capa- mailing or system-generated documentation bilities are required;what to do in the event of receipt date and time. of system problems and a point of contact This section also may indicate whether, who will be available in the event the appli- when,and in what form the applicant will re- cant experiences technical difficulties.' ceive 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.Criteria—Required.This section must ad- di Moult 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 tunities 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- erates, the way reviewers are selected, re- cations,including any statutory,regulatory, viewer qualifications,and the way that con- or other preferences(e.g.,minority status or flirts of interest are avoided.With respect to Native American tribal preferences) that electronic methods for providing informa- will be applied in the review process. These tion about funding opportunities or accept- criteria are distinct from eligibility criteria ing applicants' submissions of information, that are addressed before an application is each Federal awarding agency is responsible accepted for review and any program policy for compliance with Section 508 of the Reha- or other factors that are applied during the bilitation 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 suggest those make informed decisions when preparing they feel may be inappropriate due to a con- their applications to rn imie fairness of filet of interest, that information should be the process.The announcement should clear- included in this section. ly describe all criteria,.including any sub- 3. Anticipated Announcement and Federal criteria. If criteria vary in importance, the Award Dates—Optional. This section is in- announcement should specify the relative tended to provide applicants with informa- percentages,weights,or other means used to tion they can use for planning purposes. If distinguish among them.For statutory,reg- there is a single application deadline fol- ulatory,or other preferences, the announce- lowed by the simultaneous review of all ap- meat should provide a detailed explanation plications, the Federal awarding agency can of those preferences with an explicit indica- include in this section information about the tion of their effect(e.g.,whether they result anticipated dates for announcing or noti- in additional points being assigned). tying successful and unsuccessful 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 specifically address how it will be con- give applicants an estimate of the time need- sidered(e.g., to assign a certain number of ed to process an application and notify the additional points to applicants who offer applicant of the Federal awarding agency's cost sharing,or to break ties among applica- decision. tions with equivalent scores after evaluation against all other factors).If cost sharing will F.FEDERAL AWARD ADMINISTRATION not be considered in the evaluation, the an- INFORMATION nouncement should say so, so that there is 1, Federal Award Notices—Required. This no ambiguity for potential applicants.Vague 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, tion. If the Federal awarding agency's prac- are unhelpful to applicants.It also is impor- tice is to provide a separate notice stating taut that the announcement be clear about that an application has been selected before any restrictions on the types of cost(e.g.,in- it actually makes the Federal award, this kind contributions) that are acceptable as section would be the place to indicate that cost sharing. the letter is not an authorization to begin 2. Review and Selection Process—Required. performance (to the extent that it allows This section may vary in the level of detail charging to Federal awards of pre-award provided. The announcement must list any costs at the non-Federal entity's own risk). program policy or other factors or elements, This section should indicate that the notice other than merit criteria,that the selecting of Federal award signed by the grants officer official may use in selecting applications for (or equivalent)is the authorizing document, Federal award(e.g.,geographical dispersion, and whether it is provided through postal program balance, or diversity). The Federal mail or by electronic means and to whom.It awarding agency may also include other ap- also may address the timing,form,and con- propriate details. For example, this section tent of notifications to unsuccessful appli- may indicate who is responsible for evalna- cants. See also §200.210 Information con- tion against the merit criteria(e.g.,peers ex- tained in a Federal award. ternal to the Federal awarding agency or 2. Administrative and National Policy Re- Federal awarding agency personnel) and/or quirements Required.This section must idea- who makes the final selections for Federal try the usual administrative and national awards.If there is a multi-phase review proc- policy requirements the Federal awarding ess(e.g.,an external panel advising internal agency's Federal awards may include. Pro- • Federal awarding agency personnel who viding this information lets a potential ap- make final recommendations to the deciding plicant identify any requirements with official),the announcement may describe the which it would have difficulty complying if phases. It also may include: the number of its application is successful. In those cases, 193 Pt.200,App.II 2 CFR Ch. II (1-1-14 Edition) early notification about the requirements al- H.OTRER INFORMATION—OPTTONAL lows the potential applicant to decide not to apply or to take needed actions before re This section may include any additional oeiving the Federal award. The announce- plicant. n that will assists a potential ap meat need not include all of the terms and P i. ndicat example,the section new program conditions of the Federal award, i• Indicate initiative. this. is a program but may or a one-time initiative. refer to a document(with information about ii. Mention related programs or other up- how to obtain it) or Internet site where ap- coming or ongoing Federal awarding agency plicants can see the terms and conditions.If funding opportunities for similar activities. this fending opportunity will lead to Federal in. Include current Internet addresses for awards with some special terms and condi- Federal awarding agency Web sites that may tions 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 ceived 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- not (e.g., that the Federal Federal award is tions. For the same reason, the announce- not obligated to make any award as meat should inform potential applicants a result fi the announcement a thato only •about special requirements that could apply grants officers enn binduof the Federal govern- to particular Federal awards after the review ment to the expenditure funds). of applications and other information,based APPENDIX II TO PART 200—CONTRACT on the particular circumstances of the effort PROVISIONS FOR NON-FEDERAL,ENTl- to be supported(e.g.,if human subjects were TY CONTRACTS UNDER FEDERAL to be involved or if some situations may jus- AWARDS tify special terms on intellectual property, 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., financial or performance), frequency, under the Federal award must contain provi- and means of submission (paper or elec- sions covering the following,as applicable. ironic) of post-Federal award reporting re- (A)Contracts for more than'the simplified quirements. Highlight any special reporting acquisition threshold currently set at requirements for Federal awards under this $150,000, which is the inflation adjusted funding opportunity that differ (e.g., by re- amount determined by the Civilian Agency port type, frequency, form/format, or cir- Acquisition Council and the Defense Acgniai- cumstances for use) from what the Federal tion Regulations Council (Councils) as au- awarding agency's Federal awards usually thorized by U.S.C. al must address ad require. miniatrative, contractuual,, or legal remedies in instances where contractors violate or breach contract terms, and provide for such G.FEDERAL AWARDING AGENCY CONTACTS)- REe�,ID sanctions and penalties as appropriate. (B)All contracts in excess of$10,000 must The announcement must give potential ap- address termination for cause and for con- plicants a point(s) of contact for answering venience by the non-Federal entity including questions or helping with problems while the the manner by which it will be effected and funding opportunity is open. The intent of the basis for settlement. this requirement is to be as helpful as pas- (C) Equal Employment Opportunity. Ex- sible 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 defini- such as giving: tion of"federally assisted construction con- tract"in 41 CFR Part 60 1.3 must include the i.Points of contact who may reached in multiple ways(e.g.,by telephone, FAX,and/ equal opportunity clause provided under 41 or email,as well as regular mail). CFR 60-1.4(b), in accordance with Executive ii. A fax or email address that multiple Order6' `Equal Employment Oppor- people access,so that someone will respond 11965 Co p. FR 339),3 ) as same 3 CFR pert,1t ve even if others are unexpectedly absent dur- Ord Comp., , An amended byu Executivr ing critical periods. Order ll375, "Amending Executive Order fill. Different contacts for distinct kinds of 11246 Relating to Equal Employment Oppor- help(e.g.,one for questions of programmatic to CFR pat 6d, "Office fg regulations at 41 content and a second for administrative Compliance Progam ,of Federalal Contract questions). Opportunity,Departmentq Employment of Labor." 194 OMB Guidance Pt.200,App. II (D)Davis-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 construction contracts tation or transmission of intelligence. in excess of$2,000 awarded by non-Federal (F) Bights to Inventions Made Under a entities must include a provision for oomph- Contract or Agreement.If the Federal award ante with the Davis-Bacon Aot (40 U.S.C. meets the definition of"funding agreement" 3141-3144, and 3146-3148) as supplemented by under 37 CFR§401.2(a)and the recipient or Department of Labor regulations (29 CFR subrecipient wishes to enter into a contract Part 5, "Labor Standards Provisions Appli- with a small business firm or nonprofit orga- cable to Contracts Covering Federally Fi- nization regarding the substitution of par- named and Assisted Construction"). In ac- ties, assignment or performance of experi- cordance with the statute,contractors must mental, developmental, or research work be required to pay wages to laborers and me- under that "funding agreement," the recipi- chanics at a rate not less than the prevailing ent or subrecipient must comply with the re- wages specified in a wage determination quirements of 37 CFR Part 401,"Rights to In- made by the Secretary of Labor.In addition, ventions Made by Nonprofit Organizations contractors must be required to pay wages and Small Business Firms Under Govern- not less than once a week. The non-Federal ment Grants, Contracts and Cooperative entity must place a copy of the current pre- Agreements,"and any implementing regale- veiling wage determination issued by the De- tions issued by the awarding agency. partment of Labor in each solicitation. The (G)Clean Air Act(42 U.S.C.7401-7671q.)and decision to award a contract or subcontract the Federal Water Pollution Control Act(33 must be conditioned upon the acceptance of U.S.C.1251-1387),as amended—Contracts and the wage determination.The non-Federal en- subgrants of amounts in excess of $150,000 tity must report all suspected or reported must contain a provision that requires the violations to the Federal awarding agency, non-Federal award to agree to comply with The contracts must also include a provision all applicable standards, orders or regula- for compliance with the Copeland "Anti- tions issued pursuant to the Clean Air Act Kickback" Act (40 U.S.C. 3145), as supple- (42 U.S.C. 7401-7671q) and the Federal Water mented by Department of Labor regulations Pollution Control Act as amended(33 U.S.C. (29 CFR Part 3, "Contractors and Sub- 1251-1387).Violations must be reported to the contractors on Public Building or Public Federal awarding agency and the Regional Work Financed in Whole or in Part by Loans Office of the Environmental Protection or Grants from the United States").The Act Agency(EPA). provides that each contractor or sub- (H) Mandatory standards and policies re- recipient must be prohibited from inducing, lating to energy efficiency which are con- by any means, any person employed in the tailed in the state energy conservation plan construction,completion,or repair of public issued in compliance with the Energy Policy work, to give up any part of the compensa- and Conservation Act(42 U.S.C.6201). tion to which he or she is otherwise entitled. (I) Debarment and Suspension (Executive The non-Federal entity must report all sus- Orders 12549 and 12689)—A contract award pected or reported violations to the Federal (see 2 CFR 180.220)must not be made to par- awarding agency ties listed on the governmentwide Excluded (E) Contract Work Hours and Safety Parties List System in the System for Award Standards Act (40 U.S.C. 3701-3708). Where Management(SAM), in accordance with the applicable,all contracts awarded by the non- OMB guidelines at 2 CFR 180 that implement Federal entity in excess of$100,000 that in- Executive Orders 12549 (3 CFR Part 1986 volve the employment of mechanics or labor- Comp., p. 189) and 12689 (3 CFR Part 1989 err must include a provision for compliance Comp.,p.235),"Debarment and Suspension." with 40 U.S.C.3702 and 3704,as supplemented The Excluded Parties List System in SAM by Department of Labor regulations(29 CFR contains the names of parties debarred, sus- Part 5).Under 40 U.S.C.3702 of the Act,each pended,or otherwise excluded by agencies,as contractor must be required to compute the well as parties declared ineligible under stet- wages of every mechanic and laborer on the utory or regulatory authority other than Ex- basis of a standard work week of 40 hours. ecutive Order 12549. Work in excess of the standard work week is (J) Byrd Anti-Lobbying Amendment (31 permissible provided that the worker is corn- U.S.C. 1352)—Contractors that apply or bid pensated at a rate of not less than one and a for an award of 3100,000 or more must file the half times the basic rate of pay for all hours required certification. Each tier certifies to worked in excess of 40 hours in the work the tier above that it will not and has not week.The requirements of 40 U.S.C.3704 are used Federal appropriated funds to pay any applicable to construction work and provide person or organization for influencing or at- that no laborer or mechanic must be re- tempting to influence an officer or employee quired to work in surroundings or under of any agency,a member of Congress,officer working conditions which are unsanitary, or employee of Congress,or an employee of a hazardous or dangerous.These requirements member of Congress in connection with ob- do not apply to the purchases of supplies or twining any Federal contract, grant or any 195 Pt.200,App. III 2 CFR Ch.1I(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- non-Federal fonds 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 de- velopment activities and where such activi- APPENDIX III TO PART 200—INDIRECT ties are not included in the instruction funo- (F&A) COSTS IDENTIFICATION AND tion. ASSIGNMENT, AND RATE DETERMINA- (2) University research means all research TION FOR INSTITU'rJONS OF HIGHER and development activities that are sepa- EDUCATION(113Es) rately budgeted and accounted for by the in- stitution under an internal application of in- A.GENERAL stitutional funds. University research, for This appendix provides criteria for identi- purposes of this document, must be com- fying and computing indirect (or indirect sponsored research under the (F&A))rates at IHEs(institutions).Indirect function of organized research. (F&A) costs are those that are incurred for c.Other sponsored activities means programs common or joint objectives and therefore and projects financed by Federal and non- cannot be identified readily and specifically Federalagencies and organizations which in- with a particular sponsored project, an in- volve the performance of work other than in- structional activity, or any other institu- straction and organized research. Examples tional activity. See subsection B.1, Defini_ of such programs and projects are health tion 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 outside support, they may be classified as 1.Major Functions of an Institution other institutional activities. Refers to instruction, organized research, d.Other institutional activities means all ac- other sponsored activities and other institu- tivities of an institution except for instruc- tional activities as defined in this section: tion, departmental research, organized re a. Instruction means the teaching and search,and other sponsored activities,as de- fin activities of an institution. Excepts this section indirect(F&A)cost ac- for research training as provided in sub- tivities identified in this Appendix pare section b,this term includes all teaching and graph B,Identification 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. Examples of other institutional activities offered through regular academic depart- meats or separate divisions, such as a sum- include operation of residence halls, dining mer school division or an extension division.• 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 es- 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 ciples, 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, tion of indirect (F&A) costs 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 Separately budgeted and the fiscal year established by the institution, accounted for. Departmental research, for but in any event the base period should be so purposes of this document,is not considered selected as to avoid inequities in the dis- as a major function,but as a part of the in- tribution of costs. struction function of the institution. b. Need for cost groupings. The overall ob- b. Organized research means all research jective 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 Pt.200,App.111 the major functions of the institution in pro- expenses, or operation and maintenance ex- portions reasonably consistent with the na- penses to such activities should be accom- ture 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 establishing 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 B.1,Definition of Facilities benefits as indirect (F&A) charges, such and Administration. In general, the cost costs should be set aside as a separate cost groupings established within a category grouping for selective distribution to related should constitute, in each case, a pool of coat objectives. those items of expense that are considered to be of like nature in terms of their relative (B)The number of separate cost groupings contribution to (or degree of remotenesswithin a category should be held within from)the particular cost objectives to which practical a taking into consider- distribution is appropriate. Cost groupings ation the materiality of the amounts in- should be established considering the general volved and the degree of precision attainable guides provided in subsection c of this sec- through less selective methods of distribu- tion.Each such pool or cost grouping should tion. then be distributed individually to the re- d.Selection of distribution method. lated cost objectives, mine-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. letting 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- jectives in accordance with benefits derived; priate at an institution is a matter of judg- with a traceable cause-and-effect relation- ment to be determined on a case-by-case ship;or with logic and reason,where neither basis.Typical situations which may warrant benefit nor a cause-and-effect relationet,ip is the establishment of two or more separate determinable. cost groupings(based on account classifies- (2)If a cost grouping can be identified di- tion or analysis) within an indirect (F&A) rectiy with the cost objective benefitted, it cost category include bat are not limited to should be assigned to that cost objective. the following: (3) If the (1)If certain items or categories of expense expenses in a cost grouping are more general in nature, relate solely to one of the major functions of be on a cost st analysis study which re the distribution may the institution or to less than all functions, based such expenses should be set aside as a sepa- s� an equitable distribution of the rate cost grouping for direct assignment or costs. Such cost analysis studies may take selective allocation in accordance with the into consideration weighting factors, popu- guides provided in subsections b and d lation,or space occupied if appropriate.Cost (2)If any types of expense ordinarily treat- studies,however,must(a)be appro- ed as general administration or depart priately documented in sufficient detail for mental administration are charged to Fed- subsequent review by the cognizant agency eral awards as direct costs,expenses applica- 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,(c)be sta- circumstances must, through separate cost tistioally sound,(d)be performed specifically groupings, be excluded from the indirect at the institution at which the results are to (F&A) costs allocable to those Federal be used,and(e)be reviewed periodically,but awards and included in the direct cost of not less frequently than rate negotiations, other activities for cost allocation purposes. updated if necessary, and used consistently. (3)If it is determined that certain expenses Any assumptions made in the study must be are for the support of a service unit or facil- stated and explained. The use of cost anal- ity whose output is susceptible of measure- ysis studies and periodic changes in the meat 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, instruc- formed,or if the study does not result in an tional,and other activities at the institution equitable distribution of the costs, the dis- 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,Iden- cJ'aning, personnel administration, building tification and assignment of indirect (F&A) maintenance or similar service,the distribu- costs, unless one of the following conditions tion of general administration and general is met: 197 • Pt.200,App. III 2 CFR Ch.II(1-1-14 Edition) (a)It can be demonstrated that the use of (1) Depreciation on buildings used exclu- a different base would result in a more equi- sively in the conduct of a single function, table allocation of the costs,or that a more and on capital improvements and equipment readily available base would not increase the used in such buildings, must be assigned to costs charged to Federal awards,or that function. (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- meats and equipment used in such buildings, tion D, Simplified method for small institu- must be allocated to the individual functions tions. performed in each build ing onx the basis of (5) Notwithstanding subsection (3), effec- usable square feet of space, excluding corn- five Ju ly 1,1998,a cost analysis or base other mon areas such as hallways, stairwells, and than that in Section B must not be used to rest rooms. distribute utility or student services costs. (3) Depreciation on buildings, capital im- Instead, subsections B.4.c Operation and provements and equipment related to space maintenance expenses, may be used in the (e.g., individual rooms, laboratories) used recovery of utility costs. jointly by more than one function(as deter- s.Order of distribution. mined by the users of the space) must be (1)Indirect(F&A)costs are the broad cat- treated as follows. The cost of each jointly egories of costs 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 (FTEs) or salaries and wages of those Judi- administrative and general expenses should vidual functions benefitting from the use of be allocated in that order to the remaining that space;or indirect (F&A) cost categories as well as to (b)Institution-wide employee l"TTrls or sal- the major functions and speciaB9ed service aries and wages applicable to the benefitting facilities of the institution. Other cost cat- major functions (see Section A.1) of the in- egories may be allocated in the order deter- stitution. mined to be most appropriate by the institu- (4) Depreciation on certain capital im- tons.When cross allocation of costs is made provements to land, such as paved parking as provided in subsection(3),this order of al- areas,fences,sidewalks,and the like,not in- location does not apply eluded in the cost of buildings,must be allo- (3) Normally an indirect (F&A) cost cat- cated 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 cat- the employee category must be further allo- egories may be used if such allocation will cated 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 fanc- priate modification to the composition of tions. the indirect(F&A)cost categories described in Section B is required. 3.Interest B.IDENTIFICATION AND ASSIGNMENT OF Interest on debt associated with certain IipI AEIoCT AND SSIGNCOSTS buildings, equipment and capital improve- ments, as defined in 1200.449 Interest, must 1.Definition of Facilities and Administration be classified as an expenditure under the cat- be allo- See §200.414 Indirect (F&A) costs which cat go in the same s manner tas thetd precia- provides the basis for this indirect cost re- tion on the buildings,equipment and capital quirements. improvements to which the interest relates. 2.Depreciation 4.Operation and Maintenance Expenses a.The expenses under this heading are the a. The expenses under this heading are portion of the costs of the institution's those that have been incurred for the admin- buildings,capital improvements to land and istration, supervision, operation, mainte- buildings, and equipment which are com- nance,preservation,and protection of the in- puted in accordance with §200.436 Deprecia- stitution's physical plant. They include ex- tion. penses 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 Guidance Pt.200,App.III and disaster preparedness; environmental 5.General Administration and General Expenses safety; hazardous waste disposal; property, a. The expenses under this heading are liability and all other insurance relating to those that have been incurred for the general property; space and capital leasing; facility executive and administrative offices of edu- planning and management; and central re- cational institutions and other expenses of a ceiving. The operation and maintenance ex- general character which do not relate solely pens category should also include its cello- to any major function of the institution;i.e., cable share of fringe benefit costs, deprecia- solely to (1) instruction, (2) organized ra- tion,and interest costs. search, (3) other sponsored activities, or (4) b. In the absence of the alternatives pro- other institutional activities. The general vided for in Section A.2.d, the expenses in- administration and general expense category cluded in this category must be allocated in should also include its allocable share of the same manner as described in subsection fringe benefit costs, operation and mainte- 2.b for depreciation. Hance expense, depreciation, and interest c. A utility cost adjustment of up to 1.3 costs. Examples of general administration percentage points may be included in the ne- and general expenses include:those expenses gotiated indirect cost rate of the IRE for or- incurred by administrative offices that serve ganized research,per the computation alter- the entire university system of which the in- • natives in paragraphs (c)(1) and (2) of this stitution is a part; central offices of the in- section: stitution such as the President's or (1)Where space is devoted to a single func- Chancellor's office, the offices for institu- tion and metering allows unambiguous mean- tion-wide financial 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- that space. went;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 unam- management information systems. General bignous measurement of iisage by function, a in;stration and general expenses must must be allocated as follows: not include expenses incurred within non- costs(i)Utilities costs should be apportioned to university-wide deans'offices, academic de- functions in the same manner as deprecia- partments,organiorganized irts. (Seearch units,or on 6, lax organizational units. (See subsection 6, tics, based on the calculated difference be- Departmental administration expenses.) tween the site or building actual square foot- b. In the absence of the alternatives pro- age for monitored research laboratory space vided for in Section A.2.d, the expenses in- (site, building, floor, or room), and a sepa- cluded in this category must be grouped first rate calculation prepared by the ME using according to common major functions of the the "effective square footage" described in institution to which they render services or subsection(c)(2)(ii)of this section. provide benefits. The aggregate expenses of (ii)"Effective square footage"allocated to each group must then be allocated to serv- research laboratory space must be calculated iced or benefitted functions on the modified as the actual square footage times the rel- total cost basis. Modified total costs consist ative energy utilization index(REIII)posted of the same elements as those in Section C.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 organiza- energy use index (lab EUI) to the cor- 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 EI I). allocation or both,to assure a proper alloca- B.In July 2012,values for these two indices tion of costs. (taken respectively from the Lawrence Berkeley Laboratory"Labs for the 21st Cen- 6.Departmental Administration Expenses tury" benchmarking tool http:// a. The expenses under this heading are labs2lbenchmarking.Ibl.gov/CompareData.php those that have been incurred for adminis- and the US Department of Energy "Build- trative and supporting services that benefit lags Energy Databook" and http:// common or joint departmental activities or buildingsdatabook.eren.doe.gov/CBECS.aspx) objectives in academic deans' offices, aca- were 310 kBtu/sq 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 such units as institutes,study adjust the EUI numbers from time to time centers,and research centers.Departmental (no more often than annually nor less often administration expenses are subject to the than every 5 years), using reliable and pub- following limitations. licly disclosed data. Current values of both (1) Academic deans' offices. Salaries and the EUls and the REUI will be posted on the operating expenses are limited to those at- OMB Web site. tributable to administrative functions. 199 Pt.200,App.III 2 CFR Ch.II (1-1-14 Edition) (2)Academic departments: c.In the absence of the alternatives pro- (a) Salaries and fringe benefits attrib- vided for in.Section A.2.d, the expenses in- utable to the administrative work(including eluded in this category must be allocated as bid and proposal preparation) of faculty(in- follows: eluding department heads)and other profes- (1) The administrative expenses of the sional personnel conducting research and/or dean's office of each college and school must instruction,must be allowed at a rate of 3.6 be allocated to the academic departments percent of modified total direct costs. This within that college or school on the modified category does not include professional busi- total cost basis. ness or professional administrative officers. (2) The administrative expenses of each This allowance must be added to the corn- academic department, and the department's .putation of the indirect(F&A) cost rate for share of the expenses allocated in subsection major functions in Section C,Determination (1)must be allocated to the appropriate fanc- and application of indirect (F&A) cost rate tions of the department on the modified or rates;the expenses covered by the allow- total cost basis. ance must be excluded from the depart- mental administration cost pool. No docu- 7.Sponsored Projects Administration mentation is required to support this allow- a.The expenses under this heading are lira- ance.Other ited to those incurred bya separategani- administrative and supporting or expenses incurred within academic depart- zation(s)sponsored established primarily to functions u administer ments are allowable as ra andpr contractt, including a nc(Fe - provided they are treat- as grant administration (Fell- ed consistently in like circumstances. This eral and non-Federal), special security, pur- would include expenses such as the salaries chasmandof secretarial and clerical staffs,the salariesd,publishingsonne administration,researand th edit- of Administrative officers and assistants, ing and.They include tohe e saariechs and and otherses travel, office supplies, stockrooms, and the of the head of such organization,assistants, like' and immediate staff,together with the sale- (3)Other fringe benefit costs applicable to ries and expenses of personnel engaged in the salaries and wages included in sub- supporting activities maintained by the or- sections (1)and(2) are allowable, as well as ganization,such as stock rooms,print shops, an appropriate share of general administea- and the like.This category also includes an tion and general expenses, operation and allocable share of fringe benefit costs, gen- maintenance expenses,and depreciation. eral administration and general (4) Federal agencies may authorize rein- operation and maintenanceexpenses, bureement of additional costs for department predation. Appropriate expenses,and d e heads and facultyonlyicesoviadjustmentsotherwill be where an institution can d exceptional casesdu or organizations. provided to other functions hardship or detriment to project perform- b. In the absence of the alternatives pro- ance. vided for in Section A.2.d, the expenses b.The following guidelines apply to the de- eluded in this category must be allocated to termination of departmental administrative the major functions of the institution under costs as direct or indirect(F&A)costs, which the sponsored projects are conducted (1)In developing the departmental admin- on the basis of the modified total cost of istration cost pool,special care should be ex- sponsored projects. ercised to ensure that costs incurred for the c. An appropriate adjustment must be same purpose in like circnmstances are made to eliminate any duplicate charges to treated consistently as either direct or Judi_ Federal awards when this category includes rect (F&A) costs. For example, salaries of s'mitar or identical activities as those in- technical staff, laboratory supplies (e.g., eluded in the general administration and chemicals), telephone toll charges, animals, general expense category or other indirect animal care costs, computer costs, travel (F&A) cost items, such as accounting, pro- costs, and specialized shop costs must be curement,or personnel administration. treated as direct costs wherever identifiable to a particular cost objective.Direct charg- 8.Library Expenses ing of these costs may be accomplished a. The expenses under this heading are through specific identification of individual those that have been incurred for the oper- costs to benefiting cost objectives, or ation of the library, including the cost of through recharge centers or specialized serv- books and library materials purchased for ice facilities, as appropriate under the air- the library,less any items of library income cumstances. See§§200.413 Direct costs,para- that qualify as applicable credits under graph(c) and 200.468 Specialized service fa- §200.406 Applicable credits. The library ex- (2) Items such as office supplies, pense category should also include the fringe local telephone costs,and memberships must includbenefiedaptherein, ale n ap apprope riate and share wages normally be treated as indirect(F&A)costs. pinoPen re of general administration and general expense, 200 OMB Guidance Pt.200,App.III operation and maintenance expense, and de- struction function,and subsequently to Fed- preciation. Costs incurred in the purchases eral awards in that function. of rare books (museum-type books) with no value to Federal awards should not be allo- 10. Offset for Indirect (F&A) Expenses Other- oated to them. wise Provided for by the Federal Govern- b.In the absence of the alternatives pro- "lent vided for in Section A.2.d, 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 fall-time equivalent basis. This category may also include post-doctorate C.DETERMINATION AND APPLICATION OF fellows and graduate students. INDIRECT(F&A)COST RATE OR RATES (3)The other users category must consist 1.Indirect(F&A)Cost Pools of a reasonable factor as determined by insti- tutional records to account for all other a.(1)Subject to subsection b,the separate users of library facilities. categories of indirect (F&A) costs allocated c.Amount allocated in paragraph b of this to each major function of the institution as section must be assigned further as follows: Prescribed in paragraph B of this paragraph (1) The amount in the student category C.1 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- a. The expenses under this heading are tion A.1 under which Federal awards are car- those that have been incurred for the admin- Tied out. istration of student affairs and for services (3) Each s musttbe appropriately indirect (F&A) cost to students, including expenses of such ac- rateto process a lsponsors designed in tivities as deans of students,admissions,reg- any away bhat Federal rect( do not o istrar, counseling and placement services, other sponsors,subsidize the indirect(F&A)costs of student advisers, student health and inflr- other b industrysp dfirory n gviein ents, sored by and foreign governments.mary services, catalogs, and commence- Accordingly, each allocation method used to ments and convocations. The salaries of identify and allocate the indirect(F&A)cost members of the academic staff whose reapon- pools, as described in Sections A.2, Criteria sibilities to the institution require adminis- for distribution, and B.2 through B.9, must trative work that benefits sponsored projects contain the fall 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 final rate dis- Cost Principles of this Part. 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- struction, etc., as described in Section A.l, 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 uti- operation and maintenance, interest ex- lize the indirect (F&A) costs allocated to pease,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 A.2.d, 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.II (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. A negotiated fixed amount in lieu of indi- b.In some instances a single rate basis for rect(F&A)costs may be appropriate for self- use across the board on all work within a contained, off-campus, or primarily suboon- major function at an institution may not be traoted activities where the benefits derived appropriate. A 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 offset before allocation to instruction,or- the indirect(F&A)costs applicable to a par- ganized research, other sponsored activities, titular segment of research at the institu- and other institutional activities. The base tion. A particular segment of research may on which such remaining expenses are allo- be that performed under a single sponsored cated should be appropriately adjusted. agreement or it may consist of research 4' under a group of Federal awards performed Predetermined Rates for Indirect(F&A)Costs in a common environment. The environ- Public Law 87-638(76 Stat.437)as amended mental factors are not limited to the phys- (41 U.S.C. 4708) authorizes the use of pre- ical location of the work. Other important determined rates in determining the "indi- factors are the level of the administrative rect coats" (indirect(F&A)costs)applicable support required,the nature of the facilities under research agreements with educational or other resources employed, the scientific Institutions.The stated objectives of the law disciplines or technical skills involved, the are to simplify the administration of cost- arrangements used, or any type research and development contracts(in- organizationalcombination thereof.If a particular segment cloning grants) with educationalrerati if their of a sponsored agreement is performed with- budge, to, and facilitate the preparation ex of their in an environment which appears to generate budgetcloseouts, and to contractst morehethe work is a significantly different level of indirect completed.of such ofhpotentiale work is (F&A)costs,provisions should be made for a offered In view of the cation separate indirect(F&A) cost pool applicable tages deter by this es procedure, negotiation to such work. The separate indirect (F&A) of costs predetermined period ratwotes for indirect (F&A) should cost pool should be developed during for a period of et four years re the � the mg- be the norm in those situations where the ular course of the rate determination process cost experience and other pertinent facts and the separate 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 ment as to the probable level of indirect (F&A) cost rate differs significantly from (F&A) costs during the ensuing accounting that which would have been obtained under periods. subsection a, and(2) the volume of work to which such rate would apply is material in 5.Negotiated Fixed Rates and Carry-Forward relation to other Federal awards at the insti- Provisions tution. When a fixed rate is negotiated in advance for a fiscal year(or other time period), the 2.The Distribution Basis 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 When the rate ism negotiated before the carry- (see section A.1,Major functions of an inst.- forwardadjustmenty be applied to thenext tution) on the basis of modified total direct forward amount may applied o the next (MTDC), consisting of all salaries and justmsubsequent rate bne made,each fixede such ne- wages, fringe benefits, materials and sup- gotiat d a in re advanceo mr a peri ew a nee plies,services,travel,and subgrants and sub- com'� y for a given period will be contracts up to the first $25,000 of each (Fcomputed b applying the expected indirect subaward (regardless of the period covered forecastA) costs periodalloobll plust or minusFede awards carry- by - the subaward).MTDC is defined in§200.68 the (over- the Modified Total Direct Cost(MTDC).For this forwardrm the adjustmentiorperiod, to orunder-recovery)theforecastis purpose, an indirect (F&A) cost rate should trfrom bpase. Unrecovered der be determined for each of the separatelump-summpsun base.agreementsor amounts under Judi- or cost-sharing provi- rect(F&A)cost pools developed pursuant to sions of prior years must not be carried for- subsection 1.The rate in each case should be ward for consideration in the new rate nego- stated as the percentage which the amount tiation.There must,however,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. rest costs 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 cognizant agency for a rate is negotiated and approved by the cog- indirect costs. In the event that an institu- nizant 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- cluded in the subsequent post-determined a. Notwithstanding the provisions of sub- rates. Where multiple rates are used, the section C.l.a, the administrative costs same procedure will be applicable for deter- charged to Federal awards awarded or mining each rate. amended (including continuation and re- newal awards)with effective dates beginning 6.Provisional and Final Rates for Indirect on or after the start of the institution's first (F&A)Costs fiscal year which begins on or after October Where the cognizant agency for indirect 1, 1991,must be limited to 26% of modified costs 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 n minIs- a carry-forward, or if the parties cannot tration, Sponsored Projects Administration, agree on an equitable rate,a provisional rate and Student Administration and Services must be established.To prevent substantial (including their allocable share of deprecia- overpayment or underpayment, the provi- tion, interest costs, operation and mainte- sional rate may be adjusted by the cognizant napoe expenses,and agency for indirect costs during the institu- fringe benefits costs,as n provided bySection tion's fiscal year. Predetermined or fixed Identification and all rates may replace provisional rates at any signment of indirect (F&A) costs, and all time prior to the close of the institution's other types of expenditures not listed ape- fiscal year. If a provisiona.t rate is not re- cifically under one of the subcategories of fa- placed by a predetermined or fixed rate prior cilities in Section B. to the end of the institution's fiscal year, a b.Institutions should not change their ac- final rate will be established and upward or counting or cost allocation methods if the ef- downward adjustments will be made based on feet is to change the charging of a particular the actual allowable costs incurred for the type of cost from FB&A to direct,or to reclas- period involved. sify 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. Cognizant agencies Federal agencies must use the negotiated for indirect cost are authorized to allow rates except as provided in paragraph (e) of changes where an institution's charging §200.414 Indirect (F&A) costs, must para- practices are at variance with acceptable graph(b)(1)for indirect(F&A)costs in effect practices followed by a substantial majority at the time of the initial award throughout of other 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- tiated rates. "Negotiated rates"per the rate agreement include final,fixed, and predeter- aefixed allowance a intitution may meleet tor tiofm mined rates and exclude provisional rates. fixed for the "Administration" "Life" for the purpose of this subsection portion of indirect (F&A) costs. The allow- means each competitive segment of a ance could be either 24%of modified total di- project.A competitive segment is a period of rect costs or a percentage equal to 95%of the years approved by the Federal awarding most recently negotiated fixed or predeter- 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 lees.Under this alternative,no time of the initial 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 farther identification or doc- the life of the Federal award. umentation of these costs required(see Bub- b. Except as provided in §200.414 Indirect section c). Where a negotiated indirect (F&A)costs,when an educational institution (F&A) cost agreement includes this alter- does not have a negotiated rate with the native,an institution must make no further 203 Pt.200,App.III 2 CFR Ch.1I(1-1-14 Edition) charges for the expenditure categories de- cided based on mutual agreement between scribed in Section B.5, General administra- HIS and DOD. tion and general expenses, Section B.6, De- (2)After cognizance is established,it must partmental administration expenses,Section continue for a five-year period. B.7, Sponsored projects administration, and b. Acceptance of rates. See §200.414 Indi- Section B.9, Student administration and rect(F&A)costs. services. c. Correcting deficiencies. The cognizant b. In negotiations of rates for subsequent agency for indirect costs must negotiate periods, an institution that has elected the . changes needed to correct systems dell- option of subsection a may continue to exer- denotes relating to accountability for Fed- cise it at the same rate without further idea- eral awards. Cognizant agencies for indirect tification or documentation of costs. costs must address the concerns of other af- c. If an institution elects to accept a fected agencies,as appropriate,and must ne- threshold rate as defined in subsection a of gotiate special rates for Federal agencies this section,it is not required to perform a that are required to limit recovery of indi- detailed analysis of its administrative costs. rect costs by statute. However, in order to compute the facilities d. Resolving questioned costs. The cog- components of its indirect (F&A) cost rate, nizant agency for indirect costs must con- the institution must reconcile its indirect duct any necessary negotiations with an edu- (F&A) cost proposal to its financial state- cational institution regarding amounts ques- meats and make appropriate adjustments tioned by audit that are due the Federal gov- and reclassifications to identify the costs of eminent related to costs covered by a nego- each major function as defined in Section tinted agreement. AA,as well as to identify and allocate the fa- e.Reimbursement.Reimbursement to cog- cilities components. Administrative costs nizant agencies for indirect costs for work that are not identified as such by the insti- performed under this Part may be made by tution's accounting system(such as those in- reimbursement billing under the Economy curred in academic departments) will be Act,31 II.S.C.1535. classified as instructional costs for purposes f. Procedure for establishing facilities and of reconciling indirect (F&A) cost proposals administrative rates must be established by to financial statements and allocating facili- one of the following methods: ties costs. (1) Formal negotiation. The cognizant 10.Individual Rate Components agency for indirect costs is responsible for negotiating and approving rates for an edu- In order to provide mutually agreed-upon cational institution on behalf of all Federal information for management purposes, each agencies.Non-cognizant Federal agencies for indirect (F&A) cost rate negotiation or de- indirect costs, 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 (i.e., a need to establish 11.Negotiation and Approval of Indirect(F&A) special cost rates)which could affect the ne- gotiation process. The cognizant agency for indirect costs must address the concerns of a. Cognizant agency for indirect costs is all interested agencies, as appropriate. A defined in Subpart A—Acronyms and Defini- pre-negotiation conference may be scheduled tions. among all interested agencies, if necessary. (1)Cost negotiation cognizance is assigned The cognizant agency for indirect costs must to the Department of Health and Human then arrange a negotiation conference with Services (BHS) or the Department of De- the educational institution. fense's Office of Naval Research(DOD),nor- (2)Other than formal negotiation.The cog- mally depending on which of the two agen- nizant agency for indirect costs and edu- cies (HES 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 funding ference; for example, through correspond must be derived from relevant data gathered ence or use of the simplified method de- by the National Science Foundation.In cases scribed in this section D of this Appendix. where neither HES nor DOD provides Fed- g. Formaiiving determinations and agree- eral funding to an educational institution, ments. The cognizant 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- mination described in this section,other ar- cies having an interest. Determinations rangements for cognizance of a particular should include a description of any adjust- educational institution may also be based in ments, the actual amount, both dollar and part on the types of research performed at percentage adjusted,and the reason for mak- the educational institution and must be de- ing adjustments. 204 OMB Guidance Pt.200,App.III h. Disputes and disagreements. Where the are classified under the following titles or cognizant 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 reso- penses(exclusive of costs of student adminis- lution, the appeal system of the cognizant tration and services,student activities,stu- agency for 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- 12.Standard Format for Submission justment for costs applicable to other insti- tutionalFor facilities and administrative(indirect ib activities). (F&A)) rate proposals, educational institu- (4))Lib Library. (4) Department administration expenses, tions must use the standard format, shown which will be computeds 20 percent of the in section E of this appendix,to submit their to the cog- salaries and expenses of deans and heads of indirect (F&A) rate proposaldepartments. nizant agency for indirect costs. The cog- In those cases where expenditures classi- 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 sala- ment does not apply to educational institu- ries and wages included in the indirect(F&A) tions that use the simplified method for cal- cost pool must be separately identified. misting indirect(F&A)rates,as described in c.Establish a salary and wage distribution Section D of this Appendix. base,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 cost 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&A)cost pool,subsection b, by the amount of the distribution base, subsection D.SIMPLIFIED METHOD FOR SHALT O. INS rrru rLONS e.Apply the indirect(F&A)cost rate to di- rect salaries and wages for individual agree- 1.General ments to determine the amount of indirect a.Where the total direct cost of work cov- (F&A)costs allocable to such agreements. ered by this Part at an institution does not 3.Simplified Procedure—Modified Total Direct exceed$10 million in a fiscal year, the aim- Cost Base piffled procedure described in subsections 2 or 3 may be used in determining allowable a.Establish the total costs incurred by the indirect (F&A) costs. Under this simplified institution for the base period. procedure, the institution's most recent an- b. Establish an indirect (F&A) cost pool nual financial report and immediately avail- consisting of the expenditures (exclusive of able supporting information must be utilized capital items and other costs 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 penses(exclusive of costs of student adminis- distribution basis. tration and services, student 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) justment for costs applicable to other insti- costs should be determined through use of tutional activities). the regular procedure. (3)Library. (4) Department administration expenses, 2.Simplified Procedure—Salaries and Wages which will be computed as 20 percent of the Base salaries and expenses of deans and heads of departments. In those cases where expendi- a. Establish the total amount of salaries tures classified under subsection (1) have 'and wages paid to all employees of the insti- previously been allocated to other 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 costs specifically (F&A) cost pool must be separately identi- identified as unallowable)which customarily fled. 205 • Pt.200,App.IV 2 CFR Ch.II(1-1-14 Edition) c. Establish a modified total direct cost rates in accordance with the requirements of distribution base, as defined in Section C.2, this section, the Federal government must The distribution basis, that consists of all unilaterally establish such rates. Such rates institution's direct functions. may be based upon audited historical data or d. Establish the indirect (F&A) cost rate, such other data that have been furnished to determined by dividing the amount in the in- the cognizant agency for indirect costs and direct (F&A) cost pool, subsection b, by the for which it can be demonstrated that all un- amount of the distribution base, subsection allowable costs have been excluded.When in- c. direct(F&A) cost rates are unilaterally es- e. Apply the indirect (F&A) cost rate to tablished by the Federal government because the modified total direct costs for individual of failure of the institution to submit a cer- agreements to determine the amount of Judi- tified proposal for establishing such rates in rect (F&A) costs allocable to such agree- accordance with this section, the rates es- ments. tablished will be set at a level low enough to E.DOCUMENTATION REQUIREMENTS will that potentially unallowable costs will not be reimbursed. • The standard format for documentation re- c. Certificate. The certificate required by quirements for indirect(indirect(F&A))rate this section must be in the following form: proposals for maiming costs under the rig- CATE of INDIRECT(F&A)COSTS ular method is available on the OMB Web site here: http://www.whitehouse.gov/omb/ This is to certify that to the best of my grantsjorms. knowledge and belief: F.CERTIFICATION (1)I have reviewed the indirect(F&A)cost proposal submitted herewith; 1.Certification of Charges (2)All costs included in this proposal[iden- tify date] to establish billing or final indi- To assure that expenditures for Federal rest (F&A) costs rate for [identify period awards are proper and in accordance with covered by rate]are allowable in accordance the agreement documents and approved with the requirements of the Federal agree- project budgets, the annual and/or final fis- ment(s) to which they apply and with the cal reports or vouchers requesting payment cost principles applicable to those agree- under the agreements will include a certifi- meats. cation, signed by an authorized official of (3)This proposal does not include any costs the university,which reads"By signing this which are unallowable under applicable cost report,I certify to the best of my knowledge principles such as(without limitation):pub- and belief that the report is true, complete, lic relations costs, contributions and dona- and accurate,and the expenditures,disburse- tions, entertainment costs, fines and pen- meats and cash receipts are for the purposes alties, lobbying costs, and defense of fraud and intent set forth in the award documents. proceedings;and I am aware that any false, fictitious, or (4) All costs included in this proposal are fraudulent information, or the omission of properly allocable to Federal agreements on any material fact,may subject me to crimi- the basis of a beneficial or causal relation- al, civil or administrative penalties for ship between the expenses incurred and the fraud, false statements, false claims or oth- agreements to which they are allocated in erwise. (U.S.Code,Title 18, Section 1001 and accordance with applicable requirements. Title 31,Sections 3729-3733 and 3801-3812)". I declare that the foregoing is true and cor- 2.Certification of Indirect(F&A)Costs rect. a. Policy. Cognizant agencies must not ac- Institution of Higher Education: Signature: cept a proposed indirect cost rate must un- Name of Official: less such costs have been certified by the Title: educational institution using the Certificate Date of Execution: of indirect (F&A) Costs set forth in sub- section F.2.c APPENDIX IV TO PART 200—INDIRECT b.The certificate must be signed on behalf (F&A) COSTS IDENTIFICATION AND of the institution by the chief financial offi- ASSIGNMENT, AND RATE DETERIUIINiA- cer or an individual designated by an indi- vidual at a level no lower than vice president or chief financial officer. TIONS (1) No indirect (F&A) cost rate must be A GENERAL binding upon the Federal government if the most recent required proposal from the insti- 1. Indirect costs are those that have been tution has not been certified. Where it is incurred for common or joint objectives and necessary to establish indirect (F&A) cost cannot be readily identified with a par- rates, and the institution has not submitted titular final cost objective. Direct cost of a certified proposal for establishing such minor amounts may be treated as indirect OMB Guidance Pt.200,App. IV costs under the conditions described in rating the organization's total costs for the §200.413 Direct costs 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 cost may not be allo- to distribute indirect costs to individual sated to a Federal award as an indirect cost Federal awards.The rate should be expressed if any other cost incurred for the same par- as the percentage which the total amount of pose, in like circumstances, has been as- allowable indirect costs bears to the base se- signed to a Federal award as a direct cost. lected. This method should also be used "Major nonprofit organizations" are de- where an organization has only one major fined in§200.414 Indirect(F&A)costs.See in- function encompassing a number of indi- direct cost rate reporting requirements in viduai projects or activities, and may be sections B.2.e and B.3.g of this Appendix. used where the level of Federal awards to an B.ALLOCATION OF INDIRECT COSTS AND organization is relatively small. DETERMINATION OF INDIRECT COST RATES b. 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 costs which represent activities must be in- cluded in the direct costs under the condi- major function, or where all its major func- tions described in§200.413 Direct costs,parti- tions benefit from its indirect costs to ap- graph(e)of this Part. proximately the same degree,the allocation c. The distribution base may be total di- of indirect costs and the computation of an indirect cost rate may be accomplished rect toers (excluding capitalsu expenditures or through simplified allocation procedures, as and other distorting items,more),e),contracts sa sale- described in section B.2 of this Appendix. ries and wages,wards os$or oth0er or base which direct isin b. If an organization has several major Ties and sother triblts n functions which benefit from its indirect an equitablemustexclude distribution. The distribution costs os s costs in varying degrees, allocation of indi- base participantc support coots rect costs may require the accumulation of c defined in §200.75 Participant support such costs into separate cost groupings costs. which then are allocated individually to ben- Except where a special rate(s) is re efitting 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 costs allocated to each function under the above principles is applicable to are then distributed to individual Federal all Federal awards of the organization. If a awards and other activities included in that special rate(s)is required, appropriate modi- function by means of an indirect cost rate(s). fications must be made in order to develop c. The determination of what constitutes the special rate(s). an organization's major functions will de- than For an organization that receives more pend on its purpose in being; the types of than$10 million in Federal funding of direct services it renders to the public, its clients, costs in a fiscal year,a breakout of the indi- and its members;and the amount of effort it rect cost component into two broad cat- devotes to such activities as fundraising, egories,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 particular indirect cost category(i.e.,Facili- along with the conditions under which each ties or Administration)is of the distribution method should be used are described in sec- base identified with that category. tion B.2 through B.5 of this Appendix. 3.Multiple Allocation Base Method e.The base period for the allocation of in- direct P direct costs is the period in which such costs a. General. Where an organization's indi- are incurred and accumulated for allocation rect costs benefit its major functions in to work performed in that period. The base varying degrees,indirect costs must be aeon- period normally should coincide with the or- mulated into separate cost groupings,as de- ganization'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 bens- the allocation of the costs. fitting functions by means of a base which 2.Simplified Allocation Method best measures the relative benefits.The de- fault allocation bases by cost pool are de- a.Where an organization's major functions scribed in section B.3.c of this Appendix. benefit from its indirect costs to approxi- b. Identification of indirect costs. Cost mately the same degree,the allocation of in- groupings must be established so as to per- direct costs may be accomplished by(i)sepa- mit the allocation of each grouping on the 207 Pt.200,App. IV 2 CFR Ch.II(1-1-14 Edition) basis of benefits provided to the major func- services costs must be treated as direct coats tions.Each grouping must constitute a pool wherever identifiable to a particular pro- of expenses that are of like character in gram.The salaries and wages of administra- terms of functions they benefit and in terms Live and pooled clerical staff should nor- of the allocation base which best measures mally be treated as indirect costs. Direct the relative benefits provided to each func- charging of these costs may be appropriate tion.The groupings are classified within the where a major project or activity explicitly two broad categories: "Facilities"and"Ad- requires and budgets for administrative or ministration," as described in section A.3 of clerical services and other individuals in- this Appendix.The indirect cost pools are de- volved can be identified with the program or fined as follows: activity.Items each as office supplies, post- (1) Depreciation. The expenses under this age, local telephone costs, periodicals and heading are the portion of the costs of the memberships should normally be treated as organization's buildings, capital improve- indirect costs. 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 §200.436 Depreciation. base to be used in allocating the expenses in (2) Interest. Interest on debt associated each grouping to benefitting functions. The with certain buildings, equipment and cap- essential consideration in selecting a method ital improvements are computed in accord- or a base is that it is the one best suited for ance with§200.449 Interest. assigning the pool of costs to cost objectives (3) Operation and maintenance expenses. in accordance with benefits derived;a trace- The expenses under this heading are those able cause and effect relationship; or logic that have been incurred for the administra- and reason,where neither the cause nor the Lion, operation, maintenance, preservation, effect of the relationship is determinable. and protection of the organization's physical When an allocation can be made by assign- plant. They include expenses normally in- ment of a cost grouping directly to the func- curred for such items as:janitorial and util- Lion benefitted,the allocation must be made ity services;repairs and ordinary or normal in that manner.When the expenses in a cost alterations of buildings,furniture and equip- grouping are more general in nature,the al- meat; care of grounds;maintenance and op- location must be made through the use of a eration of buildings and other plant facili- selected base which produces results that are ties; security; earthquake and disaster pre- equitable to both the Federal government paredness; environmental safety; hazardous and the organization.The distribution must waste disposal;property,liability and other be made in accordance with the bases de- insurance relating to property; space and scribed herein unless it can be demonstrated capital leasing; facility planning and man- 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 est costs. (such as an engineering utility study) must (4)General administration and general ex- not be used to determine and allocate the in- penses.The expenses under this heading are direct costs to Federal awards. those that have been incurred for the overall (1) Depreciation. Depreciation expenses general executive and administrative offices must be allocated in the following manner: of the organization and other expenses of a (a) Depreciation on buildings used exclu- general nature which do not relate solely to sively in the conduct of a single function, any major function of the organization.This and on capital improvements and equipment category must also include its allocable used in such buildings, must be assigned to share of fringe benefit costs, operation and that function. maintenance expense, depreciation, and in- (b)Depreciation on buildings used for more terest costs. Examples of this category in- than one function, and on capital improve- dude 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- agement information systems, and library mon areas,such as hallways, stairwells, and costs. restrooms. In developing this cost pool, special care (c) Depreciation on buildings, capital im- should be exercised to ensure that costs in- provements and equipment related space curred for the same purpose in like cir- (e.g., individual rooms, and laboratories) cumstances are treated consistently as ei- used jointly by more than one function(as ther 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 space must be allocated to computer costs, travel costs, and specialized the benefitting functions on the basis of: OMB Guidance Pt.200,App.IV (i)the employees and other users on a fall- common pool for that function.The costs in time equivalent (l'TJii) basis or salaries and the common pool must then be distributed to wages of those individual functions benefit- individual Federal awards included in that ting from the use of that space;or inaction by use of a single indirect cost rate. (i1) organization-wide employee rills s or f. Distribution basis. Indirect costs must salaries and wages applicable to the benefit- be distributed to applicable Federal awards ting functions of the organization. and other benefitting activities within each (d) Depreciation on certain capital im- major function on the basis of MTDC (see provements to land, such as paved parking definition in §200.68 Modified Total Direct areas,fences,sidewalks,and the like,not in- Cost(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 rect 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. oentage which the amount of the particular (2) Interest. Interest costs mast be allo- indirect cost pool is of the distribution base cated in the same manner as the deprecia- 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 expenses. 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 classified within two broad cat- preciation. egories: "Facilities" and "Administration," (4)General administration and general ex- as described in section A.3 of this Appendix. penses. General Ariminiatration and general expenses must be allocated to benefitting 4.Direct Allocation Method functions based on modified total costs (MTC).The MTC is the modified total direct a. Some nonprofit organizations treat all costs (MTDC), as described in Subpart A— costs as direct costs except general adminis- Acronyms and Definitions of Part 200, plus tration and general expenses. These organi- the allocated indirect cost proportion. The nations generally separate their costs into expenses included in this category could be three basic categories: (i) General admiais grouped first according to major functions of tration and general expenses, (fi) fund- the organization to which they render sera- raising,and(iii) other direct functions (in- ices or provide benefits. The aggregate ex- eluding projects performed under Federal penes of each group must then be allocated awards). Joint costs, 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 eral 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 organi- joint cost is prorated Turing a base which ac- zatfon. Other cost categories should be allo- curately measures the benefits provided to cated 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 oar- of costs 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 Reporting for Voluntary Health and Welfare be considered closed once it has been allo- Organizations issued jointly by the National cated 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 c. Under this method, indirect costs con- be used if such allocation will result in a list exclusively of general administration more equitable allocation of costs.If a cross and general expenses. In all other respects, allocation is used, an appropriate modifica- the organization'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 cost 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 mast be aggregated and treated as a for each major function of the organization Pt.200,App.IV 2 CFR Ch. 11(1-1-14 Edition) may not be appropriate, since it would not f. Indirect cost proposal means the docu- take into account those different factors mentation prepared by an organization to which may substantially affect the indirect substantiate its claim for the reimbursement costs applicable to a particular segment of of indirect costs.This proposal provides the work.For this purpose,a particular segment basis for the review and negotiation leading of work may be that performed under a sin- to the establishment of an organization's In- gle Federal award or it may consist of work direct cost rate. under a group of Federal awards performed g.Cost objective means a function,organiza- in a common 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 administrative 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 asses,projects,jobs and capitalized projects. or technical skills involved, the organiza- tional arrangements used, or any combina- 2.Negotiation and Approval of Rates tion thereof. When a particular segment of a. Unless different arrangements work is performed in an environment which consare appears to generate a significantly different theagee Federalo by the Federal the taries concerned, agency with the largest dollar level of indirect costs, provisions should be value of Federal awards with an organization made for a separate indirect cost pool appli- vain be designated as the cognizant agency cable to such work. The separate indirect for indirect costs for the negotiation and ap- cost pool should be developed during the proval of the indirect cost rates and, where course of the regular allocation process,and necessary,other rates such as the separate indirect cost rate resulting fringeO benefit therefrom should be used, provided it is de- and computers charge-out ed cognizancegni rates. Once an termined that (i) the rate differs signifi- tiagency �nonprofitsigneo for a par- cantly from that which would have been ob- mentcn will otb organization,nedunless the resiin a tamed under sections B.2,B.3,and B.4 of this will not dollare changed of st theree e a shift in the volume of the Federal Appendix, and (ii) the volume of work to awards to the organization for at least three which the rate would apply is material. years. All concerned Federal agencies must C.NEGOTIATION AND APPROVAL OF INDIRECTbe given the opportunity t0 participate in COST RATES the negotiation process but,after a rate has been agreed upon, it will be accepted by all 1.Definitions Federal agencies.When a Federal agency has used in this section,the following 'reason to believe that special operating fac- As terms tors affecting its Federal awards necessitate have the meanings set forth in this section: special indirect cost rates in accordance a. Cognizant agency for indirect costs means with section B.5 of this Appendix, it will, the Federal agency responsible for negoti- prior to the time the rates are negotiated, ating and approving indirect cost rates for a notify the cognizant agency for indirect nonprofit organization on behalf of all Fed- costs.(See also§200.414 Indirect(F&A)costs eral agencies. of Part 200.) b.Predetermined rate means an indirect cost b. Except as otherwise provided in§200.414 rate, applicable to a specified current or fu- Indirect (F&A) costs paragraph (e) of this tare 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 cost rate costs to be incurred during the period.A pre- with a Federal agency must submit its ini- determined rate is not subject to adjust- tial indirect cost proposal immediately after ment. the organization is advised that a Federal c. Fixed rate means an indirect cost rate award will be made and, in no event, later which has the same characteristics as a pre- than three months after the effective date of determined rate, except that the difference the Federal award. between the estimated costs and the actual c.Unless approved by the cognizant agency costs of the period covered by the rate is car- for indirect costs in accordance with§200.414 ried forward as an adjustment to the rate Indirect (F&A) costs paragraph (f) of this computation of a subsequent period. Part, organizations that have previously es- d. Final rate means an indirect cost rate tablished indirect cost rates must submit a applicable to a specified past period which is new indirect cost proposal to the cognizant based on the actual costs of the period. A agency for indirect costs within six months final rate is not subject to adjustment. after the close of each fiscal year. e. Provisional rate or billing rate means a d.A predetermined rate may be negotiated temporary indirect cost rate applicable to a for use on Federal awards where there is rea- specified period which is used for funding,in- sonable assurance, based on past experience terim reimbursement,and reporting indirect and reliable projection of the organization's costs on Federal awards pending the estab- costs,that the rate is not likely to exceed a lishment of a final rate for the period. rate based on the organization's actual costs. 210 OMB Guidance Pt.200,App.V e. Fixed rates may be negotiated where to which they apply and with Subpart E— predetermined rates are not considered ap- Cost Principles of Part 200. propriate.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 the organization's Federal awards are ex- Cost Principles of Part 200 such as(without petted to expire before the carry-forward ad- limitation):public relations costs,contribu- justment can be made;(ii)the mix of Federal tions and donations, entertainment costs, and non-Federal work at the organization is fines and penalties, lobbying costs, and de- too erratic to permit an equitable carry-for- fence of fraud proceedings;and ward adjustment; or (iii) the organization's (4) All costs included in this proposal are operations fluctuate significantly from year properly allocable to Federal awards on the to year. basis of a beneficial or causal relationship f.Provisional and final rates must be nego- between the expenses incurred and the Fed- tiated where neither predetermined nor fixed eral awards to which they are allocated in rates are appropriate. Predetermined or accordance with applicable requirements. fixed rates may replace provisional rates at I declare that the foregoing is true and cor- any time prior to the close of the organize- rect. tion's fiscal year. if that event does not occur,a final rate will be established and up- Nonprofit Organization: ward or downward adjustments will be made Signature: based on the actual allowable costs incurred Name of Official: for the period involved. Title: g.The results of each negotiation must be Date of Execution: formalized in a written agreement between the cognizant agency for indirect costs and APPENDIX V TO PART 200—STATE/LOCAL the nonprofit organization. The cognizant GOVERNMENT AND INDIAN TRIBE- agency for indirect costs must make avail- WIDE CENTRAL SERVICE COST ALLO- able copies of the agreement to all concerned CATION PLANS Federal agencies. h.If a dispute arises in a negotiation of an A.GExEa-I indirect cost rate between the cognizant agency for indirect costs and the nonprofit 1.Most governmental units provide certain organization,the dispute must be resolved in services,such as motor pools,computer cen- accordance with the appeals procedures of ters, purchasing, accounting, etc., to oper- the cognizant agency for indirect costs. ating agencies on a centralized basis. Since i.To the extent that problems are encoun- federally-supported awards are performed tered among the Federal agencies in connec- within the individual operating agencies, tion with the negotiation and approval proc- 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- able and consistent basis.The central service D.Certification of Indirect(F&A)Costs cost allocation plan provides that process. Required Certification. No proposal to es- All costs and other data used to distribute tablish indirect(F&A)cost rates must be ac- the costs included in the plan should be sup- ceptable unless such costs have been cer- ported by formal accounting and other titled by the non-profit organization using records that will support the propriety of the the Certificate of Indirect (F&A) Costs set costs assigned to Federal awards. forth in section j. of this appendix.The cer- 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 Gov- j.Each indirect cost rate proposal must be moments: 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 Government."A copy of this brochure may be Certificate of Indirect(F&A)Costs obtained from the Superintendent of Docu- This is to certify that to the best of my ments,U.S.Government Printing Office. knowledge and belief: B.DEFINITIONS (1)I have reviewed the indirect(F&A)cost proposal submitted herewith; 1. Agency or operating agency means an or- (2)All costs included in this proposal[idea- ganizatlonal unit or sub-division within a tify date] to establish billing or final indi- governmental unit that is responsible for the rect (F&A) costs 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. 211 �.....a.a iar aaa.a+a.a uv�a vau•a Choose Funding Program: (Circle all applicable) CDBG HOME ESG SHP Other CITY OF OMAHA-TENANT SURVEY FORM 20 A. GENERAL INFORMATION Tenant Name(s) Telephone Address Apt.No. Initial Date of Lease Recertification Lease Date DEMOGRAPHICS&ANTICIPATED INCOME OF ALL.HOUSEHOLD MEMBERS Head of Household is: Male 0 Female❑ Elderly❑ Number of Occupants: Total No.Adults No. Children Under 18 Please enter ethnicity and race for each household member in accordance with the attached definitions. Ethnicity—Choose either H or NH.Enter H for Hispanic or Latino. Enter NH for Not Hispanic or Latino. Race Categories—Choose all that apply for each household member. Enter one or more of the following abbreviations: W,B,A,AI,PI,O. White(W);BIack or African American(B);Asian(A);American Indian or Alaska Native(AI); Native Hawaiian or Other Pacific Islander(PI) Other(0)(Please specify) Anticipated Anticipated Name of'Household Member (H or NH) (See Above) Monthly Annual Age Ethnicity Race Handicap Income Income $ $ $ $ $ $ $ $ TOTAL $ $ 100%MEDIAN FAMILY INCOME(MFI)FOR HH SIZE $ %OF MFI FOR HH SIZE a/a B. HOUSING CHARACTERISTICS Housing Costs HUD Rent Limits Monthly Housing Cost: Actual Contract Rent $ Average Monthly Utility Cost $ Total Monthly Housing Cost $ $ Subsidized Rent Assistance Received(Please list source and amount): Section 8: $ Other Assistance: Source Amount $ No Assistance Unit Type: Efficiency❑ 1 BR 0 2 BR❑ 3 BR 0 . Other❑ Handicap Accessible Unit: Yes❑ No❑ Check one: 50%Unit❑ 60%Unit 0 80%Unit❑ C. TENANTS IN-PLACE AT TIME OF LOAN CLOSING. -Non-disclosure Form Required D. REMARKS: Owner or Authorized Representative Phone Date Please attach utility allowance determination form, City of Omaha Computing Annual Income Form and current lease agreement with each Tenant Survey. COMAL IIOUSIHO OPPORTUNTY Revised 5/1/08 Page 1 of 2 4)C1444 • 1. American Indian or Alaska Native. A person having origins in any of the original peoples of North and South America(including Central America),and who maintains tribal affiliation or community attachment. 2. Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands,Thailand and Vietnam. 3. Black or African American. A person having origins in any of the black racial groups of Africa. Terms such as"Haitian"or"Negro"can be used in addition to`Black"or"African American". 4. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples of Hawaii, Guam, Samoa or other Pacific Islands. 5. White. A person having origins in any of the original peoples of Europe,the Middle East or North Africa. • Revised 5/1/08 Page 2 of 2 ' _ �"�C Bi : • �_ � ' ;_T4 Wtoz",09 3ONG 7 �' a- QIUIHApQ � . x :tee ac•R : Oltaa4ku a tg ba `. ;, _ .- .-,as s t r-� . .-..":--...::.;":;,-;.-7---...;1-....II:...,.:";•;:.:7::..',..:-!:-.- .^. --..-7---::-..:.';.•::..-..T....:-......7;...;:.:::.:•-•i' •••••••••••:-.••.:4,4;g:;:::-:::-..;;::,-;%"7-'-'7-,.'•:,"- '..-i.7777.::-.l'...-I'-':.'-'...:T.....:-•: i';ZYPflalIZZ,„:'.0:,'"::- t.:' •Iti.iii* ""'"• - :::... " ...--7... " . '-.,..:.: •-.... - ••-..'7..;:ii:if..-:':;.;7,. •'.::::.:-... :i;.Y.•-.':',:f.:4;,',..•-• :.:3.411**1;:i,---•;-:.•-4-:.4*;e1r-ii: ,• ,,,•;'•,•T i'•,-•i7;•?,`-!iii••-• ;A.' II,,.or..,Mc •"�:y �- ;= yrv�'er�'- v�'�clF^ ('^ +e: �+ • ".E t+k . 3 . H040.ng �•• IaA rat fee f br: Q Marl : _ - Li - F d. 1 —� ro l m {A � ;- GQoking:; a N8(wret`'Gas: ; . �'� '_ a -• , -tiid.E talilTf .v .5� ....r .. 'irl� i..'I�' .lv.. �i _ .:?4VS/. ♦ '1iTti� if,. 1 errorocrtr9 1 . _'. ;• ::�-' sue. ._Nott-iiii: �,,.�... :. . .. ... __ l .: �� . � _ a .Ete c . 9 ' 9 1 24 - 4 alter 17 ta ! J • n . • .. ;. • ,. is e rator -. F kr--sped i 1 I*I1I G AUc nCes To�sased.rey.. •ia to compute auowancc. e~^7 omplefl bdow'for the actual unit read: (aineiiArr" = Y T. �• it k • •: _ . lyddre9a or pnu't • • yrt�.� .� �`i� i 4 a _1. iumberof edmOm4 k .-::t - Wog• , ?teviws ed&nn:.'1r-. 9MS61e1a 101 mf Wendbook•49.O.f Instructions for the Race and Ethnic Data Reporting(Form HUD-27061-II) • A. General Instructions: This form is to be completed by the head of household for those wishing to be served (applicants) and those that are currently served (tenants/owner-occupants) in housing assisted by the Department of Housing and Urban Development. If the assisted property is a rental unit, the owner or agent is required to offer the applicant/tenant the option to complete the form. The form is to be completed at initial application or at lease signing. In-place tenants must also be offered the opportunity to • complete the form as part of the next interim or annual recertification. Once the form is completed, it need not be completed again unless the head of household changes. There is no penalty for persons who do not complete the form. However, the owner or agent may place a note in the tenant file stating the applicant/tenant refused to complete the form. Completed documents should be placed in the household's file. The Office of Housing has been given permission to use this form for gathering race and ethnic data in assisted housing programs. 1. The two ethnic.categories you should from are defined below. You should check one of the two categories. A. Hispanic or Latino. A person of Cuban, Mexican, Puerto Rican, South or Central American or other Spanish culture or origin,regardless of race. The term of"Spanish origin" can be used in addition to"Hispanic"or"Latino". B. Not Hispanic or Latino. A person not of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin,regardless of race. 2. The five racial categories to choose from are defined below: You should check as many as apply to you. A. American Indian or Alaska Native. A person having origins in any of the original peoples of North and South America(including Central America), and who maintains tribal affiliation or community attachment. B. Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand and Vietnam. C. Black or African American. A person having origins in any of the black racial groups of Africa. Terms such as "Hatian" or "Negro" can be used in addition to "Black"or"African American". D. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples of Hawaii, Guam, Samoa,or other Pacific Islands. E. White. A person having origins in any of the original peoples of Europe, the Middle East or North Africa. • Nrry revised and approved 7/7/10 E O • 0 0 E ~ 4 N CI a. 14 it W ^ O ZS 0 O y N W o O u ; Q x o i7 O co 4 II • a Cl, 0 0 2a d V] - Cl, to cE y s Q Q `� Q o o r (z1 �. �+` p Z .. li " �b0.e .Y O O '.7." W � ) O. y Z 0 u m �+ 72 " a I. .a to d A.7 4 0 o c r • W d z A (� d o rn W la [� z EN o , L. Q to C' 7�, DU clI ba a+ N W r .� A G 0. o n 4 E R O r� O O ez Q vs, — C 8 C L. N �y� a, d y .� ral U F • 5 ' 0. y a y o y an r° tia .1a04c4 3 0 11,3) o E F' p aWi o ° X 73 o co � � chi o R > dU I ' o z 5 � ¢ awg '". ° W a .0 O O i" CO H ZQi� 4 CAAA Race and Ethnic Data U.S Department of Housing OMB Approval No.2502-0204 Reporting Form and Urban Development (exp. 03/31/2011) P Office of Housing Name of Property Project No. Address of Property Name of Owner/Managing Agent Type of Assistance or Program Title Name of Head of Household Name of Household Member Date(mm/dd/yyyy): • W1,7 '. pf '�a�F �� Sfi '�.. '� Cl • Hispanic or Latino Not-Hispanic or Latino ■ 1] American Indian or Alaska Native ❑ Asian ❑ Black or African American ❑ Native Hawaiian or Other Pacific Islander ❑ White ❑ Other ❑ *Definitions of these categories may be found on the reverse side. . There is no penalty for persons who do not complete the form. Signature Date Public reporting burden for this collection is estimated to average 10 minutes per response, including the time for reviewing instructions, searching existing data sources,gathering and maintaining the data needed,and completing and reviewing the collection of information. This information is required to obtain benefits and voluntary. HUD may not collect this information,and you are not required to complete this form, unless it displays a currently valid OMB control number. This information is authorized by the U.S.Housing Act of 1937,as amended,the Housing and Urban Rural Recovery Act of 1983.and Housing and Community Development Technical Amendments of 1984. This information is needed to be in compliance with OMB-mandated changes to Ethnicity and Race categories for recording the 50059 Data Requirements to HUD. Owners/agents must offer the opportunity to the head and co- head of each household to"self certify"during the application interview or lease signing. In-place tenants must complete the format as part of their next interim or annual re-certification. This process will allow the owner/agent to collect the needed information on all members of the household. Completed'documents should be stapled together for each household and placed in the household's file. Parents or guardians are to complete the self-certification for children under the age of 18. Once system development funds are provided and the appropriate system upgrades have been implemented,owners/agents will be required to report the race and ethnicity data electronically to the TRACS(Tenant Rental Assistance Certification System). This information is considered non-sensitive and does not require any special protection. MVP revised and approved 7/7/10 CITY OF OMAHA-DEFINITION OF INCOME Annual Income Includes: 1. Wages, salaries, tips, commissions, etc.; 2. Self-employment income from owned non-farm business, including proprietorships and partnerships; 3. Farm self-employment income; 4. Interest, dividends, net rental income, or income from estates or trusts 5. Social security or railroad retirement; 6. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance or public welfare programs; 7. Retirement, survivor or disability pensions; 8. Any other sources of income received regularly including Veterans' (VA) payments, unemployment compensation, child support and alimony; and 9. Income from assets, as shown below: a. Amounts in savings certificates, money market funds and other investment accounts. b. Stocks, bonds, savings certificates, money market funds and other investment accounts. c. Equity in real property or other capital investments. Equity is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as broker fees) that would be incurred in selling the asset. Do not include equity in principle residence (home equity). d. The cash value of trusts that are available to the household. e. IRA, Keogh and similar retirement savings accounts, even though withdrawal would result in a penalty. f. Contributions to company retirement/pension funds that can be withdrawn without retiring or terminating employment. g. Assets which, although owned by more than one person, allow unrestricted access by the applicant. h. Lump sum receipts such as inheritances, capital gains, lottery winnings, insurance settlements and other claims. i. Personal property held as an investment such as gems,jewelry, coin collections, antique cars, etc. j. Cash value of life insurance policies. k. Assets disposed of for less than fair market value during two years preceding certification or re- certification. 10. Actual income from assets if total assets are$5,000 or less. 11. If assets are more than $5,000, the greater of (a) actual income from assets, or (b) total assets times passbook rate. Annual Income Does Not Include the Following Assets: 1. Necessary personal property, except as noted in 9 (i). 2. Interest in Indian trust lands. 3. Assets that are a part of an active business or farming operation. NOTE: Rental properties are considered personal assets held as an investment rather than business assets unless real estate is the applicant's/tenant's main occupation. 4. Assets not accessible to the family and which provide no income for the family. 5. Vehicles especially equipped for the handicapped. 6. Equity in owner-occupied cooperatives and manufactured homes in which the family lives. 7. Equity in principle residence (home equity). I EQUAL HOUSING OPPORTUNITY Revised and approved 7/12/2011 NON-HOMEOWNERSHIP FINANCIAL STATUS REPORT FORM (Please attach AIA G702 form and other comparable supporting documentation for expenditures) Developer Name: Bojan Ninkovic Program: CDBG ❑ ESG ❑ Developer's Contractor: HOME NAHTF ❑ Project Address: 4336 North 415t Street NSP ❑ SHP ❑ Project Type: Acquisition ❑ Loan#: 24504 New Constr ❑ Rehab Reporting Period: From: to DEVELOPMENT PROJECT % BUDGET COSTS BUDGET COMPLETE REMAINING Hard costs $ % $ Soft costs(list): $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ $ % $ TOTALS S % $ TOTAL PAY REQUEST: $ Amount Amount City Funds Other Funds $ $ FUNDING SOURCES PROJECT % BUDGET BUDGET COMPLETE REMAINING $ % $ $ % $ $ % $ Other: $ % $ Other: $ % $ Other: $ % $ TOTALS: $ % $ I certify to the best of my knowledge that the above information is correct and complete and is for the purpose set forth in the award documents. Financial records are available for audit or review. Authorized Certifying Officer Title Date Printed Name: O OPPORTUNITY Revised and approved 6/18/2010 24 CFR 85.43 ENFORCEMENT (a) Remedies for non-compliance. If a grantee or sub-grantee materially fails to comply with any term of an award,whether stated in a federal statute or regulation, an assurance, in a State plan or application, a notice of award, or elsewhere, the awarding agency may take one or more of the following actions, as appropriate in the circumstances: (1) Temporarily withhold cash payments pending correction of the deficiency by the grantee or sub-grantee or more severe enforcement action by the awarding agency, (2) Disallow(that is,deny both use of funds and matching credit for)all or part of the cost of the activity or action not in compliance, (3) Wholly or partly suspend or terminate the current award for the grantee's or sub-grantee's program, (4) Withhold further awards for the program,or, (5) Take other remedies that may be legally available. (b) Hearings, appeals. In taking an enforcement action, the awarding agency will provide the grantee or sub-grantee an opportunity for such hearing, appeal or other administrative proceeding to which the .grantee or sub-grantee is entitles under any statute or regulation applicable to the action involved. (c) Effects of suspension and termination. Costs of grantee or sub-grantee resulting from obligations incurred by the grantee or sub-grantee during a suspension or after termination of an award are not allowable unless the awarding agency expressly authorizes them in the notice of suspension or termination or subsequently. Other grantee or sub-grantee costs during suspension or after termination which are necessary and not reasonably avoidable are allowable if: (1) The costs result from obligations which were properly incurred by the grantee or sub- grantee before the effective date of suspension or termination,are not in anticipation of it, and, in the case of a termination,are non-cancelable,and, (2) The costs would be allowable if the award were not suspended or expired normally at the end of the funding period in which the termination takes effect. (d) Relationship to Debarment and Suspension. The enforcement remedies identified in this section, including suspension and termination, do not preclude grantee or sub-grantee from being subject to "Debarment and Suspension"under EO 12549(see§ 85.35). 24 CFR 85.44 TERMINATION FOR CONVENIENCE Except as provided in § 85.43 awards may be terminated in whole or in part only as follows: (a) By the awarding agency with the consent of the grantee or sub-grantee in which case the two parties shall agree upon the termination conditions, including the effective date and in the case of partial termination,the portion to be terminated,or (b) By the grantee or sub-grantee upon written notification to the awarding agency, setting forth the reasons for such termination, the effective date, and in the case of partial termination, the portion to be terminated. However, if, in the case of a partial termination,the awarding agency determines that the remaining portion of the award will not accomplish the purposes for which the award was made, the awarding agency may terminate the award in its entirety under either § 85.43 or Paragraph(a) of this section. O EQUAL RTUNITY Rev. 5/7/08 UNITED STATES CITIZENSHIP ATTESTATION FORM FOR PUBLIC BENEFIT For the purpose of complying with Neb. Rev. Stat. §§ 4-108 through 4-114, I attest as follows: ❑ I am a citizen of the United States. — OR— ❑ I am a qualified alien under the federal Immigration and Nationality Act, my immigration status and alien number are as follows: and I agree to provide a copy of my USCIS (United States Citizenship and Immigration Services) documentation upon request. I hereby attest that my response and the information provided on this form and any related application for public benefits are true, complete,and accurate and I understand that this information may be used to verify my lawful presence in the United States. PRINT NAME (first, middle. last) SIGNATURE DATE Project ID No. 24504 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 Approved 6/1/10 Federal Sub-award Reporting System(FSRS) 9 Digit DUNS Number. - r Organization Name: Address: Street city state Zlp Code+4 Question 1:During.your organizations preceding completed fiscal year,did the legal entity to which the DUNS number belongs receive(1)80 percent or more of its annual gross revenues in U.S.federal contracts,subcontracts,loans,grants, subgrants,and/or cooperative agreements;and(2)$25,000,000 or more in annual gross revenues from U.S.federal contracts,subcontracts,loans,grants,subgrants,and/or cooperative agreements? O YES O No • If YES please answer Question 2 Question 2:Does the public have access to information about the compensation of the executives in your organization (the legal entity to which.the DUNS number provided belongs)through periodic reports filed under section 13(a)or 15(d)of the Securities Exchange Act of 1934(15 U.S.C.78m(a),78o(d)or section 6104 of the internal Revenue Code of 1986? YES NO • If NO please answer Question 3 Question 3:What are the Names and Total Compensation for the top 5 employees in your organization? Name - Compensation 1 $ 2 3 $. 4 $ 5 $ Signature of Authorized Official Date Requirements for Federal Funding Accountability and Transparency Act Implementation In September 2010, the Office of Management and Budget issued Interim Final Guidance in the Federal Register(Volume 75, No. 177, September 14, 2010, 2 CFR Part 170)to establish reporting requirements necessary for the implementation of the Federal Funding Accountability and Transparency Act of 2006 (Pub. L. 109-282), as amended by section 6202 of Public Law 110-252. This award term implements those requirements and is located at 2 CFR Part 170. Learn more Appendix A to Part 170—Award Term Reporting Subawards and Executive Compensation. a. Reporting of first-tier subawards. 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 e obligation was made on November 7, 2010, the obligation must be reported by no later than December 31, 2010.) 3. What to report. You must report the information about each obligating action that the submission instructions posted at http:/Iwww.fsrs.gov specify. b. Reporting Total Compensation of Recipient Executives. 1. Applicability and what to report. You must report total compensation for each of your five most highly compensated executives for the preceding completed fiscal year, if— i. the total Federal funding authorized to date under this award is $25,000 or more; ii. in the preceding fiscal year, you received— A. 80 percent or more of your annual gross revenues from Federal procurement contracts(and subcontracts) and Federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and B. $25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts) and Federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and iii. The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934(15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at the Executive Compensation page of the SEC website.) 2. Where and when to report. You must report executive total compensation described in paragraph b.1. of this award term: i. As part of your registration profile at the Central Contractor Registry. ii. By the end of the month following the month in which this award is made, and annually thereafter. c. Reporting of Total Compensation of Subrecipient Executives. 1. Applicability and what to report. Unless you are exempt as provided in paragraph d. of this award term, for each first-tier subrecipient under this award, you shall report the names and total compensation of each of the subrecipient's five most highly compensated executives for the subrecipient's preceding completed fiscal year, if— i. in the subrecipient's preceding fiscal year, the subrecipient received— A. 80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and B. $25,000,000 or more in annual gross revenues from Federal procurement contracts(and subcontracts), and Federal financial assistance subject to the Transparency Act (and subawards); and ii. The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934(15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at the Executive Compensation page of the SEC website.) 2. Where and when to report. You must report subrecipient executive total compensation described in paragraph c.1. of this award term: i. To the recipient. ii. By the end of the month following the month during which you make the subaward. For example, if a subaward is obligated on any date during the month of October of a given year(i.e., between October 1 and 31), you must report any required compensation information of the subrecipient by November 30 of that year. d. Exemptions If, in the previous tax year, you had gross income, from all sources, under$300,000, you are exempt from the requirements to report: i. 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: i. A Governmental organization, which is a State, local government, or Indian tribe; ii. A foreign public entity; iii. A domestic or foreign nonprofit organization; iv. A domestic or foreign for-profit organization; v. A Federal agency, but only as a subrecipient under an award or subaward to a non-Federal entity. 2. "Executive" means officers, managing partners, or any other employees in management positions. 3. "Subaward": i. This term means a legal instrument to provide support for the performance of any portion of the substantive project or program for which you received this award and that you as the recipient award to an eligible subrecipient. ii. 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"). iii. A subaward may be provided through any legal agreement, including an agreement that you or a subrecipient considers a contract. 4. "Subrecipient" means an entity that: i. Receives a subaward from you (the recipient) under this award; and ii. Is accountable to you for the use of the Federal funds provided by the subaward. 5. "Total compensation" means the cash and noncash dollar value earned by the executive during the recipient's or subrecipient's preceding fiscal year and includes the following (for more information see 17 CFR 229.402(c)(2)): i. Salary and bonus. ii. Awards of stock, stock options, and stock appreciation rights. Use the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year in accordance with the Statement of Financial Accounting Standards No. 123 (Revised 2004) (FAS 123R), Shared Based Payments. iii. Earnings for services under non-equity incentive plans. This does not include group life, health, hospitalization or medical reimbursement plans that do not discriminate in favor of executives, and are available generally to all salaried employees. iv. Change in pension value. This is the change in present value of defined benefit and actuarial pension plans. v. Above-market earnings on deferred compensation which is not tax- qualified. vi. Other compensation, if the aggregate value of all such other compensation (e.g. severance, termination payments, value of life insurance paid on behalf of the employee,perquisites or property) for the executive exceeds$10,000. CITY OF OMAHA-DEFINITION OF INCOME Annual Income Includes: 1. Wages, salaries,tips, commissions, etc.; 2. Self-employment income from owned non-farm business, including proprietorships and partnerships; 3. Farm self-employment income; 4. Interest, dividends, net rental income, or income from estates or trusts 5. Social security or railroad retirement; 6. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance or public welfare programs; 7. Retirement,survivor or disability pensions; 8. Any other sources of income received regularly including Veterans' (VA) payments, unemployment compensation, child support and alimony; and 9. Income from assets, as shown below: a. Amounts in savings certificates, money market funds and other investment accounts. b. Stocks, bonds,savings certificates, money market funds and other investment accounts. c. Equity in real property or other capital investments. Equity is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and reasonable costs(such as broker fees) that would be incurred in selling the asset. Do not include equity in principle residence (home equity). d. The cash value of trusts that are available to the household. e. IRA, Keogh and similar retirement savings accounts,even though withdrawal would result in a penalty. f. Contributions to company retirement/pension funds that can be withdrawn without retiring or terminating employment. g. Assets which, although owned by more than one person, allow unrestricted access by the applicant. h. Lump sum receipts such as inheritances, capital gains, lottery winnings, insurance settlements and other claims. i. Personal property held as an investment such as gems,jewelry, coin collections, antique cars, etc. j. Cash value of life insurance policies. k. Assets disposed of for less than fair market value during two years preceding certification or re- certification. 10. Actual income from assets if total assets are$5,000 or less. 11. If assets are more than $5,000, the greater of (a) actual income from assets, or (b) total assets times passbook rate. Annual Income Does Not Include the Following Assets: 1. Necessary personal property, except as noted in 9(i). 2. Interest in Indian trust lands. - 3. Assets that are a part of an active business or farming operation. NOTE: Rental properties are considered personal assets held as an investment rather than business assets unless real estate is the applicant's/tenant's main occupation. 4. Assets not accessible to the family and which provide no income for the family. 5. Vehicles especially equipped for the handicapped. 6. Equity in owner-occupied cooperatives and manufactured homes in which the family lives. 7. Equity in principle residence(home equity). EQUAL HOUSING OPPORTUNITY Revised and approved 7/12/2011 EQUAL EMPLOYMENT OPPORTUNITY CLAUSE During the performance of this Contract,the Contractor agrees as follows: (1) The Contractor and its subcontractors shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, sexual orientation, gender identity, national origin, disability or familial status. As used herein, the work "treated" shall mean and include, without limitation, the following: Recruited, whether by advertising or by other means; compensated; selected for training, including apprenticeship; promoted; upgraded; demoted; downgraded; transferred; laid off; and terminated. The Contractor agrees to and shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officers setting forth the provisions of this nondiscrimination clause. (2) The Contractor and its subcontractors shall, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sexual orientation, gender identity, sex, national origin, age, disability or 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. MINORITY BUSINESS & WOMEN BUSINESS ENTERPRISE PLAN October 2014 oux"ot° ,N88 R'r•• �i�%tf 1�L I',JCL ■ / +PA _ - ry 4-4 42.4D FE S PLANNING.OMAHA Jean Stothert,Mayor PLANNING DEPARTMENT James R.Thele City of Omaha CITY OF OMAHA City of Omaha Planning Department Omaha/DongJas Civic Center 1819 Farnam Street Omaha,Nebraska 68183 1 Reviewed and approved 10/3/2014 MINORITY BUSINESS/WOMEN BUSINESS ENTERPRISE PLAN INTRODUCTION Minority and women business sectors play an important part in Omaha's overall plans for future growth, progress, and prosperity. It is vital to the City's economic condition and well-being that minority and women businesses expand, thrive and prosper, generating economic stability and increased job • opportunities. Towards the fulfillment and accomplishment of these important objectives, the City of Omaha remains committed to minority and women business development. The City of Omaha's approach to minority/women business development is embedded in its policy of non- discrimination in the conduct of City business including the procurement of goods,materials and services, construction and community and economic development projects. The City recognizes its obligations to each segment of the various communities it serves. It is in recognition of these responsibilities that the City established the City's Contract Compliance Ordinance. The Ordinance commits the City to: 1. Require contractors and/or vendors to provide employment opportunities without regard to race, color, sex, religion,or national origin; 2. Monitor contractor and vendor equal opportunity performance;and 3. Increase the total number and total dollar volume of City contracts awarded to minority-owned and women-owned firms. GOALS AND OBJECTIVES The following represents a summary of the goals and objectives of the Planning Department as they relate to minority and women-owned businesses: 1. Encourage, increase and promote business and procurement opportunities for women-owned businesses; 2. Increase and expand the awareness and understanding regarding the concerns, obstacles, and hindrances preventing increased MBE/WBE participation in Planning Department activities; 3. Assist MBE's/WBE's through the revitalization of business districts; 4. Assist minority and female entrepreneurs in the formation and growth of new small businesses; and 5. Provide technical assistance to neighborhood organizations; MBE's and WBE's to increase their participation in the Planning Department programs and activities at all levels. SCOPE OF WORK In order to accomplish these objectives,the Planning Department will: 1. Require that recipients of grant awards, consulting contracts, or loans to adopt the City's MBE/WBE Enterprise Plan. The Minority Business/Women Business Enterprise and Fair Housing plan must be filled out by contractors, developers,corporations, partnerships and/or sole proprietors. 2. Ensure that Requests for Proposals have the MBE/WBE Enterprise Plan. 3. Ensure that the programs of the Planning Department are advertised in the appropriate new media whose markets are targeted toward MBE/WBE. 2 Reviewed and approved 10/3/2014 4. Implement an outreach effort informing MBE and WBE firms and capture information on these firms doing business with the Planning Department. 5. Implement a system to identify MBE and WBE firms and capture information on these firms doing business with the Planning Department. 6. Require developers, corporations, partnerships and/or sole proprietors to register with the Human Rights & Relations Department. In addition, require these entities to complete CC-1 (Human Relations Department). The following information has been developed to assist you in complying with the MBE/WBE requirements in the agreement with the City of Omaha. If you have any questions,please contact Edward Dantzler at(402)444-5150 Ext.2009. 3 Reviewed and approved 10/3/2014 MBE/WBE FOR GOODS AND SERVICES Your company must make vendors aware of equal opportunity utilization of minority, disabled and women-owned businesses. To accomplish this goal,you must provide a copy of the approved MBE/WBE Participation Plan to all businesses providing goods and/or services to the project. Your company must provide the opportunity for Minority Business Enterprises and Women Business Enterprises to provide goods and services through all phases of the project. A concerted effort must be made to allow these businesses to actively compete for project contracts. This effort will include utilization of the following resources and documentation of your actions to achieve these objectives. City of Omaha Housing and Community Development Division 1819 Famam Street Room 1111 Omaha,NE 68183 Edward Dantzler,Development Section Manager ed.dantzler@cityofomaha org (402)444-5150 Ext. 2009 Fax: (402)444-5201 City of Omaha Human Rights&Relations Contract Compliance 1819 Famam Street Room 502 Omaha,NE 68183 Maria Partida,Contract Compliance maria.partida@cityofomaha.org (402)444-5050 Fax: (402)444-5058 Minority Economic Development Greater Omaha Chamber of Commerce 1301 Harney Street Omaha,NE 68102 Winsley Durand, Senior Director-Business Attraction wdurand@selectgreateromaha.com (402)233-7144 Fax: (402)346-7050 4 Reviewed and approved 10/3/2014 MBE/WBE FOR GOODS AND SERVICES North Omaha Contractor Alliance 2505 North 24th Street Suite 409A Omaha,NE 68110 Houston McKell,III,Executive Director houstonmckell@yahoo.com (402)991-3420 Omaha Small Business Network,Inc. 2505 North 24th Street Omaha,NE 68110 Julie Parker,Executive Director info@osbnbtc.org (402)453-5336 Fax: (402)451-2876 Small Business Administration 10675 Bedford Avenue Suite 100 Omaha,NE 68134 Dwight Johnson dwight.johnson@sba.gov (402)221-7206 Fax: (402)221-3680 Urban League of Nebraska,Inc. 3040 Lake Street Omaha,NE 68110 Thomas H. Warren,President/CEO. thomas.warren@a,urbanleagueneb.org (402)451-1066 5 Reviewed and approved 10/3/2014 CITY OF OMAHA CONTRACTOR INFORMATION FORM Date: Project Address: Owner Information Name: Address: City,St.,Zip: Phone: • General Contractor Information Name: Address: City,St.,Zip: Phone: Federal Tax ID or SSN Contract Amount $ Woman Owned Business ❑Yes ❑No BRE(Business Owned Race/Ethnic)Code: (BRE Code: 1 White American; 2 Black American; 3 Native American; 4 Hispanic American 5 Asian/Pacific American; 6 Hasidic Jews Subcontractor Information (Complete for each subcontractor for the project) Name/Address Fed Tax Contract Woman Own BRE ID/SSN Amt. Code Name: $ ❑Yes ❑No _ Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: • Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No •Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: 6 Reviewed and approved 10/3/2014 Date: Project Address: Owner Information Name: General Contractor Information Name: (BRE Code: 1 White American; 2 Black American; 3 Native American; 4 Hispanic American 5 Asian/Pacific American; 6 Hasidic Jews Name/Address Fed Tax Contract Woman Own BRE ID/SSN Amt. Name: $ ❑Yes 0 No _ Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: Name: $ ❑Yes 0 No _ Address: City,St.,Zip: • Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: _ Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: Name: $ ❑Yes ❑No Address: City,St.,Zip: Phone: 7 Reviewed and approved 10/3/2014 DEFINITIONS: 1. American Indian or Alaska Native. A person having origins in any of the original peoples of North and South America (including Central America), and who maintains tribal affiliation or community • attachment. 2. Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,the Philippine Islands,Thailand and Vietnam. 3. Black or African American. A person having origins in any of the black racial groups of Africa. Terms such as"Haitian"or"Negro"can be used in addition to"Black"or"African American". 4. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples of Hawaii,Gnana,Samoa or other Pacific Islands. 5. White. A person having origins in any of the original peoples of Europe, the Middle East or North Africa. • 8 Reviewed and approved 10/3/2014 MINORITY BUSINESS/WOMEN BUSINESS ENTERPRISE AND FAIR HOUSING PLAN As Owner(s), , I/we agree that my/our contractors and subcontractors will make our best efforts to ensure the construction services, contracts and employment opportunities are affirmatively marketed to women and members of minority groups as outlined in the City of Omaha's Policy for Minority Business/Women Business Enterprise and to further Fair Housing, where applicable, in the following manner. 1. Provide employment opportunities without regard to race, color, sex, age, religion, national origin, familial or handicap status; 2. Encourage, increase and promote business and procurement opportunities for women-owned businesses; 3. Award contracts to eligible minority-owned and women-owned firms; 4. Monitor contractor and vendor equal opportunity performance. As Owner(s), , I/we agree that our contractors and subcontractors will not discriminate against any employee or applicant for employment because of race, color, sex, age, religion, national origin, familial or handicap status. As Owner(s), I/we agree that my/our contractors and subcontractors shall in all solicitations or advertisements for employment give all qualified applicants consideration for employment without regard to race, color, sex, age, religion, • national origin, familial or handicap status. As Owner(s), , I/We certify that I/we support the furtherance of fair housing choice and that I/we will not discriminate on the basis of race, color, religion, sex, national origin, familial status, marital or handicap status in the rental or sale of the assisted property nor in any activities related to the sale, rental, and operation of the assisted property in accordance with the applicable laws and regulations. Dated this day of , 20 Business or Corporation(it applicable) By: Signature of Owner/Authorized Representative Name Pnnt Owner/Authorized Representative Name A n x�NRY 9 Reviewed and approved 10/3/20.14 SOIL WORK POLICY For Housing Development.Programs (January 2011) The City of Omaha operates several federally funded housing development programs. These programs may involve the removal of structures, installation of public infrastructure, and site preparation work prior to the construction of new residential structures. Tfie United States Environmental Protection Agency("EPA")has identified a prominent lead hazard in Omaha: soil contamination attributed to emissions from the former ASARCO plant which was located in the former Union Pacific Railroad yards along the Missouri River. The Omaha Lead Superfund Site is generally bound by Florence to the north,the Missouri River to the east,the Douglas-Sarpy County line to the south,and 50th Street to the west. Only residential use properties are included in the Omaha Lead Superfund Site. Policy: The objectives of the soil work policy are to ensure site soils are safe for.the property's intended use and to remove project sites from the Omaha Lead Superfund Site before they are conveyed to another party. The following steps are the preferred means of achieving these objectives while the EPA is conducting soil clean-up in Omaha: 1. The City will first determine the soil clean up status of the project site according to the EPA. a. If the EPA has not tested the project site,then the City will request the EPA test soil prior to any soil work at the project site. The City will facilitate and/or expedite the sampling process when possible. 2.If the soil has been tested by the EPA and does not require clean up,then site work may proceed. 3.If the soil has been tested by the EPA and requires clean up,then: a. Site work involving soil may not occur until soil clean-up is completed. The City will facilitate and/or expedite the clean-up process when possible. Other options are permissible,as necessary,as long as the process is documented. Regardless of the method of addressing potential soil contamination,the City is required to test site soil at the end of a project before the property is sold or otherwise conveyed to another party. If the lead concentration exceeds 400 parts per million then further mitigation work and follow up testing is required. The Environmental Review for each project site will describe the steps taken to address lead contamination in soil. Housing and Community Development Division City of Omaha Planning Department Cost Certification Form Project Name: Rental Rehabilitation Project Owner: Bojan Ninkovic Project Address: 4336 N 41 St. Certified amount: $39,725.00 The Rehabilitation Division has reviewed the project cost estimate,work write-up or plans, specifications, &proposal. In our opinion the project cost proposed is reasonable given the type of work that is to be completed. (See attached) Construction Specialist: mate: iDAl r d'/_�/ Development Section Manager: Date: /© z 0.5 CITY OF OMAHA SUBSIDY LAYERING STANDARDS FOR THE HOME/NSP/NAHTF PROGRAM Standard: Before committing funds to a project, the City of Omaha will evaluate the project in accordance with the following guidelines and will not invest any more HOME/NSP/NAHTF funds, in combination with other, private and/or governmental assistance, than is necessary to provide affordable housing. This standard is established in accordance with Cranston Gonzalez National Affordable Housing Act, Section 212(F)as amended and 24 CFR Part 91. Layering Guidelines: Generally, there will be multiple levels of review of the assistance received on a project. The City of Omaha will rely on the determinations of the Nebraska Investment Finance Authority, the City's Tax Increment Financing Authority and the Nebraska Equity Fund, as appropriate, in evaluating such assistance. City of Omaha Community Development staff will review the project pro-forma in assessing whether or not the proposed HOME/NSP/NAHTF fund allocation is necessary to ensure feasibility of the project. All sources and uses of funds will be detailed in applications and reviewed to determine that funding sources are committed, an evaluation of all costs associated with the development will be conducted and the reasonableness and appropriateness of the development costs will be assessed. All costs will be compared to industry standards as to their reasonableness and certified by the Construction Specialist. The City shall ensure that costs being funded by HOME/NSP/NAHTF are eligible and that per unit assistance does not exceed the maximum. Developers will be required to provide a project pro forma to the City of Omaha. The aggregate amount of assistance from the US Department of Housing and Urban Development and all other sources will be considered to ensure the viability of the project. Factors relevant to the feasibility of the project will include, among other things, rates of returns to owners and investors relative to current interest rates, long-term needs of the project and the usual and customary fees charged to the project. The target population and the needs of tenants will also be considered when reviewing a project. The City's policy is that projects serving extremely low-income persons will generally require a higher subsidy than projects serving low-income persons, and that projects serving low-income persons will require a higher subsidy than projects serving moderate-income persons, and so forth. Other factors may include whether or not the project serves primarily persons with physical or mental disability, elderly persons, or others with special needs. Additionally, non-profit organizations will generally require a higher subsidy than for-profit businesses. Project cash flow and rate of return will also be evaluated. The City of Omaha normally will not allow an excessive gain or profit to be derived from a project. The specific standard governing rate of return is the return on investment shall not exceed twenty percent(20%); except in the case of a Single-Family Rental Rehabilitation Program project with no first mortgage, the project costs have been certified by the Planning Department, rents are affordable,and operating expenses are reasonable,the maximum return on investment shall not exceed forty percent(40%). Certification: The project located , has been evaluated in accordance with the above Subsidy Layering Standards for the HOME/NSP/NAHTF Program guidelines, as approved by the Planning Director and the Housing and Community Development Manager. Contract Administration Date and Compliance Manager Revised and approved Mae/am/a 7 c Asa CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: WHEREAS, the City annually receives Community Development Block Grant funds under Title I of the Housing and Community Development Act of 1974, as amended, for the purpose of benefiting low- and moderate-income residents, eliminating slums and blight, and for other urgent community development needs; and, WHEREAS, the Mayor recommended various projects in the 2015 Consolidated Submission for Community Planning and Development Programs (Consolidated Plan), approved on February 24, 2015, by Resolution 127 and as amended on July 14, 2015 by Resolution No. 729, including $50,000.00 for the continuation of the League of Human Dignity, Inc. (LHD), a Nebraska Non-profit Corporation, Barrier Removal Program under the Housing Accessibility Program; and, WHEREAS, the LHD has submitted an application that provides for a program to provide accessibility modifications on properties owned or rented by low- and moderate-income households that have a physically disabled family member(the Project); and, WHEREAS, the LHD offers independent living services to persons with disabilities, including assistance with barrier free housing; and, WHEREAS, the rehabilitation and improvement of privately owned buildings for residential purposes are eligible uses of CDBG funds; and, WHEREAS, the LHD has indicated the total estimated Project cost to be $125,349.00, consisting of $50,000.00 in FY 2015 CDBG Funds combined with $75,349.00 in private funds for the removal of architectural barriers for nine (9) properties for low- and moderate-income owners and renters with a disabled family member; and, WHEREAS, the Consolidated Plan identified this Project as providing or improving housing which is determined to benefit low- and moderate-income persons or addresses slums and blighted conditions on a spot basis and, therefore, the Project is consistent with the Consolidated Plan; and By Councilmember Adopted • City Clerk Approved Mayor CC cJ CD n CD 7:1 rD C.- •••s(j 111. 6 C-25A CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska Page 2 WHEREAS, it is in the best interest of the City of Omaha to enter into an agreement with the LHD to provide partial funding for the Barrier Removal Program. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: THAT, as recommended by the Mayor, the attached Agreement between the City of Omaha and the League of Human Dignity, Inc., a Nebraska Non-profit Corporation, 5513 Center Street, Omaha, Nebraska 68106, in the amount of $50,000.00 in FY 2015 funds for barrier removal services for 9 (nine) housing units within the city limits of the City of Omaha for the period from January 1, 2016 through December 31, 2016, is hereby approved. Funds shall be paid from the Community Development Block Grant, Fund No. 12186, and Organization No. 128072. APPROVED AS TO FORM: • / it �(S TY ATTORNEY DATE 2270 dlh By ,, ..., ..... ouncilmember Adopted NOV 2 4 2 0 ' . C'ty Clerk !� �!� Approv . ... 4:12.1 Mayor f/S f.I(l" NO. .....✓..� jh9Ci..,.o.,....,.. 1 Resolution by I 1 1 Res. that, as recommended by the Mayor, the attached Agreement between the City of Omaha and the League of Human Dignity, . 1 Inc., a Nebraska Non-profit Corporation. 2 5513 Center Street, Omaha, Nebraska 68106, in the amount of $50,000.00 in FY ; 2015 funds for barrier removal services for 9 1 (nine) housing units within the city limits of 1 the City of Omaha for the period from 1 January 1, 2016 through December 31, 2016, is hereby approved. Funds shall be paid from the Community Development Block Grant, Fund No. 12186, and Organization No. 128072. 1 1 q 1 2270 dlh } t I 1 t i t i 1 Presented to City Council NOV 2 4 2015 Adopted 1-O I 1 gaiter groWn City Clerk