R-05-03-24-12B1 - 3/24/2005RESOLUTION NO. R -05-03-24-12B1
WHEREAS, the City of Round Rock has applied for and received
funds from the United States Government under Title I of the Housing
and Community Development Act of 1974, Public Law 93-383, and
WHEREAS, the City of Round Rock wishes to engage the Round Rock
Housing Authority to assist the City in utilizing said funds, and
WHEREAS, the City Council desires to enter into a Community
Development Block Grant Program Agreement with the Round Rock Housing
Authority for a Senior Activity Program, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the City, a Community Development Block Grant Agreement with
the Round Rock Housing Authority for a Senior Activity Program, a copy
of said agreement being attached hereto as Exhibit "A" and incorporated
herein for all purposes.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended.
RESOLVED this 24th day of March, 20
ATTES
NY ELL, Ma •r
City V Round Rock, Texas
CHRISTINE R. MARTINEZ, City Secretary
@PFDesktOp\::ODMA/WORLDOX/O:/WDOX/RESOLUTI/R5032491.WPD/sc
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
COMMUNITY DEVELOPMENT BLOCK GRANT AGREEMENT
(B -04 -MC -48-0514)
THIS AGREEMENT, entered into this _ day of , 2005 by and between the
City of Round Rock, a Texas home -rule municipality (herein called the "CITY") and the Round
Rock Housing Authority (herein called the "HOUSING AUTHORITY").
WHEREAS, the CITY has applied for and received funds from the United States
Government under Title I of the Housing and Community Development Act of 1974, Public Law
93-383; and
WHEREAS, the CITY wishes to engage the HOUSING AUTHORITY to assist the
CITY in utilizing such funds;
NOW, THEREFORE, In consideration of the mutual covenants and agreements contained herein
the parties agree as follows:
SECTION I:
SCOPE OF SERVICES
1.1. Activities and Beneficiaries
The HOUSING AUTHORITY will be responsible for administering a Community
Development Block Grant ("CDBG") Year 2004 program in a manner satisfactory to the CITY
and consistent with any standards required as a condition of providing these funds. Such
program will include the following activities eligible under the CDBG Program: Senior Activity
Program. Under this program, the HOUSING AUTHORITY agrees to provide these services
for:
Persons Assisted
Total Unduplicated Persons 65
Total Unduplicated Low to Moderate Income Persons 65
1.2. Level of Accomplishments
In addition to normal administrative services required as part of this Agreement, the
HOUSING AUTHORITY agrees to provide the households/persons the following program
services:
RRHA_Senior Activity contract_04-05.DOC
EXHIBIT
nA"
Activity
# of Weeks
Times #
Unduplicated
Persons
Equals Units of Service
Bingo
26
20
520
Sewing/Quilting
24
6
144
Health Screenings
12
20
240
Breakfasts
4
25
100
Home Visits
26
5
130
1.3. Staffing
To undertake the activities described above and accomplish the levels of service
described above, the HOUSING AUTHORITY will allocate staff time in support of the program
funded under this Agreement as follows:
Title
Hrs. per Week
# of Weeks
=
Estimated Hours
Activity Coordinator
20
52
=
1040
Timeframe: October 1, 2004 through September 30, 2005
1.4. Performance Monitoring
The CITY will monitor the performance of the HOUSING AUTHORITY against the
goals and performance standards required 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 HOUSING AUTHORITY within thirty (30) days
after being notified by the CITY, contract suspension or termination procedures will be initiated
in accordance with Section VI of this Agreement.
SECTION II:
TIME OF PERFORMANCE
Services of the HOUSING AUTHORITY shall start on the 1st day of October, 2004 and
end on the 3e day of September, 2005. The term of this Agreement and the provisions herein
shall be extended to cover any additional time period during which the HOUSING
AUTHORITY remains in control of CDBG funds or other assets including program income.
SECTION III:
PAYMENT
It is expressly agreed the total amount to be paid by the CITY under this contract shall
not exceed $8,500.00. Drawdowns for the payment of eligible expenses shall be made against
the line item budgets specified in Exhibit "C", attached hereto and incorporated herein and in
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accordance with performance. Expenses for general administration shall also be paid against the
line item budgets specified in Exhibit "C" and in accordance with performance.
Payments will be contingent upon certification of the HOUSING AUTHORITY's
financial management system in accordance with the standards specified in Appendix A to this
Agreement.
SECTION IV:
NOTICES
Notices made pursuant to this Agreement shall be directed to the following
representatives:
CITY:
HOUSING AUTHORITY:
Mona Ryan,
Community Development Coordinator
Round Rock Housing Authority
Ebby Green
City of Round Rock
Executive Director
301 West Bagdad, Suite 140
PO Box 781
Round Rock, Texas 78664
Round Rock TX 78680-0781
SECTION V:
SPECIAL CONDITIONS
The HOUSING AUTHORITY shall agree to comply with the requirements of Title 24
Code of Federal Regulations, Part 570 of the Housing and Urban Development (HUD)
regulations concerning Community Development Block Grants (CDBG) and all federal
regulations and policies issued pursuant to these regulations. The HOUSING AUTHORITY
further agrees to utilize funds available under this Agreement to supplement rather than supplant
funds otherwise available.
SECTION VI:
GENERAL CONDITIONS
6.1. General Compliance
The HOUSING AUTHORITY agrees to comply with all applicable federal, state and
local laws and regulations governing the funds provided under this Agreement.
6.2. Independent Contract
It is understood and agreed that SUBRECIPEINT is an independent contractor and shall
not be considered an employee of the CITY. SUBPRICIPIENT shall not be within protection or
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coverage of the CITY'S Workers' Compensation insurance, Health Insurance, Liability
Insurance or any other Insurance that the CITY from time to time may have in force and effect.
6.3. Hold Harmless
The HOUSING AUTHORITY shall indemnify, save harmless and exempt the CITY, its
officers, agents, servants, and employees from and against any and all suits, actions, legal
proceedings, claims, demands, damages, costs, expenses , attorney fees and any and all other costs
or fees incident to any work done as result of this Agreement and arising out of a willful or
negligent act or omission of the HOUSING AUTHORITY, its officers, agents, servants, and
employees ; provided, however, that the HOUSING AUTHORITY shall not be liable for any suits,
actions, legal proceedings, claims, demands, damages, costs, expenses and attorneys' fees arising
out of a willful or negligent act or omission of the CITY, its officers, agents, servants and
employees, or third parties.
6.4. Amendments
The term and conditions of this Agreement, including the attachments listed below,
constitute the entire agreement between the parties and superseded all previous communications,
representations, or agreements, either written or oral, with respect to the subject matter hereof.
No modification or amendment of this Agreement will be binding on either party unless
acknowledged in writing by their duly authorized representatives.
Attachments:
a. Exhibit A — Client Data Form
b. Exhibit B — Beneficiary Report Form
c. Exhibit C — Project Budget
d. Appendix A — OMB Circular A-110
e. Appendix B — 24 CFR 570 CDBG Regulations Subpart C, Eligible Activities
f. Appendix C — 24 CFR 570 CDBG Regulations Subpart J, Grant Administration
g. Appendix D — 24 CFR 570 CDBG Regulations Subpart J, Other Program
Requirements
6.5. Suspension or Termination
Either party may terminate this Agreement at any time by giving written notice to the
other party of such termination and specifying the effective date thereof at least thirty (30) days
before the effective date of such termination. Partial terminations of the Scope of Service in
Paragraph 1.1 above may only be undertaken with the prior approval of the CITY. In the event
of any termination for convenience, all finished or unfinished documents, data, reports or other
materials prepared by the HOUSING AUTHORITY under this Agreement shall, at the option of
the CITY, become property of the CITY.
The CITY may also suspend or terminate this Agreement, in whole or in part, if the
HOUSING AUTHORITY materially fails to comply with any term of this Agreement, or with
any of the rules, regulations, or provisions referred to herein; and the CITY may declare the
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HOUSING AUTHORITY ineligible for any further participation in GRANTEE contracts, in
addition to other remedies as provided by law. Should the SUBRICIPIENT fail to cure or
correct such defects or failures identified by the CITY within the fifteen (15) days after
notification of deficiencies, and such breach of contract relate to a violation of federal law or
regulations which results in a demand for reimbursement from the Department of Housing and
Urban Development (HUD) or its successor, the CITY may seek reimbursement of all funds
from the CITY to the HOUSING AUTHORITY under this Agreement.
The HOUSING AUTHORITY shall not be relieved of the liability to the CITY for
damages sustained by the CITY by virtue of any breach of this Agreement by the HOUSING
AUTHORITY and the CITY may withhold any payments to the HOUSING AUTHORITY for
the purpose as set out and until such time as the exact amount of damages due the CITY from the
HOUSING AUTHORITY is determined. Should the CITY become aware of any activity by the
HOUSING AUTHORITY which would jeopardize the CITY's position with HUD which would
cause a payback of CDBG funds or other CITY federal funds then the CITY may take
appropriate action including injunctive relief against the HOUSING AUTHORITY to prevent
the transaction as aforesaid. The failure of the CITY to exercise this right shall in no way
constitute a waiver by the CITY to demand payment or seek any other relief in law or in equity
to which it may be justly entitled.
6.6. Reversion of Assets
Pursuant to 24 CFR 570.503, the HOUSING AUTHORITY agrees that should it
discontinue the services as provided for herein, then all unexpended CDBG funds shall be
returned within ten (10) days to the CITY. The funds remaining will be appropriated to eligible
CDBG activities in keeping with the CITY'S budgetary process.
SECTION VII:
ADMINISTRATIVE REQUIREMENTS
7.1. Records and Reports
A. Recordkeeping
The HOUSING AUTHORITY shall maintain all records required by the federal
regulations specified in 24 CFR Part 570.506 and that are pertinent to the activities to be funded
under this Agreement. Such records shall include, but not be limited to:
1. Records providing a full description of each activity undertaken;
2. Records demonstrating that each activity undertaken meets one of the
National Objectives of the CDBG program under 24 CFR Part 570.208;
3. Records required to determine the eligibility of activities under 24 CFR
Part 570.201 - 570.206;
4. Financial records as required by 24 CFR Part 570.502, and OMB Circular
A-110; and
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5. Other records necessary to document compliance with Subpart K of 24
CFR 570.
B. Retention
The HOUSING AUTHORITY shall retain all records pertinent to expenditures under this
Agreement for a period of four (4) years after the termination of all activities funded under this
Agreement, or after the resolution of all Federal audit findings, which ever occurs later.
C. Client Data
The HOUSING AUTHORITY shall maintain client data demonstrating client eligibility
for services provided. Such data shall include, but not be limited to, client name, address and
annual household income level as shown in Exhibit "A", attached hereto and incorporated herein.
Any other basis for determining eligibility must be approved by the CITY in advance in writing,
and description of services provided. Such information shall be made available to CITY
monitors or their designees upon request.
D. Progress Reports
The HOUSING AUTHORITY shall submit regular Quarterly Progress Reports to the
CITY in the form, content, and frequency as required by the CITY. These shall include but not
be limited to summary of expenditures, list of beneficiaries and a brief narrative of
accomplishments. Beneficiary reports should be submitted on Exhibit "B", attached hereto and
incorporated herein unless an alternative report is approved by CITY in advance in writing.
E. Disclosure
The HOUSING AUTHORITY understands that client information collected under this
contract is private and the use or disclosure of such information, when not directly connected
with the administration of the CITY's or the HOUSING AUTHORITY's responsibilities with
respect to services provided under this contract is prohibited by the U.S. Privacy Act of 1974
unless written consent is obtained from such person receiving service and, in the case of a minor,
that of a responsible parent/guardian.
F. Property Records
The HOUSING AUTHORITY shall maintain real property inventory records, which
clearly identifies any properties purchased, improved or sold using funds provided under this
Agreement. Property retained shall continue to meet eligibility criteria and shall conform to the
"changes in use" restrictions specified in 24 CFR Parts 570.503(b)(8).
G. Close -Outs
The HOUSING AUTHORITY's obligation to the CITY shall not end until all closeout
requirements are completed. Activities during this close-out period shall include, but are not
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limited to: making final payments, disposing of program assets (including the return of all
unused materials, equipment, unspent cash advances, program income balances, and receivable
accounts to the CITY, and determining custodianship of records).
H. Audits & Inspections
All the HOUSING AUTHORITY's records with respect to any matters covered by this
Agreement shall be made available to the CITY, grantor agency, their designees or the Federal
Government. At any time during normal business hours, as often as the CITY or grantor agency
deems necessary, to audit, examine, and make excerpts or transcripts of all relevant data. Any
deficiencies noted in audit reports must be fully cleared by the HOUSING AUTHORITY within
thirty (30) days after receipt by the HOUSING AUTHORITY. Failure by the HOUSING
AUTHORITY to comply with the above audit requirements will constitute a violation of this
contract and may result in the withholding of future payments. The HOUSING AUTHORITY
hereby agrees to have an annual agency audit conducted in accordance with current city policy
concerning the HOUSING AUTHORITY's audits.
7.2. Financial Management
A. Budgets
A detailed contract budget is attached hereto and incorporated herein as Exhibit "C". The
CITY and the HOUSING AUTHORITY may agree to revise the budget from time to time in
accordance with existing city policies.
B. Program Income
The HOUSING AUTHORITY shall report quarterly all program income as defined at 24
CFR 570.504 generated by activities carried out with CDBG funds made available under this
contract. The use of program income by the HOUSING AUTHORITY shall comply with
requirements set forth in 24 CFR 570.504. By way of further limitations, the HOUSING
AUTHORITY may use such income during the contract period for activities permitted under this
contract and shall reduce requests for additional funds by the amount of any such program
income balances on hand. All unused program income shall be returned to the CITY at the end of
the contract period. Any interest earned on cash advances from the U.S. Treasury is not program
income and shall be remitted promptly to the CITY. Reporting of any such program income
shall, at minimum, be included in quarterly reports under Section VI of this agreement.
Information on program income provided in these reports will include, but not be limited to,
summaries of program income generated; a summary of expenditures of these funds; and a
description of the use of program income sufficient for determining eligibility of these expenses
under CDBG guidelines.
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C. Indirect Costs
If indirect costs are charged, the HOUSING AUTHORITY will develop an indirect cost
allocation plan for determining the appropriate CITY's share of administrative costs and shall
submit such plan to the CITY for approval.
D. Payment Procedures
The CITY will pay to the HOUSING AUTHORITY funds available under this contract
based on information submitted by the HOUSING AUTHORITY and consistent with an
approved budget and city policies concerning payments. With the exception of certain advances,
payments will be made for eligible expenses actually incurred by the HOUSING AUTHORITY,
and not to exceed actual cash requirements. Payments will be adjusted by the CITY in
accordance with advance fund and program income balances available under this contract for
costs incurred by the CITY on the behalf of the HOUSING AUTHORITY.
7.3. Procurement
A. Compliance
All program assets (unexpended advanced funds) shall revert to the CITY upon
termination of this Agreement. The only authorized expenditures of funds shall be travel
vouchers or prepaid bus tickets as described herein.
B. OMB Standards
The HOUSING AUTHORITY shall procure materials in accordance with the
requirements of Attachment 0 of OMB Circular A-110, Procurement Standards, and shall
subsequently follow Attachment N, Property Management Standards, covering utilization and
disposal of property. These requirements are referenced in 24 CFR Part 84, titled "Common
Rule".
C. Travel
The HOUSING AUTHORITY shall obtain written approval from the CITY for any travel
outside the metropolitan area with funds provided under this contract. The CITY shall determine
that such travel is necessary and reasonable according to applicable standards outlined in OMB
Circular A87.
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SECTION VIII:
PERSONNEL & PARTICIPANT CONDITIONS
8.1. Civil Rights
A. Compliance
The HOUSING AUTHORITY agrees to comply with (city and state civil rights
ordinance referenced here) and with Title VI of the Civil Rights Act of 1964 as amended, Title
VIII of the Civil Rights Act of 1968 as amended, Section 109 of Title I of the Housing and
Community Development Act of 1974, Section 504 of the Rehabilitation Act of 1973, the
Americans with Disabilities Act of 1990, the Age Discrimination Act of 1975, Executive Order
11063, and with Executive Order 11246 as amended by Executive Orders 11375 and 12086.
B. Nondiscrimination
The HOUSING AUTHORITY will not cause any person to be excluded from
participation in, denied the benefits of, or subjected to discrimination under any of the program's
activities receiving assistance under this Agreement based on the grounds of race, color, religion,
sex, ancestry, national origin or handicap. In order to allow the CITY to monitor non-
discrimination, the HOUSING AUTHORITY will at minimum maintain records regarding the
race of persons or households assisted under this contract and whether households assisted have
a female head of household.
The HOUSING AUTHORITY will not discriminate against any employee or applicant
for employment because of race, color, religion, sex, ancestry, national origin, or other handicap,
age, marital status, or status with regard to public assistance. The HOUSING AUTHORITY will
take affirmative action to insure all employment practices are free from such discrimination.
Such employment practices include but are not limited to the following: hiring, upgrading,
demotion, transfer, recruitment or recruitment advertising, layoff, termination, rates of pay or
other forms of compensation, and selection for training, including apprenticeship. The
HOUSING AUTHORITY agrees to post in conspicuous places, available to employees and
applicants for employment, notices to be provided by the contracting agency setting forth the
provisions of this nondiscrimination clause.
C. Compliance with Federal Regulations
The HOUSING AUTHORITY agrees to comply with any federal regulations issued
pursuant to compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 706) or
applicable updates which prohibits discrimination against the handicapped in any federally
assisted program. The CITY shall provide the HOUSING AUTHORITY with any guidelines
necessary for compliance with that portion of the regulations in force during the term of this
contract.
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8.2. Conduct
A. Assignability
The HOUSING AUTHORITY shall not assign or transfer any interest in this Agreement
without the prior written consent of the CITY.
B. Hatch Act
The HOUSING AUTHORITY agrees that no funds provided, nor personnel employed
under this contract, shall be in any way or to any extent engaged in the conduct of political
activities in violation of Chapter 15 of Title V United States Code.
C. Conflict of Interest
The HOUSING AUTHORITY understands and agrees to abide by the provisions of 24
CFR 570.611 with respect to conflicts of interest, and covenants that it presently has no 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. These
conflict of interest provisions apply to any person who is an employee, agent, consultant, officer,
or elected official of the CITY, or of any designated public agencies or the HOUSING
AUTHORITY which are receiving funds under the CDBG Entitlement program.
D. Subcontracts
1. Approvals
The HOUSING AUTHORITY shall not enter into any subcontracts with any agency or
individual in the performance of this contract without written consent of the CITY prior to the
execution of such Agreement.
2. Monitoring of Subcontractors
The HOUSING AUTHORITY will monitor all subcontracted services on a regular basis
to assure contract compliance. Results of monitoring efforts shall be summarized in written
reports and supported with evidence of follow-up actions taken to correct areas of
noncompliance.
3. Content
The HOUSING AUTHORITY shall cause all of the provisions of this contract in its
entirety to be included in and made a part of any subcontract executed in the performance of this
Agreement.
4. Selection Process
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The HOUSING AUTHORITY shall undertake to insure that all subcontracts let in the
performance of this agreement shall be awarded on a fair and open competition basis. Executed
copies of all subcontracts shall be forwarded to CITY along with documentation concerning the
selection process.
E. Religious Organization
The HOUSING AUTHORITY agrees that funds provided under this contract will not be
utilized for religious activities, to promote religious interests, or for the benefit of a religious
organization in accordance with the federal regulations specified in 24 CFR 570.200(j).
F. Pending Litigation
The HOUSING AUTHORITY agrees to inform CITY about any litigation the
HOUSING AUTHORITY is or becomes in involved in.
G. Background Checks
The HOUSING AUTHORITY agrees to conduct a criminal background check on all
employees working directly with youth.
IN WITNESS WHEREOF, this Agreement is executed on this day of
, 2005.
Approved as to form:
Stephan L. Sheets, City Attorney
CITY: HOUSING AUTHORITY:
City of Round Rock Round Rock Housing Authority
Nyle Maxwell
Mayor
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Exhibit A
Client Data
12
Exhibit B
Beneficiary Data
13
Exhibit C
Project Budget
Itemize program expenditures below. Only expenditures listed will be reimbursed
unless budget is amended with prior approval. Budgeted items cannot exceed
CDBG program allocation.
Description
Budget Amount
Senior Activities Director salary
$8,500.00
Total:
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$8,500.00
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Appendix A
OMB Circular A-110
CIRCULAR A-110
(DEVISED 11/19/93, Am Further Amended
9/30/99)
CIRCULAR NO. A-110
Revised
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND
ESTABLISHMENTS
SUBJECT: Uniform Administrative Requirements
for Grants and Agreements With
Institutions of Higher Education,
Hospitals, and Other Non -Profit
Organizations
1. Purpose. This Circular sets forth
standards tor obtaining consistency and
uniformity among Federal agencies in the
administration of grants to and agreements
with institutions of higher education,
hospitals, and other non-profit
organizations.
2. Authority. Circular A-110 is issued under
the authority of 31 U.S.C. 503 (the Chief
Financial Officers Act), 31 U.S.C. 1111, 41
O.S.C. 405 (the Office of Federal
Procurement Policy Act), Reorganization Plan
No. 2 of 1970, and E.O. 11541 ("Prescribing
the Duties of the Office of Management and
Budget and the Domestic Policy Council in
the Executive Office of the President").
3. Policy. Except as provided herein, the
standards set forth in this Circular are
applicable to all Federal agencies. If any
statute specifically prescribes policies or
specific requirements that differ from the
standards provided herein, the provisions of
the statute shall govern.
The provisions of the sections of this
Circular shall be applied by Federal
agencies to recipients. Recipients shall
apply the provisions of this Circular to
subrecipients 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 1.
This Circular 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 Governments," and the
Federal agencies' grants management common
rule which standardized and codified the
administrative requirements Federal agencies
impose on State and local grantees. In
addition, subawards and contracts to State
or local governments are not covered by this
Circular. However, this Circular applies to
subawards made by State and local
governments to organizations covered by this
Circular. Federal agencies may apply the
provisions of this Circular to commercial
organizations, foreign governments,
organizations under the jurisdiction of
foreign governments, and international
organizations.
4. Definition. Definitions of key terms
used in this Circular ate contained in
Section .2 in the Attachment.
5. Requite Action. The specific
requirements and responsibilities of Federal
agencies and institutions of higher
education, hospitals, and other non-profit
organizations are set forth in this
Circular. Federal agencies responsible for
awarding and administering grants to and
other agreements with organizations
described in paragraph 1 shall adopt the
language in the Circular unless different
provisions are required by Federal statute
or are approved by OMB.
6. OMB Responsibilities. OMB will review
agency regulations and implementation of
this Circular, and will provide
interpretations of policy requirements and
assistance to insure effective and efficient
implementation. Any exceptions will be
subject to approval by OMB, as indicated in
Section .4 in the Attachment. Exceptions
will only be made in particular cases where
adequate justification is presented.
7. Information Contact. Further information
concerning this Circular may be obtained by
contacting the Office of Federal Financial
Management, Office of Management and Budget,
Washington, DC 20503, telephone (202) 395-
3993.
8. Termination Review Dab. This Circular
will have a policy review three years from
date of issuance.
9. Effective Date. The standards set forth
in this Circular which affect Federal
agencies will be effective 30 days after
publication of the final revision in the
Federal Register. Those standards which
Federal agencies impose on grantees will be
adopted by agencies in codified regulations
within six months after publication in the
Federal Register. Earlier implementation is
encouraged.
Grants and Agreements with Institutions of
Higher Education,
Hospital., and Other Non -Profit
Organization.
SUBPART A - GENERAL
Sec.
.1 Purpose.
.2 Definitions.
.3 Effect on other issuances.
.4 Deviations.
.5 Subawards.
SUBPART B - PRH -AWARD PEQUIR:ENTS
.10 Purpose.
.11 Pre -award policies.
.12 Forms for applying for Federal
assistance.
.13 Debarment and suspension.
.14 Special award conditions.
.15 Metric system of measurement.
_.16 Resource Conservation and Recovery
Act.
.17 Certifications and representations.
SUBPART C - POST -AWARD REQUIREMENTS
Financial and Program Management
.20 Purpose of financial and program
management.
_.21 Standards for financial management
systems.
.22 Payment.
_.23 Cost sharing or matching.
_.24 Program income.
.25 Revision of budget and program plans.
.26 Non -Federal audits.
.27 Allowable costs.
.28 Period of availability of funds.
.29 Conditional exemptions.
Property Standards
.30 Purpose of property standards.
_.31 Insurance coverage.
.32 Real property.
.33 Federally -owned and exempt property.
.34 Equipment.
.35 Supplies and other expendable
property.
.36 Intangible property.
.37 Property trust relationship.
Procurement Standards
.40 Purpose of procurement standards.
.41 Recipient responsibilities.
.42 Codes of conduct.
.43 Competition.
.44 Procurement procedures.
.45 Cost and price analysis.
.46 Procurement records.
.47 Contract administration.
.48 Contract provisions.
Reports and Records
.50 Purpose of reports and records.
.51 Monitoring and reporting program
performance.
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.52 Financial reporting.
.53 Retention and access requirements for
records.
Termination and Enforcement
_.60 Purpose of termination and
enforcement.
.61 Termination.
.62 Enforcement.
SUBPART D - APTER-TBE-ANARD REQUIREMENTS
.70 Purpose.
.71 Closeout procedures.
.72 Subsequent adjustments and continuing
responsibilities.
.73 Collection of amounts due
APPENDIX A - CONTRACT PROVISIONS
SUBPART A - General
.1 Purpose. This Circular establishes
uniform administrative requirements for
Federal grants and agreements awarded to
institutions of higher education, hospitals,
and other non-profit organizations. Federal
awarding agencies shall not impose
additional or inconsistent requirements,
except as provided in Sections .4, and
_.14 or unless specifically required by
Federal statute or executive order. Non-
profit organizations that implement Federal
programs for the States are also subject to
State requirements.
.2 Definitions.
(a) Accrued expenditures means the
charges incurred by the recipient
during a given period requiring the
provision of funds for: (1) goods and
other tangible property received; (2)
services performed by employees,
contractors, subrecipients, and other
payees; and, (3) other amounts
becoming owed under programs for
which no current services or
performance is required.
(b) Accrued income means the sum of:
(1) earnings during a given period
from (i) services performed by the
recipient, and (ii) goods and other
tangible property delivered to
purchasers, and (2) amounts becoming
20
owed to the recipient for which no
current services or performance is
required by the recipient.
(c) Acquisition cost of equipment
means the net invoice price of the
equipment, including the cost of
modifications, attachments,
accessories, or auxiliary apparatus
necessary to make the property usable
for the purpose for which it was
acquired. Other charges, such as the
cost of installation, transportation,
taxes, duty or protective in -transit
insurance, shall be included or
excluded from the unit acquisition
cost in accordance with the
recipient's regular accounting
practices.
(d) Advance means a payment made by
Treasury check or other appropriate
payment mechanism to a recipient upon
its request either before outlays are
made by the recipient or through the
use of predetermined payment
schedules.
(e) Award means financial assistance
that provides support or stimulation
to accomplish a public purpose.
Awards include grants and other
agreements in the form of money or
property in lieu of money, by the
Federal Government to an eligible
recipient. The term does not include:
technical assistance, which provides
services instead of money; other
assistance in the form of loans, loan
guarantees, interest subsidies, or
insurance; direct payments of any
kind to individuals; and, contracts
which are required to be entered into
and administered under procurement
laws and regulations.
(f) Cash contributions means the
recipient's cash outlay, including
the outlay of money contributed to
the recipient by third parties.
(g) Closeout means the process by
which a Federal awarding agency
determines that all applicable
administrative actions and all
required work of the award have been
completed by the recipient and
Federal awarding agency.
(h) Contract means a procurement
contract under an award or subaward,
and a procurement subcontract under a
recipient's or subrecipient's
contract.
(i) Cost sharing or matching means
that portion of project or program
costs not borne by the Federal
Government.
(j) Date of completion means the date
on which all work under an award is
completed or the date on the award
document, or any supplement or
amendment thereto, on which Federal
sponsorship ends.
(k) Disallowed costs means those
charges to an award that the Federal
awarding agency determines to be
unallowable, in accordance with the
applicable Federal cost principles or
other terms and conditions contained
in the award.
(1) Equipment means tangible
nonexpendable personal property
including exempt property charged
directly to the award having a useful
life of more than one year and an
acquisition cost of 55000 or more per
unit. However, consistent with
recipient policy, lower limits may be
established.
(m) Excess property means property
under the control of any Federal
awarding agency that, as determined
by the head thereof, is no longer
required for its needs or the
discharge of its responsibilities.
(n) Exempt property means tangible
personal property acquired in whole
or in part with Federal funds, where
the Federal awarding agency has
statutory authority to vest title in
the recipient without further
obligation to the Federal Government.
An example of exempt property
authority is contained in the Federal
Grant and Cooperative Agreement Act
(31 U.S.C. 6306), for property
acquired under an award to conduct
basic or applied research by a non-
profit institution of higher
education or non-profit organization
whose principal purpose is conducting
scientific research.
(o) Federal awarding agency means the
Federal agency that provides an award
to the recipient.
(p) Federal funds authorized means
the total amount of Federal funds
obligated by the Federal Government
for use by the recipient. This amount
may include any authorized carryover
of unobligated funds from prior
funding periods when permitted by
agency regulations or agency
implementing instructions.
(q) Federal share of real property,
equipment, or supplies means that
percentage of the property's
acquisition costs and any improvement
expenditures paid with Federal funds.
(r) Funding period means the period
of time when Federal funding is
available for obligation by the
recipient.
(s) Intangible property and debt
instruments means, but is not limited
to, trademarks, copyrights, patents
and patent applications and such
property as loans, notes and other
debt instruments, lease agreements,
stock and other instruments of
property ownership, whether
considered tangible or intangible.
(t) Obligations means the amounts of
orders placed, contracts and grants
awarded, services received and
similar transactions during a given
period that require payment by the
21
recipient during the same or a future
period.
(u) Outlays or expenditures means
charges made to the project or
program. They may be reported on a
cash or accrual basis. For reports
prepared on a cash basis, outlays are
the sum of cash disbursements for
direct charges for goods and
services, the amount of indirect
expense charged, the value of third
party in-kind contributions applied
and the amount of cash advances and
payments made to subrecipients. For
reports prepared on an accrual basis,
outlays are the sum of cash
disbursements for direct charges for
goods and services, the amount of
indirect expense incurred, the value
of in-kind contributions applied, and
the net increase (or decrease) in the
amounts owed by the recipient for
goods and other property received,
for services performed by employees,
contractors, subrecipients and other
payees and other amounts becoming
owed under programs for which no
current services or performance are
required.
(v) Personal property means property
of any kind except real property. It
may be tangible, having physical
existence, or intangible, having no
physical existence, such as
copyrights, patents, or securities.
(w) Prior approval means written
approval by an authorized official
evidencing prior consent.
(x) Program income means gross income
earned by the recipient that is
directly generated by a supported
activity or earned as a result of the
award (see exclusions in paragraphs
.24 (e) and (h)). Program income
includes, but is not limited to,
income from fees for services
performed, the use or rental of real
or personal property acquired under
federally -funded projects, the sale
of commodities or items fabricated
under an award, license fees and
royalties on patents and copyrights,
and interest on loans made with award
funds. Interest earned on advances of
Federal funds is not program income.
Except as otherwise provided in
Federal awarding agency regulations
or the terms and conditions of the
award, program income does not
include the receipt of principal on
loans, rebates, credits, discounts,
etc., or interest earned on any of
them.
(y) Project costs means all allowable
costs, as set forth in the applicable
Federal cost principles, incurred by
a recipient and the value of the
contributions made by third parties
in accomplishing the objectives of
the award during the project period.
(z) Project period means the period
established in the award document
during which Federal sponsorship
begins and ends.
(aa) Property means, unless otherwise
stated, real property, equipment,
intangible property and debt
instruments.
(bb) Real property means land,
including land improvements,
structures and appurtenances thereto,
but excludes movable machinery and
equipment.
(cc) Recipient means an organization
receiving financial assistance
directly from Federal awarding
agencies to carry out a project or
program. The term includes public and
private institutions of higher
education, public and private
hospitals, and other quasi -public and
private non-profit organizations such
as, but not limited to, community
action agencies, research institutes,
educational associations, and health
centers. The term may include
commercial organizations, foreign or
international organizations (such as
agencies of the United Nations) which
are recipients, subrecipients, or
contractors or subcontractors of
recipients or subrecipients at the
discretion of the Federal awarding
agency. The term does not include
government-owned contractor -operated
facilities or research centers
providing continued support for
mission -oriented, large-scale
programs that are government-owned or
controlled, or are designated as
federally -funded research and
development centers.
(dd) Research and development means
all research activities, both basic
and applied, and all development
activities that are supported at
universities, colleges, and other
non-profit institutions. "Research"
is defined as a systematic study
directed toward fuller scientific
knowledge or understanding of the
subject studied. "Development" is the
systematic use of knowledge and
understanding gained from research
directed toward the production of
useful materials, devices, systems,
or methods, including design and
development of prototypes and
processes. The term research also
includes activities involving the
training of individuals in research
techniques where such activities
utilize the same facilities as other
research and development activities
and where such activities are not
included in the instruction function.
(ee) Small awards means a grant or
cooperative agreement not exceeding
the small purchase threshold fixed at
41 U.S.C. 403(11) (currently
$25,000).
(ff) Subaward means an award of
22
financial assistance in the form of
money, or property in lieu of money,
made under an award by a recipient to
an eligible subrecipient or by a
subrecipient to a lower tier
subrecipient. The term includes
financial assistance when provided by
any legal agreement, even if the
agreement is called a contract, but
does not include procurement of goods
and services nor does it include any
form of assistance which is excluded
from the definition of "award" in
paragraph (e).
Ogg) Subrecipient means the legal
entity to which a subaward is made
and which is accountable to the
recipient for the use of the funds
provided. The term may include
foreign or international
organizations (such as agencies of
the United Nations) at the discretion
of the Federal awarding agency.
(hh) Supplies means all personal
property excluding equipment,
intangible property, and debt
instruments as defined in this
section, and inventions of a
contractor conceived or first
actually reduced to practice in the
performance of work under a funding
agreement ("subject inventions"), as
defined in 37 CFR part 401, "Rights
to Inventions Made by Nonprofit
Organizations and Small Business
Firms Under Government Grants,
Contracts, and Cooperative
Agreements."
(ii) Suspension means an action by a
Federal awarding agency that
temporarily withdraws Federal
sponsorship under an award, pending
corrective action by the recipient or
pending a decision to terminate the
award by the Federal awarding agency.
Suspension of an award is a separate
action from suspension under Federal
agency regulations implementing E.O.s
12549 and 12689, "Debarment and
Suspension."
(jj) Termination means the
cancellation of Federal sponsorship,
in whole or in part, under an
agreement at any time prior to the
date of completion.
(kkl Third party in-kind
contributions means the value of non-
cash contributions provided by non -
Federal third parties. Third party
in-kind contributions may be in the
form of real property, equipment,
supplies and other expendable
property, and the value of goods and
services directly benefiting and
specifically identifiable to the
project or program.
(11) Unliquidated obligations, for
financial reports prepared on a cash
basis, means the amount of
obligations incurred by the recipient
that have not been paid. For reports
prepared on an accrued expenditure
basis, they represent the amount of
obligations incurred by the recipient
for which an outlay has not been
recorded.
(mm) Unobligated balance means the
portion of the funds authorized by
the Federal awarding agency that has
not been obligated by the recipient
and is determined by deducting the
cumulative obligations from the
cumulative funds authorized.
(nn) Unrecovered indirect coat means
the difference between the amount
awarded and the amount which could
have been awarded under the
recipient's approved negotiated
indirect cost rate.
(oo) Working capital advance means a
procedure where by funds are advanced
to the recipient to cover its
estimated disbursement needs for a
given initial period.
.3 Effect on other issuances. For
awards subject to this Circular, all
administrative requirements of
codified program regulations, program
manuals, handbooks and other
nonregulatory materials which are
inconsistent with the requirements of
this Circular shall be superseded,
except to the extent they are
required by statute, or authorized in
accordance with the deviations
provision in Section _.4.
.4 Deviations. The Office of
Management and Budget (OMB) may grant
exceptions for classes of grants or
recipients subject to the
requirements of this Circular when
exceptions are not prohibited by
statute. However, in the interest of
maximum uniformity, exceptions from
the requirements of this Circular
shall be permitted only in unusual
circumstances. Federal awarding
agencies may apply more restrictive
requirements to a class of recipients
when approved by OMB. Federal
awarding agencies may apply less
restrictive requirements when
awarding small awards, except for
those requirements which are
statutory. Exceptions on a case-by-
case basis may also be made by
Federal awarding agencies.
_.5 Subawards. Unless sections of
this Circular specifically exclude
subrecipients from coverage, the
provisions of this Circular shall be
applied to subrecipients performing
work under awards if such
subrecipients are institutions of
higher education, hospitals or other
non-profit organizations. State and
local government subrecipients are
23
subject to the provisions of
regulations implementing the grants
management common rule,"Uniform
Administrative Requirements for
Grants and Cooperative Agreements to
State and Local Governments,"
published at 53 FR 8034 (3/11/88).
SUBPART H - Pre -Award Requirement.
.10 Purpose. Sections _.11
through .17 prescribes forms and
instructions and other pre -award
matters to be used in applying for
Federal awards.
.11 Pre -award policies.
(a) Use of Grants and Cooperative
Agreements, and Contracts. In each
instance, the Federal awarding agency
shall decide on the appropriate award
instrument (i.e., grant, cooperative
agreement, or contract). The Federal
Grant and Cooperative Agreement Act
(31 U.S.C. 6301-08) governs the use
of grants, cooperative agreements and
contracts. A grant or cooperative
agreement shall be used only when the
principal purpose of a transaction is
to accomplish a public purpose of
support or stimulation authorized by
Federal statute. The statutory
criterion for choosing between grants
and cooperative agreements is that
for the latter, "substantial
involvement is expected between the
executive agency and the State, local
government, or other recipient when
carrying out the activity
contemplated in the agreement."
Contracts shall be used when the
principal purpose is acquisition of
property or services for the direct
benefit or use of the Federal
Government.
(b) Public Notice and Priority
Setting. Federal awarding agencies
shall notify the public of its
intended funding priorities for
discretionary grant programs, unless
funding priorities are established by
Federal statute.
.12 Forms for applying for Federal
assistance.
(a) Federal awarding agencies shall
comply with the applicable report
clearance requirements of 5 CFR part
1320, "Controlling Paperwork Burdens
on the Public," with regard to all
forms used by the Federal awarding
agency in place of or as a supplement
to the Standard Form 424 (SF -424)
series.
(b) Applicants shall use the SF -424
series or those forms and
instructions prescribed by the
Federal awarding agency.
(c) For Federal programs covered by
E.O. 12372, "Intergovernmental Review
of Federal Programs," the applicant
shall complete the appropriate
sections of the SF -424 (Application
for Federal Assistance) indicating
whether the application was subject
to review by the State Single Point
of Contact (SPOC). The name and
address of the SPOC for a particular
State can be obtained from the
Federal awarding agency or the
Catalog of Federal Domestic
Assistance. The SPOC shall advise the
applicant whether the program for
which application is made has been
selected by that State for review.
(d) Federal awarding agencies that do
not use the SF -424 form should
indicate whether the application is
subject to review by the State under
E.O. 12372.
.13 Debarment and suspension.
Federal awarding agencies and
recipients shall comply with the
nonprocurement debarment and
suspension common rule implementing
E.O.s 12549 and 12689, "Debarment and
Suspension." This common rule
restricts subawards and contracts
with certain parties that are
debarred, suspended or otherwise
excluded from or ineligible for
participation in Federal assistance
programs or activities.
.14 Special award conditions. If
an applicant or recipient: (a) has a
history of poor performance, (b) is
not financially stable, (c) has a
management system that does not meet
the standards prescribed in this
Circular, (d) has not conformed to
the terms and conditions of a
previous award, or (e) is not
otherwise responsible, Federal
awarding agencies may impose
additional requirements as needed,
provided that such applicant or
recipient is notified in writing as
to: the nature of the additional
requirements, the reason why the
additional requirements are being
imposed, the nature of the corrective
action needed, the time allowed for
completing the corrective actions,
and the method for requesting
reconsideration of the additional
requirements imposed. Any special
conditions shall be promptly removed
once the conditions that prompted
them have been corrected.
.15 Metric system of measurement.
The Metric Conversion Act, as amended
24
by the Omnibus Trade and
Competitiveness Act (15 U.:*.
declares that the metric sv.c,•
the preferred measurement
U.S. trade and commerce. TF,..
requires each Federal agency
establish a date or dates ±.
consultation with the Secr”i. ,c
Commerce, when the metric
measurement will be used it. :.
agency's procurements, grant -
other business-related act).11
Metric implementation may t-.
where the use of the systes. _.
initially impractical or 11. •.
cause significant inefficic,,e
the accomplishment of fede::
funded activities. Federal.
agencies shall follow the ):
of E.O. 12770, "Metric Usage
Federal Government Program."
.16 Resource Conservati•,.'.:
Recovery Act (RCRA) (Pub.
codified at 42 U.S.C. 6962).*,.
the Act, any State agency o
of a political subdivision
which is using appropriateq ..
funds must comply with Sect,.:
Section 6002 requires that
be given in procurement progr.nn.
the purchase of specific prod,'
containing recycled material:
identified in guidelines deur}.•
the Environmental Protection. !•t; .
(EPA) (40 CFR parts 247-254).
Accordingly, State and local
institutions of higher education
hospitals, and non-profit
organizations that receive di.. -e,
Federal awards or other Fedora`
shall give preference in their
procurement programs funded wit}.
Federal funds to the purchase of
recycled products pursuant to t!t
guidelines.
.17 Certifications and
representations. Unless prohibit)
statute or codified regulation, <..
Federal awarding agency is auth,..�
and encouraged to allow recipies1
submit certifications and
representations required by stat,
executive order, or regulation
annual basis, if the recipients t: .
ongoing and continuing relations
with the agency. Annual
certifications and representati•:n
shall be signed by responsible
officials with the authority to
ensure recipients' compliance wii:
the pertinent requirements.
SUBPART C - Post -Award Requirements
Financial and Program Management
.20 Purpose of financial and
program management. Sections .21
through .28 prescribe standards
for financial management systems,
methods for making payments and rules
for: satisfying cost sharing and
matching requirements, accounting for
program income, budget revision
approvals, making audits, determining
allowability of cost, and
establishing fund availability.
.21 Standards for financial
management systems.
(a) Federal awarding agencies shall
require recipients to relate
financial data to performance data
and develop unit cost information
whenever practical.
(b) Recipients' financial management
systems shall provide for the
following.
(1) Accurate, current and complete
disclosure of the financial results
of each federally -sponsored project
or program in accordance with the
reporting requirements set forth in
Section .52. If a Federal awarding
agency requires reporting on an
accrual basis from a recipient that
maintains its records on other than
an accrual basis, the recipient shall
not be required to establish an
accrual accounting system. These
recipients may develop such accrual
data for its reports on the basis of
an analysis of the documentation on
hand.
(2) Records that identify adequately
the source and application of funds
for federally -sponsored activities.
These records shall contain
information pertaining to Federal
awards, authorizations, obligations,
unobligated balances, assets,
outlays, income and interest.
(3) Effective control over and
accountability for all funds,
property and other assets. Recipients
shall adequately safeguard all such
assets and assure they are used
solely for authorized purposes.
(4) Comparison of outlays with budget
amounts for each award. Whenever
appropriate, financial information
should be related to performance and
unit cost data.
(5) Written procedures to minimize
the time elapsing between the
transfer of funds to the recipient
from the U.S. Treasury and the
issuance or redemption of checks,
warrants or payments by other means
25
for program purposes by the
recipient. To the extent that the
provisions of the Cash Management
Improvement Act (CMIA) (Pub. L. 101-
453) govern, payment methods of State
agencies, instrumentalities, and
fiscal agents shall be consistent
with CMIA Treasury -State Agreements
or the CMIA default procedures
codified at 31 CFR part 205,
"Withdrawal of Cash from the Treasury
for Advances under Federal Grant and
Other Programs.'
(6) Written procedures for
determining the reasonableness,
allocability and allowability of
costs in accordance with the
provisions of the applicable Federal
cost principles and the terms and
conditions of the award.
(7) Accounting records including cost
accounting records that are supported
by source documentation.
(c) Where the Federal Government
guarantees or insures the repayment
of money borrowed by the recipient,
the Federal awarding agency, at its
discretion, may require adequate
bonding and insurance if the bonding
and insurance requirements of the
recipient are not deemed adequate to
protect the interest of the Federal
Government.
(d) The Federal awarding agency may
require adequate fidelity bond
coverage where the recipient lacks
sufficient coverage to protect the
Federal Government's interest.
(e) Where bonds are required in the
situations described above, the bonds
shall be obtained from companies
holding certificates of authority as
acceptable sureties, as prescribed in
31 CFR part 223, "surety Companies
Doing Business with the United
States."
.22 Payment.
(a) Payment methods shall minimize
the time elapsing between the
transfer of funds from the United
States Treasury and the issuance or
redemption of checks, warrants, or
payment by other means by the
recipients. Payment methods of State
agencies or instrumentalities shall
be consistent with Treasury -State
CMIA agreements or default procedures
codified at 31 CFR part 205.
(b) Recipients are to be paid in
advance, provided they maintain or
demonstrate the willingness to
maintain: (1) written procedures that
minimize the time elapsing between
the transfer of funds and
disbursement by the recipient, and
(2) financial management systems that
meet the standards for fund control
and accountability as established in
Section .21. Cash advances to a
recipient organization shall be
limited to the minimum amounts needed
and be timed to be in accordance with
the actual, immediate cash
requirements of the recipient
organization in carrying out the
purpose of the approved program or
project. The timing and amount of
cash advances shall be as close as is
administratively feasible to the
actual disbursements by the recipient
organization for direct program or
project costs and the proportionate
share of any allowable indirect
costs.
(c) Whenever possible, advances shall
be consolidated to cover anticipated
cash needs for all awards made by the
Federal awarding agency to the
recipient.
(1) Advance payment mechanisms
include, but are not limited to,
Treasury check and electronic funds
transfer.
(2) Advance payment mechanisms are
subject to 31 CFR part 205.
(3) Recipients shall be authorized to
submit requests for advances and
reimbursements at least monthly when
electronic fund transfers are not
used.
(d) Requests for Treasury check
advance payment shall be submitted on
SF -270, "Request for Advance or
Reimbursement," or other forms as may
be authorized by OMB. This form is
not to be used when Treasury check
advance payments are made to the
recipient automatically through the
use of a predetermined payment
schedule or if precluded by special
Federal awarding agency instructions
for electronic funds transfer.
(e) Reimbursement is the preferred
method when the requirements in
paragraph (b) cannot be met. Federal
awarding agencies may also use this
method on any construction agreement,
or if the major portion of the
construction project is accomplished
through private market financing or
Federal loans, and the Federal
assistance constitutes a minor
portion of the project.
(1) When the reimbursement method is
used, the Federal awarding agency
shall make payment within 30 days
after receipt of the billing, unless
the billing is improper.
(2) Recipients shall be authorized to
submit request for reimbursement at
least monthly when electronic funds
transfers are not used.
(f) If a recipient cannot meet the
criteria for advance payments and the
Federal awarding agency has
determined that reimbursement is not
feasible because the recipient lacks
sufficient working capital, the
26
Federal awarding agency may provide
cash on a working capital advance
basis. Under this procedure, the
Federal awarding agency shall advance
cash to the recipient to cover its
estimated disbursement needs for an
initial period generally geared to
the awardee's disbursing cycle.
Thereafter, the Federal awarding
agency shall reimburse the recipient
for its actual cash disbursements.
The working capital advance method of
payment shall not be used for
recipients unwilling or unable to
provide timely advances to their
subrecipient to meet the
subrecipient's actual cash
disbursements.
(g) To the extent available,
recipients shall disburse funds
available from repayments to and
interest earned on a revolving fund,
program income, rebates, refunds,
contract settlements, audit
recoveries and interest earned on
such funds before requesting
additional cash payments.
(h) Unless otherwise required by
statute, Federal awarding agencies
shall not withhold payments for
proper charges made by recipients at
any time during the project period
unless (1) or (2) apply.
(1) A recipient has failed to comply
with the project objectives, the
terms and conditions of the award, or
Federal reporting requirements.
(2) The recipient or subrecipient is
delinquent in a debt to the United
States as defined in OMB Circular A-
129, "Managing Federal Credit
Programs." Under such conditions, the
Federal awarding agency may, upon
reasonable notice, inform the
recipient that payments shall not be
made for obligations incurred after a
specified date until the conditions
are corrected or the indebtedness to
the Federal Government is liquidated.
(i) Standards governing the use of
banks and other institutions as
depositories of funds advanced under
awards are as follows.
(1) Except for situations described
in paragraph (i)(2), Federal awarding
agencies shall not require separate
depository accounts for funds
provided to a recipient or establish
any eligibility requirements for
depositories for funds provided to a
recipient. However, recipients must
be able to account for the receipt,
obligation and expenditure of funds.
(2) Advances of Federal funds shall
be deposited and maintained in
insured accounts whenever possible.
(j) Consistent with the national goal
of expanding the opportunities for
women -owned and minority-owned
business enterprises, recipients
shall be encouraged to use women-
owned and minority-owned banks (a
bank which is owned at least 50
percent by women or minority group
members).
(k) Recipients shall maintain
advances of Federal funds in interest
bearing accounts, unless (1), (2) or
(3) apply.
(1) The recipient receives less than
$120,000 in Federal awards per year.
(2) The best reasonably available
interest bearing account would not be
expected to earn interest in excess
of $250 per year on Federal cash
balances.
(3) The depository would require an
average or minimum balance so high
that it would not be feasible within
the expected Federal and non -Federal
cash resources.
(1) For those entities where CMIA and
its implementing regulations do not
apply, interest earned on Federal
advances deposited in interest
bearing accounts shall be remitted
annually to Department of Health and
Human Services, Payment Management
System, Rockville, MD 20852. Interest
amounts up to $250 per year may be
retained by the recipient for
administrative expense. State
universities and hospitals shall
comply with CMIA, as it pertains to
interest. If an entity subject to
CMIA uses its own funds to pay pre-
award costs for discretionary awards
without prior written approval from
the Federal awarding agency, it
waives its right to recover the
interest under CHIA.
(m) Except as noted elsewhere in this
Circular, only the following forms
shall be authorized for the
recipients in requesting advances and
reimbursements. Federal agencies
shall not require more than an
original and two copies of these
forms.
(1) SF -270, Request for Advance or
Reimbursement. Each Federal awarding
agency shall adopt the SF -270 as a
standard form for all nonconstruction
programs when electronic funds
transfer or predetermined advance
methods are not used. Federal
awarding agencies, however, have the
option of using this form for
construction programs in lieu of the
SF -271, "Outlay Report and Request
for Reimbursement for Construction
Programs."
(2) SF -271, Outlay Report and Request
for Reimbursement for Construction
Programs. Each Federal awarding
agency shall adopt the SF -271 as the
standard form to be used for
requesting reimbursement for
construction programs. However, a
Federal awarding agency may
substitute the SF -270 when the
Federal awarding agency determines
27
that it provides adequate information
to meet Federal needs.
.23 Cost sharing or matching.
(a) All contributions, including cash
and third party in-kind, shall be
accepted as part of the recipient's
cost sharing or matching when such
contributions meet all of the
following criteria.
(1) Are verifiable from the
recipient's records.
(2) Are not included as contributions
for any other federally -assisted
project or program.
(3) Are necessary and reasonable for
proper and efficient accomplishment
of project or program objectives.
(8) Are allowable under the
applicable cost principles.
(5) Are not paid by -the Federal
Government under another award,
except where authorized by Federal
statute to be used for cost sharing
or matching.
(6) Are provided for in the approved
budget when required by the Federal
awarding agency.
(7) Conform to other provisions of
this Circular, as applicable.
(b) Unrecovered indirect costs may be
included as part of cost sharing or
matching only with the prior approval
of the Federal awarding agency.
(c) Values for recipient
contributions of services and
property shall be established in
accordance with the applicable cost
principles. If a Federal awarding
agency authorizes recipients to
donate buildings or land for
construction/facilities acquisition
projects or long-term use, the value
of the donated property for cost
sharing or matching shall be the
lesser of (1) or (2).
(1) The certified value of the
remaining life of the property
recorded in the recipient's
accounting records at the time of
donation.
(2) The current fair market value.
However, when there is sufficient
justification, the Federal awarding
agency may approve the use of the
current fair market value of the
donated property, even if it exceeds
the certified value at the time of
donation to the project.
(d) Volunteer services furnished by
professional and technical personnel,
consultants, and other skilled and
unskilled labor may be counted as
cost sharing or matching if the
service is an integral and necessary
part of an approved project or
program. Rates for volunteer services
shall be consistent with those paid
for similar work in the recipient's
organization. In those instances in
which the required skills are not
found in the recipient organization,
rates shall be consistent with those
paid for similar work in the labor
market in which the recipient
competes for the kind of services
involved. In either case, paid fringe
benefits that are reasonable,
allowable, and allocable may be
included in the valuation.
(e) When an employer other than the
recipient furnishes the services of
an employee, these services shall be
valued at the employee's regular rate
of pay (plus an amount of fringe
benefits that are reasonable,
allowable, and allocable, but
exclusive of overhead costs),
provided these services are in the
same skill -for which the employee is
normally paid.
(f) Donated supplies may include such
items as expendable equipment, office
supplies, laboratory supplies or
workshop and classroom supplies.
Value assessed to donated supplies
included in the cost sharing or
matching share shall be reasonable
and shall not exceed the fair market
value of the property at the time of
the donation.
(g) The method used for determining
cost sharing or matching for donated
equipment, buildings and land for
which title passes to the recipient
may differ according to the purpose
of the award, if (1) or (2) apply.
(1) If the purpose of the award is to
assist the recipient in the
acquisition of equipment, buildings
or land, the total value of the
donated property may be claimed as
cost sharing or matching.
(2) If the purpose of the award is to
support activities that require the
use of equipment, buildings or land,
normally only depreciation or use
charges for equipment and buildings
may be made. However, the full value
of equipment or other capital assets
and fair rental charges for land may
be allowed, provided that the Federal
awarding agency has approved the
charges.
(h) The value of donated property
shall be determined in accordance
with the usual accounting policies of
the recipient, with the following
qualifications.
(1) The value of donated land and
buildings shall not exceed its fair
market value at the time of donation
to the recipient as established by an
independent appraiser (e.g.,
certified real property appraiser or
General Services Administration
representative) and certified by a
responsible official of the
recipient.
28
(2) The value of donated e. ,
shall not exceed the fair z,�.
value of equipment of the sar-
and condition at the time
donation.
(3) The value of donated spa:_
not exceed the fair rental
comparable space as establi:.: .
independent appraisal of c:-,
space and facilities in a jr.
owned building in the same h."
(4) The value of loaned egci,..
shall not exceed its fair r-,,
value.
(5) The following requiremen.
pertain to the recipient's --a
records for in-kind contrii•:
from third parties.
(i) Volunteer services sham :,.
documented and, to the extew,
feasible, supported by the
methods used by the recipi.-,.
own employees.
(ii) The basis for determi..;.,
valuation for personal sere,.
material, equipment, buildinu .d
land shall be documented.
.24 Program income.
is
(a) Federal awarding agencie. ,11
apply the standards set forth this
section in requiring recipiei.-
organizations to account for r:, gram
income related to projects f_u,toced
in whole or in part with Federal
funds.
(b) Except as provided in par.lgraph
(h) below, program income earned
during the project period shall be
retained by the recipient and, in
accordance with Federal awarding
agency regulations or the terms and
conditions of the award, shall be
used in one or more of the ways
listed in the following.
(1) Added to funds committed to the
project by the Federal awarding
agency and recipient and used to
further eligible project or program
objectives.
(2) Used to finance the non -Federal
share of the project or program.
(3) Deducted from the total project
or program allowable cost in
determining the net allowable costs
on which the Federal share of costs
is based.
(c) When an agency authorizes the
disposition of program income as
described in paragraphs (b)(1) or
(b)(2), program income in excess of
any limits stipulated shall he used
in accordance with paragraph rb)(3).
(d) In the event that the Federal
awarding agency does not specify in
its regulations or the terms and
conditions of the award how program
income is to be used, paragraph
(b)(3) shall apply automatically to
all projects or programs except
research. For awards that support
research, paragraph (b)(1) shall
apply automatically unless the
awarding agency indicates in the
terms and conditions another
alternative on the award or the
recipient is subject to special award
conditions, as indicated in Section
.14.
(e) Unless Federal awarding agency
regulations or the terms and
conditions of the award provide
otherwise, recipients shall have no
obligation to the Federal Government
regarding program income earned after
the end of the project period.
(f) If authorized by Federal awarding
agency regulations or the terms and
conditions of the award, costs
incident to the generation of program
income may be deducted from gross
income to determine program income,
provided these costs have not been
charged to the award.
(g) Proceeds from the sale of
property shall be handled in
accordance with the requirements of
the Property Standards (See Sections
.30 through .37).
(h) Unless Federal awarding agency
regulations or the terms and
condition of the award provide
otherwise, recipients shall have no
obligation to the Federal Government
with respect to program income earned
from license fees and royalties for
copyrighted material, patents, patent
applications, trademarks, and
inventions produced under an award.
However, Patent and Trademark
Amendments (35 U.S.C. 18) apply to
inventions made under an
experimental, developmental, or
research award.
.25 Revision of budget and program
plans.
(a) The budget plan is the financial
expression of the project or program
as approved during the award process.
It may include either the Federal and
non -Federal share, or only the
Federal share, .depending upon Federal
awarding agency requirements. It
shall be related to performance for
program evaluation purposes whenever
appropriate.
(b) Recipients are required to report
deviations from budget and program
plans, and request prior approvals
for budget and program plan
revisions, in accordance with this
section.
(c) For nonconstruction awards,
recipients shall request prior
approvals from Federal awarding
29
agencies for one or more of the
following program or budget related
reasons.
(1) Change in the scope or the
objective of the project or program
(even if there is no associated
budget revision requiring prior
written approval).
(2) Change in a key person specified
in the application or award document.
(3) The absence for more than three
months, or a 25 percent reduction in
time devoted to the project, by the
approved project director or
principal investigator.
(4) The need for additional Federal
funding.
(5) The transfer of amounts budgeted
for indirect costs to absorb
increases in direct costs, or vice
versa, if approval is required by the
Federal awarding agency.
(6) The inclusion, unless waived by
the Federal awarding agency, of costs
that require prior approval in
accordance with OMB Circular A-21,
"Cost Principles for Educational
Institutions," OMB Circular A-122,
"Cost Principles for Non -Profit
Organizations," or 45 CFR part 74
Appendix E, "Principles for
Determining Costs Applicable to
Research and Development under Grants
and Contracts with Hospitals," or 48
CFR part 31, "Contract Cost
Principles and Procedures," as
applicable.
(7) The transfer of funds allotted
for training allowances (direct
payment to trainees) to other
categories of expense.
(8) Unless described in the
application and funded in the
approved awards, the subaward,
transfer or contracting out of any
work under an award. This provision
does not apply to the purchase of
supplies, material, equipment or
general support services.
(d) No other prior approval
requirements for specific items may
be imposed unless a deviation has
been approved by OMB.
(e) Except for requirements listed in
paragraphs (c)(1) and (c)(4) of this
section, Federal awarding agencies
are authorized, at their option, to
waive cost -related and administrative
prior written approvals required by
this Circular and OMB Circulars A-21
and A-122. Such waivers may include
authorizing recipients to do any one
or more of the following_
(1) Incur pre -award costs 90 calendar
days prior to award or more than 90
calendar days with the prior approval
of the Federal awarding agency. All
pre -award costs are incurred at the
recipient's risk (i.e., the Federal
awarding agency is under no
obligation to reimburse such costs if
for any reason the recipient does not
receive an award or if the award is
less than anticipated and inadequate
to cover such costs).
(2) Initiate a one-time extension of
the expiration date of the award of
up to 12 months unless one or more of
the following conditions apply. For
one-time extensions, the recipient
must notify the Federal awarding
agency in writing with the supporting
reasons and revised expiration date
at least 10 days before the
expiration date specified in the
award. This one-time extension may
not be exercised merely for the
purpose of using unobligated
balances.
(i) The terms and conditions of award
prohibit the extension.
(ii) The extension requires
additional Federal funds.
(iii) The extension involves any
change in the approved objectives or
scope of the project.
(3) Carry forward unobligated
balances to subsequent funding
periods.
(4) For awards that support research,
unless the Federal awarding agency
provides otherwise in the award or in
the agency's regulations, the prior
approval requirements described in
paragraph (e) are automatically
waived (i.e., recipients need not
obtain such prior approvals) unless
one of the conditions included in
paragraph (e)(2) applies.
(f) The Federal awarding agency may,
at its option, restrict the transfer
of funds among direct cost categories
or programs, functions and activities
for awards in which the Federal share
of the project exceeds $100,000 and
the cumulative amount of such
transfers exceeds or is expected to
exceed 10 percent of the total budget
as last approved by the Federal
awarding agency. No Federal awarding
agency shall permit a transfer that
would cause any Federal appropriation
or part thereof to be used for
purposes other than those consistent
with the original intent of the
appropriation.
(g) All other changes to
nonconstruction budgets, except for
the changes described in paragraph
(j), do not require prior approval.
(h) For construction awards,
recipients shall request prior
written approval promptly from
Federal awarding agencies for budget
revisions whenever (1), (2) or (3)
apply.
(1) The revision results from changes
in the scope or the objective of the
project or program.
(2) The need arises for additional
Federal funds to complete the
project.
30
(3) A revision is desired which
involves specific costs for which
prior written approval requirements
may be imposed consistent with
applicable OMB cost principles listed
in Section .27.
(i) No other prior approval
requirements for specific items may
be imposed unless a deviation has
been approved by OMB.
(j) When a Federal awarding agency
makes an award that provides support
for both construction and
nonconstruction work, the Federal
awarding agency may require the
recipient to request prior approval
from the Federal awarding agency
before making any fund or budget
transfers between the two types of
work supported.
(k) For both construction and
nonconstruction awards, Federal
awarding agencies shall require
recipients to notify the Federal
awarding agency in writing promptly
whenever the amount of Federal
authorized funds is expected to
exceed the needs of the recipient for
the project period by more than $5000
or five percent of the Federal award,
whichever is greater. This
notification shall not be required if
an application for additional funding
is submitted for a continuation
award.
(1) When requesting approval for
budget revisions, recipients shall
use the budget forms that were used
in the application unless the Federal
awarding agency indicates a letter of
request suffices.
(m) Within 30 calendar days frau the
date of receipt of the request for
budget revisions, Federal awarding
agencies shall review the request and
notify the recipient whether the
budget revisions have been approved.
If the revision is still under
consideration at the end of 30
calendar days, the Federal awarding
agency shall inform the recipient in
writing of the date when the
recipient may expect the decision.
.26 Non -Federal audits.
(a) Recipients and subrecipients that
are institutions of higher education
or other non-profit organizations
(including hospitals) shall be
subject to the audit requirements
contained in the Single Audit Act
Amendments of 1996 (31 USC 7501-7507)
and revised OMB Circular A-133,
"Audits of States, Local Governments,
and Non -Profit Organizations."
(b) State and local governments shall
be subject to the audit requirements
contained in the Single Audit Act
Amendments of 1996 (31 USC 7501-7507)
and revised OMB Circular A-133,
"Audits of States, Local Governments,
and Non -Profit Organizations."
(c) For-profit hospitals not covered
by the audit provisions of revised
OMB Circular A-133 shall be subject
to the audit requirements of the
Federal awarding agencies.
(d) Commercial organizations shall be
subject to the audit requirements of
the Federal awarding agency or the
prime recipient as incorporated into
the award document.
.27 Allowable costs. For each kind
of recipient, there is a set of
Federal principles for determining
allowable costs. Allowability of
costs shall be determined in
accordance with the cost principles
applicable to the entity incurring
the costs. Thus, allowability of
costs incurred by State, local or
federally -recognized Indian tribal
governments is determined in
accordance with the provisions of OMB
Circular A-87, "Cost Principles for
State, Local, and Indian Tribal
Governments." The allowability of
costs incurred by non-profit
organizations is determined in
accordance with the provisions of OMB
Circular A-122, "Cost Principles for
Non -Profit Organizations." The
allowability of costs incurred by
institutions of higher education is
determined in accordance with the
provisions of OMB Circular A-21,
"Cost Principles for Educational
Institutions." The allowability of
costs incurred by hospitals is
determined in accordance with the
provisions of Appendix E of 45 CFR
part 74, "Principles for Determining
Costs Applicable to Research and
Development Under Grants and
Contracts with Hospitals." The
allowability of costs incurred by
commercial organizations and those
non-profit organizations listed in
Attachment C to Circular A-122 is
determined in accordance with the
provisions of the Federal Acquisition
Regulation (FAR) at 48 CFR part 31.
.28 Period of availability of
funds. Where a funding period is
specified, a recipient may charge to
the grant only allowable costs
resulting from obligations incurred
during the funding period and any
pre -award costs authorized by the
Federal awarding agency.
.29 Conditional exemptions.
(al OMB authorizes conditional
31
exemption from OM8 administrative
requirements and cost principles
circulars for certain Federal
programs with statutorily -authorized
consolidated planning and
consolidated administrative funding,
that are identified by a Federal
agency and approved by the head of
the Executive department or
establishment. A Federal agency shall
consult with OMB during its
consideration of whether to grant
such an exemption.
(b) To promote efficiency in State
and local program administration,
when Federal non -entitlement programs
with common purposes have specific
statutorily -authorized consolidated
planning and consolidated
administrative funding and where most
of the State agency's resources come
from non -Federal sources, Federal
agencies may exempt these covered
State -administered, non -entitlement
grant programs from certain OMB
grants management requirements. The
exemptions would be from all but the
allocability of costs provisions of
OMB Circulars A-87 (Attachment A,
subsection C.3), "Cost Principles for
State, Local, and Indian Tribal
Governments," A-21 (Section C,
subpart 4), 'Cost Principles for
Educational Institutions," and A-122
(Attachment A, subsection A.4), "Cost
Principles for Non -Profit
Organizations," and from all of the
administrative requirements
provisions of OM8 Circular A-110,
"Uniform Administrative Requirements
for Grants and Agreements with
Institutions of Higher Education,
Hospitals, and Other Non -Profit
Organizations," and the agencies'
grants management common rule.
(c) When a Federal agency provides
this flexibility, as a prerequisite
to a State's exercising this option,
a State must adopt its own written
fiscal and administrative
requirements for expending and
accounting for all funds, which are
consistent with the provisions of OMB
Circular A-87, and extend such
policies to all subrecipients. These
fiscal and administrative
requirements must be sufficiently
specific to ensure that: funds are
used in compliance with all
applicable Federal statutory and
regulatory provisions, Costs are
reasonable and necessary for
operating these programs, and funds
are not be used for general expenses
required to carry out other
responsibilities of a State or its
subrecipients.
Property Standards
.30 Purpose of property standards.
Sections .31 through .37 set
forth uniform standards governing
management and disposition of
property furnished by the Federal
Government whose cost was charged to
a project supported by a Federal
award. Federal awarding agencies
shall require recipients to observe
these standards under awards and
shall not impose additional
requirements, unless specifically
required by Federal statute. The
recipient may use its own property
management standards and procedures
provided it observes the provisions
of Sections .31 through .37.
.31 Insurance coverage. Recipients
shall, at a minimum, provide the
equivalent insurance coverage for
real property and equipment acquired
with Federal funds as provided to
property owned by the recipient.
Federally -owned property need not be
insured unless required by the terms
and conditions of the award.
.32 Real property. Each Federal
awarding agency shall prescribe
requirements for recipients
concerning the use and disposition of
real property acquired in whole or in
part under awards. Unless otherwise
provided by statute, such
requirements, at a minimum, shall
contain the following.
(a) Title to real property shall vest
in the recipient subject to the
condition that the recipient shall
use the real property for the
authorized purpose of the project as
long as it is needed and shall not
encumber the property without
approval of the Federal awarding
agency.
(b) The recipient shall obtain
written approval by the Federal
awarding agency for the use of real
property in other federally -sponsored
projects when the recipient
determines that the property is no
longer needed for the purpose of the
original project. Use in other
projects shall be limited to those
under federally -sponsored projects
(i.e., awards) or programs that have
purposes consistent with those
authorized for support by the Federal
awarding agency.
(c) When the real property is no
longer needed as provided in
paragraphs (a) and (b), the recipient
shall request disposition
32
instructions from the Federal
awarding agency or its successor
Federal awarding agency. The Federal
awarding agency shall observe one or
more of the following disposition
instructions.
(1) The recipient may be permitted to
retain title without further
obligation to the Federal Government
after it compensates the Federal
Government for that percentage of the
current fair market value of the
property attributable to the Federal
participation in the project.
(2) The recipient may be directed to
sell the property under guidelines
provided by the Federal awarding
agency and pay the Federal Government
for that percentage of the current
fair market value of the property
attributable to the Federal
participation in the project (after
deducting actual and reasonable
selling and fix -up expenses, if any,
from the sales proceeds). When the
recipient is authorized or required
to sell the property, proper sales
procedures shall be established that
provide for competition to the extent
practicable and result in the highest
possible return.
(3) The recipient may be directed to
transfer title to the property to the
Federal Government or to an eligible
third party provided that, in such
cases, the recipient shall be
entitled to compensation for its
attributable percentage of the
current fair market value of the
property.
.33 Federally -owned and exempt property.
(a) Federally -owned property.
(1) Title to federally -owned property
remains vested in the Federal
Government. Recipients shall submit
annually an inventory listing of
federally -owned property in their
custody to the Federal awarding
agency. Upon completion of the award
or when the property is no longer
needed, the recipient shall report
the property to the Federal awarding
agency for further Federal agency
utilization.
(2) If the Federal awarding agency
has no further need for the property,
it shall be declared excess and
reported to the General Services
Administration, unless the Federal
awarding agency has statutory
authority to dispose of the property
by alternative methods (e.g., the
authority provided by the Federal
Technology Transfer Act (15 U.S.C.
3710 (I)) to donate research
equipment to educational and non-
profit organizations in accordance
with E.O. 12821, "Improving
Mathematics and Science Education in
Support of the National Education
Goals.") Appropriate instructions
shall be issued to the recipient by
the Federal awarding agency.
(b) Exempt property. When statutory
authority exists, the Federal
awarding agency has the option to
vest title to property acquired with
Federal funds in the recipient
without further obligation to the
Federal Government and under
conditions the Federal awarding
agency considers appropriate. Such
property is "exempt property." Should
a Federal awarding agency not
establish conditions, title to exempt
property upon acquisition shall vest
in the recipient without further
obligation to the Federal Government.
.34 Equipment.
(a) Title to equipment acquired by a
recipient with Federal funds shall
vest in the recipient, subject to
conditions of this section.
(b) The recipient shall not use
equipment acquired with Federal funds
to provide services to non -Federal
outside organizations for a fee that
is less than private companies charge
for equivalent services, unless
specifically authorized by Federal
statute, for as long as the Federal
Government retains an interest in the
equipment.
(c) The recipient shall use the
equipment in the project or program
for which it was acquired as long as
needed, whether or not the project or
program continues to be supported by
Federal funds and shall not encumber
the property without approval of the
Federal awarding agency. When no
longer needed for the original
project or program, the recipient
shall use the equipment in connection
with its other federally -sponsored
activities, in the following order of
priority: (i) Activities sponsored by
the Federal awarding agency which
funded the original project, then
(ii) activities sponsored by other
Federal awarding agencies.
(d) During the time that equipment is
used on the project or program for
which it was acquired, the recipient
shall make it available for use on
other projects or programs if such
other use will not interfere with the
work on the project or program for
which the equipment was originally
acquired. First preference for such
other use shall be given to other
projects or programs sponsored by the
Federal awarding agency that financed
the equipment; second preference
33
shall be given to projects or
programs sponsored by other Federal
awarding agencies. If the equipment
is owned by the Federal Government,
use on other activities not sponsored
by the Federal Government shall be
permissible if authorized by the
Federal awarding agency. User charges
shall be treated as program income.
(e) When acquiring replacement
equipment, the recipient may use the
equipment to be replaced as trade-in
or sell the equipment and use the
proceeds to offset the costs of the
replacement equipment subject to the
approval of the Federal awarding
agency.
(f) The recipient's property
management standards for equipment
acquired with Federal funds and
federally -owned equipment shall
include all of the following.
(1) Equipment records shall be
maintained accurately and shall
include the following information.
(i) A description of the equipment.
(ii) Manufacturer's serial number,
model number, Federal stock number,
national stock number, or other
identification number.
(iii) Source of the equipment,
including the award number.
(iv) Whether title vests in the
recipient or the Federal Government.
(v) Acquisition date (or date
received, if the equipment was
furnished by the Federal Government)
and cost.
(vi) Information from which one can
calculate the percentage of Federal
participation in the cost of the
equipment (not applicable to
equipment furnished by the Federal
Government).
(vii) Location and condition of the
equipment and the date the
information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data,
including date of disposal and sales
price or the method used to determine
current fair market value where a
recipient compensates the Federal
awarding agency for its share.
(2) Equipment owned by the Federal
Government shall be identified to
indicate Federal ownership.
(3) A physical inventory of equipment
shall be taken and the results
reconciled with the equipment records
at least once every two years. Any
differences between quantities
determined by the physical inspection
and those shown in the accounting
records shall be investigated to
determine the causes of the
difference. The recipient shall, in
connection with the inventory, verify
the existence, current utilization,
and continued need for the equipment.
(4) A control system shall be in
effect to insure adequate safeguards
to prevent loss, damage, or theft of
the equipment. Any loss, damage, or
theft of equipment shall be
investigated and fully documented; if
the equipment was owned by the
Federal Government, the recipient
shall promptly notify the Federal
awarding agency.
(5) Adequate maintenance procedures
shall be implemented to keep the
equipment in good condition.
(6) Where the recipient is authorized
or required to sell the equipment,
proper sales procedures shall be
established which provide for
competition to the extent practicable
and result in the highest possible
return.
(g) When the recipient no longer
needs the equipment, the equipment
may be used for other activities in
accordance with the following
standards. For equipment with a
current per unit fair market value of
$5000 or more, the recipient may
retain the equipment for other uses
provided that compensation is made to
the original Federal awarding agency
or its successor. The amount of
compensation shall be computed by
applying the percentage of Federal
participation in the cost of the
original project or program to the
current fair market value of the
equipment. If the recipient has no
need for the equipment, the recipient
shall request disposition
instructions from the Federal
awarding agency. The Federal awarding
agency shall determine whether the
equipment can be used to meet the
agency's requirements. If no
requirement exists within that
agency, the availability of the
equipment shall be reported to the
General Services Administration by
the Federal awarding agency to
determine whether a requirement for
the equipment exists in other Federal
agencies. The Federal awarding agency
shall issue instructions to the
recipient no later than 120 calendar
days after the recipient's request
and the following procedures shall
govern.
(1) If so instructed or if
disposition instructions are not
issued within 120 calendar days after
the recipient's request, the
recipient shall sell the equipment
and reimburse the Federal awarding
agency an amount computed by applying
to the sales proceeds the percentage
of Federal participation in the cost
of the original project or program.
However, the recipient shall be
permitted to deduct and retain from
the Federal share $500 or ten percent
of the proceeds, whichever is less,
for the recipient's selling and
34
handling expenses.
(2) If the recipient is instructed to
ship the equipment elsewhere, the
recipient shall be reimbursed by the
Federal Government by an amount which
is computed by applying the
percentage of the recipient's
participation in the cost of the
original project or program to the
current fair market value of the
equipment, plus any reasonable
shipping or interim storage costs
incurred.
(3) If the recipient is instructed to
otherwise dispose of the equipment,
the recipient shall be reimbursed by
the Federal awarding agency for such
costs incurred in its disposition.
(4) The Federal awarding agency may
reserve the right to transfer the
title to the Federal Government or to
a third party named by the Federal
Government when such third party is
otherwise eligible under existing
statutes. Such transfer shall be
subject to the following standards.
(i) The equipment shall be
appropriately identified in the award
or otherwise made known to the
recipient in writing.
(ii) The Federal awarding agency
shall issue disposition instructions
within 120 calendar days after
receipt of a final inventory. The
final inventory shall list all
equipment acquired with grant funds
and federally -owned equipment. If the
Federal awarding agency fails to
issue disposition instructions within
the 120 calendar day period, the
recipient shall apply the standards
of this section, as appropriate.
(iii) When the Federal awarding
agency exercises its right to take
title, the equipment shall be subject
to the provisions for federally -owned
equipment.
.35 Supplies and other expendable
property.
(a) Title to supplies and other
expendable property shall vest in the
recipient upon acquisition. If there
is a residual inventory of unused
supplies exceeding $5000 in total
aggregate value upon termination or
completion of the project or program
and the supplies are not needed for
any other federally -sponsored project
or program, the recipient shall
retain the supplies for use on non -
Federal sponsored activities or sell
them, but shall, in either case,
compensate the Federal Government for
its share. The amount of compensation
shall be computed in the same manner
as for equipment.
(b) The recipient shall not use
supplies acquired with Federal funds
to provide services to non -Federal
outside organizations for a fee that
is less than private companies charge
for equivalent services, unless
specifically authorized by Federal
statute as long as the Federal
Government retains an interest in the
supplies.
.36 Intangible property.
(a) The recipient may copyright any
work that is subject to copyright and
was developed, or for which ownership
was purchased, under an award. The
Federal awarding agency(ies) reserve
a royalty -free, nonexclusive and
irrevocable right to reproduce,
publish, or otherwise use the work
for Federal purposes, and to
authorize others to do so.
(b) Recipients are subject to
applicable regulations governing
patents and inventions, including
government -wide regulations issued by
the Department of Commerce at 37 CFR
part 401, "Rights to Inventions Made
by Nonprofit Organizations and Small
Business Firms Under Government
Grants, Contracts and Cooperative
Agreements."
(c) The Federal Government has the
right to:
(1) obtain, reproduce, publish or
otherwise use the data first produced
under an award; and
(2) authorize others to receive,
reproduce, publish, or otherwise use
such data for Federal purposes.
(d) (1) In addition, in response to a
Freedom of Information Act (FOIA)
request for research data relating to
published research findings produced
under an award that were used by the
Federal Government in developing an
agency action that has the force and
effect of law, the Federal awarding
agency shall request, and the
recipient shall provide, within a
reasonable time, the research data so
that they can be made available to
the public through the procedures
established under the FOIA. If the
Federal awarding agency obtains the
research data solely in response to a
FOIA request, the agency may charge
the requester a reasonable fee
equaling the full incremental cost of
obtaining the research data. This fee
should reflect costs incurred by the
agency, the recipient, and applicable
subrecipients. This fee is in
addition to any fees the agency may
assess under the FOIA (5 U.S.c.
552(a)(4)(A))-
(2) The following definitions apply
for purposes of paragraph (d) of this
section:
35
(i) Research data is defined as the
recorded factual material commonly
accepted in the scientific community
as necessary to validate research
findings, but not any of the
following: preliminary analyses,
drafts of scientific papers, plans
for future research, peer reviews, or
communications with colleagues. This
"recorded" material excludes physical
objects (e.g., laboratory samples).
Research data also do not include:
(A) Trade secrets, commercial
information, materials necessary to
be held confidential by a researcher
until they are published, or similar
information which is protected under
law; and
(B) Personnel and medical information
and similar information the
disclosure of which would constitute
a clearly unwarranted invasion of
personal privacy, such as information
that could be used to identify a
particular person in a research
study.
(ii) Published is defined as either
when:
(A) Research findings are published
in a peer-reviewed scientific or
technical journal; or
(B) A Federal agency publicly and
officially cites the research
findings in support of an agency
action that has the force and effect
of law.
(iii) Used by the Federal Government
in developing an agency action that
has the force and effect of law is
defined as when an agency publicly
and officially cites the research
findings in support of an agency
action that has the force and effect
of law.
(e) Title to intangible property and
debt instruments acquired under an
award or subaward vests upon
acquisition in the recipient. The
recipient shall use that property for
the originally -authorized purpose,
and the recipient shall not encumber
the property without approval of the
Federal awarding agency. When no
longer needed for the originally
authorized purpose, disposition of
the intangible property shall occur
in accordance with the provisions of
paragraph _.34(g).
.37 Property trust relationship.
Real property, equipment, intangible
property and debt instruments that
are acquired or improved with Federal
funds shall be held in trust by the
recipient as trustee for the
beneficiaries of the project or
program under which the property was
acquired or improved. Agencies may
require recipients to record liens or
other appropriate notices of record
to indicate that personal or real
property has been acquired or
improved with Federal funds and that
use and disposition conditions apply
to the property.
Procurement Standards
.40 Purpose of procurement
standards. Sections _.41 through
.48 set forth standards for use by
recipients in establishing procedures
for the procurement of supplies and
other expendable property, equipment,
real property and other services with
Federal funds. These standards are
furnished to ensure that such
materials and services are obtained
in an effective manner and in
compliance with the provisions of
applicable Federal statutes and
executive orders. No additional
procurement standards or requirements
shall be imposed by the Federal
awarding agencies upon recipients,
unless specifically required by
Federal statute or executive order or
approved by OMB.
.41 Recipient responsibilities.
The standards contained in this
section do not relieve the recipient
of the contractual responsibilities
arising under its contract(s). The
recipient is the responsible
authority, without recourse to the
Federal awarding agency, regarding
the settlement and satisfaction of
all contractual and administrative
issues arising out of procurements
entered into in support of an award
or other agreement. This includes
disputes, claims, protests of award,
source evaluation or other matters of
a contractual nature. Matters
concerning violation of statute are
to be referred to such Federal, State
or local authority as may have proper
jurisdiction.
.42 Codes of conduct. The
recipient shall maintain written
standards of conduct governing the
performance of its employees engaged
in the award and administration of
contracts. No employee, officer, or
agent shall participate in the
selection, award, or administration
of a contract supported by Federal
funds if a real or apparent conflict
of interest would be involved. Such a
conflict would arise when the
employee, officer, or agent, any
member of his or her immediate
family, his or her partner, or an
organization which employs or is
about to employ any of the parties
indicated herein, has a financial or
36
other interest in the firm selected
for an award. The officers,
employees, and agents of the
recipient shall neither solicit nor
accept gratuities, favors, or
anything of monetary value from
contractors, or parties to
subagreements. However, recipients
may set standards for situations in
which the financial interest is not
substantial or the gift is an
unsolicited item of nominal value.
The standards of conduct shall
provide for disciplinary actions to
be applied for violations of such
standards by officers, employees, or
agents of the recipient.
.43 Competition. All procurement
transactions shall be conducted in a
manner to provide, to the maximum
extent practical, open and free
competition. The recipient shall be
alert to organizational conflicts of
interest as well as noncompetitive
practices among contractors that may
restrict or eliminate competition or
otherwise restrain trade. In order to
ensure objective contractor
performance and eliminate unfair
competitive advantage, contractors
that develop or draft specifications,
requirements, statements of work,
invitations for bids and/or requests
for proposals shall be excluded from
competing for such procurements.
Awards shall be made to the bidder or
offeror whose bid or offer is
responsive to the solicitation and is
most advantageous to the recipient,
price, quality and other factors
considered. Solicitations shall
clearly set forth all requirements
that the bidder or offeror shall
fulfill in order for the bid or offer
to be evaluated by the recipient. Any
and all bids or offers may be
rejected when it is in the
recipient's interest to do so.
.44 Procurement procedures.
(a) All recipients shall establish
written procurement procedures. These
procedures shall provide for, at a
minimum, that (1), (2) and (3) apply.
(1) Recipients avoid purchasing
unnecessary items.
(2) Where appropriate, an analysis is
made of lease and purchase
alternatives to determine which would
be the most economical and practical
procurement for the Federal
Government.
(3) Solicitations for goods and
services provide for all of the
following.
(i) A clear and accurate description
of the technical requirements for the
material, product or service to be
procured. In competitive
procurements, such a description
shall not contain features which
unduly restrict competition.
(ii) Requirements which the
bidder/offeror must fulfill and all
other factors to be used in
evaluating bids or proposals.
(iii) A description, whenever
practicable, of technical
requirements in terms of functions to
be performed or performance required,
including the range of acceptable
characteristics or minimum acceptable
standards.
(iv) The specific features of "brand
name or equal" descriptions that
bidders are required to meet when
such items are included in the
solicitation.
(v) The acceptance, to the extent
practicable and economically
feasible, of products and services
dimensioned in the metric system of
measurement.
(vi) Preference, to the extent
practicable and economically
feasible, for products and services
that conserve natural resources and
protect the environment and are
energy efficient.
(b) Positive efforts shall be made by
recipients to utilize small
businesses, minority-owned firms, and
women's business enterprises,
whenever possible. Recipients of
Federal awards shall take all of the
following steps to further this goal.
(1) Ensure that small businesses,
minority-owned firms, and women's
business enterprises are used to the
fullest extent practicable.
(2) Make information on forthcoming
opportunities available and arrange
time frames for purchases and
contracts to encourage and facilitate
participation by small businesses,
minority-owned firms, and women's
business enterprises.
(3) Consider in the contract process
whether firms competing for larger
contracts intend to subcontract with
small businesses, minority-owned
firms, and women's business
enterprises.
(4) Encourage contracting with
consortiums of small businesses,
minority-owned firms and women's
business enterprises when a contract
is too large for one of these firms
to handle individually.
(5) Use the services and assistance,
as appropriate, of such organizations
as the Small Business Administration
and the Department of Commerce's
Minority Business Development Agency
in the solicitation and utilization
of small businesses, minority- owned
firms and women's business
enterprises.
(c) The type of procuring instruments
used (e.g., fixed price contracts,
cost reimbursable contracts, purchase
orders, and incentive contracts)
shall be determined by the recipient
but shall be appropriate for the
particular procurement and for
promoting the best interest of the
program or project involved. The
"cost -plus -a -percentage -of -cost" or
"percentage of construction cost"
methods of contracting shall not be
used.
(d) Contracts shall be made only with
responsible contractors who possess
the potential ability to perform
successfully under the terms and
conditions of the proposed
procurement. Consideration shall be
given to such matters as contractor
integrity, record of past
performance, financial and technical
resources or accessibility to other
necessary resources. In certain
circumstances, contracts with certain
parties are restricted by agencies'
implementation of E.O.s 12549 and
12689, "Debarment and Suspension."
(e) Recipients shall, on request,
make available for the Federal
awarding agency, pre -award review and
procurement documents, such as
request for proposals or invitations
for bids, independent cost estimates,
etc., when any of the following
conditions apply.
(1) A recipient's procurement
procedures or operation fails to
comply with the procurement standards
in the Federal awarding agency's
implementation of this Circular.
(2) The procurement is expected to
exceed the small purchase threshold
fixed at 41 U.S.C. 403 (11)
(currently $25,000) and is to be
awarded without competition or only
one bid or offer is received in
response to a solicitation.
(3) The procurement, which is
expected to exceed the small purchase
threshold, specifies a "brand name"
product.
(4) The proposed award over the small
purchase threshold is to be awarded
to other than the apparent low bidder
under a sealed bid procurement.
(5) A proposed contract modification
changes the scope of a contract or
increases the contract amount by more
than the amount of the small purchase
threshold.
.45 Cost and price analysis. Some form of
cost or price analysis shall be made and
documented in the procurement files in
connection with every procurement action.
Price analysis may be accomplished in
various ways, including the comparison of
price quotations submitted, market prices
and similar indicia, together with
37
discounts. Cost analysis is the review and
evaluation of each element of cost to
determine reasonableness, allocability and
allowability.
.46 Procurement records. Procurement
records and files for purchases in excess of
the small purchase threshold shall include
the following at a minimum: (a) basis for
contractor selection, (b) justification for
lack of competition when competitive bids or
offers are not obtained, and (c) basis for
award cost or price.
.47 Contract administration. A system for
contract administration shall be maintained
to ensure contractor conformance with the
terms, conditions and specifications of the
contract and to ensure adequate and timely
follow up of all purchases. Recipients shall
evaluate contractor performance and
document, as appropriate, whether
contractors have met the terms, conditions
and specifications of the contract.
_.48 Contract provisions. The recipient
shall include, in addition to provisions to
define a sound and complete agreement, the
following provisions in all contracts. The
following provisions shall also be applied
to subcontracts.
(a) Contracts in excess of the small
purchase threshold shall contain
contractual provisions or conditions
that allow for administrative,
contractual, or legal remedies in
instances in which a contractor
violates or breaches the contract
terms, and provide for such remedial
actions as may be appropriate.
(b) All contracts in excess of the
small purchase threshold shall
contain suitable provisions for
termination by the recipient,
including the manner by which
termination shall be effected and the
basis for settlement. In addition,
such contracts shall describe
conditions under which the contract
may be terminated for default as well
as conditions where the contract may
be terminated because of
circumstances beyond the control of
the contractor.
(c) Except as otherwise required by
statute, an award that requires the
contracting (or subcontracting) for
construction or facility improvements
shall provide for the recipient to
follow its own requirements relating
to bid guarantees, performance bonds,
and payment bonds unless the
Construction contract or subcontract
exceeds $100,000. For those contracts
or subcontracts exceeding $100,000,
the Federal awarding agency may
accept the bonding policy and
38
requirements of the recipient,
provided the Federal awarding agency
has made a determination that the
Federal Government's interest is
adequately protected. If such a
determination has not been made, the
minimum requirements shall be as
follows.
(1) A bid guarantee from each bidder
equivalent to five percent of the bid
price. The "bid guarantee" shall
consist of a firm commitment such as
a bid bond, certified check, or other
negotiable instrument accompanying a
bid as assurance that the bidder
shall, upon acceptance of his bid,
execute such contractual documents as
may be required within the time
specified.
(2) A performance bond on the part of
the contractor for 100 percent of the
contract price. A "performance bond"
is one executed in connection with a
contract to secure fulfillment of all
the contractor's obligations under
such contract.
(3) A payment bond on the part of the
contractor for 100 percent of the
contract price. A "payment bond" is
one executed in connection with a
contract to assure payment as
required by statute of all persons
supplying labor and material in the
execution of the work provided for in
the contract.
(4) Where bonds are required in the
situations described herein, the
bonds shall be obtained from
companies holding certificates of
authority as acceptable sureties
pursuant to 31 CFR part 223, "Surety
Companies Doing Business with the
United States."
(d) All negotiated contracts (except
those for less than the small
purchase threshold) awarded by
recipients shall include a provision
to the effect that the recipient, the
Federal awarding agency, the
Comptroller General of the United
States, or any of their duly
authorized representatives, shall
have access to any books, documents,
papers and records of the contractor
which are directly pertinent to a
specific program for the purpose of
making audits, examinations, excerpts
and transcriptions.
(e) All contracts, including small
purchases, awarded by recipients and
their contractors shall contain the
procurement provisions of Appendix A
to this Circular, as applicable.
Reports and Records
.50 Purpose of reports and
records. Sections _.51 through
.53 set forth the procedures for
monitoring and reporting on the
recipient's financial and program
performance and the necessary
standard reporting forms. They also
set forth record retention
requirements.
.51 Monitoring and reporting
program performance.
(a) Recipients are responsible for
managing and monitoring each project,
program, subaward, function or
activity supported by the award.
Recipients shall monitor subawards to
ensure subrecipients have met the
audit requirements as delineated in
Section .26.
(b) The Federal awarding agency shall
prescribe the frequency with which
the performance reports shall be
submitted. Except as provided in
paragraph .51(f), performance
reports shall not be required more
frequently than quarterly or, less
frequently than annually. Annual
reports shall be due 90 calendar days
after the grant year; quarterly or
semi-annual reports shall be due 30
days after the reporting period. The
Federal awarding agency may require
annual reports before the anniversary
dates of multiple year awards in lieu
of these requirements. The final
performance reports are due 90
calendar days after the expiration or
termination of the award.
(c) If inappropriate, a final
technical or performance report shall
not be required after completion of
the project.
(d) When required, performance
reports shall generally contain, for
each award, brief information on each
of the following.
(1) A comparison of actual
accomplishments with the goals and
objectives established for the
period, the findings of the
investigator, or both. Whenever
appropriate and the output of
programs or projects can be readily
quantified, such quantitative data
should be related to cost data for
computation of unit costs.
(2) Reasons why established goals
were not met, if appropriate.
(3) Other pertinent information
including, when appropriate, analysis
and explanation of cost overruns or
high unit costs.
(e) Recipients shall not be required
39
to submit more than the original and
two copies of performance reports.
(f) Recipients shall immediately
notify the Federal awarding agency of
developments that have a significant
impact on the award -supported
activities. Also, notification shall
be given in the case of problems,
delays, or adverse conditions which
materially impair the ability to meet
the objectives of the award. This
notification shall include a
statement of the action taken or
contemplated, and any assistance
needed to resolve the situation.
(g) Federal awarding agencies may
make site visits, as needed.
(h) Federal awarding agencies shall
comply with clearance requirements of
5 CFR part 1320 when requesting
performance data from recipients.
.52 Financial reporting.
(a) The following forms or such other
forms as may be approved by OMB are
authorized for obtaining financial
information from recipients.
(1) SF -269 or SF -269A, Financial
Status Report.
(i) Each Federal awarding agency
shall require recipients to use the
SF -269 or SF -269A to report the
status of funds for all
nonconstruction projects or programs.
A Federal awarding agency may,
however, have the option of not
requiring the SF -269 or SF -269A when
the SF -270, Request for Advance or
Reimbursement, or SF -272, Report of
Federal Cash Transactions, is
determined to provide adequate
information to meet its needs, except
that a final SF -269 or SF -269A shall
be required at the completion of the
project when the SF -270 is used only
for advances.
(ii) The Federal awarding agency.
shall prescribe whether the report
shall be on a cash or accrual basis.
If the Federal awarding agency
requires accrual information and the
recipient's accounting records are
not normally kept on the accrual
basis, the recipient shall not be
required to convert its accounting
system, but shall develop such
accrual information through best
estimates based on an analysis of the
documentation on hand.
(iii) The Federal awarding agency
shall determine the frequency of the
Financial Status Report for each
project or program, considering the
size and complexity of the particular
project or program. However, the
report shall not be required more
frequently than quarterly or less
frequently than annually. A final
report shall be required at the
completion of the agreement.
(iv) The Federal awarding agency
shall require recipients to submit
the SF -269 or SF -269A (an original
and no more than two copies) no later
than 30 days after the end of each
specified reporting period for
quarterly and semi-annual reports,
and 90 calendar days for annual and,
final reports. Extensions of
reporting due dates may be approved
by the Federal awarding agency upon
request of the recipient.
(2) SF -272, Report of Federal Cash
Transactions.
(i) When funds are advanced to
recipients the Federal awarding
agency shall require each recipient
to submit the SF -272 and, when
necessary, its continuation sheet,
SF -272a. The Federal awarding agency
shall use this report to monitor cash
advanced to recipients and to obtain
disbursement information for each
agreement with the recipients.
(ii) Federal awarding agencies may
require forecasts of Federal cash
requirements in the "Remarks' section
of the report.
(iii) When practical and deemed
necessary, Federal awarding agencies
may require recipients to report in
the "Remarks" section the amount of
cash advances received in excess of
three days. Recipients shall provide
short narrative explanations of
actions taken to reduce the excess
balances.
(iv) Recipients shall be required to
submit not more than the original and
two copies of the SF -272 15 calendar
days following the end of each
quarter. The Federal awarding
agencies may require a monthly report
from those recipients receiving
advances totaling $1 million or more
per year.
(v) Federal awarding agencies may
waive the requirement for submission
of the SF -272 for any one of the
following reasons: (1) When monthly
advances do not exceed $25,000 per
recipient, provided that such
advances are monitored through other
forms contained in this section; (2)
If, in the Federal awarding agency's
opinion, the recipient's accounting
controls are adequate to minimize
excessive Federal advances; or, (3)
When the electronic payment
mechanisms provide adequate data.
(b) When the Federal awarding agency
needs additional information or more
frequent reports, the following shall
be observed.
(1) When additional information is
needed to comply with legislative
requirements, Federal awarding
agencies shall issue instructions to
require recipients to submit such
40
information under the "Remarks"
section of the reports.
(2) When a Federal awarding agency
determines that a recipient's
accounting system does not meet the
standards in Section .21,
additional pertinent information to
further monitor awards may be
obtained upon written notice to the
recipient until such time as the
system is brought up to standard. The
Federal awarding agency, in obtaining
this information, shall comply with
report clearance requirements of 5
CFR part 1320.
(3) Federal awarding agencies are
encouraged to shade out any line item
on any report if not necessary.
(4) Federal awarding agencies may
accept the identical information from
the recipients in machine readable
format or computer printouts or
electronic outputs in lieu of
prescribed formats.
(5) Federal awarding agencies may
provide computer or electronic
outputs to recipients when such
expedites or contributes to the
accuracy of reporting.
.53 Retention and access requirements for
records.
la) This section sets forth
requirements for record retention and
access to records for awards to
recipients. Federal awarding agencies
shall not impose any other record
retention or access requirements upon
recipients.
(b) Financial records, supporting
documents, statistical records, and
all other records pertinent to an
award shall be retained for a period
of three years from the date of
submission of the final expenditure
report or, for awards that are
renewed quarterly or annually, from
the date of the submission of the
quarterly or annual financial report,
as authorized by the Federal awarding
agency. The only exceptions are the
following.
(1) If any litigation, claim, or
audit is started before the
expiration of the 3 -year period, the
records shall be retained until all
litigation, claims or audit findings
involving the records have been
resolved and final action taken.
(2) Records for real property and
equipment acquired with Federal funds
shall be retained for 3 years after
final disposition.
(3) When records are transferred to
or maintained by the Federal awarding
agency, the 3 -year retention
requirement is not applicable to the
recipient.
(4) Indirect cost rate proposals,
cost allocations plans, etc. as
specified in paragraph _.53(g).
(c) Copies of original records may be
substituted for the original records
if authorized by the Federal awarding
agency.
(d) The Federal awarding agency shall
request transfer of certain records
to its custody from recipients when
it determines that the records
possess long term retention value.
However, in order to avoid duplicate
recordkeeping, a Federal awarding
agency may make arrangements for
recipients to retain any records that
are continuously needed for joint
use.
(e) The Federal awarding agency, the
Inspector General, Comptroller
General of the United States, or any
of their duly authorized
representatives, have the right of
timely and unrestricted access to any
books, documents, papers, or other
records of recipients that are
pertinent to the awards, in order to
make audits, examinations, excerpts,
transcripts and copies of such
documents. This right also includes
timely and reasonable access to a
recipient's personnel for the purpose
of interview and discussion related
to such documents. The rights of
access in this paragraph are not
limited to the required retention
period, but shall last as long as
records are retained.
(f) Unless required by statute, no
Federal awarding agency shall place
restrictions on recipients that limit
public access to the records of
recipients that are pertinent to an
award, except when the Federal
awarding agency can demonstrate that
such records shall be kept
confidential and would have been
exempted from disclosure pursuant to
the Freedom of Information Act (5
A.S.C. 552) if the records had
belonged to the Federal awarding
agency.
(g) Indirect cost rate proposals,
cost allocations plans, etc.
Paragraphs (g)(1) and (g)(2) apply to
the following types of documents, and
their supporting records: indirect
cost rate computations or proposals,
cost allocation plans, and any
similar accounting computations of
the rate at which a particular group
of costs is chargeable (such as
computer usage chargeback rates or
composite fringe benefit rates).
(1) If submitted for negotiation. If
the recipient submits to the Federal
awarding agency or the subrecipient
submits to the recipient the
proposal, plan, or other computation
to form the basis for negotiation of
the rate, then the 3 -year retention
period for its supporting records
starts on the date of such
submission.
(2) If not submitted for negotiation.
If the recipient is not required to
submit to the Federal awarding agency
or the subrecipient is not required
to submit to the recipient the
proposal, plan, or other computation
for negotiation purposes, then the 3 -
year retention period for the
proposal, plan, or other computation
and its supporting records starts at
the end of the fiscal year (or other
accounting period) covered by the
proposal, plan, or other computation.
Termination and Znforcement
.60 Purpose of termination and
enforcement. Sections .61 and .62 set
forth uniform suspension, termination and
enforcement procedures.
41
.61 Termination.
(a) Awards may be terminated in whole
or in part only if (1), (2) or (3)
apply.
(1) By the Federal awarding agency,
if a recipient materially fails to
comply with the terms and conditions
of an award.
(2) By the Federal awarding agency
with the consent of the recipient, in
which case the two parties shall
agree upon the termination
conditions, including the effective
date and, in the case of partial
termination, the portion to be
terminated.
(3) By the recipient upon sending to
the Federal awarding agency written
notification setting forth the
reasons for such termination, the
effective date, and, in the case of
partial termination, the portion to
be terminated. However, if the
Federal awarding agency determines in
the case of partial termination that
the reduced or modified portion of
the grant will not accomplish the
purposes for which the grant was
made, it may terminate the grant in
its entirety under either paragraphs
(a) (1) or (2).
(b) If costs are allowed under an
award, the responsibilities of the
recipient referred to in paragraph
.71(a), including those for
property management as applicable,
shall be considered in the
termination of the award, and
provision shall be made for
continuing responsibilities of the
recipient after termination, as
appropriate.
.62 Enforcement. Federal awarding agency implementing
regulations (see Section .13).
(a) Remedies for noncompliance. If a
recipient materially fails to comply
with the terms and conditions of an
award, whether stated in a Federal
statute, regulation, assurance,
application, or notice of award, the
Federal awarding agency may, in
addition to imposing any of the
special conditions outlined in
Section .14, 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 recipient or more
severe enforcement action by the
Federal awarding agency.
(2) Disallow (that is, deny both use
of funds and any applicable 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.
(4) Withhold further awards for.the
project or program.
(5) Take other remedies that may be
legally available.
(b) Hearings and appeals. In taking
an enforcement action, the awarding
agency shall provide the recipient an
opportunity for hearing, appeal, or
other administrative proceeding to
which the recipient is entitled under
any statute or regulation applicable
to the action involved.
(c) Effects of suspension and
termination. Costs of a recipient
resulting from obligations incurred
by the recipient during a suspension
or after termination of an award are
not allowable unless the awarding
agency expressly authorizes them in
the notice of suspension or
termination or subsequently. Other
recipient costs during suspension or
after termination which are necessary
and not reasonably avoidable are
allowable if (1) and (2) apply.
(1) The costs result from obligations
which were properly incurred by the
recipient before the effective date
of suspension or termination, are not
in anticipation of it, and in the
case of a termination, are
noncancellable.
(2) The costs would be allowable if
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 a recipient from being
subject to debarment and suspension
under E.O.s 12549 and 12689 and the
42
SUBPART D - After -the -Award
Requireeenta
.70 Purpose. Sections .71
through .73 contain closeout
procedures and other procedures for
subsequent disallowances and
adjustments.
.71 Closeout procedures.
(a) Recipients shall submit, within
90 calendar days after the date of
completion of the award, all
financial, performance, and other
reports as required by the terms and
conditions of the award. The Federal
awarding agency may approve
extensions when requested by the
recipient.
(b) Unless the Federal awarding
agency authorizes an extension, a
recipient shall liquidate all
obligations incurred under the award
not later than 90 calendar days after
the funding period or the date of
completion as specified in the terms
and conditions of the award or in
agency implementing instructions.
(c) The Federal awarding agency shall
make prompt payments to a recipient
for allowable reimbursable costs
under the award being closed out.
(d) The recipient shall promptly
refund any balances of unobligated
cash that the Federal awarding agency
has advanced or paid and that is not
authorized to be retained by the
recipient for use in other projects.
OMB Circular A-129 governs unreturned
amounts that become delinquent debts.
(e) When authorized by the terns and
conditions of the award, the Federal
awarding agency shall make a
settlement for any upward or downward
adjustments to the Federal share of
costs after closeout reports are
received.
(f) The recipient shall account for
any real and personal property
acquired with Federal funds or
received from the Federal Government
in accordance with Sections .31
through .37.
(g) In the event a final audit has
not been performed prior to the
closeout of an award, the Federal
awarding agency shall retain the
right to recover an appropriate
amount after fully considering the
recommendations on disallowed costs
resulting from the final audit.
.72 Subsequent adjustments and
continuing responsibilities.
(a) The closeout of an award does not
affect any of the following.
(1) The right of the Federal awarding
agency to disallow costs and recover
funds on the basis of a later audit
or other review.
(2) The obligation of the recipient
to return any funds due as a result
of later refunds, corrections, or
other transactions.
(3) Audit requirements in Section
.26.
(4) Property management requirements
in Sections .31 through _.37.
(5) Records retention as required in
Section .53.
(b) After closeout of an award, a
relationship created under an award
may be modified or ended in whole or
in part with the consent of the
Federal awarding agency and the
recipient, provided the
responsibilities of the recipient
referred to in paragraph _.73(a),
including those for property
management as applicable, are
considered and provisions made for
continuing responsibilities of the
recipient, as appropriate.
.73 Collection of amounts due.
(a) Any funds paid to a recipient in
excess of the amount to which the
recipient is finally determined to be
entitled under the terms and
conditions of the award constitute a
debt to the Federal Government. If
not paid within a reasonable period
after the demand for payment, the
Federal awarding agency may reduce
the debt by (1), (2) or (3).
(1) Making an administrative offset
against other requests for
reimbursements.
(2) Withholding advance payments
otherwise due to the recipient.
(3) Taking other action permitted by
statute.
(b) Except as otherwise provided by
law, the Federal awarding agency
shall charge interest on an overdue
debt in accordance with 4 CFR Chapter
II, "Federal Claims Collection
Standards."
43
Appendix A
Contract Provisions
All contracts, awarded by a recipient
including small purchases, shall
contain the following provisions as
applicable:
1. Equal Employment Opportunity - All
contracts shall contain a provision
requiring compliance with E.O. 11246,
"Equal Employment Opportunity," as
amended by E.O. 11375, "Amending
Executive Order 11246 Relating to
Equal Employment Opportunity," and as
supplemented by regulations at 41 CFR
part 60, "Office of Federal Contract
Compliance Programs, Equal Employment
Opportunity, Department of Labor."
2. Copeland "Anti -Kickback" Act (18
U.S.C. 874 and 40 U.S.C. 276c) - All
contracts and subgrants in excess of
$2000 for construction or repair
awarded by recipients and
subrecipients shall include a
provision for compliance with the
Copeland "Anti -Kickback" Act (1B
U.S.C. 874), as supplemented by
Department of Labor regulations (29
CFR part 3, "Contractors and
Subcontractors on Public Building or
Public Work Financed in Whole or in
Part by Loans or Grants from the
United States"). The Act provides
that each contractor or subrecipient
shall be prohibited from inducing, by
any means, any person employed in the
construction, completion, or repair
of public work, to give up any part
of the compensation to which he is
otherwise entitled. The recipient
shall report all suspected or
reported violations to the Federal
awarding agency.
3. Davis -Bacon Act, as amended (40
U.S.C. 276a to a-7) - When required
by Federal program legislation, all
construction contracts awarded by the
recipients and subrecipients of more
than $2000 shall include a provision
for compliance with the Davis -Bacon
Act (40 U.S.C. 276a to a-7) and as
supplemented by Department of Labor
regulations (29 CFR part 5, "Labor
Standards Provisions Applicable to
Contracts Governing Federally
Financed and Assisted Construction").
Under this Act, contractors shall be
required to pay wages to laborers and
mechanics at a rate not less than the
minimum wages specified in a wage
determination made by the Secretary
of Labor. In addition, contractors
44
shall be required to pay wages not
less than once a week. The recipient
shall place a copy of the current
prevailing wage determination issued
by the Department of Labor in each
solicitation and the award of a
contract shall be conditioned upon
the acceptance of the wage
determination. The recipient shall
report all suspected or reported
violations to the Federal awarding
agency.
4. Contract Rork Hours and Safety
Standards Act (40 U.S.C. 327-333) -
Where applicable, all contracts
awarded by recipients in excess of
$2000 for construction contracts and
in excess of $2500 for other
contracts that involve the employment
of mechanics or laborers shall
include a provision for compliance
with Sections 102 and 107 of the
Contract Work Hours and Safety
Standards Act (40 O.S.C. 327-333), as
supplemented by Department of Labor
regulations (29 CFR part 5). Under
Section 102 of the Act, each
contractor shall be required to
compute the wages of every mechanic
and laborer on the basis of a
standard work week of 40 hours. Work
in excess of the standard work week
is permissible provided that the
worker is compensated at a rate of
not less than 1 +t times the basic
rate of pay for all hours worked in
excess of 40 hours in the work week.
Section 107 of the Act is applicable
to construction work and provides
that no laborer or mechanic shall be
required to work in surroundings or
under working conditions which are
unsanitary, hazardous or dangerous.
These requirements do not apply to
the purchases of supplies or
materials or articles ordinarily
available on the open market, or
contracts for transportation or
transmission of intelligence.
5. Rights to Inventions Made Under a
Contract or Agreement - Contracts or
agreements for the performance of
experimental, developmental, or
research work shall provide for the
rights of the Federal Government and
the recipient in any resulting
invention in accordance with 37 CFR
part 401, "Rights to Inventions Made
by Nonprofit Organizations and Small
Business Firms Under Government
Grants, Contracts and Cooperative
Agreements," and any implementing
regulations issued by the awarding
agency.
6. Clean Air Act (42 U.S.C. 7401 et
seq.) and the Federal Water Pollution
Control Act (33 U.S.C. 1251 et seq.),
as amended - Contracts and subgrants
of amounts in excess of $100,000
shall contain a provision that
requires the recipient to agree to
comply with all applicable standards,
orders or regulations issued pursuant
to the Clean Air Act (42 U.S.C. 7401
et seq.) and the Federal Water
Pollution Control Act as amended (33
U.S.C. 1251 et seq.). Violations
shall be reported to the Federal
awarding agency and the Regional
Office of the Environmental
Protection Agency (EPA).
7. Byrd Anti -Lobbying Amendment (31
U.B.C. 1352) - Contractors who apply
or bid for an award of $100,000 or
more shall file the required
certification. Each tier certifies to
the tier above that it will not and
has not used Federal appropriated
funds to pay any person or
organization for influencing or
attempting to influence an officer or
employee of any agency, a member of
Congress, officer or employee of
Congress, or an employee of a member
of Congress in connection with
obtaining any Federal contract, grant
or any other award covered by 31
U.S.C. 1352. Each tier shall also
disclose any lobbying with non -
Federal funds that takes place in
connection with obtaining any Federal
award. Such disclosures are forwarded
from tier to tier up to the
recipient.
8. Debarment and Suspension (H.O.s
12549 and 12689) - No contract shall
be made to parties listed on the
General Services Administration's
List of Parties Excluded from Federal
Procurement or Nonprocurement
Programs in accordance with E.O.s
12549 and 12689, "Debarment and
Suspension." This list contains the
names of parties debarred, suspended,
or otherwise excluded by agencies,
and contractors declared ineligible
under statutory or regulatory
authority other than E.O. 12549.
Contractors with awards that exceed
the small purchase threshold shall
provide the required certification
regarding its exclusion status and
that of its principal employees.
45
Appendix B
24 CFR 570 CDBG Regulations Subpart C, Eligible Activities
46
WAIS Document Retrieval[Code of Federal
Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 20041
From the U.S. Government Printing Office via
GPO Access
(CITE: 24CFR570.201]
[Page 41-44]
TITLE 24 --HOUSING AND URBAN DEVELOPMENT
CHAPTER V --OFFICE OF ASSISTANT SECRETARY FOR
COMMUNITY PLANNING AND
DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT
PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS-
-Table of Contents
Subpart C_Eligible Activities
Sec. 570.201 Basic eligible activities.
CDBG funds may be used for the following
activities:
(a) Acquisition. Acquisition in whole or in
part by the recipient, or other public or
private nonprofit entity, by purchase, long-
term lease, donation, or otherwise, of real
property (including air rights, water
rights, rights-of-way, easements, and other
interests therein) for any public purpose,
subject to the limitations of Sec. 570.207.
(b) Disposition. Disposition, through sale,
lease, donation, or otherwise, of any real
property acquired with CDBG funds or its
retention for public purposes, including
reasonable costs of temporarily managing
such property or property acquired under
urban renewal, provided that the proceeds
from any such disposition shall be program
income subject to the requirements set forth
in Sec. 570.504.
(c) Public facilities and improvements.
Acquisition, construction, reconstruction,
rehabilitation or installation of public
facilities and improvements, except as
provided in Sec. 570.207(a), carried out by
the recipient or other public or private
nonprofit entities. (However, activities
under this paragraph may be directed to the
removal of material and architectural
barriers that restrict the mobility and
accessibility of elderly or severely
disabled persons to public facilities and
improvements, including those provided for
in Sec. 570.207(a)(1).) In undertaking such
activities, design features and improvements
which promote energy efficiency may be
included. such activities may also include
the execution of architectural design
features, and similar treatments intended to
enhance the aesthetic quality of facilities
and improvements receiving CDBG assistance,
such as decorative pavements, railings,
sculptures, pools of water and fountains,
and other works of art. Facilities designed
for use in providing shelter for persons
having special needs are considered public
facilities and not subject to the
prohibition of new housing construction
described in Seca 570.207(b)(3). Such
facilities include shelters for the
homeless; convalescent homes; hospitals,
nursing homes; battered spouse shelters;
halfway houses for run -away children, drug
offenders or parolees; group homes for
mentally retarded persons and temporary
housing for disaster victims. In certain
cases, nonprofit entities and subrecipients
including those specified in Sec. 570.204
may acquire title to public facilities. When
such facilities are owned by nonprofit
entities or subrecipients, they shall be
operated so as [[Page 42]) to be open for
use by the general public during all normal
hours of operation. Public facilities and
improvements eligible for assistance under
this paragraph are subject to the policies
in Sec. 570.200(b).
(d) Clearance activities. Clearance,
demolition, and removal of buildings and
improvements, including movement of
structures to other sites. Demolition of
HUD -assisted or HUD -owned housing units may
be undertaken only with the prior approval
of HUD.
(e) Public services. Provision of public
services (including labor, supplies, and
materials) including but not limited to
those concerned with employment, crime
prevention, child care, health, drug abuse,
education, fair housing counseling, energy
conservation, welfare (but excluding the
provision of income payments identified
under Sec. 570.207(b)(4)), homebuyer
downpayment assistance, or recreational
needs. To be eligible for CDBG assistance, a
public service must be either a new service
or a quantifiable increase in the level of
an existing service above that which has
been provided by or on behalf of the unit of
general local government (through funds
raised by the unit or received by the unit
from the State in which it is located) in
the 12 calendar months before the submission
of the action plan. (An exception to this
requirement may be made if HUD determines
that any decrease in the level of a service
was the result of events not within the
control of the unit of general local
government.) The amount of CDBG funds used
for public services shall not exceed
paragraphs (e) (1) or (2) of this section,
as applicable:
(1) The amount of CDBG funds used for
public services shall not exceed 15 percent
of each grant, except that for entitlement
grants made under subpart D of this part,
the amount shall not exceed 15 percent of
the grant plus 15 percent of program income,
as defined in Sec. 570.500(a). For
entitlement grants under subpart D of this
part, compliance is based on limiting the
amount of CDBG funds obligated for public
service activities in each program year to
an amount no greater than 15 percent of the
entitlement grant made for that program year
47
plus 15 percent of the program income
received during the grantee's immediately
preceding program year.
(2) A recipient which obligated more CDBG
funds for public services than 15 percent of
its grant funded from Federal fiscal year
1982 or 1983 appropriations (excluding
program income and any assistance received
under Public Law 98-8), may obligate more
CDBG funds than allowable under paragraph
(e)(1) of this section, so long as the total
amount obligated in any program year does
not exceed:
(i) For an entitlement grantee, 15%
of the program income it received during the
preceding program year; plus
(ii) A portion of the grant received
for the program year which is the highest of
the following amounts:
(A) The amount determined by
applying the percentage of the grant it
obligated for public services in the 1982
program year against the grant for its
current program year;
(B) The amount determined by
applying the percentage of the grant it
obligated for public services in the 1983
program year against the grant for its
current program year;
(C) The amount of funds it
obligated for public services in the 1982
program year; or,
(D) The amount of funds it
obligated for public services in the 1983
program year.
(f) Interim assistance.
(1) The following activities may be
undertaken on an interim basis in areas
exhibiting objectively determinable signs of
physical deterioration where the recipient
has determined that immediate action is
necessary to arrest the deterioration and
that permanent improvements will be carried
out as soon as practicable:
(i) The repairing of streets,
sidewalks, parks, playgrounds, publicly
owned utilities, and public buildings; and
(ii) The execution of special garbage,
trash, and debris removal, including
neighborhood cleanup campaigns, but not the
regular curbside collection of garbage or
trash in an area.
(2) In order to alleviate emergency
conditions threatening the public health and
safety in areas where the chief executive
officer of the recipient determines that
such an emergency [[Page 43]] condition
exists and requires immediate resolution,
CDBG funds may be used for:
(i) The activities specified in
paragraph (f)(1) of this section, except for
the repair of parks and playgrounds;
(ii) The clearance of streets,
including snow removal and similar
activities, and
(iii) The improvement of private
properties.
(3) A11 activities authorized under
paragraph (f)(2) of this section are limited
to the extent necessary to alleviate
emergency conditions.
(g) Payment of non -Federal share. Payment
of the non -Federal share required in
connection with a Federal grant-in-aid
program undertaken as part of CDBG
activities, provided, that such payment
shall be limited to activities otherwise
eligible and in compliance with applicable
requirements under this subpart.
(h) Urban renewal completion. Payment of
the cost of completing an urban renewal
project funded under title I of the Housing
Act of 1949 as amended. Further information
regarding the eligibility of such costs is
set forth in Sec. 570.801.
(i) Relocation. Relocation payments and
other assistance for permanently and
temporarily relocated individuals families,
businesses, nonprofit organizations, and
farm operations where the assistance is
(1) required under the provisions of
Sec. 570.606 (b) or (c); or
(2) determined by the grantee to be
appropriate under the provisions of Sec.
570.606(d).
(j) Loss of rental income. Payments to
housing owners for losses of rental income
incurred in holding, for temporary periods,
housing units to be used for the relocation
of individuals and families displaced by
program activities assisted under this part.
(k) Housing services. Housing services, as
provided in section 105(a)(21) of the Act
(42 U.S.C. 5305(a)(21)).
(1) Privately owned utilities. CDBG funds
may be used to acquire, construct,
reconstruct, rehabilitate, or install the
distribution lines and facilities of
privately owned utilities, including the
placing underground of new or existing
distribution facilities and lines.
(m) Construction of housing. CDBG funds may
be used for the construction of housing
assisted under section 17 of the United
States Housing Act of 1937.
(n) Homeownership assistance. CDBG funds
may be used to provide direct homeownership
assistance to low- or moderate -income
households in accordance with section 105(a)
of the Act.
(0)
(1) The provision of assistance either
through the recipient directly or through
public and private organizations, agencies,
and other subrecipients (including nonprofit
and for-profit subrecipients) to facilitate
economic development by:
(i) Providing Credit, including, but
not limited to, grants, loans, loan
guarantees, and other forms of financial
support, for the establishment,
stabilization, and expansion of
microenterprises;
(ii) Providing technical assistance,
advice, and business support services to
owners of microenterprises and persons
developing microenterprises; and
(iii) Providing general support,
including, but not limited to, peer support
programs, counseling, child care,
transportation, and other similar services,
48
to owners of microenterprises and persons
developing microenterprises.
(2) Services provided this paragraph (0)
shall not be subject to the restrictions on
public services contained in paragraph (e)
of this section.
(3) For purposes of this paragraph (o),
"persons developing microenterprises"
means such persons who have expressed
interest and who are, or after an initial
screening process are expected to be,
actively working toward developing
businesses, each of which is expected to be
a microenterprise at the time it is formed.
(4) Assistance under this paragraph (o)
may also include training, technical
assistance, or other support services to
increase the capacity of the recipient or
subrecipient to carry out the activities
under this paragraph (0).
(p) Technical assistance. Provision of
technical assistance to public or nonprofit
entities to increase the capacity of such
entities to carry out eligible neighborhood
revitalization or economic development
activities. (The recipient must determine,
prior to the ((Page 44)) provision of the
assistance, that the activity for which it
is attempting to build capacity would be
eligible for assistance under this subpart
C, and that the national objective claimed
by the grantee for this assistance can
reasonably be expected to be met once the
entity has received the technical assistance
and undertakes the activity.) Capacity
building for private or public entities
(including grantees) for other purposes may
be eligible under Sec. 570.205.
(q) Assistance to institutions of higher
education. Provision of assistance by the
recipient to institutions of higher
education when the grantee determines that
such an institution has demonstrated a
capacity to carry out eligible activities
under this subpart C.
(53 FR 34439, Sept. 6, 1988, as amended at
53 FR 31239, Aug. 17, 1968; 55 FR 29308,
July 18, 1990; 57 FR 27119, June 17, 1992;
60 FR 1943, Jan. 5, 1995; 60 FR 56911, Nov.
9, 1995; 61 FR 18674, Apr. 29, 1996; 65 FR
70215, Nov. 21, 2000; 67 FR 47213, July 17,
2002)
49
Appendix C
24 CFR 570 CDBG Regulations Subpart J, Grant Administration
50
WAIS Document Retrieval[Code of Federal
Regulations)
[Title 24, Volume 3)
[Revised as of April 1, 2004)
From the U.S. Government Printing Office via
GPO Access
(CITE: 24CFR570.501)
(Page 131-132)
TITLE 24 --HOUSING AND URBAN DEVELOPMENT
CHAPTER V --OFFICE OF ASSISTANT SECRETARY FOR
COMMUNITY PLANNING ANDDEVELOPMENT,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS-
-Table of Contents
Subpart J Grant Administration
Sec. 570.501 Responsibility for grant
administration.
(a) One or more public agencies, including
existing local public agencies, may be
designated by the chief executive officer of
the recipient to undertake activities
assisted by this part. A public agency so
designated shall be subject to the same
requirements as are applicable to
subrecipients.
(b) The recipient is responsible for
ensuring that CDBG funds are used in
accordance with all program requirements.
The use of designated public agencies,
subrecipients, or contractors ((Page 132))
does not relieve the recipient of this
responsibility. The recipient is also
responsible for determining the adequacy of
performance under subrecipient agreements
and procurement contracts, and for taking
appropriate action when performance problems
arise, such as the actions described in Sec.
570.910. Where a unit of general local
government is participating with, or as part
of, an urban county, or as part of a
metropolitan city, the recipient is
responsible for applying to the unit of
general local government the same
requirements as are applicable to
subrecipients, except that the five-year
period identified under Sec.
570.503(b)(8)(i) shall begin with the date
that the unit of general local government is
no longer considered by HUD to be a part of
the metropolitan city or urban county, as
applicable, instead of the date that the
subrecipient agreement expires.
(53 FR 8058, Mar. 11, 1988, as amended at 57
FR 27120, June 17, 1992)
Sec. 570.502 Applicability of uniform
administrative requirements.
(a) Recipients and subrecipients that are
governmental entities (including public
agencies) shall comply with the requirements
and standards of OMB Circular No. A-87,
"Cost Principles for State, Local, and
Indian Tribal Governments"; OMB Circular A-
128, "Audits of State and Local
Governments" (implemented at 24 CFR part
44); and with the following sections of 24
CFR part 85 "Uniform Administrative
Requirements for Grants and Cooperative
Agreements to State and Local Governments'.
or the related CDBG provision, as specified
in this paragraph:
(1) Section 85.3, "Definitions";
(2) Section 85.6, "Exceptions";
(3) Section 85.12, "Special grant or
subgrant conditions for 'high-risk'
grantees";
(4) Section 85.20, "Standards for
financial management systems," except
paragraph (a);
(5) Section 85.21, "Payment," except as
modified by Sec. 570.513;
(6) Section 85.22, "Allowable costs";
(7) Section 85.26, "Non-federal
audits";
(8) Section 85.32, "Equipment," except
in all cases in which the equipment is sold,
the proceeds shall be program income;
(9) Section 85.33, "Supplies";
(10) Section 85.34, "Copyrights";
(11) Section 85.35, " Subawards to
debarred and suspended parties";
(12) Section 85.36, "Procurement,''
except paragraph (a);
(13) Section 85.37, " Subgrants " ;
(14) Section 85.40, "Monitoring and
reporting program performance," except
paragraphs (b) through (d) and paragraph
(f);
(15) Section 85.41, "Financial
reporting," except paragraphs (a),
(b), and (e);
(16) Section 85.42, "Retention and
access requirements for records," except
that the period shall be four years;
(17) Section 85.43, "Enforcement";
(18) Section 85.44, "Termination for
convenience'
(19) Section 85.51 "Later disallowances
and adjustments" and
(20) Section 85.52, "Collection of
amounts due."
(b) Subrecipients, except subrecipients
that are governmental entities, shall comply
with the requirements and standards of OMB
Circular No. A-122, "Cost Principles for
Non-profit Organizations," or OMB Circular
No. A-21, "Cost Principles for Educational
Institutions," as applicable, and OMB
Circular A-133, "Audits of Institutions of
Higher Education and Other Nonprofit
Institutions" (as set forth in 24 CFR part
45). Audits shall be conducted annually.
Such subrecipients shall also comply with
the following provisions of the Uniform
Administrative requirements of OMB Circular
A-110 (implemented at 24 CFR part 84,
"Uniform Administrative Requirements for
Grants and Agreements With Institutions of
Higher Education, Hospitals and Other Non -
51
Profit Organizations") or the related CDBG
provision, as specified in this paragraph:
(1) Subpart A --"General";
(2) Subpart 13--"Pre-Award
Requirements," except for Sec. 84.12,
"Forms for Applying for Federal
Assistance";
(3) Subpart C--"Post-Award
Requirements," except for:
(i) Section 84.22, "Payment
Requirements." Grantees shall follow the
standards of Sec. Sec. 85.20(b)(7) and 85.21
in making payments to subrecipients; ([page
133)1
(ii) Section 84.23, "Cost Sharing
and Matching";
(iii) Section 84.24, "Program
Income." In lieu of Sec. 84.24, CDBG
subrecipients shall follow Sec. 570.504;
(iv) Section 84.25, "Revision of
Budget and Program Plans";
(v) Section 84.32, "Real Property."
In lieu of Sec. 84.32, CDBG subrecipients
shall follow Sec. 570.505;
(vi) Section 84.34(g), "Equipment. "
In lieu of the disposition provisions of
Sec. 84.34(g), the following applies:
(A) In all cases in which
equipment is sold, the proceeds shall be
program income (prorated to reflect the
extent to which CDBG funds were used to
acquire the equipment); and
(8) Equipment not needed by the
subrecipient for CDBG activities shall be
transferred to the recipient for the CDBG
program or shall be retained after
compensating the recipient;
(vii) Section 84.51 (b), (c), (d),
(e), (f), (g), and (h), "Monitoring and
Reporting Program Performance";
(viii) Section 84.52, "Financial
Reporting•';
(ix) Section 84.53(b), "Retention
and access requirements for records."
Section 84.53(b) applies with the following
exceptions:
(A) The retention period
referenced in Sec. 84.53(b) pertaining to
individual CDBG activities shall be four
years; and
(B) The retention period starts
from the date of submission of the annual
performance and evaluation report, as
prescribed in 24 CFR 91.520, in which the
specific activity is reported on for the
final time rather than from the date of
submission of the final expenditure report
for the award;
(x) Section 84.61, "Termination."
In lieu of the provisions of Sec. 84.61,
CDBG subrecipients shall comply with Sec.
570.503(b)(7); and
(4) Subpart D--"After-the-Award
Requirements," except for Sec. 84.71,
"Closeout Procedures."
[53 FR 8058, Mar. 11, 1988, as amended at
60 FR 1916, Jan. 5, 1995; 60 FR 56915, Nov.
9, 1995)
Sec. 570.503 Agreements with subrecipients.
(a) Before disbursing any CDBG funds to a
subrecipient, the recipient shall sign a
written agreement with the subrecipient. The
agreement shall remain in effect during any
period that the subrecipient has control
over CDBG funds, including program income.
(b) At a minimum, the written agreement
with the subrecipient shall include
provisions concerning the following items:
(1) Statement of work. The agreement
shall include a description of the work to
be performed, a schedule for completing the
work, and a budget. These items shall be in
sufficient detail to provide a sound basis
for the recipient effectively to monitor
performance under the agreement.
(2) Records and reports. The recipient
shall specify in the agreement the
particular records the subrecipient must
maintain and the particular reports the
subrecipient must submit in order to assist
the recipient in meeting its recordkeeping
and reporting requirements.
(3) Program income. The agreement shall
include the program income requirements set
forth in Sec. 570.504(c). The agreement
shall also specify that, at the end of the
program year, the grantee may require
remittance of all or part of any program
income balances (including investments
thereof) held by the subrecipient (except
those needed for immediate cash needs, cash
balances of a revolving loan fund, cash
balances from a lump sum drawdown, or cash
or investments held for section 108 security
needs).
(4) Uniform administrative requirements.
The agreement shall require the subrecipient
to comply with applicable uniform
administrative requirements, as described
in Sec. 570.502.
(5) Other program requirements. The
agreement shall require the subrecipient to
carry out each activity in compliance with
all Federal laws and regulations described
in subpart K of these regulations, except
that:
(i) The subrecipient does not assume
the recipient's environmental
responsibilities described at Sec. 570.604;
and
(ii) The subrecipient does not assume
the recipient's responsibility for
initiating the review process under the
provisions of 24 CFR part 52.
(6) Suspension and termination. The
agreement shall specify that, in accordance
with 24 CFR 85.43, suspension ((Page
134)] or termination may occur if the
subrecipient materially fails to comply with
any term of the award, and that the award
may be terminated for convenience in
accordance with 24 CFR 85.44.
(7) Reversion of assets. The agreement
shall specify that upon its expiration the
subrecipient shall transfer to the recipient
any CDBG funds on hand at the time of
expiration and any accounts receivable
attributable to the use of CDBG funds. It
52
shall also include provisions designed to
ensure that any real property under the
subrecipient's control that was acquired or
improved in whole or in part with CDBG
funds (including CDBG funds provided to the
subrecipient in the form of a loan) in
excess of $25,000 is either:
(i) Used to meet one of the national
objectives in Sec. 570.208 (formerly Sec.
570.901) until five years after expiration
of the agreement, or for such longer period
of time as determined to be appropriate by
the recipient; or
(ii) Not used in accordance with
paragraph (b)(7)(1) of this section, in
which event the subrecipient shall pay to
the recipient an amount equal to the current
market value of the property less any
portion of the value attributable to
expenditures of non-CDBG funds for the
acquisition of, or improvement to, the
property. The payment is program income to
the recipient. (No payment is required after
the period of time specified in paragraph
(b)(7)(i) of this section.)
[53 FR 8058, Har. 11, 1988, as amended at 53
FR 41331, Oct. 21, 1988; 57 FR 27120, June
17, 1992; 60 FR 56915, Nov. 9, 1995; 68 FR
56405, Sept. 30, 2003]
Sec. 570.504 Program income.
(a) Recording program income. The receipt
and expenditure of program income as defined
in Sec. 570.500(a) shall be recorded as part
of the financial transactions of the grant
program.
(b) Disposition of program income received
by recipients.
(1) Program income received before grant
closeout may be retained by the recipient if
the income is treated as additional CDBG
funds subject to all applicable requirements
governing the use of CDBG funds.
(2) If the recipient chooses to retain
program income, that program income shall be
disposed of as follows:
(i) Program income in the form of
repayments to, or interest earned in, a
revolving fund as defined in Sec. 570.500(b)
shall be substantially disbursed from the
fund before additional cash withdrawals are
made from the U.S. Treasury for the same
activity. (This rule does not prevent a lump
sum disbursement to finance the
rehabilitation of privately owned properties
as provided for in Sec. 570.513.)
(ii) Substantially all other program
income shall be disbursed for eligible
activities before additional cash
withdrawals are made from the U.S. Treasury.
(iii) At the end of each program
year, the aggregate amount of program income
cash balances and any investment thereof
(except those needed for immediate cash
needs, cash balances of a revolving loan
fund, cash balances from a lump -sum
drawdown, or cash or investments held for
section 108 loan guarantee security needs)
that, as of the last day of the program
year, exceeds one -twelfth of the most recent
grant made pursuant to Sec. 570.304 shall be
remitted to HUD as soon as practicable
thereafter, to be placed in the recipient's
line of credit. This provision applies to
program income cash balances and investments
thereof held by the grantee and its
subrecipients. (This provision shall be
applied for the first time at the end of the
program year for which Federal Fiscal Year
1996 funds are provided.)
(3) Program income on hand at the time of
closeout shall continue to be subject to the
eligibility requirements in subpart C and
all other applicable provisions of this part
until it is expended.
(4) Unless otherwise provided in any
grant closeout agreement, and subject to the
requirements of paragraph (b)(5) of this
section, income received after closeout
shall not be governed by the provisions of
this part, except that, if at the time of
closeout the recipient has another ongoing
CDBG grant received directly from HUD, funds
received after closeout shall be treated as
program income of the ongoing grant
program. [(Page 135))
(5) if the recipient does not have
another ongoing grant received directly from
HUD at the time of closeout, income received
after closeout from the disposition of real
property or from loans outstanding at the
time of closeout shall not be governed by
the provisions of this part, except that
such income shall be used for activities
that meet one of the national objectives in
Sec. 570.901 and the eligibility
requirements described in section 105 of the
Act.
(c) Disposition of program income received
by subrecipients. The written agreement
between the recipient and the subrecipient,
as required by Sec. 570.503, shall specify
whether program income received is to be
returned to the recipient or retained by the
subrecipient. Where program income is to be
retained by the subrecipient, the agreement
shall specify the activities that will be
undertaken with the program income and that
all provisions of the written agreement
shall apply to the specified activities.
When the subrecipient retains program
income, transfers of grant funds by the
recipient to the subrecipient shall be
adjusted according to the principles
described in paragraphs (b)(2) (i) and (ii)
of this section. Any program income on hand
when the agreement expires, or received
after the agreement's expiration, shall be
paid to the recipient as required by Sec.
570.503(b)(6).
(d) Disposition of certain program income
received by urban counties. Program income
derived from urban county program activities
undertaken by or within the jurisdiction of
a unit of general local government which
thereafter terminates its participation in
the urban county shall continue to be
program income of the urban county. The
urban county may transfer the program income
to the unit of general local government,
53
upon its termination of urban county
participation, provided that the unit of
general local government has become an
entitlement grantee and agrees to use the
program income in its own CDBG entitlement
program.
[53 FR 8058, Mar. 11, 1988, as amended at 60
FR 56915, Nov. 9, 1995]
Sec. 570.505 Use of real property.
The standards described in this section
apply to real property within the
recipient's control which was acquired or
improved in whole or in part using CDBG
funds in excess of $25,000. These standards
shall apply from the date CDBG funds are
first spent for the property until five
years after closeout of an entitlement
recipient's participation in the entitlement
CDBG program or, with respect to other
recipients, until five years after the
closeout of the grant from which the
assistance to the property was provided.
(a) A recipient may not change the use or
planned use of any such property (including
the beneficiaries of such use) from that for
which the acquisition or improvement was
made unless the recipient provides affected
citizens with reasonable notice of, and
opportunity to comment on, any proposed
change, and either:
(1) The new use of such property
qualifies as meeting one of the national
objectives in Sec. 570.208 (formerly Sec.
570.901) and is not a building for the
general conduct of government; or
(2) The requirements in paragraph (b) of
this section are met.
(b) If the recipient determines, after
consultation with affected citizens, that it
is appropriate to change the use of the
property to a use which does not qualify
under paragraph (a)(1) of this section, it
may retain or dispose of the property for
the changed use if the recipient's CDBG
program is reimbursed in the amount of the
current fair market value of the property,
less any portion of the value attributable
to expenditures of non-CDBG funds for
acquisition of, and improvements to, the
property.
(c) If the change of use occurs after
closeout, the provisions governing income
from the disposition of the real property in
Sec. 570.504(b)(4) or (5), as applicable,
shall apply to the use of funds reimbursed.
(d) Following the reimbursement of the CDBG
program in accordance with paragraph (b) of
this section, the property no longer will be
subject to any CDBG requirements.
[53 FR 8058, Mar. 11, 1988, as amended at
53 FR 41331, Oct. 21, 1988] [(Page 13611
Sec. 570.506 Records to be maintained.
Each recipient shall establish and maintain
sufficient records to enable the Secretary
to determine whether the recipient has met
the requirements of this part. At a minimum,
the following records are needed:
(a) Records providing a full description of
each activity assisted (or being assisted)
with CDBG funds, including its location (if
the activity has a geographical locus), the
amount of CDBG funds budgeted, obligated and
expended for the activity, and the provision
in subpart C under which it is eligible.
(b) Records demonstrating that each
activity undertaken meets one of the
criteria set forth in Sec. 570.208. (Where
information on income by family size is
required, the recipient may substitute
evidence establishing that the person
assisted qualifies under another program
having income qualification criteria at
least as restrictive as that used in the
definitions of "low and moderate income
person" and "low and moderate income
household" (as applicable) at Sec. 570.3,
such as Job Training Partnership Act (JTPA)
and welfare programs; or the recipient may
substitute evidence that the assisted person
is homeless; or the recipient may substitute
a copy of a verifiable certification from
the assisted person that his or her family
income does not exceed the applicable income
limit established in accordance with Sec.
570.3; or the recipient may substitute a
notice that the assisted person is a
referral from a state, county or local
employment agency or other entity that
agrees to refer individuals it determines to
be low and moderate income persons based on
HUD's criteria and agrees to maintain
documentation supporting these
determinations.) Such records shall include
the following information:
(1) For each activity determined to
benefit low and moderate income persons, the
income limits applied and the point in time
when the benefit was determined.
(2) For each activity determined to
benefit low and moderate income persons
based on the area served by the activity:
(i) The boundaries of the service
area;
(ii) The income characteristics of
families and unrelated individuals in the
service area; and
(iii) If the percent of low and
moderate income persons in the service area
is less than 51 percent, data showing that
the area qualifies under the exception
criteria set forth at Sec.
570.208(a) (1) (ii).
(3) For each activity determined to
benefit low and moderate income persons
because the activity involves a facility or
service designed for use by a limited
clientele consisting exclusively or
predominantly of low and moderate income
persons:
(i) Documentation establishing that
the facility or service is designed for the
particular needs of or used exclusively by
senior citizens, adults meeting the Bureau
of the Census' Current Population Reports
definition of "severely disabled," persons
living with AIDS, battered spouses, abused
54
children, the homeless, illiterate adults,
or migrant farm workers, for which the
regulations provide a presumption concerning
the extent to which low- and moderate -income
persons benefit; or
(ii) Documentation describing how the
nature and, if applicable, the location of
the facility or service establishes that it
is used predominantly by low and moderate
income persons; or
(iii) Data showing the size and
annual income of the family of each person
receiving the benefit.
(4) For each activity carried out for
the purpose of providing or improving
housing which is determined to benefit low
and moderate income persons:
(i) A copy of a written agreement
with each landlord or developer receiving
CDBG assistance indicating the total number
of dwelling units in each multifamily
structure assisted and the number of those
units which will be occupied by low and
moderate income households after assistance;
(ii) The total cost of the activity,
including both CDBG and non-CDBG funds.
(iii) For each unit occupied by a low
and moderate income household, the size and
income of the household;
(iv) For rental housing only:
(A) The rent charged (or to be
charged) after assistance for each ((Page
13711 dwelling unit in each structure
assisted; and
(B) Such information as necessary
to show the affordability of units occupied
(or to be occupied) by low and moderate
income households pursuant to criteria
established and made public by the
recipient;
(v) For each property acquired on
which there are no structures, evidence of
commitmentsensuringthat the criteria in
Sec. 570.208(a)(3) will be met when the
structures are built;
(vi) Where applicable, records
demonstrating that the activity qualifies
under the special conditions at Sec.
570.208(a)(3)(i);
(vii) For any homebuyer assistance
activity qualifying under Sec. 570.201(e),
570.201(n), or 570.204, identification of
the applicable eligibility paragraph and
evidence that the activity meets the
eligibility criteria for that provision; for
any such activity qualifying under Sec.
570.208(a), the size and income of each
homebuyer's household; and
(viii) For a Sec. 570.201(k) housing
services activity, identification of the
HOME project(s) or assistance that the
housing services activity supports, and
evidence that project(s) or assistance meet
the HOME program income targeting
requirements at 24 CFR 92.252 or 92.254.
(5) For each activity determined to
benefit low and moderate income persons
based on the creation of jobs, the recipient
shall provide the documentation described
in either paragraph (b)(5)(i) or (ii) of
this section.
(i) Where the recipient chooses to
document that at least 51 percent of the
jobs will be available to low and moderate
income persons, documentation for each
assisted business shall include:
(A) A copy of a written agreement
containing:
(1) A commitment by the
business that it will make at least 51
percent of the jobs available to low and
moderate income persons and will provide
training for any of those jobs requiring
special skills or education;
(2) A listing by job title of
the permanent jobs to be created indicating
which jobs will be available to low and
moderate income persons, which jobs require
special skills or education, and which jobs
are part-time, if any; and
(3) A description of actions
to be taken by the recipient and business to
ensure that low and moderate income persons
receive first consideration for those jobs:
and
(B) A listing by job title of
the permanent jobs filled, and which jobs of
those were available to low and moderate
income persons, and a description of how
first consideration was given to such
persons for those jobs. The description
shall include what hiring process was used;
which low and moderate income persons were
interviewed for a particular job; and which
low and moderate income persons were hired.
(ii) Where the recipient chooses to
document that at least 51 percent of the
jobs will be held by low and moderate income
persons, documentation for each assisted
business shall include:
(A) A copy of a written agreement
containing:
(1) A commitment by the
business that at least 51 percent of the
jobs, on a full-time equivalent basis, will
be held by low and moderate income persons;
and
(2) A listing by job title of
the permanent jobs to be created,
identifying which are part-time, if any;
(8) A listing by job title of the
permanent jobs filled and which jobs were
initially held by low and moderate income
persons; and
(C) For each such low and
moderate income person hired, the size and
annual income of the person's family prior
to the person being hired for the job.
(6) For each activity determined to
benefit low and moderate income persons
based on the retention of jobs:
(i) Evidence that in the absence of
CDBG assistance jobs would be lost;
(ii) For each business assisted, a
listing by job title of permanent jobs
retained, indicating which of those jobs are
part-time and (where it is known) which are
held by low and moderate income persons at
the time the CDBG assistance is provided.
Where applicable, identification of any of
the retained jobs (other than those known to
be held by low and moderate income persons)
55
which are projected to become available to
low and moderate income [(Page 138))
persons through job turnover within two
years of the time CDBG assistance is
provided. Information upon which the job
turnover projections were based shall also
be included in the record;
(iii) For each retained job claimed
to be held by a low and moderate income
person, information on the size and annual
income of the person's family;
(iv) For jobs claimed to be available
to low and moderate income persons based on
job turnover, a description covering the
items required for "available to" jobs in
paragraph (b)(5) of this section; and
(v) Where jobs were claimed to be
available to low and moderate income
persons through turnover, a listing of each
job which has turned over to date,
indicating which of those jobs were either
taken by, or available to, low and moderate
income persons. For jobs made available, a
description of how first consideration was
given to such persons for those jobs shall
also be included in the record.
(7) For purposes of documenting, pursuant
to paragraph (b)(5)(i)(B), (b)(5)(ii)(C),
(b)(6)(iii) or (b)(6)(v) of this section,
that the person for whom a job was either
filled by or made available to a low- or
moderate -income person based upon the census
tract where the person resides or in which
the business is located, the recipient, in
lieu of maintaining records showing the
person's family size and income, may
substitute records showing either the
person's address at the time the
determination of income status was made or
the address of the business providing the
job, as applicable, the census tract in
which that address was located, the percent
of persons residing in that tract who either
are in poverty or who are low- and moderate -
income, as applicable, the data source used
for determining the percentage, and a
description of the pervasive poverty and
general distress in the census tract in
sufficient detail to demonstrate how the
census tract met the criteria in Sec.
570.208(a)(4)(v), as applicable.
(8) For each activity determined to aid
in the prevention or elimination of slums or
blight based on addressing one or more of
the conditions which qualified an area as a
slum or blighted area:
(i) The boundaries of the area; and
(ii) A description of the conditions
which qualified the area at the time of its
designation in sufficient detail to
demonstrate how the area met the criteria in
Sec. 570.208(b)(1).
(9) For each residential rehabilitation
activity determined to aid in the prevention
or elimination of slums or blight in a slum
or blighted area:
(i) The local definition of
"substandard";
(ii) A pre -rehabilitation inspection
report describing the deficiencies in each
structure to be rehabilitated; and
(iii) Details and scope of CDBG
assisted rehabilitation, by structure.
(10) For each activity determined to aid
in the prevention or elimination of slums or
blight based on the elimination of specific
conditions of blight or physical decay not
located in a slum or blighted area:
(i) A description of the specific
condition of blight or physical decay
treated; and
(ii) For rehabilitation carried out
under this category, a description of the
specific conditions detrimental to public
health and safety which were identified and
the details and scope of the CDBG assisted
rehabilitation by structure.
(11) For each activity determined to aid
in the prevention or elimination of slums or
blight based on addressing slums or blight
in an urban renewal area, a copy of the
Urban Renewal Plan, as in effect at the time
the activity is carried out, including maps
and supporting documentation.
(12) For each activity determined to meet
a community development need having a
particular urgency:
(i) Documentation concerning the
nature and degree of seriousness of the
condition requiring assistance;
(ii) Evidence that the recipient
certified that the CDBG activity was
designed to address the urgent need;
(iii) Information on the timing of
the development of the serious condition;
and
(iv) Evidence confirming that other
financial resources to alleviate the need
were not available. [(Page 139]]
(c) Records that demonstrate that the
recipient has made the determinations
required as a condition of eligibility of
certain activities, as prescribed in Sec.
Sec. 570.201(f), 570.201(i)(2), 570.201(p),
570.201(q), 570.202(b)(3), 570.206(f),
570.209, and 570.309.
(d) Records which demonstrate compliance
with Sec. 570.505 regarding any change of
use of real property acquired or improved
with CDBG assistance.
(e) Records that demonstrate compliance
with the citizen participation requirements
prescribed in 24 CFR part 91, subpart 8, for
entitlement recipients, or in 24 CFR part
91, subpart C, for HUD -administered small
cities recipients.
(f) Records which demonstrate compliance
with the requirements in Sec. 570.606
regarding acquisition, displacement,
relocation, and replacement housing.
(g) Fair housing and equal opportunity
records containing:
(1) Documentation of the analysis of
impediments and the actions the recipient
has carried out with its housing and
community development and other resources to
remedy or ameliorate any impediments to fair
housing choice in the recipient's community.
(2) Data on the extent to which each
racial and ethnic group and single -headed
households (by gender of household head)
have applied for, participated in, or
56
benefited from, any program or activity
funded in whole or in part with CDBG funds.
Such information shall be used only as a
basis for further investigation as to
compliance with nondiscrimination
requirements. No recipient is required to
attain or maintain any particular
statistical measure by race, ethnicity, or
gender in covered programs.
(3) Data on employment in each of the
recipient's operating units funded in whole
or in part with CDBG funds, with such data
maintained in the categories prescribed on
the Equal Employment Opportunity
Commission's EEO -4 form; and documentation
of any actions undertaken to assure equal
employment opportunities to all persons
regardless of race, color, national origin,
sex or handicap in operating units funded in
whole or in part under this part.
(4) Data indicating the race and
ethnicity of households (and gender of
single heads of households) displaced as a
result of CDBG funded activities, together
with the address and census tract of the
housing units to which each displaced
household relocated. Such information shall
be used only as a basis for further
investigation as to compliance with
nondiscrimination requirements. No recipient
is required to attain or maintain any
particular statistical measure by race,
ethnicity, or gender in covered programs.
(5) Documentation of actions undertaken
to meet the requirements of Sec. 570.607(b)
which implements section 3 of the Housing
Development Act of 1968, as amended (12
U.S.C. 17010) relative to the hiring and
training of low and moderate income persons
and the use of local businesses.
(6) Data indicating the racial/ethnic
character of each business entity receiving
a contract or subcontract of $25,000 or more
paid, or to be paid, with CDBG funds, data
indicating which of those entities are
women's business enterprises as defined in
Executive Order 12138, the amount of the
contract or subcontract, and documentation
of recipient's affirmative steps to assure
that minority business and women's business
enterprises have an equal opportunity to
obtain or compete for contracts and
subcontracts as sources of supplies,
equipment, construction and services. Such
affirmative steps may include, but are not
limited to, technical assistance open to all
businesses but designed to enhance
opportunities for these enterprises and
special outreach efforts to inform them of
contract opportunities. Such steps shall not
include preferring any business in the award
of any contract or subcontract solely or in
part on the basis of race or gender.
(71 Documentation of the affirmative
action measures the recipient has taken to
overcome prior discrimination, where the
courts or HUD have found that the recipient
has previously discriminated against persons
on the ground of race, color, national
origin or sex in administering a program or
activity funded in whole or in part with
CDBG funds. ((Page 140))
(h) Financial records, in accordance with
the applicable requirements listed in Sec.
570.502, including source documentation for
entities not subject to parts 84 and 85 of
this title. Grantees shall maintain evidence
to support how the CDBG funds provided to
such entities are expended. Such
documentation must include, to the extent
applicable, invoices, schedules containing
comparisons of budgeted amounts and actual
expenditures, construction progress
schedules signed by appropriate parties
(e.g., general contractor and/or a project
architect), and/or other documentation
appropriate to the nature of the activity.
(i) Agreements and other records related to
lump sum disbursements to private financial
institutions for financing rehabilitation as
prescribed in Sec. 570.513; and •
(j) Records required to be maintained in
accordance with other applicable laws and
regulations set forth in subpart K of this
part. (Approved by the Office of Management
and Budget under control number 2506-0077)
(53 FR 34454, Sept. 6, 1988; 53 FR 41330,
Oct. 21, 1988, as amended at 60 FR 1916,
1953, Jan. 5, 1995; 60 FR 56915, Nov. 9,
1995; 61 FR 18674, Apr. 29, 1996; 64 FR
38813, July 19, 1999)
Sec. 570.508 Public access to program
records.
Notwithstanding 24 CFR 85.42(1), recipients
shall provide citizens with reasonable
access to records regarding the past use of
CDBG funds, consistent with applicable State
and local laws regarding privacy and
obligations of confidentiality.
Sec. 570.509 Grant closeout procedures.
(a) Criteria for closeout. A grant will be
closed out when HUD determines, in
consultation with the recipient, that the
following criteria have been met:
(1) All costs to be paid with CDBG funds
have been incurred, with the exception of
closeout costs (e.g., audit costs) and costs
resulting from contingent liabilities
described in the closeout agreement pursuant
to paragraph (c) of this section. Contingent
liabilities include, but are not limited to,
third -party claims against the recipient, as
well as related administrative costs.
(2) With respect to activities (such as
rehabilitation of privately owned
properties) which are financed by means of
escrow accounts, loan guarantees, or similar
mechanisms, the work to be assisted with
CDBG funds (but excluding program income)
has actually been completed.
(3) Other responsibilities of the
recipient under the grant agreement and
applicable laws and regulations appear to
have been carried out satisfactorily or
there is no further Federal interest in
57
keeping the grant agreement open for the
purpose of securing performance.
(b) Closeout actions.
(1) Within 90 days of the date it is
determined that the criteria for closeout
have been met, the recipient shall submit to
HUD a copy of the final performance and
evaluation report described in 24 CFR part
91. If an acceptable report is not
submitted, an audit of the recipient's grant
activities may be conducted by HUD.
(2) Based on the information provided in
the performance report and other relevant
information, HUD, in consultation with the
recipient, will prepare a closeout agreement
in accordance with paragraph (c) of this
section.
(3) HUD will cancel any unused portion of
the awarded grant, as shown in the signed
grant closeout agreement. Any unused grant
funds disbursed from the U.S. Treasury which
are in the possession of the recipient shall
be refunded to HUD.
(4) Any costs paid with CDBG funds which
were not audited previously shall be subject
to coverage in the recipient's next single
audit performed in accordance with 24 CFR
part 44. The recipient may be required to
repay HUD any disallowed costs based on the
results of the audit, or on additional HUD
reviews provided for in the closeout
agreement.
(c) Closeout agreement. Any obligations
remaining as of the date of the closeout
shall be covered by the terms of a closeout
agreement. The agreement shall be prepared
by the HUD field office in consultation with
the recipient. The agreement shall identify
the grant being closed out, and include
provisions with respect to the following:
(1) Identification of any closeout costs
or contingent liabilities subject to payment
with CDBG funds after the closeout agreement
is signed;
(2) Identification of any unused grant
funds to be canceled by HUD;
(3) Identification of any program income
on deposit in financial institutions at the
time the closeout agreement is signed:
(4) Description of the recipient's
responsibility after closeout for:
(i) Compliance with all program
requirements, certifications and assurances
in using program income on deposit at the
time the closeout agreement is signed and in
using any other remaining CDBG funds
available for closeout costs and contingent
liabilities; ((Page 142)1
(ii) Use of real property assisted with
CDBG funds in accordance with the principles
described in Sec. 570.505;
(iii) Compliance with requirements
governing program income received subsequent
to grant closeout, as described in Sec.
570.504(b)(4) and (5); and
(iv) Ensuring that flood insurance
coverage for affected property owners is
maintained for the mandatory period;
(5) Other provisions appropriate to any
special circumstances of the grant closeout,
in modification of or in addition to the
obligations in paragraphs (c)(1) through (4)
of this section. The agreement shall
authorize monitoring by HUD, and shall
provide that findings of noncompliance may
be taken into account by HUD, as
unsatisfactory performance of the recipient,
in the consideration of any future grant
award under this part.
(d) Status of consolidated plan after
closeout. Unless otherwise provided in a
closeout agreement, the Consolidated Plan
will remain in effect after closeout until
the expiration of the program year covered
by the last approved consolidated plan.
(e) Termination of grant for convenience.
Grant assistance provided under this part
may be terminated for convenience in whole
or in part before the completion of the
assisted activities, in accordance with the
provisions of 24 CFR 85.44. The recipient
shall not incur new obligations for the
terminated portions after the effective
date, and shall cancel as many outstanding
obligations as possible. HUD shall allow
full credit to the recipient for those
portions of obligations which could not be
canceled and which had been properly
incurred by the recipient in carrying out
the activities before the termination. The
closeout policies contained in this section
shall apply in such cases, except where the
approved grant is terminated in its
entirety. Responsibility for the
environmental review to be performed under
24 CFR part 50 or 24 CFR part 58, as
applicable, shall be determined as part of
the closeout process.
(f) Termination for cause. In cases in
which the Secretary terminates the
recipient's grant under the authority of
subpart 0 of this part, or under the terms
of the grant agreement, the closeout
policies contained in this section shall
apply, except where the approved grant is
cancelled in its entirety. The provisions in
24 CFR 05.43(c) on the effects of
termination shall also apply. HUD shall
determine whether an environmental
assessment or finding of inapplicability is
required, and if such review is required,
HUD shall perform it in accordance with 24
CFR part 50.
(53 FR 8058, Mar. 11, 1988, as amended at 56
FR 56128, Oct. 31, 1991; 60 FR 1916, Jan.
5, 1995; 60 FR 16379, Mar. 30, 1995)
Sec. 570.510 Transferring projects from
urban counties to metropolitan cities.
Section 106(c)(3) of the Act authorizes the
Secretary to transfer unobligated grant
funds from an urban county to a new
metropolitan city, provided: the city was an
included unit of general local government in
the urban county immediately before its
qualification as a metropolitan city; the
funds to be transferred were received by the
county before the qualification of the city
as a metropolitan city; the funds to be
transferred had been programmed by the urban
58
county for use in the city before such
qualification; and the city and county agree
to transfer responsibility for the
administration of the funds being
transferred from the county's letter of
credit to the city's letter of credit. The
following rules apply to the transfer of
responsibility for an activity from an urban
county to the new metropolitan city.
(a) The urban county and the metropolitan
city must execute a legally binding
agreement which shall specify:
(1) The amount of funds to be transferred
from the urban county's letter of credit to
the metropolitan city's letter of credit;
(2) The activities to be carried out by
the city with thefunds being transferred;
(3) The county's responsibility for all
expenditures and unliquidated obligations
associated with the activities before the
time of transfer, including a statement that
responsibility for all audit and monitoring
findings associated with those expenditures
and obligations shall remain with the
county; ((Page 14311
(4) The responsibility of the
metropolitan city for all other audit and
monitoring findings;
(5) How program income (if any) from the
activities specified shall be divided
between the metropolitan city and the urban
county; and
(6) Such other provisions as may be
required by HUD.
(b) Upon receipt of a request for the
transfer of funds from an urban county to a
metropolitan city and a copy of the executed
agreement, HUD, in consultation with the
Department of the Treasury, shall establish
a date upon which the funds shall be
transferred from the letter of credit of
the urban county to the letter of credit of
the metropolitan city, and shall take all
necessary actions to effect the requested
transfer of funds.
(c) HUD shall notify the metropolitan city
and urban county of any special audit and
monitoring rules which apply to the
transferred funds when the date of the
transfer is communicated to the city and the
county.
Sec. 570.511 Use of escrow accounts for
rehabilitation of privately owned
residential property.
(a) Limitations. A recipient may withdraw
funds from its letter of credit for
immediate deposit into an escrow account for
use in funding loans and grants for the
rehabilitation of privately owned
residential property under Sec.
570.202(a)(1). The following additional
limitations apply to the use of escrow
accounts for residential rehabilitation
loans and grants closed after September 7,
1990:
(1) The use of escrow accounts under this
section is limited to loans and grants for
the rehabilitation of primarily residential
properties containing no more than four
dwelling units (and accessory neighborhood -
scale non-residential space within the same
structure, if any, e.g., a store front below
a dwelling unit).
(2) An escrow account shall not be used
unless the contract between the property
owner and the contractor selected to do the
rehabilitation work specifically provides
that payment to the contractor shall be made
through an escrow account maintained by the
recipient, by a subrecipient as defined in
Sec. 570.500(c), by a public agency
designated under Sec. 570.501(a), or by an
agent under a procurement contact governed
by the requirements of 24 CFR 85.36. No
deposit to the escrow account shall be made
until after the contract has been executed
between the property owner and the
rehabilitation contractor.
(3) All funds withdrawn under this
section shall be deposited into one interest
earning account with a financial
institution. Separate bank accounts shall
not be established for individual loans and
grants.
(4) The amount of funds deposited into an
escrow account shall be limited to the
amount expected to be disbursed within 10
working days from the date of deposit. If
the escrow account, for whatever reason, at
any time contains funds exceeding 10 days
cash needs, the grantee immediately shall
transfer the excess funds to its program
account. In the program account, the excess
funds shall be treated as funds erroneously
drawn in accordance with the requirements of
U.S. Treasury Financial Manual, paragraph 6-
2075.30.
(5) Funds deposited into an escrow
account shall be used only to pay the actual
costs of rehabilitation incurred by the
owner under the contract with a private
contractor. Other eligible costs related to
the rehabilitation loan or grant. e.g,,. the
recipient's administrative costs under Sec.
570.206 or rehabilitation services costs
under Sec. 570.202(b)(9), are not
permissible uses of escrowed funds. Such
other eligible rehabilitation costs shall be
paid under normal CDBG payment procedures
(e.g., from withdrawals of grant funds under
the recipient's letter of credit with the
Treasury).
(b) Interest. Interest earned on escrow
accounts established in accordance with this
section, less any service charges for the
account, shall be remitted to HUD at least
quarterly but not more frequently than
monthly. Interest earned on escrow accounts
is not required to be remitted to HUD to the
extent the interest is attributable to the
investment of program income.
(c) Remedies for noncompliance. If HUD
determines that a recipient has failed to
use an escrow account in accordance [(Page
1441)with this section, HUD may, in addition
to imposing any other sanctions provided for
under this part, require the recipient to
discontinue the use of escrow accounts, in
whole or in part.
59
(55 FR 32369, Aug. 8, 1990) Sec. 570.512
[Reserved)
Sec. 570.513 Lump sum drawdown for
financing of property rehabilitation
activities.
Subject to the conditions prescribed in this
section, recipients may draw funds from the
letter of credit in a lump sum to establish
a rehabilitation fund in one or more private
financial institutions for the purpose of
financing the rehabilitation of privately
owned properties. The fund may be used in
conjunction with various rehabilitation
financing techniques, including loans,
interest subsidies, loan guarantees, loan
reserves, or such other uses as may be
approved by HUD consistent with the
objectives of this section. The fund may
also be used for making grants, but only for
the purpose of leveraging non-CDBG funds for
the rehabilitation of the same property.
(a) Limitation on drawdown of grant funds.
(1) The funds that a recipient deposits
to a rehabilitation fund shall not exceed
the grant amount that the recipient
reasonably expects will be required,
together with anticipated program income
from interest and loan repayments, for the
rehabilitation activities during the period
specified in the agreement to undertake
activities, based on either:
(i) Prior level of rehabilitation
activity; or
(ii) Rehabilitation staffing and
management capacity during the period
specified in the agreement to undertake
activities.
(2) No grant funds may be deposited under
this section solely for the purpose of
investment, notwithstanding that the
interest or other income is to be used for
the rehabilitation activities.
(3) The recipient's rehabilitation
program administrative costs and the
administrative costs of the financial
institution may not be funded through lump
sum drawdown. Such costs must be paid from
periodic letter of credit withdrawals in
accordance with standard procedures or from
program income, other than program income
generated by the lump sum distribution.
(b) Standards to be met. The following
standards shall apply to all lump sum
drawdowns of CDBG funds for rehabilitation:
(1) Eligible rehabilitation activities.
The rehabilitation fund shall be used to
finance the rehabilitation of privately
owned properties eligible under the general
policies in Sec. 570.200 and the specific
provisions of either Sec. 570.202, including
the acquisition of properties for
rehabilitation, or Sec. 570.203.
(2) Requirements for agreement. The
recipient shall execute a written agreement
with one or more private financial
institutions for the operation of the
rehabilitation fund. The agreement shall
specify the obligations and responsibilities
of the parties, the terms and conditions on
which CDBG funds are to be deposited and
used or returned, the anticipated level of
rehabilitation activities by the financial
institution, the rate of interest and other
benefits to be provided by the financial
institution in return for the lump sum
deposit, and such other terms as are
necessary for compliance with the provisions
of this section. Upon execution of the
agreement, a copy must be provided to the
HUD field office for its record and use in
monitoring. Any modifications made during
the term of the agreement must also be
provided to HUD.
(3) Period to undertake activities. The
agreement must provide that the
rehabilitation fund may only be used for
authorized activities during a period of no
more than two years. The lump sum deposit
shall be made only after the agreement is
fully executed.
(4) Time limit on use of deposited funds.
Use of the deposited funds for
rehabilitation financing assistance must
start (e.g., first loan must be made,
subsidized or guaranteed) within 45 days of
the deposit. In addition, substantial
disbursements from the fund must occur
within 180 days of the receipt of the
deposit. (Where CDBG funds are used as a
guarantee, the funds that must be
substantially disbursed are the guaranteed
funds.) For a recipient with an agreement
specifying two years to [[Page 14511
undertake activities, the disbursement of 25
percent of the fund (deposit plus any
interest earned) within 180 days will be
regarded as meeting this requirement. If a
recipient with an agreement specifying two
years to undertake activities determines
that it has had substantial disbursement
from the fund within the 180 days although
it had not met this 25 percent threshold,
the justification for the recipient's
determination shall be included in the
program file. Should use of deposited funds
not start within 45 days, or substantial
disbursement from such fund not occur within
180 days, the recipient may be required by
HUD to return all or part of the deposited
funds to the recipient's letter of credit.
(5) Program activity. Recipients shall
review the level of program activity on a
yearly basis. Where activity is
substantially below that anticipated,
program funds shall be returned to the
recipient's letter of credit.
(6) Termination of agreement. In the case
of substantial failure by a private
financial institution to comply with the
terms of a lump sum drawdown agreement, the
recipient shall terminate its agreement,
provide written justification for the
action, withdraw all unobligated deposited
funds from the private financial
institution, and return the funds to the
recipient's letter of credit.
(7) Return of unused deposits. At the end
of the period specified in the agreement for
undertaking activities, all unobligated
deposited funds shall be returned to the
60
recipient's letter of credit unless the
recipient enters into a new agreement
conforming to the requirements of this
section. In addition, the recipient shall
reserve the right to withdraw any
unobligated deposited funds required by HUD
in the exercise of corrective or remedial
actions authorized under Sec. 570.910(b),
Sec. 570.911, Sec. 570.912 or Sec. 570.913.
(8) Rehabilitation loans made with non-
CDBG funds. If the deposited funds or
program income derived from deposited funds
are used to subsidize or guarantee repayment
of rehabilitation loans made with non-CDBG
funds, or to provide a supplemental loan or
grant to the borrower of the non-CDBG funds,
the rehabilitation activities are considered
to be CDBG-assisted activities subject to
the requirements applicable to such
activities, except that repayment of non-
CDBG funds shall not be treated as program
income.
(9) Provision of consideration. In
consideration for the lump sum deposit by
the recipient in a private financial
institution, the deposit must result in
appropriate benefits in support of the
recipient's local rehabilitation program.
Minimum requirements for such benefits are:
(i) Grantees shall require the
financial institution to pay interest on the
lump sum deposit.
(A) The interest rate paid by the
financial institution shall be no more than
three points below the rate on one year
Treasury obligations at constant maturity.
(B) When an agreement sets a
fixed interest rate for the entire term of
the agreement, the rate should be based on
the rate at the time the agreement is
executed.
(C) The agreement may provide for
an interest rate that would fluctuate
periodically during the term of the
agreement, but at no time shall the rate be
established at more than three points below
the rate on one year Treasury obligations at
constant maturity.
61
(ii) In addition to the payment of
interest, at least one of the following
benefits must be provided by the financial
institution:
(A) Leverage of the deposited
funds so that the financial institution
commits private funds for loans in the
rehabilitation program in an amount
substantially in excess of the amount of the
lump sum deposit;
(B) Commitment of private funds
by the financial institution for
rehabilitation loans at below market
interest rates, at higher than normal risk,
or with longer than normal repayment
periods; or
(C) Provision of administrative
services in support of the rehabilitation
program by the participating financial
institution at no cost or at lower than
actual cost.
(c) Program income. Interest earned on lump
sum deposits and payments on loans made from
such deposits are program income and, during
the period of ((Page 14611 the agreement,
shall be used for rehabilitation activities
under the provisions of this section.
(d) Outstanding findings. Notwithstanding
any other provision of this section, no
recipient shall enter into a new agreement
during any period of time in which an audit
or monitoring finding on a previous lump sum
drawdown agreement remains unresolved.
(e) Prior notification. The recipient shall
provide the HUD field office with written
notification of the amount of funds to be
distributed to a private financial
institution before distribution under the
provisions of this section.
(f) Recordkeeping requirements. The
recipient shall maintain in its files a copy
ofthe written agreement and related
documents establishing conformance with this
section and concerning performance by a
financial institution in accordance with the
agreement.
Appendix D
24 CFR 570 CDBG Regulations Subpart K, Other Program Requirements
62
Section
[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 20041
From the O.S. Government Printing Office via
GPO Access
[CITE: 24CFR570.600]
(Page 1461
TITLE 24 --HOUSING AND URBAN DEVELOPMENT
CHAPTER V --OFFICE OF ASSISTANT SECRETARY FOR
COMMUNITY PLANNING AND DEVELOPMENT,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS-
-Table of Contents
Subpart K_Other Program Requirements
Sec. 570.600 General.
Source: 53 FR 34456, Sept. 6, 1988, unless
otherwise noted.
(a) This subpart K enumerates laws that
the Secretary will treat as applicable to
grants made under section 106 of the Act,
other than grants to States made pursuant to
section 106(d) of the Act, for purposes of
the Secretary's determinations under section
104(e)(1) of the Act, including statutes
expressly made applicable by the Act and
certain other statutes and Executive Orders
for which the Secretary has enforcement
responsibility. This subpart K applies to
grants made under the Insular areas program
in Sec. 570.405, with the exception of Sec.
570.612. The absence of mention herein of
any other statute for which the Secretary
does not have direct enforcement
responsibility is not intended to be taken
as an indication that, in the Secretary's
opinion, such statute or Executive Order is
not applicable to activities assisted under
the Act. For laws that the Secretary will
treat as applicable to grants made to States
under section 106(d) of the Act for purposes
of the determination required to be made by
the Secretary pursuant to section 104(e((2)
of the Act, see Sec. 570.487.
(b) This subpart also sets forth certain
additional program requirements which the
Secretary has determined to be applicable to
grants provided under the Act as a matter of
administrative discretion.
(c) In addition to grants made pursuant to
section 106(b) and 106(d)(2)(8) of the Act
(subparts D and F, respectively), the
requirements of this subpart K are
applicable to grants made pursuant to
sections 107 and 119 of the Act (subparts E
and G, respectively), and to loans
guaranteed pursuant to subpart M.
[53 FR 34456, Sept. 6, 1988, as amended at
61 FR 11477, Mar. 20, 19961
Sec. 570.601 Public Law 88-352 and Public
Law 90-284; affirmatively furthering fair
housing; Executive Order 11063.
(a) The following requirements apply
according to sections 104(b) and 107 of the
Act:
(1) Public Law 88-352, which is title
VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d et seq.), and implementing
regulations in 24 CFR part 1.
(2) Public Law 90-284, which is the
Fair Housing Act (42 U.S.C. 3601-3620). In
accordance with the Fair Housing Act, the
Secretary requires that grantees administer
all programs and activities related to
housing and community development in a
manner to affirmatively further the policies
of the Fair Housing Act. Furthermore, in
accordance with section 104(b)(2) of the
Act, for each community receiving a grant
under subpart D of this part, the
certification that the grantee will
affirmatively further fair housing shall
specifically require the grantee to assume
the responsibility of fair housing planning
by conducting an analysis to identify
impediments to fair housing choice within
its jurisdiction, taking appropriate actions
to overcome the effects of any impediments
identified through that analysis, and
maintaining records reflecting the analysis
and actions in this regard.
(b) Executive Order 11063, as amended by
Executive Order 12259 (3 CFR, 1959-1963
Comp., p. 652; 3 CFR, 1980 Comp., p. 307)
(Equal Opportunity in Housing), ([Page 1471]
and implementing regulations in 24 CFR part
107, also apply.
[61 FR 11477, Mar. 20, 19961
Sec. 570.602 Section 109 of the Act.
Section 109 of the Act requires that no
person in the United States shall on the
grounds of race, color, national origin,
religion, or sex be excluded from
participation in, be denied the benefits of,
or be subjected to discrimination under any
program or activity receiving Federal
financial assistance made available pursuant
to the Act. Section 109 also directs that
the prohibitions against discrimination on
the basis of age under the Age
Discrimination Act and the prohibitions
against discrimination on the basis of
disability under Section 504 shall apply to
programs or activities receiving Federal
financial assistance under Title I programs.
The policies and procedures necessary to
ensure enforcement of section 109 are
codified in 24 CFR part 6.
(64 FR 3802, Jan. 25, 1999)
Sec. 570.603 Labor standards.
(a) Section 110(a) of the Act contains
labor standards that apply to non volunteer
labor financed in whole or in part with
63
assistance received under the Act. In
accordance with section 110(a) of the Act,
the Contract Work Hours and Safety Standards
Act (40 U.S.C. 327 et seq.) also applies.
However, these requirements apply to the
rehabilitation of residential property only
if such property contains not less than 8
units.
(b) The regulations in 24 CFR part 70
apply to the use of volunteers.
[61 FR 11477, Mar. 20, 1996)
Sec. 570.604 Environmental standards.
For purposes of section 104(g) of the Act,
the regulations in 24 CFR part 58 specify
the other provisions of law which further
the purposes of the National Environmental
Policy Act of 1969, and the procedures by
which grantees must fulfill their
environmental responsibilities. In certain
cases, grantees assume these environmental
review, decision making, and action
responsibilities by execution of grant
agreements with the Secretary.
161 FR 11477, Mar. 20, 19961
Sec. 570.605 National Flood Insurance
Program.
Notwithstanding the date of HUD approval of
the recipient's application (or, in the case
of grants made under subpart D of this part
or HUD -administered small cities recipients
in Hawaii, the date of submission of the
grantee's consolidated plan, in accordance
with 24 CFR part 91), section 202(a) of the
Flood Disaster Protection Act of 1973 (42
U.S.C. 4106) and the regulations in 44 CFR
parts 59 through 79 apply to funds provided
under this part 570.
[61 FR 11477, Mar. 20, 19961
Sec. 570.606 Displacement, relocation,
acquisition, and replacement of housing.
(a) General policy for minimizing
displacement. Consistent with the other
goals and objectives of this part, grantees
(or States or state recipients, as
applicable) shall assure that they have
taken all reasonable steps to minimize the
displacement of persons (families,
individuals, businesses, nonprofit
organizations, and farms) as a result of
activities assisted under this part.
(b) Relocation assistance for displaced
persons at URA levels.
(1) A displaced person shall be
provided with relocation assistance at the
levels described in, and in accordance with
the requirements of 49 CFR part 24, which
contains the government -wide regulations
implementing the Uniform Relocation
Assistance and Real Property Acquisition
Policies Act of 1970 (URA) (42 U.S.C. 4601-
4655).
(2) Displaced person.
(i) For purposes of paragraph (b)
of this section, the term "displaced
person" means any person (family,
individual, business, nonprofit
organization, or farm) that moves from real
property, or moves his or her personal
property from real property, permanently and
involuntarily, as a direct result of
rehabilitation, demolition, or acquisition
for an activity assisted under this part. A
permanent, involuntary move for an assisted
activity includes a permanent move from real
property that is made:
(A) After notice by the grantee
(or the state recipient, if applicable) to
move permanently from the property, if the
move occurs after the initial official
submission to HUD (or the State, ((Page
14811 as applicable) for grant, loan, or
loan guarantee funds under this part that
are later provided or granted.
(B) After notice by the
property owner to move permanently from the
property, if the move occurs after the date
of the submission of a request for financial
assistance by the property owner (or person
in control of the site) that is later
approved for the requested activity.
(C) Before the date described
in paragraph (b)(2)(i)(A) or (B) of this
section, if either HUD or the grantee (or
State, as applicable) determines that the
displacement directly resulted from
acquisition, rehabilitation, or demolition
for the requested activity.
(D) After the "initiation of
negotiations" if the person is the tenant -
occupant of a dwelling unit and any one of
the following three situations occurs:
(1) The tenant has not been
provided with a reasonable opportunity to
lease and occupya suitable decent, safe,
and sanitary dwelling in the same
building/complex upon the completion of the
project, including a monthly rent that does
not exceed the greater of the tenant's
monthly rent and estimated average utility
costs before the initiation of negotiations
or 30 percent of the household's average
monthly gross income; or
(2) The tenant is required
to relocate temporarily for the activity but
the tenant is not offered payment for all
reasonable out-of-pocket expenses incurred
in connection with the temporary relocation,
including the cost of moving to and from the
temporary location and any increased housing
costs, or other conditions of the temporary
relocation are not reasonable; and the
tenant does not return to the
building/complex; or
(3) The tenant is required
to move to another unit in the
building/complex, but is not offered
reimbursement for all reasonable out-of-
pocket expenses incurred in connection with
the move.
(ii) Notwithstanding the provisions of
paragraph (b)(2)(1) of this section, the
term "displaced person-" does not include:
64
(A) A person who is evicted for
cause based upon serious or repeated
violations of material terms of the lease or
occupancy agreement. To exclude a person on
this basis, the grantee (or State or state '
recipient, as applicable) must determine
that the eviction was not undertaken for the
purpose of evading the obligation to provide
relocation assistance under this section;
(B) A person who moves into the
property after the date of the notice
described in paragraph (b)(2)(1)(A) or (B)
of this section, but who received a written
notice of the expected displacement before
occupancy.
(C) A person who is not displaced
as described in 49 CFR 24.2(g)(2).
(D) A person who the grantee (or
State, as applicable) determines is not
displaced as a direct result of the
acquisition, rehabilitation, or demolition
for an assisted activity. To exclude a
person on this basis, HUD must concur in
that determination.
(iii) A grantee (or State or state
recipient, as applicable) may, at any time,
request HUD to determine whether a person is
a displaced person under this section. (3)
Initiation of negotiations. For purposes of
determining the type of replacement housing
assistance to be provided under paragraph
(b) of this section, if the displacement is
the direct result of privately undertaken
rehabilitation, demolition, or acquisition
of real property, the term "initiation of
negotiations" means the execution of the
grant or loan agreement between the grantee
(or State or state recipient, as
(applicable) and the person owning or
controlling the real property.
(c) Residential antidisplacement and
relocation assistance plan. The grantee
shall comply with the requirements of 24 CFR
part 42, subpart 8.
(d) Optional relocation assistance. Under
section 105(a)(11) of the Act, the grantee
may provide (or the State may permit the
state recipient to provide, as applicable)
relocation payments and other relocation
assistance to persons displaced by
activities that are not subject to paragraph
(b) or (c) of this section. The grantee may
also provide (or the State may also permit
the state recipient to provide, as
applicable) relocation assistance to persons
receiving assistance under paragraphs (b) or
(c) of this section et levels in excess of
those required by these paragraphs. Unless
such assistance is provided ([Page 14911
under State or local law, the grantee (or
state recipient, as applicable) shall
provide such assistance only upon the basis
of a written determination that the
assistance is appropriate (see, e.g., 24 CFR
570.201(i), as applicable). The grantee (or
state recipient, as applicable) must adopt a
written policy available to the public that
describes the relocation assistance that the
grantee (or state recipient, as applicable)
has elected to provide and that provides for
equal relocation assistance within each
class of displaced persons.
(e) Acquisition of real property. The
acquisition of real property for an assisted
activity is subject to 49 CFR part 24,
subpart B.
(f) Appeals. If a person disagrees with
the determination of the grantee (or the
state recipient, as applicable) concerning
the person's eligibility for, or the amount
of, a relocation payment under this section,
the person may file a written appeal of that
determination with the grantee (or state
recipient, as applicable). The appeal
procedures to be followed are described in
49 CFR 24.10. In addition, a low- or
moderate -income household that has been
displaced from a dwelling may file a written
request for review of the grantee's decision
to the HUD Field Office. For purposes of the
State CDBG program, a low- or moderate -
income household may file a written request
for review of the state recipient's decision
with the State.
(g) Responsibility of grantee or State.
(1) The grantee (or State, if applicable) is
responsible for ensuring compliance with the
requirements of this section,
notwithstanding any third party's
contractual obligation to the grantee to
comply with the provisions of this section.
For purposes of the State CDBG program, the
State shall require state recipients to
certify that they will comply with the
requirements of this section.
(2) The cost of assistance required
under this section may be paid from local
public funds, funds provided under this
part, or funds available from other sources.
(3) The grantee (or State and state
recipient, as applicable) must maintain
records in sufficient detail to demonstrate
compliance with the provisions of this
section.
(Approved by the Office of Management and
Budget under OMB control number 2506-0102)
[61 FR 11477, Mar. 20, 1996, as amended at
61 FR 51760, Oct. 3, 1996)
Sec. 570.607 Employment and contracting
opportunities.
To the extent that they are otherwise
applicable, grantees shall comply with:
(a) Executive Order 11246, as amended by
Executive Orders 11375, 11478, 12086, and
12107 (3 CFR 1964-1965 Comp. p. 339; 3 CFR,
1966-1970 Comp., p. 684; 3 CFR, 1966-1970.,
p. 803; 3 CFR, 1978 Comp., p. 230; 3 CFR,
1978 Comp., p. 264 (Equal Employment
Opportunity), and Executive Order 13279
(Equal Protection of the Laws for Faith -
Based and Community Organizations), 67 FR
77141, 3 CFR, 2002 Comp., p. 258; and the
implementing regulations at 41 CFR chapter
60; and (b) Section 3 of the Housing and
Urban Development Act of 1968 (12 U.S.C.
1701u) and implementing regulations at 24
CFR part 135.
65
(68 FR 56405, Sept. 30, 2003)
Sec. 570.608 Lead-based paint.
The Lead -Based Paint Poisoning Prevention
Act (42 U.S.C. 4821-4846), the Residential
Lead -Based Paint Hazard Reduction Act of
1992 (42 U.S.C. 4851-4856), and implementing
regulations at part 35, subparts A, B, J, K,
and R of this part apply to activities under
this program.
(64 FR 50226, Sept. 15, 1999)
Sec. 570.609 Use of debarred, suspended or
ineligible contractors or subrecipients.
The requirements set forth in 24 CFR part 5
apply to this program.
(61 FR 5209, Feb. 9, 1996)
Sec. 570.610 Uniform administrative
requirements and cost principles.
The recipient, its agencies or
instrumentalities, and subrecipients shall
comply with the policies, guidelines, and
requirements of 24 CFR part 85 and OLID
Circulars A-87, A-110 (implemented at 24 CFR
part 84), A-122, A-133 (implemented at 24
CFR part 451, and [(Page 150)) A-128 2
(implemented at 24 CFR part 44), as
applicable, as they relate to the acceptance
and use of Federal funds under this part.
The applicable sections of 24 CFR parts 84
and 85 are set forth at Sec. 570.502. \2\
See footnote 1 at Sec. 570.200(a)(5).
[60 FR 56916, Nov. 9, 1995)
Sec. 570.611 Conflict of interest.
(a) Applicability.
(1) In the procurement of supplies,
equipment, construction, and services by
recipients and by subrecipients, the
conflict of interest provisions in 24 CFR
85.36 and 24 CFR 84.42, respectively, shall
apply.
(2) In all cases not governed by 24 CFR
85.36 and 84.42, the provisions of this
section shall apply. Such cases include the
acquisition and disposition of real property
and the provision of assistance by the
recipient or by its subrecipients to
individuals, businesses, and other private
entities under eligible activities that
authorize such assistance (e.g.,
rehabilitation, preservation, and other
improvements of private properties or
facilities pursuant to Sec. 570.202; or
grants, loans, and other assistance to
businesses, individuals, and other private
entities pursuant to Sec. 570.203, 570.204,
570.455, or 570.703(i)).
(b) Conflicts prohibited. The general rule
is that no persons described in paragraph
(c) of this section who exercise or have
exercised any functions or responsibilities
with respect to CDBG activities assisted
under this part, or who are in a position to
participate in a decision making process or
gain inside information with regard to such
activities, may obtain a financial interest
or benefit from a CDBG-assisted activity, or
have a financial interest in any contract,
subcontract, or agreement with respect to a
CDBG-assisted activity, or with respect to
the proceeds of the CDBG-assisted activity,
either for themselves or those with whom
they have business or immediate family ties,
during their tenure or for one year
thereafter. For the UDAG program, the above
restrictions shall apply to all activities
that are a part of the UDAG project, and
shall cover any such financial interest or
benefit during, or at any time after, such
person's tenure.
(c) Persons covered. The conflict of
interest provisionsof paragraph (b) of this
section apply to any person who is an
employee, agent, consultant, officer, or
elected official or appointed official of
the recipient, or of any designated public
agencies, or of subrecipients that are
receiving funds under this part. (d)
Exceptions. Upon the written request of the
recipient, HUD may grant an exception to the
provisions of paragraph (b) of this section
on a case-by-case basis when it has
satisfactorily met the threshold
requirements of (d)(1) of this section,
taking into account the cumulative effects
of paragraph (d)(2) of this section.
(1) Threshold requirements. HUD will
consider an exception only after the
recipient has provided the following
documentation:
(i) A disclosure of the nature of the
conflict, accompanied by an assurance that
there has been public disclosure of the
conflict and a description of how the public
disclosure was made; and
(ii) An opinion of the recipient's
attorney that the interest for which the
exception is sought would not violate State
or local law.
(2) Factors to be considered for
exceptions. In determining whether to grant
a requested exception after the recipient
has satisfactorily met the requirements of
paragraph (d)(1) of this section, HUD shall
conclude that such an exception will serve
to further the purposes of the Act and the
effective and efficient administration of
the recipient's program or project, taking
into account the cumulative effect of the
following factors, as applicable:
(i) Whether the exception would
provide a significant cost benefit or an
essential degree of expertise to the program
or project that would otherwise not be
available;
(ii) Whether an opportunity was
provided for open competitive bidding or
negotiation;
(iii) Whether the person affected is a
member of a group or class of low- or
moderate -income persons intended to be the
beneficiaries of the assisted activity, and
the exception will permit such person to
66
receive generally the same interests or
benefits as are being [(Page 151]]
made available or provided to the group or
class;
(iv) Whether the affected person has
withdrawn from his or her functions or
responsibilities, or the decision making
process with respect to the specific
assisted activity in question;
(v) Whether the interest or benefit
was present before the affected person was
in a position as described in paragraph (b)
of this section;
(vi) Whether undue hardship will
result either to the recipient or the person
affected when weighed against the public
interest served by avoiding the prohibited
conflict; and
(vii) Any other relevant
considerations.
160 FR 56916, Nov. 9, 1995]
Sec. 570.612 Executive Order 12372.
(a) General. Executive Order 12372,
Intergovernmental Review of Federal
Programs, and the Department's implementing
regulations at 24 CFR part 52, allow each
State to establish its own process for
review and comment on proposed Federal
financial assistance programs.
(b) Applicability. Executive Order 12372
applies to the CDBG Entitlement program and
the UDAG program. The Executive Order
applies to all activities proposed to be
assisted under UDAG, but it applies to the
Entitlement program only where a grantee
proposes to use funds for the planning or
construction (reconstruction or
installation) of water or sewer facilities.
Such facilities include storm sewers as well
as all sanitary sewers, but do not include
water and sewer lines connecting a structure
to the lines in the public right-of-way or
easement. It is the responsibility of the
grantee to initiate the Executive Order
review process if it proposes to use its
CDBG or UDAG funds for activities subject to
review.
Sec. 570.613 Eligibility restrictions for
certain resident aliens.
(a) Restriction. Certain newly legalized
aliens, as described in 24 CFR part 49, are
not eligible to apply for benefits under
covered activities funded by the programs
listed in paragraph (e) of this section.
"Benefits" under this section means
financial assistance, public services, jobs
and access to new or rehabilitated housing
and other facilities made available under
covered activities funded by programs listed
in paragraph (e) of this section.
"Benefits" do not include relocation
services and payments to which displacees
are entitled by law.
(b) Covered activities. "Covered
activities" under this section means
activities meeting the requirements of Sec.
570.208(a) that either:
(1) Have income eligibility requirements
limiting the benefits exclusively to low and
moderate income persons; or
(2) Are targeted geographically or
otherwise to primarily benefit low and
moderate income persons (excluding
activities serving the public at large, such
as sewers, roads, sidewalks, and parks), and
that provide benefits to persons on the
basis of an application.
(c) Limitation on coverage. The
restrictions under this section apply only
to applicants for new benefits not being
received by covered resident aliens as of
the effective date of this section.
(d) Compliance. Compliance can be
accomplished by obtaining certification as
provided in 24 CFR 49.20.
(e) Programs affected.
(1) The Community Development Block Grant
program for small cities, administered under
subpart F of part 570 of this title until
closeout of the recipient's grant,.
(2) The Community Development Block Grant
program for entitlement grants, administered
under subpart D of part 570 of this title.
(3) The Community Development Block Grant
program for States, administered under
subpart I of part 570 of this title until
closeout of the unit of general local
government's grant by the State.
(4) The Urban Development Action Grants
program, administered under subpart G of
part 570 of this title until closeout of the
recipient's grant.
(55 FR 18494, May 2, 1990]
Sec. 570.614 Architectural Barriers Act and
the Americans with Disabilities Act.
(a) The Architectural Barriers Act of 1968
(42 U.S.C. 4151-4157) requires certain
Federal and Federally funded((Page 15211
buildings and other facilities to be
designed, constructed, or altered in
accordance with standards that insure
accessibility to, and use by, physically
handicapped people. A building or facility
designed, constructed, or altered with funds
allocated or reallocated under this part
after December 11, 1995, and that meets the
definition of "residential structure" as
defined in 24 CFR 40.2 or the definition of
"building" as defined in 41 CFR 101-
19.602(a) is subject to the requirements of
the Architectural Barriers Act of 1968 (42
U.S.C. 4151-4157) and shall comply with the
Uniform Federal Accessibility Standards
(appendix A to 24 CFR part 40 for
residential structures,and appendix A to 41
CFR part 101-19, subpart 101-19.6, for
general type buildings).
(b) The Americans with Disabilities Act (42
U.S.C. 12131; 47 U.S.C. 155, 201, 218 and
225) (ADA) provides comprehensive civil
rights to individuals with disabilities in
the areas of employment, public
accommodations, State and local government
67
DATE: March 17, 2005
SUBJECT: City Council Meeting - March 24, 2005
ITEM: *12.6.1. Consider a resolution authorizing the Mayor to execute a
Community Development Block Grant Program Agreement with
the Round Rock Housing Authority for a Senior Activity
Program for $8,500.00.
Department: Planning and Community Development
Staff Person: Mona Ryan, Community Development Coordinator
Justification:
On July 22, 2004 City Council adopted by resolution R -04-07-22-13C1 the 2004-2009
Community Development Consolidated Plan and 2004-2005 Action Plan. Table 3 of this
plan lists the Consolidated Plan listing of projects to be implemented in the 2005 Fiscal
Year.
Funding:
Cost: $8,500.00
Source of funds: Community Development Block Grant (CDBG)
Outside Resources: US Department of Housing and Urban Development
Background Information:
Community Development Block Grant funds are used to subsidize the salary of the
Round Rock Housing Authority Activities Director for their elderly tenants.
Public Comment: N/A
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
COMMUNITY DEVELOPMENT BLOCK GRANT AGREEMENT
(B -04 -MC -48-0514)
THIS AGREEMENT, entered into this 4q day of Mahal , 2005 by and between the
City of Round Rock, a Texas home -rule municipality (herein called the "CITY") and the Round
Rock Housing Authority (herein called the "HOUSING AUTHORITY").
WHEREAS, the CITY has applied for and received funds from the United States
Government under Title I of the Housing and Community Development Act of 1974, Public Law
93-383; and
WHEREAS, the CITY wishes to engage the HOUSING AUTHORITY to assist the
CITY in utilizing such funds;
NOW, THEREFORE, In consideration of the mutual covenants and agreements contained herein
the parties agree as follows:
SECTION I:
SCOPE OF SERVICES
1.1. Activities and Beneficiaries
The HOUSING AUTHORITY will be responsible for administering a Community
Development Block Grant ("CDBG") Year 2004 program in a manner satisfactory to the CITY
and consistent with any standards required as a condition of providing these funds. Such
program will include the following activities eligible under the CDBG Program: Senior Activity
Program. Under this program, the HOUSING AUTHORITY agrees to provide these services
for:
Persons Assisted
Total tIndup1icatcd Persons 65
-l'otal Unduplicated Lobe to Moderate Income Persons 65
1.2. Level of Accomplishments
In addition to normal administrative services required as part of this Agreement, the
HOUSING AUTHORITY agrees to provide the households/persons the following program
services:
RRHA_Senior Activity contract_04-05.DOC
Activity
it of Weeks
`Times /i
Unduplicated
Persons
Equals knits of Service
Bingo
26
20
520
Sew ing:'Quiltin
24
6
144
}Health Screenings
12
20
240
l3reak lasts
4
25
100
home Visits
26
5
130
1.3. Staffing
To undertake the activities described above and accomplish the levels of service
described above, the HOUSING AUTHORITY will allocate staff time in support of the program
funded under this Agreement as follows:
Title
11rs. per Week
// of Weeks
Estimated 1iours
Activity Coordinator
20
52
1040
Timeframe: October 1, 20 )4 through September 30, 2005
1.4. Performance Monitoring
The CITY will monitor the performance of the HOUSING AUTHORITY against the
goals and performance standards required 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 HOUSING AUTHORITY within thirty (30) days
after being notified by the CITY, contract suspension or termination procedures will be initiated
in accordance with Section VI of this Agreement.
SECTION II:
TIME OF PERFORMANCE
Services of the HOUSING AUTHORITY shall start on the 1st day of October, 2004 and
end on the 30th day of September, 2005. The term of this Agreement and the provisions herein
shall be extended to cover any additional time period during which the HOUSING
AUTHORITY remains in control of CDBG funds or other assets including program income.
SECTION III:
PAYMENT
It is expressly agreed the total amount to be paid by the CITY under this contract shall
not exceed 58,500.00. Drawdowns for the payment of eligible expenses shall be made against
the line item budgets specified in Exhibit "C", attached hereto and incorporated herein and in
2
accordance with performance. Expenses for general administration shall also be paid against the
line item budgets specified in Exhibit "C" and in accordance with performance.
Payments will be contingent upon certification of the HOUSING AUTHORITY's
financial management system in accordance with the standards specified in Appendix A to this
Agreement.
SECTION IV:
NOTICES
Notices made pursuant to this Agreement shall be directed to the following
representatives:
CITY:
HOUSING AUTHORITY:
Mona Ryan,
Community Development Coordinator
Round Rock Housing Authority
Ebby Green
City of Round Rock
Executive Director
301 West Bagdad, Suite 140
PO Box 781
Round Rock, Texas 78664
Round Rock TX 78680-0781
SECTION V:
SPECIAL CONDITIONS
The HOUSING AUTHORITY shall agree to comply with the requirements of Title 24
Code of Federal Regulations, Part 570 of the Housing and Urban Development (HUD)
regulations concerning Community Development Block Grants (CDBG) and all federal
regulations and policies issued pursuant to these regulations. The HOUSING AUTHORITY
further agrees to utilize funds available under this Agreement to supplement rather than supplant
funds otherwise available.
SECTION VI:
GENERAL CONDITIONS
6.1. General Compliance
The HOUSING AUTHORITY agrees to comply with all applicable federal, state and
local laws and regulations governing the funds provided under this Agreement.
6.2. Independent Contract
It is understood and agreed that SUBRECIPEINT is an independent contractor and shall
not be considered an employee of the CITY. SUBPRICIPIENT shall not be within protection or
3
coverage of the CITY'S Workers' Compensation insurance, Health Insurance, Liability
Insurance or any other Insurance that the CITY from time to time may have in force and effect.
6.3. Hold Harmless
The HOUSING AUTHORITY shall indemnify, save harmless and exempt the CITY, its
officers, agents, servants, and employees from and against any and all suits, actions, legal
proceedings, claims, demands, damages, costs, expenses , attorney fees and any and all other costs
or fees incident to any work done as result of this Agreement and arising out of a willful or
negligent act or omission of the HOUSING AUTHORITY, its officers, agents, servants, and
employees ; provided, however, that the HOUSING AUTHORITY shall not be liable for any suits,
actions, legal proceedings, claims, demands, damages, costs, expenses and attorneys' fees arising
out of a willful or negligent act or omission of the CITY, its officers, agents, servants and
employees, or third parties.
6.4. Amendments
The term and conditions of this Agreement, including the attachments listed below,
constitute the entire agreement between the parties and superseded all previous communications,
representations, or agreements, either written or oral, with respect to the subject matter hereof.
No modification or amendment of this Agreement will be binding on either party unless
acknowledged in writing by their duly authorized representatives.
Attachments:
a. Exhibit A — Client Data Form
b. Exhibit B — Beneficiary Report Form
c. Exhibit C — Project Budget
d. Appendix A — OMB Circular A-110
e. Appendix B — 24 CFR 570 CDBG Regulations Subpart C, Eligible Activities
f. Appendix C — 24 CFR 570 CDBG Regulations Subpart J, Grant Administration
g. Appendix D — 24 CFR 570 CDBG Regulations Subpart J, Other Program
Requirements
6.5. Suspension or Termination
Either party may terminate this Agreement at any time by giving written notice to the
other party of such termination and specifying the effective date thereof at least thirty (30) days
before the effective date of such termination. Partial terminations of the Scope of Service in
Paragraph 1.1 above may only be undertaken with the prior approval of the CITY. In the event
of any termination for convenience, all finished or unfinished documents, data, reports or other
materials prepared by the HOUSING AUTHORITY under this Agreement shall, at the option of
the CITY, become property of the CITY.
The CITY may also suspend or terminate this Agreement, in whole or in part, if the
HOUSING AUTHORITY materially fails to comply with any term of this Agreement, or with
any of the rules, regulations, or provisions referred to herein; and the CITY may declare the
4
HOUSING AUTHORITY ineligible for any further participation in GRANTEE contracts, in
addition to other remedies as provided by law. Should the SUBRICIPIENT fail to cure or
correct such defects or failures identified by the CITY within the fifteen (15) days after
notification of deficiencies, and such breach of contract relate to a violation of federal law or
regulations which results in a demand for reimbursement from the Department of Housing and
Urban Development (HUD) or its successor, the CITY may seek reimbursement of all funds
from the CITY to the HOUSING AUTHORITY under this Agreement.
The HOUSING AUTHORITY shall not be relieved of the liability to the CITY for
damages sustained by the CITY by virtue of any breach of this Agreement by the HOUSING
AUTHORITY and the CITY may withhold any payments to the HOUSING AUTHORITY for
the purpose as set out and until such time as the exact amount of damages due the CITY from the
HOUSING AUTHORITY is determined. Should the CITY become aware of any activity by the
HOUSING AUTHORITY which would jeopardize the CITY's position with HUD which would
cause a payback of CDBG funds or other CITY federal funds then the CITY may take
appropriate action including injunctive relief against the HOUSING AUTHORITY to prevent
the transaction as aforesaid. The failure of the CITY to exercise this right shall in no way
constitute a waiver by the CITY to demand payment or seek any other relief in law or in equity
to which it may be justly entitled.
6.6. Reversion of Assets
Pursuant to 24 CFR 570.503, the HOUSING AUTHORITY agrees that should it
discontinue the services as provided for herein, then all unexpended CDBG funds shall be
returned within ten (10) days to the CITY. The funds remaining will be appropriated to eligible
CDBG activities in keeping with the CITY's budgetary process.
SECTION VII:
ADMINISTRATIVE REQUIREMENTS
7.1. Records and Reports
A. Recordkeeping
The HOUSING AUTHORITY shall maintain all records required by the federal
regulations specified in 24 CFR Part 570.506 and that are pertinent to the activities to be funded
under this Agreement. Such records shall include, but not be limited to:
1. Records providing a full description of each activity undertaken;
2. Records demonstrating that each activity undertaken meets one of the
National Objectives of the CDBG program under 24 CFR Part 570.208;
3. Records required to determine the eligibility of activities under 24 CFR
Part 570.201 - 570.206;
4. Financial records as required by 24 CFR Part 570.502, and OMB Circular
A-110; and
5
5. Other records necessary to document compliance with Subpart K of 24
CFR 570.
B. Retention
The HOUSING AUTHORITY shall retain all records pertinent to expenditures under this
Agreement for a period of four (4) years after the termination of all activities funded under this
Agreement, or after the resolution of all Federal audit findings, which ever occurs later.
C. Client Data
The HOUSING AUTHORITY shall maintain client data demonstrating client eligibility
for services provided. Such data shall include, but not be limited to, client name, address and
annual household income level as shown in Exhibit "A", attached hereto and incorporated herein.
Any other basis for determining eligibility must be approved by the CITY in advance in writing,
and description of services provided. Such information shall be made available to CITY
monitors or their designees upon request.
D. Progress Reports
The HOUSING AUTHORITY shall submit regular Quarterly Progress Reports to the
CITY in the form, content, and frequency as required by the CITY. These shall include but not
be limited to summary of expenditures, list of beneficiaries and a brief narrative of
accomplishments. Beneficiary reports should be submitted on Exhibit "B", attached hereto and
incorporated herein unless an alternative report is approved by CITY in advance in writing.
E. Disclosure
The HOUSING AUTHORITY understands that client information collected under this
contract is private and the use or disclosure of such information, when not directly connected
with the administration of the CITY's or the HOUSING AUTHORITY's responsibilities with
respect to services provided under this contract is prohibited by the U.S. Privacy Act of 1974
unless written consent is obtained from such person receiving service and, in the case of a minor,
that of a responsible parent/guardian.
F. Property Records
The HOUSING AUTHORITY shall maintain real property inventory records, which
clearly identifies any properties purchased, improved or sold using funds provided under this
Agreement. Property retained shall continue to meet eligibility criteria and shall conform to the
"changes in use" restrictions specified in 24 CFR Parts 570.503(b)(8).
G. Close -Outs
The HOUSING AUTHORITY's obligation to the CITY shall not end until all closeout
requirements are completed. Activities during this close-out period shall include, but are not
6
limited to: making final payments, disposing of program assets (including the return of all
unused materials, equipment, unspent cash advances, program income balances, and receivable
accounts to the CITY, and determining custodianship of records).
H. Audits & Inspections
All the HOUSING AUTHORITY's records with respect to any matters covered by this
Agreement shall be made available to the CITY, grantor agency, their designees or the Federal
Government. At any time during normal business hours, as often as the CITY or grantor agency
deems necessary, to audit, examine, and make excerpts or transcripts of all relevant data. Any
deficiencies noted in audit reports must be fully cleared by the HOUSING AUTHORITY within
thirty (30) days after receipt by the HOUSING AUTHORITY. Failure by the HOUSING
AUTHORITY to comply with the above audit requirements will constitute a violation of this
contract and may result in the withholding of future payments. The HOUSING AUTHORITY
hereby agrees to have an annual agency audit conducted in accordance with current city policy
concerning the HOUSING AUTHORITY's audits.
7.2. Financial Management
A. Budgets
A detailed contract budget is attached hereto and incorporated herein as Exhibit "C". The
CITY and the HOUSING AUTHORITY may agree to revise the budget from time to time in
accordance with existing city policies.
B. Program Income
The HOUSING AUTHORITY shall report quarterly all program income as defined at 24
CFR 570.504 generated by activities carried out with CDBG funds made available under this
contract. The use of program income by the HOUSING AUTHORITY shall comply with
requirements set forth in 24 CFR 570.504. By way of further limitations, the HOUSING
AUTHORITY may use such income during the contract period for activities permitted under this
contract and shall reduce requests for additional funds by the amount of any such program
income balances on hand. All unused program income shall be returned to the CITY at the end of
the contract period. Any interest earned on cash advances from the U.S. Treasury is not program
income and shall be remitted promptly to the CITY. Reporting of any such program income
shall, at minimum, be included in quarterly reports under Section VI of this agreement.
Information on program income provided in these reports will include, but not be limited to,
summaries of program income generated; a summary of expenditures of these funds; and a
description of the use of program income sufficient for determining eligibility of these expenses
under CDBG guidelines.
7
C. Indirect Costs
If indirect costs are charged, the HOUSING AUTHORITY will develop an indirect cost
allocation plan for determining the appropriate CITY's share of administrative costs and shall
submit such plan to the CITY for approval.
D. Payment Procedures
The CITY will pay to the HOUSING AUTHORITY funds available under this contract
based on information submitted by the HOUSING AUTHORITY and consistent with an
approved budget and city policies concerning payments. With the exception of certain advances,
payments will be made for eligible expenses actually incurred by the HOUSING AUTHORITY,
and not to exceed actual cash requirements. Payments will be adjusted by the CITY in
accordance with advance fund and program income balances available under this contract for
costs incurred by the CITY on the behalf of the HOUSING AUTHORITY.
7.3. Procurement
A. Compliance
All program assets (unexpended advanced funds) shall revert to the CITY upon
termination of this Agreement. The only authorized expenditures of funds shall be travel
vouchers or prepaid bus tickets as described herein.
B. OMB Standards
The HOUSING AUTHORITY shall procure materials in accordance with the
requirements of Attachment 0 of OMB Circular A-110, Procurement Standards, and shall
subsequently follow Attachment N, Property Management Standards, covering utilization and
disposal of property. These requirements are referenced in 24 CFR Part 84, titled "Common
Rule".
C. Travel
The HOUSING AUTHORITY shall obtain written approval from the CITY for any travel
outside the metropolitan area with funds provided under this contract. The CITY shall determine
that such travel is necessary and reasonable according to applicable standards outlined in OMB
Circular A87.
8
SECTION VIII:
PERSONNEL & PARTICIPANT CONDITIONS
8.1. Civil Rights
A. Compliance
The HOUSING AUTHORITY agrees to comply with (city and state civil rights
ordinance referenced here) and with Title VI of the Civil Rights Act of 1964 as amended, Title
VIII of the Civil Rights Act of 1968 as amended, Section 109 of Title I of the Housing and
Community Development Act of 1974, Section 504 of the Rehabilitation Act of 1973, the
Americans with Disabilities Act of 1990, the Age Discrimination Act of 1975, Executive Order
11063, and with Executive Order 11246 as amended by Executive Orders 11375 and 12086.
B. Nondiscrimination
The HOUSING AUTHORITY will not cause any person to be excluded from
participation in, denied the benefits of, or subjected to discrimination under any of the program's
activities receiving assistance under this Agreement based on the grounds of race, color, religion,
sex, ancestry, national origin or handicap. In order to allow the CITY to monitor non-
discrimination, the HOUSING AUTHORITY will at minimum maintain records regarding the
race of persons or households assisted under this contract and whether households assisted have
a female head of household.
The HOUSING AUTHORITY will not discriminate against any employee or applicant
for employment because of race, color, religion, sex, ancestry, national origin, or other handicap,
age, marital status, or status with regard to public assistance. The HOUSING AUTHORITY will
take affirmative action to insure all employment practices are free from such discrimination.
Such employment practices include but are not limited to the following: hiring, upgrading,
demotion, transfer, recruitment or recruitment advertising, layoff, termination, rates of pay or
other forms of compensation, and selection for training, including apprenticeship. The
HOUSING AUTHORITY agrees to post in conspicuous places, available to employees and
applicants for employment, notices to be provided by the contracting agency setting forth the
provisions of this nondiscrimination clause.
C. Compliance with Federal Regulations
The HOUSING AUTHORITY agrees to comply with any federal regulations issued
pursuant to compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 706) or
applicable updates which prohibits discrimination against the handicapped in any federally
assisted program. The CITY shall provide the HOUSING AUTHORITY with any guidelines
necessary for compliance with that portion of the regulations in force during the term of this
contract.
9
8.2. Conduct
A. Assignability
The HOUSING AUTHORITY shall not assign or transfer any interest in this Agreement
without the prior written consent of the CITY.
B. Hatch Act
The HOUSING AUTHORITY agrees that no funds provided, nor personnel employed
under this contract, shall be in any way or to any extent engaged in the conduct of political
activities in violation of Chapter 15 of Title V United States Code.
C. Conflict of Interest
The HOUSING AUTHORITY understands and agrees to abide by the provisions of 24
CFR 570.611 with respect to conflicts of interest, and covenants that it presently has no 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. These
conflict of interest provisions apply to any person who is an employee, agent, consultant, officer,
or elected official of the CITY, or of any designated public agencies or the HOUSING
AUTHORITY which are receiving funds under the CDBG Entitlement program.
D. Subcontracts
1. Approvals
The HOUSING AUTHORITY shall not enter into any subcontracts with any agency or
individual in the performance of this contract without written consent of the CITY prior to the
execution of such Agreement.
2. Monitoring of Subcontractors
The HOUSING AUTHORITY will monitor all subcontracted services on a regular basis
to assure contract compliance. Results of monitoring efforts shall be summarized in written
reports and supported with evidence of follow-up actions taken to correct areas of
noncompliance.
3. Content
The HOUSING AUTHORITY shall cause all of the provisions of this contract in its
entirety to be included in and made a part of any subcontract executed in the performance of this
Agreement.
4. Selection Process
10
The HOUSING AUTHORITY shall undertake to insure that all subcontracts let in the
performance of this agreement shall be awarded on a fair and open competition basis. Executed
copies of all subcontracts shall be forwarded to CITY along with documentation concerning the
selection process.
E. Religious Organization
The HOUSING AUTHORITY agrees that funds provided under this contract will not be
utilized for religious activities, to promote religious interests, or for the benefit of a religious
organization in accordance with the federal regulations specified in 24 CFR 570.200(j).
F. Pending Litigation
The HOUSING AUTHORITY agrees to inform CITY about any litigation the
HOUSING AUTHORITY is or becomes in involved in.
G. Background Checks
The HOUSING AUTHORITY agrees to conduct a criminal background check on all
employees working directly with youth.
IN WITNESS WHEREOF, this Agreement is executed on this of i" day of fraA,CN
, 2005.
as to form:
Stepha L. Sheets, 1 y Attorney
CITY:
City of Round Rock
Nyle Maxwel
Mayor
HOUSING AUTHORITY:
Round Rock Housing Authority
Tit
NI I M1140 -'—•--
Boar. Chairperson
11
Exhibit A
Client Data
12
Exhibit B
Beneficiary Data
13
Exhibit C
Project Budget
Itemize program expenditures below. Only expenditures listed will be reimbursed
unless budget is amended with prior approval. Budgeted items cannot exceed
CDBG program allocation.
Description
Senior Activities Director salary
Budget Amount
$8,500.00
Total:
14
$8,500.00
15
Appendix A
OMB Circular A-110
CIRCULAR A-110
(REVISED 11/19/93, As Ftizrther Amended
9/30/99)
CIRCULAR NO. A-110
Revised
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND
ESTABLISHMENTS
SUBJECT: Uniform Administrative Requirements
for Grants and Agreements With
Institutions of Higher Education,
Hospitals, and Other Non -Profit
Organizations
1. Purpose. This Circular sets forth
standards tor obtaining consistency and
uniformity among Federal agencies in the
administration of grants to and agreements
with institutions of higher education,
hospitals, and other non-profit
organizations.
2. Authority. Circular A-110 is issued under
the authority of 31 U.S.C. 503 (the Chief
Financial Officers Act), 31 U.S.C. 1111, 41
U.S.C. 405 (the Office of Federal
Procurement Policy Act), Reorganization Plan
No. 2 of 1970, and E.O. 11541 ("Prescribing
the Duties of the Office of Management and
Budget and the Domestic Policy Council in
the Executive Office of the President").
3. Policy. Except as provided herein, the
standards set forth in this Circular are
applicable to all Federal agencies. If any
statute specifically prescribes policies or
specific requirements that differ from the
standards provided herein, the provisions of
the statute shall govern.
The provisions of the sections of this
Circular shall be applied by Federal
agencies to recipients. Recipients shall
apply the provisions of this Circular to
subrecipients 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 1.
This Circular 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 Governments," and the
Federal agencies' grants management common
rule which standardized and codified the
administrative requirements Federal agencies
impose on State and local grantees. In
addition, subawards and contracts to State
or local governments are not covered by this
Circular. However, this Circular applies to
subawards made by State and local
governments to organizations covered by this
Circular. Federal agencies may apply the
provisions of this Circular to commercial
organizations, foreign governments,
organizations under the jurisdiction of
foreign governments, and international
organizations.
4. Definitions. Definitions of key terms
used in this Circular are contained in
Section .2 in the Attachment.
5. Required Action. The specific
requirements and responsibilities of Federal
agencies and institutions of higher
education, hospitals, and other non-profit
organizations are set forth in this
Circular. Federal agencies responsible for
awarding and administering grants to and
other agreements with organizations
described in paragraph 1 shall adopt the
language in the Circular unless different
provisions are required by Federal statute
or are approved by OMB.
6. OMB Responsibilities. OMB will review
agency regulations and implementation of
this Circular, and will provide
interpretations of policy requirements and
assistance to insure effective and efficient
implementation. Any exceptions will be
subject to approval by OMB, as indicated in
Section .4 in the Attachment. Exceptions
will only be made in particular cases where
adequate justification is presented.
7. Information Contact. Further information
concerning this Circular may be obtained by
contacting the Office of Federal Financial
Management, Office of Management and Budget,
Washington, DC 20503, telephone (202) 395-
3993.
0. Termination Review Date. This Circular
will have a policy review three years from
date of issuance.
9. Effective Data. The standards set forth
in this Circular which affect Federal
agencies will be effective 30 days after
publication of the final revision in the
Federal Register. Those standards which
Federal agencies impose on grantees will be
adopted by agencies in codified regulations
within six months after publication in the
Federal Register. Earlier implementation is
encouraged.
Grants and Agreements with Institutions of
Higher Education,
Hospitals, and Other Non -Profit
Organisations
SUBPART A - GENERAL
Sec.
.1 Purpose.
.2 Definitions.
.3 Effect on other issuances.
.4 Deviations.
.5 Subawards.
SUBPART B - PRE-AFARD REQUIREMENTS
.10 Purpose.
_.11 Pre -award policies.
.12 Forms for applying for Federal
assistance.
.13 Debarment and suspension.
.14 Special award conditions.
.15 Metric system of measurement.
.16 Resource Conservation and Recovery
Act.
.17 Certifications and representations.
SUBPART C - POST -AWARD REQUIREMENTS
Financial and Program Management
_.20 Purpose of financial and program
management.
.21 Standards for financial management
systems.
.22 Payment.
_.23 Cost sharing or matching.
.24 Program income.
.25 Revision of budget and program plans.
_.26 Non -Federal audits.
.27 Allowable costs.
.28 Period of availability of funds.
_.29 Conditional exemptions.
Property Standards
.30 Purpose of property standards.
_.31 Insurance coverage.
_.32 Real property.
.33 Federally -owned and exempt property.
.34 Equipment.
.35 Supplies and other expendable
property.
.36 Intangible property.
.37 Property trust relationship.
Procurement Standards
.40 Purpose of procurement standards.
_.41 Recipient responsibilities.
-_.42 Codes of conduct.
.43 Competition.
.44 Procurement procedures.
.45 Cost and price analysis.
.46 Procurement records.
.47 Contract administration.
_.48 Contract provisions.
Reports and Records
.50 Purpose of reports and records.
.51 Monitoring and reporting program
performance.
_.52 Financial reporting.
19
.53 Retention and access requirements for
records.
Termination and Enforcement
.60 Purpose of termination and
enforcement.
.61 Termination.
_.62 Enforcement.
SUBPART D - ABTER-TEE-AiAAD REQUIREMENTS
.70 Purpose.
.71 Closeout procedures.
.72 Subsequent adjustments and continuing
responsibilities.
.73 Collection of amounts due
APPENDIX A - CONTRACT PROVISIONS
SUBPART A - General
.1 Purpose. This Circular establishes
uniform administrative requirements for
Federal grants and agreements awarded to
institutions of higher education, hospitals,
and other non-profit organizations. Federal
awarding agencies shall not impose
additional or inconsistent requirements,
except as provided in Sections .4, and
.14 or unless specifically required by
Federal statute or executive order. Non-
profit organizations that implement Federal
programs for the States are also subject to
State requirements.
.2 Definitions.
(a) Accrued expenditures means the
charges incurred by the recipient
during a given period requiring the
provision of funds for: (1) goods and
other tangible property received; (2)
services performed by employees,
contractors, subrecipients, and other
payees; and, (3) other amounts
becoming owed under programs for
which no current services or
performance is required.
(b) Accrued income means the sum of:
(1) earnings during a given period
from (i) services performed by the
recipient, and (ii) goods and other
tangible property delivered to
purchasers, and (2) amounts becoming
20
owed to the recipient for which no
current services or performance is
required by the recipient.
(c) Acquisition cost of equipment
means the net invoice price of the
equipment, including the cost of
modifications, attachments,
accessories, or auxiliary apparatus
necessary to make the property usable
for the purpose for which it was
acquired. Other charges, such as the
cost of installation, transportation,
taxes, duty or protective in -transit
insurance, shall be included or
excluded from the unit acquisition
cost in accordance with the
recipient's regular accounting
practices.
(d) Advance means a payment made by
Treasury check or other appropriate
payment mechanism to a recipient upon
its request either before outlays are
made by the recipient or through the
use of predetermined payment
schedules.
(e) Award means financial assistance
that provides support or stimulation
to accomplish a public purpose.
Awards include grants and other
agreements in the form of money or
property in lieu of money, by the
Federal Government to an eligible
recipient. The term does not include:
technical assistance, which provides
services instead of money; other
assistance in the form of loans, loan
guarantees, interest subsidies, or
insurance; direct payments of any
kind to individuals; and, contracts
which are required to be entered into
and administered under procurement
laws and regulations.
(f) Cash contributions means the
recipient's cash outlay, including
the outlay of money contributed to
the recipient by third parties.
(g) Closeout means the process by
which a Federal awarding agency
determines that all applicable
administrative actions and all
required work of the award have been
completed by the recipient and
Federal awarding agency.
(h) Contract means a procurement
contract under an award or subaward,
and a procurement subcontract under a
recipient's or subrecipient's
contract.
(i) Cost sharing or matching means
that portion of project or program
costs not borne by the Federal
Government.
(j) Date of completion means the date
on which all work under an award is
completed or the date on the award
document, or any supplement or
amendment thereto, on which Federal
sponsorship ends.
(k) Disallowed costs means those
charges to an award that the Federal
awarding agency determines to be
unallowable, in accordance with the
applicable Federal cost principles or
other terms and conditions contained
in the award.
(1) Equipment means tangible
nonexpendable personal property
including exempt property charged
directly to the award having a useful
life of more than one year and an
acquisition cost of $5000 or more per
unit. However, consistent with
recipient policy, lower limits may be
established.
(m) Excess property means property
under the control of any Federal
awarding agency that, as determined
by the head thereof, is no longer
required for its needs or the
discharge of its responsibilities.
(n) Exempt property means tangible
personal property acquired in whole
or in part with Federal funds, where
the Federal awarding agency has
statutory authority to vest title in
the recipient without further
obligation to the Federal Government.
An example of exempt property
authority is contained in the Federal
Grant and Cooperative Agreement Act
(31 U.S.C. 6306), for property
acquired under an award to conduct
basic or applied research by a non-
profit institution of higher
education or non-profit organization
whose principal purpose is conducting
scientific research.
(o) Federal awarding agency means the
Federal agency that provides an award
to the recipient.
(p) Federal funds authorized means
the total amount of Federal funds
obligated by the Federal Government
for use by the recipient. This amount
may include any authorized carryover
of unobligated funds from prior
funding periods when permitted by
agency regulations or agency
implementing instructions.
(q) Federal share of real property,
equipment, or supplies means that
percentage of the property's
acquisition costs and any improvement
expenditures paid with Federal funds.
(r) Funding period means the period
of time when Federal funding is
available for obligation by the
recipient.
(s) Intangible property and debt
instruments means, but is not limited
to, trademarks, copyrights, patents
and patent applications and such
property as loans, notes and other
debt instruments, lease agreements,
stock and other instruments of
property ownership, whether
considered tangible or intangible.
(t) Obligations means the amounts of
orders placed, contracts and grants
awarded, services received and
similar transactions during a given
period that require payment by the
21
recipient during the same or a future
period.
(u) Outlays or expenditures means
charges made to the project or
program. They may be reported on a
cash or accrual basis. For reports
prepared on a cash basis, outlays are
the sum of cash disbursements for
direct charges for goods and
services, the amount of indirect
expense charged, the value of third
party in-kind contributions applied
and the amount of cash advances and
payments made to subrecipients. For
reports prepared on an accrual basis,
outlays are the sum of cash
disbursements for direct charges for
goods and services, the amount of
indirect expense incurred, the value
of in-kind contributions applied, and
the net increase (or decrease) in the
amounts owed by the recipient for
goods and other property received,
for services performed by employees,
contractors, subrecipients and other
payees and other amounts becoming
owed under programs for which no
current services or performance are
required.
(v) Personal property means property
of any kind except real property. It
may be tangible, having physical
existence, or intangible, having no
physical existence, such as
copyrights, patents, or securities.
(w) Prior approval means written
approval by an authorized official
evidencing prior consent.
(x) Program income means gross income
earned by the recipient that is
directly generated by a supported
activity or earned as a result of the
award (see exclusions in paragraphs
.24 (e) and (h}). Program income
includes, but is not limited to,
income from fees for services
performed, the use or rental of real
or personal property acquired under
federally -funded projects, the sale
of commodities or items fabricated
under an award, license fees and
royalties on patents and copyrights,
and interest on loans made with award
funds. Interest earned on advances of
Federal funds is not program income.
Except as otherwise provided in
Federal awarding agency regulations
or the terms and conditions of the
award, program income does not
include the receipt of principal on
loans, rebates, credits, discounts,
etc., or interest earned on any of
them.
(y) Project costs means all allowable
costs, as set forth in the applicable
Federal cost principles, incurred by
a recipient and the value of the
contributions made by third parties
in accomplishing the objectives of
the award during the project period.
(z) Project period means the period
established in the award document
during which Federal sponsorship
begins and ends.
(aa) Property means, unless otherwise
stated, real property, equipment,
intangible property and debt
instruments.
(bb) Real property means land,
including land improvements,
structures and appurtenances thereto,
but excludes movable machinery and
equipment.
(cc) Recipient means an organization
receiving financial assistance
directly from Federal awarding
agencies to carry out a project or
program. The term includes public and
private institutions of higher
education, public and private
hospitals, and other quasi -public and
private non-profit organizations such
as, but not limited to, community
action agencies, research institutes,
educational associations, and health
centers. The term may include
commercial organizations, foreign or
international organizations (such as
agencies of the United Nations) which
are recipients, subrecipients, or
contractors or subcontractors of
recipients or subrecipients at the
discretion of the Federal awarding
agency. The term does not include
government-owned contractor -operated
facilities or research centers
providing continued support for
mission -oriented, large-scale
programs that are government-owned or
controlled, or are designated as
federally -funded research and
development centers.
(dd) Research and development means
all research activities, both basic
and applied, and all development
activities that are supported at
universities, colleges, and other
non-profit institutions. "Research"
is defined as a systematic study
directed toward fuller scientific
knowledge or understanding of the
subject studied. "Development" is the
systematic use of knowledge and
understanding gained from research
directed toward the production of
useful materials, devices, systems,
or methods, including design and
development of prototypes and
processes. The term research also
includes activities involving the
training of individuals in research
techniques where such activities
utilize the same facilities as other
research and development activities
and where such activities are not
included in the instruction function.
(ee) Small awards means a grant or
cooperative agreement not exceeding
the small purchase threshold fixed at
41 U.S.C. 403(11) (currently
$25,000).
(ff) Subaward means an award of
22
financial assistance in the form of
money, or property in lieu of money,
made under an award by a recipient to
an eligible subrecipient or by a
subrecipient to a lower tier
subrecipient. The term includes
financial assistance when provided by
any legal agreement, even if the
agreement is called a contract, but
does not include procurement of goods
and services nor does it include any
form of assistance which is excluded
from the definition of "award" in
paragraph (e).
(gg) Subrecipient means the legal
entity to which a subaward is made
and which is accountable to the
recipient for the use of the funds
provided. The term may include
foreign or international
organizations (such as agencies of
the United Nations) at the discretion
of the Federal awarding agency.
(hh) Supplies means all personal
property excluding equipment,
intangible property, and debt
instruments as defined in this
section, and inventions of a
contractor conceived or first
actually reduced to practice in the
performance of work under a funding
agreement ("subject inventions"), as
defined in 37 CFR part 401, "Rights
to Inventions Made by Nonprofit
Organizations and Small Business
Firms Under Government Grants,
Contracts, and Cooperative
Agreements."
(ii) Suspension means an action by a
Federal awarding agency that
temporarily withdraws Federal
sponsorship under an award, pending
corrective action by the recipient or
pending a decision to terminate the
award by the Federal awarding agency.
Suspension of an award is a separate
action from suspension under Federal
agency regulations implementing E.O.s
12549 and 12689, "Debarment and
Suspension."
(jj) Termination means the
cancellation of Federal sponsorship,
in whole or in part, under an
agreement at any time prior to the
date of completion.
(kk) Third party in-kind
contributions means the value of non-
cash contributions provided by non -
Federal third parties. Third party
in-kind contributions may be in the
form of real property, equipment,
supplies and other expendable
property, and the value of goods and
services directly benefiting and
specifically identifiable to the
project or program.
(11) Unliquidated obligations, for
financial reports prepared on a cash
basis, means the amount of
obligations incurred by the recipient
that have not been paid. For reports
prepared on an accrued expenditure
basis, they represent the amount of
obligations incurred by the recipient
for which an outlay has not been
recorded.
(mm) Unobligated balance means the
portion of the funds authorized by
the Federal awarding agency that has
not been obligated by the recipient
and is determined by deducting the
cumulative obligations from the
cumulative funds authorized.
(nn) Unrecovered indirect cost means
the difference between the amount
awarded and the amount which could
have been awarded under the
recipient's approved negotiated
indirect cost rate.
foo) Working capital advance means a
procedure where by funds are advanced
to the recipient to cover its
estimated disbursement needs for a
given initial period.
.3 Effect on other issuances. For
awards subject to this Circular, all
administrative requirements of
codified program regulations, program
manuals, handbooks and other
nonregulatory materials which are
inconsistent with the requirements of
this Circular shall be superseded,
except to the extent they are
required by statute, or authorized in
accordance with the deviations
provision in Section .4.
.4 Deviations. The Office of
Management and Budget (OMB) may grant
exceptions for classes of grants or
recipients subject to the
requirements of this Circular when
exceptions are not prohibited by
statute. However, in the interest of
maximum uniformity, exceptions from
the requirements of this Circular
shall be permitted only in unusual
circumstances. Federal awarding
agencies may apply more restrictive
requirements to a class of recipients
when approved by OMB. Federal
awarding agencies may apply less
restrictive requirements when
awarding small awards, except for
those requirements which are
statutory. Exceptions on a case-by-
case basis may also be made by
Federal awarding agencies.
.5 Subawards. Unless sections of
this Circular specifically exclude
subrecipients from coverage, the
provisions of this Circular shall be
applied to subrecipients performing
work under awards if such
subrecipients are institutions of
higher education, hospitals or other
non-profit organizations. State and
local government subrecipients are
23
subject to the provisions of
regulations implementing the grants
management common rule,"Uniform
Administrative Requirements for
Grants and Cooperative Agreements to
State and Local Governments,"
published at 53 FR 8034 (3/11/88).
SUBPART B - Pre -]Ward Requirements
.10 Purpose. Sections .11
through .17 prescribes forms and
instructions and other pre -award
matters to be used in applying for
Federal awards.
.11 Pre -award policies.
(a) Use of Grants and Cooperative
Agreements, and Contracts. In each
instance, the Federal awarding agency
shall decide on the appropriate award
instrument (i.e., grant, cooperative
agreement, or contract). The Federal
Grant and Cooperative Agreement Act
(31 U.S.C. 6301-08) governs the use
of grants, cooperative agreements and
contracts. A grant or cooperative
agreement shall be used only when the
principal purpose of a transaction is
to accomplish a public purpose of
support or stimulation authorized by
Federal statute. The statutory
criterion for choosing between grants
and cooperative agreements is that
for the latter, "substantial
involvement is expected between the
executive agency and the State, local
government, or other recipient when
carrying out the activity
contemplated in the agreement."
Contracts shall be used when the
principal purpose is acquisition of
property or services for the direct
benefit or use of the Federal
Government.
(b) Public Notice and Priority
Setting. Federal awarding agencies
shall notify the public of its
intended funding priorities for
discretionary grant programs, unless
funding priorities are established by
Federal statute.
.12 Forms for applying for Federal
assistance.
(a) Federal awarding agencies shall
comply with the applicable report
clearance requirements of 5 CFR part
1320, "Controlling Paperwork Burdens
on the Public," with regard to all
forms used by the Federal awarding
agency in place of or as a supplement
to the Standard Form 424 fSF-424)
series.
(b) Applicants shall use the SF -424
series or those forms and
instructions prescribed by the
Federal awarding agency.
(c) For Federal programs covered by
E.O. 12372, "Intergovernmental Review
of Federal Programs," the applicant
shall complete the appropriate
sections of the SF -424 (Application
for Federal Assistance) indicating
whether the application was subject
to review by the State Single Point
of Contact (SPOC). The name and
address of the SPOC for a particular
State can be obtained from the
Federal awarding agency or the
Catalog of Federal Domestic
Assistance. The SPOC shall advise the
applicant whether the program for
which application is made has been
selected by that State for review.
(d) Federal awarding agencies that do
not use the SF -424 form should
indicate whether the application is
subject to review by the State under
E.O. 12372.
.13 Debarment and suspension.
Federal awarding agencies and
recipients shall comply with the
nonprocurement debarment and
suspension common rule implementing
E.O.s 12549 and 12689, "Debarment and
Suspension." This common rule
restricts subawards and contracts
with certain parties that are
debarred, suspended or otherwise
excluded from or ineligible for
participation in Federal assistance
programs or activities.
_,14 Special award conditions. If
an applicant or recipient: (a) has a
history of poor performance, (b) is
not financially stable, (c) has a
management system that does not meet
the standards prescribed in this
Circular, (d) has not conformed to
the terms and conditions of a
previous award, or (e) is not
otherwise responsible, Federal
awarding agencies may impose
additional requirements as needed,
provided that such applicant or
recipient is notified in writing as
to: the nature of the additional
requirements, the reason why the
additional requirements are being
imposed, the nature of the corrective
action needed, the time allowed for
completing the corrective actions,
and the method for requesting
reconsideration of the additional
requirements imposed. Any special
conditions shall be promptly removed
once the conditions that prompted
them have been corrected.
.15 Metric system of measurement.
The Metric Conversion Act, as amended
24
by the Omnibus Trade and
Competitiveness Act (15 U.:.
declares that the metric sv,'.
the preferred measurement
U.S. trade and commerce. TC,..
requires each Federal agency
establish a date or dates 1•
consultation with the Secr',i. ,c
Commerce, when the metric
measurement will be used
agency's procurements, gran*c.
other business-related act:•..
Metric implementation may t
where the use of the systes
initially impractical or li.. .
cause significant inefficic,,
the accomplishment of fedri.
funded activities. Federal.
agencies shall follow the )..;
of E.O. 12770, "Metric Usage ,.
Federal Government Prograsm
.16 Resource Conservati-;..,
Recovery Act (RCRA) (Pub.
codified at 42 U.S.C. 6962;
the Act, any State agency o
of a political subdivision .:.r
which is using appropriate
funds must comply with Sect,.
Section 6002 requires that ,,(A.
be given in procurement progc.. ,o.
the purchase of specific prod'
containing recycled material-:
identified in guidelines dev:1
the Environmental Protection f'n.
(EPA) (40 CFR parts 247-254).
Accordingly, State and local
institutions of higher educat.inn
hospitals, and non-profit
organizations that receive di _e,
Federal awards or other Fedora'
shall give preference in their
procurement programs funded witl,
Federal funds to the purchase of
recycled products pursuant to t1Le
guidelines.
_.17 Certifications and
representations. Unless prohibit
statute or codified regulation,
Federal awarding agency is auth.,'
and encouraged to allow recipien+
submit certifications and
representations required by srat-
executive order, or regulation
annual basis, if the recipients 1,
ongoing and continuing relation> -,I ,
with the agency. Annual
certifications and representati<n
shall be signed by responsible
officials with the authority to
ensure recipients' compliance w,i
the pertinent requirements.
SUBPART C - Poet -Award Requirements
Financial and Program Management
.20 Purpose of financial and
program management. Sections .21
through .28 prescribe standards
for financial management systems,
methods for making payments and rules
for: satisfying cost sharing and
matching requirements, accounting for
program income, budget revision
approvals, making audits, determining
allowability of cost, and
establishing fund availability.
_.21 Standards for financial
management systems.
(a) Federal awarding agencies shall
require recipients to relate
financial data to performance data
and develop unit cost information
whenever practical.
(b) Recipients' financial management
systems shall provide for the
following.
(1) Accurate, current and complete
disclosure of the financial results
of each federally -sponsored project
or program in accordance with the
reporting requirements set forth in
Section .52. If a Federal awarding
agency requires reporting on an
accrual basis from a recipient that
maintains its records on other than
an accrual basis, the recipient shall
not be required to establish an
accrual accounting system. These
recipients may develop such accrual
data for its reports on the basis of
an analysis of the documentation on
hand.
(2) Records that identify adequately
the source and application of funds
for federally -sponsored activities.
These records shall contain
information pertaining to Federal
awards, authorizations, obligations,
unobligated balances, assets,
outlays, income and interest.
(3) Effective control over and
accountability for all funds,
property and other assets. Recipients
shall adequately safeguard all such
assets and assure they are used
solely for authorized purposes.
(4) Comparison of outlays with budget
amounts for each award. Whenever
appropriate, financial information
should be related to performance and
unit cost data.
(5) Written procedures to minimize
the time elapsing between the
transfer of funds to the recipient
from the U.S. Treasury and the
issuance or redemption of checks,
warrants or payments by other means
25
for program purposes by the
recipient. To the extent that the
provisions of the Cash Management
improvement Act (CMIA) (Pub. L. 101-
453) govern, payment methods of State
agencies, instrumentalities, and
fiscal agents shall be consistent
with CMIA Treasury -State Agreements
or the CMIA default procedures
codified at 31 CFR part 205,
"Withdrawal of Cash from the Treasury
for Advances under Federal Grant and
Other Programs."
(6) Written procedures for
determining the reasonableness,
allocability and allowability of
costs in accordance with the
provisions of the applicable Federal
cost principles and the terms and
conditions of the award.
(7) Accounting records including cost
accounting records that are supported
by source documentation.
(c) Where the Federal Government
guarantees or insures the repayment
of money borrowed by the recipient,
the Federal awarding agency, at its
discretion, may require adequate
bonding and insurance if the bonding
and insurance requirements of the
recipient are not deemed adequate to
protect the interest of the Federal
Government.
(d) The Federal awarding agency may
require adequate fidelity bond
coverage where the recipient lacks
sufficient coverage to protect the
Federal Government's interest.
(e) Where bonds are required in the
situations described above, the bonds
shall be obtained from companies
holding certificates of authority as
acceptable sureties, as prescribed in
31 CFR part 223, "Surety Companies
Doing Business with the United
States."
.22 Payment.
fa) Payment methods shall minimize
the time elapsing between the
transfer of funds from the United
States Treasury and the issuance or
redemption of checks, warrants, or
payment by other means by the
recipients. Payment methods of State
agencies or instrumentalities shall
be consistent with Treasury -State
CMIA agreements or default procedures
codified at 31 CFR part 205.
(b) Recipients are to be paid in
advance, provided they maintain or
demonstrate the willingness to
maintain: (1) written procedures that
minimize the time elapsing between
the transfer of funds and
disbursement by the recipient, and
(2) financial management systems that
meet the standards for fund control
and accountability as established in
Section .21. Cash advances to a
recipient organization shall be
limited to the minimum amounts needed
and be timed to be in accordance with
the actual, immediate cash
requirements of the recipient
organization in carrying out the
purpose of the approved program or
project. The timing and amount of
cash advances shall be as close as is
administratively feasible to the
actual disbursements by the recipient
organization for direct program or
project costs and the proportionate
share of any allowable indirect
costs.
(c) Whenever possible, advances shall
be consolidated to cover anticipated
cash needs for all awards made by the
Federal awarding agency to the
recipient.
(1) Advance payment mechanisms
include, but are not limited to,
Treasury check and electronic funds
transfer.
(2) Advance payment mechanisms are
subject to 31 CFR part 205.
(3) Recipients shall be authorized to
submit requests for advances and
reimbursements at least monthly when
electronic fund transfers are not
used.
(d) Requests for Treasury check
advance payment shall be submitted on
SF -270, "Request for Advance or
Reimbursement," or other forms as may
be authorized by OMB. This form is
not to be used when Treasury check
advance payments are made to the
recipient automatically through the
use of a predetermined payment
schedule or if precluded by special
Federal awarding agency instructions
for electronic funds transfer.
(e) Reimbursement is the preferred
method when the requirements in
paragraph (b) cannot be met. Federal
awarding agencies may also use this
method on any construction agreement,
or if the major portion of the
construction project is accomplished
through private market financing or
Federal loans, and the Federal
assistance constitutes a minor
portion of the project.
(1) When the reimbursement method is
used, the Federal awarding agency
shall make payment within 30 days
after receipt of the billing, unless
the billing is improper.
(2) Recipients shall be authorized to
submit request for reimbursement at
least monthly when electronic funds
transfers are not used.
(f) If a recipient cannot meet the
criteria for advance payments and the
Federal awarding agency has
determined that reimbursement is not
feasible because the recipient lacks
sufficient working capital, the
26
Federal awarding agency may provide
cash on a working capital advance
basis. Under this procedure, the
Federal awarding agency shall advance
cash to the recipient to cover its
estimated disbursement needs for an
initial period generally geared to
the awardee's disbursing cycle.
Thereafter, the Federal awarding
agency shall reimburse the recipient
for its actual cash disbursements.
The working capital advance method of
payment shall not be used for
recipients unwilling or unable to
provide timely advances to their
subrecipient to meet the
subrecipient's actual cash
disbursements.
(g) To the extent available,
recipients shall disburse funds
available from repayments to and
interest earned on a revolving fund,
program income, rebates, refunds,
contract settlements, audit
recoveries and interest earned on
such funds before requesting
additional cash payments.
(h) Unless otherwise required by
statute, Federal awarding agencies
shall not withhold payments for
proper charges made by recipients at
any time during the project period
unless (1) or (2) apply.
(1) A recipient has failed to comply
with the project objectives, the
terms and conditions of the award, or
Federal reporting requirements.
(2) The recipient or subrecipient is
delinquent in a debt to the United
States as defined in OMB Circular A-
129, "Managing Federal Credit
Programs." Under such conditions, the
Federal awarding agency may, upon
reasonable notice, inform the
recipient that payments shall not be
made for obligations incurred after a
specified date until the conditions
are corrected or the indebtedness to
the Federal Government is liquidated.
(i) Standards governing the use of
banks and other institutions as
depositories of funds advanced under
awards are as follows.
(1) Except for situations described
in paragraph (i)(2), Federal awarding
agencies shall not require separate
depository accounts for funds
provided to a recipient or establish
any eligibility requirements for
depositories for funds provided to a
recipient. However, recipients must
be able to account for the receipt,
obligation and expenditure of funds.
(2) Advances of Federal funds shall
be deposited and maintained in
insured accounts whenever possible.
(j) Consistent with the national goal
of expanding the opportunities for
women -owned and minority-owned
business enterprises, recipients
shall be encouraged to use women-
owned and minority-owned banks (a
bank which is owned at least 50
percent by women or minority group
members).
(k) Recipients shall maintain
advances of Federal funds in interest
bearing accounts, unless (1), (2) or
(3) apply.
(1) The recipient receives less than
$120,000 in Federal awards per year.
(2) The best reasonably available
interest bearing account would not be
expected to earn interest in excess
of $250 per year on Federal cash
balances.
(3) The depository would require an
average or minimum balance so high
that it would not be feasible within
the expected Federal and non -Federal
cash resources.
(1) For those entities where CMIA and
its implementing regulations do not
apply, interest earned on Federal
advances deposited in interest
bearing accounts shall be remitted
annually to Department of Health and
Human Services, Payment Management
System, Rockville, MD 20852. Interest
amounts up to $250 per year may be
retained by the recipient for
administrative expense. State
universities and hospitals shall
comply with CMIA, as it pertains to
interest. If an entity subject to
CMIA uses its own funds to pay pre-
award costs for discretionary awards
without prior written approval from
the Federal awarding agency, it
waives its right to recover the
interest under CHIA.
(m) Except as noted elsewhere in this
Circular, only the following forms
shall be authorized for the
recipients in requesting advances and
reimbursements. Federal agencies
shall not require more than an
original and two copies of these
forms.
(1) SF -270, Request for Advance or
Reimbursement. Each Federal awarding
agency shall adopt the SF -270 as a
standard form for all nonconstruction
programs when electronic funds
transfer or predetermined advance
methods are not used. Federal
awarding agencies, however, have the
option of using this form for
construction programs in lieu of the
SF -271, "Outlay Report and Request
for Reimbursement for Construction
Programs."
(2) SF -271, Outlay Report and Request
for Reimbursement for Construction
Programs. Each Federal awarding
agency shall adopt the SF -271 as the
standard form to be used for
requesting reimbursement for
construction programs. However, a
Federal awarding agency may
substitute the SF -270 when the
Federal awarding agency determines
27
that it provides adequate information
to meet Federal needs.
.23 Cost sharing or matching.
(a) All contributions, including cash
and third party in-kind, shall be
accepted as part of the recipient's
cost sharing or matching when such
contributions meet all of the
following criteria.
(1) Are verifiable from the
recipient's records.
(2) Are not included as contributions
for any other federally -assisted
project or program.
(3) Are necessary and reasonable for
proper and efficient accomplishment
of project or program objectives.
(4) Are allowable under the
applicable cost principles.
(5) Are not paid by the Federal
Government under another award,
except where authorized by Federal
statute to be used for cost sharing
or matching.
(6) Are provided for in the approved
budget when required by the Federal
awarding agency.
(7) Conform to other provisions of
this Circular, as applicable.
(b) Unrecovered indirect costs may be
included as part of cost sharing or
matching only with the prior approval
of the Federal awarding agency.
(c) values for recipient
contributions of services and
property shall be established in
accordance with the applicable cost
principles. If a Federal awarding
agency authorizes recipients to
donate buildings or land for
construction/facilities acquisition
projects or long-term use, the value
of the donated property for cost
sharing or matching shall be the
lesser of (1) or (2).
(1) The certified value of the
remaining life of the property
recorded in the recipient's
accounting records at the time of
donation.
(2) The current fair market value.
However, when there is sufficient
justification, the Federal awarding
agency may approve the use of the
current fair market value of the
donated property, even if it exceeds
the certified value at the time of
donation to the project.
(d) volunteer services furnished by
professional and technical personnel,
consultants, and other skilled and
unskilled labor may be counted as
cost sharing or matching if the
service is an integral and necessary
part of an approved project or
program. Rates for volunteer services
shall be consistent with those paid
for similar work in the recipient's
organization. In those instances in
which the required skills are not
found in the recipient organization,
rates shall be consistent with those
paid for similar work in the labor
market in which the recipient
competes for the kind of services
involved. In either case, paid fringe
benefits that are reasonable,
allowable, and allocable may be
included in the valuation.
(e) When an employer other than the
recipient furnishes the services of
an employee, these services shall be
valued at the employee's regular rate
of pay (plus an amount of fringe
benefits that are reasonable,
allowable, and allocable, but
exclusive of overhead costs),
provided these services are in the
same skill for which the employee is
normally paid.
(f) Donated supplies may include such
items as expendable equipment, office
supplies, laboratory supplies or
workshop and classroom supplies.
Value assessed to donated supplies
included in the cost sharing or
matching share shall be reasonable
and shall not exceed the fair market
value of the property at the time of
the donation.
(g) The method used for determining
cost sharing or matching for donated
equipment, buildings and land for
which title passes to the recipient
may differ according to the purpose
of the award, if (1) or (2) apply.
(1) If the purpose of the award is to
assist the recipient in the
acquisition of equipment, buildings
or land, the total value of the
donated property may be claimed as
cost sharing or matching.
(2) If the purpose of the award is to
support activities that require the
use of equipment, buildings or land,
normally only depreciation or use
charges for equipment and buildings
may be made. However, the full value
of equipment or other capital assets
and fair rental charges for land may
be allowed, provided that the Federal
awarding agency has approved the
charges.
(h) The value of donated property
shall be determined in accordance
with the usual accounting policies of
the recipient, with the following
qualifications.
(1) The value of donated land and
buildings shall not exceed its fair
market value at the time of donation
to the recipient as established by an
independent appraiser (e.g.,
certified real property appraiser or
General Services Administration
representative) and certified by a
responsible official of the
recipient.
28
(2) The value of donated
shall not exceed the fair .r,
value of equipment of the sec •
and condition at the time
donation.
(3) The value of donated spa,.
not exceed the fair rental
comparable space as establi:,',
independent appraisal of c
space and facilities in a (r,
owned building in the same
(4) The value of loaned egcn.,.
shall not exceed its fair r
value.
(5) The following requiremer.
pertain to the recipient's s•a
records for in-kind contri,
from third parties.
(i) Volunteer services sha: .
documented and, to the exten..
feasible, supported by the
methods used by the recipi.
own employees.
(ii) The basis for determi.
valuation for personal sere,.
material, equipment, buildino .d
land shall be documented.
.24 Program income.
k.ts
(a) Federal awarding agencies; .11
apply the standards set fort this
section in requiring recipie.:
organizations to account for r3ram
income related to projects 1..1,anced
in whole or in part with Federal
funds.
(b) Except as provided in paragraph
(h) below, program income earned
during the project period shall be
retained by the recipient and, in
accordance with Federal awarding
agency regulations or the terms and
conditions of the award, shall be
used in one or more of the ways
listed in the following.
(1) Added to funds committed to the
project by the Federal awarding
agency and recipient and used to
further eligible project or program
objectives.
(2) Used to finance the non -Federal
share of the project or program.
(3) Deducted from the total project
or program allowable cost in
determining the net allowable costs
on which the Federal share of costs
is based.
(c) When an agency authorizes the
disposition of program income as
described in paragraphs (b)(1) or
(b)(2), program income in excess of
any limits stipulated shall be used
in accordance with paragraph 1b)(3).
(d) In the event that the Fetirral
awarding agency does not specify in
its regulations or the terms and
conditions of the award how program
income is to be used, paragraph
(b)(3) shall apply automatically to
all projects or programs except
research. For awards that support
research, paragraph (b)(1) shall
apply automatically unless the
awarding agency indicates in the
terms and conditions another
alternative on the award or the
recipient is subject to special award
conditions, as indicated in Section
.14.
(e) Unless Federal awarding agency
regulations or the terms and
conditions of the award provide
otherwise, recipients shall have no
obligation to the Federal Government
regarding program income earned after
the end of the project period.
(f) If authorized by Federal awarding
agency regulations or the terms and
conditions of the award, costs
incident to the generation of program
income may be deducted from gross
income to determine program income,
provided these costs have not been
charged to the award.
(g) Proceeds from the sale of
property shall be handled in
accordance with the requirements of
the Property Standards (See Sections
.30 through .37).
(h) Unless Federal awarding agency
regulations or the terms and
condition of the award provide
otherwise, recipients shall have no
obligation to the Federal Government
with respect to program income earned
from license fees and royalties for
copyrighted material, patents, patent
applications, trademarks, and
inventions produced under an award.
However, Patent and Trademark
Amendments (35 U.S.C. 18) apply to
inventions made under an
experimental, developmental, or
research award.
.25 Revision of budget and program
plans.
(a) The budget plan is the financial
expression of the project or program
as approved during the award process.
It may include either the Federal and
non -Federal share, or only the
Federal share, .depending upon Federal
awarding agency requirements. It
shall be related to performance for
program evaluation purposes whenever
appropriate.
(b) Recipients are required to report
deviations from budget and program
plans, and request prior approvals
for budget and program plan
revisions, in accordance with this
section.
(c) For nonconstruction awards,
recipients shall request prior
approvals from Federal awarding
29
agencies for one or more of the
following program or budget related
reasons.
(1) Change in the scope or the
objective of the project or program
(even if there is no associated
budget revision requiring prior
written approval).
(2) Change in a key person specified
in the application or award document.
(3) The absence for more than three
months, or a 25 percent reduction in
time devoted to the project, by the
approved project director or
principal investigator.
(4) The need for additional Federal
funding.
(5) The transfer of amounts budgeted
for indirect costs to absorb
increases in direct costs, or vice
versa, if approval is required by the
Federal awarding agency.
(6) The inclusion, unless waived by
the Federal awarding agency, of costs
that require prior approval in
accordance with OMB Circular A-21,
"Cost Principles for Educational
Institutions," OMB Circular A-122,
"Cost Principles for Non -Profit
Organizations," or 45 CFR part 74
Appendix E, "Principles for
Determining Costs Applicable to
Research and Development under Grants
and Contracts with Hospitals," or 48
CFR part 31, "Contract Cost
Principles and Procedures," as
applicable.
(7) The transfer of funds allotted
for training allowances (direct
payment to trainees) to other
categories of expense.
(8) Unless described in the
application and funded in the
approved awards, the subaward,
transfer or contracting out of any
work under an award. This provision
does not apply to the purchase of
supplies, material, equipment or
general support services.
(d) No other prior approval
requirements for specific items may
be imposed unless a deviation has
been approved by OMB.
(e) Except for requirements listed in
paragraphs (c)(1) and (c)(4) of this
section, Federal awarding agencies
are authorized, at their option, to
waive cost -related and administrative
prior written approvals required by
this Circular and OMB Circulars A-21
and A-122. Such waivers may include
authorizing recipients to do any one
or more of the following.
(1) Incur pre -award costs 90 calendar
days prior to award or more than 90
calendar days with the prior approval
of the Federal awarding agency. All
pre -award costs are incurred at the
recipient's risk (i.e., the Federal
awarding agency is under no
obligation to reimburse such costs if
for any reason the recipient does not
receive an award or if the award is
less than anticipated and inadequate
to cover such costs).
(2) Initiate a one-time extension of
the expiration date of the award of
up to 12 months unless one or more of
the following conditions apply. For
one-time extensions, the recipient
must notify the Federal awarding
agency in writing with the supporting
reasons and revised expiration date
at least 10 days before the
expiration date specified in the
award. This one-time extension may
not be exercised merely for the
purpose of using unobligated
balances.
(i) The terms and conditions of award
prohibit the extension.
(ii) The extension requires
additional Federal funds.
(iii) The extension involves any
change in the approved objectives or
scope of the project.
(3) Carry forward unobligated
balances to subsequent funding
periods.
(4) For awards that support research,
unless the Federal awarding agency
provides otherwise in the award or in
the agency's regulations, the prior
approval requirements described in
paragraph (e) are automatically
waived (i.e., recipients need not
obtain such prior approvals) unless
one of the conditions included in
paragraph (e)(2) applies.
(f) The Federal awarding agency may,
at its option, restrict the transfer
of funds among direct cost categories
or programs, functions and activities
for awards in which the Federal share
of the project exceeds $100,000 and
the cumulative amount of such
transfers exceeds or is expected to
exceed 10 percent of the total budget
as last approved by the Federal
awarding agency. No Federal awarding
agency shall permit a transfer that
would cause any Federal appropriation
or part thereof to be used for
purposes other than those consistent
with the original intent of the
appropriation.
(g) A11 other changes to
nonconstruction budgets, except for
the changes described in paragraph
(j), do not require prior approval.
(h) For construction awards,
recipients shall request prior
written approval promptly from
Federal awarding agencies for budget
revisions whenever (1), (2) or (3)
apply.
(1) The revision results from changes
in the scope or the objective of the
project or program.
(2) The need arises for additional
Federal funds to complete the
project.
30
(3) A revision is desired which
involves specific costs for which
prior written approval requirements
may be imposed consistent with
applicable OMB cost principles listed
in Section _.27.
(i) No other prior approval
requirements for specific items may
be imposed unless a deviation has
been approved by OMB.
(j) When a Federal awarding agency
makes an award that provides support
for both construction and
nonconstruction work, the Federal
awarding agency may require the
recipient to request prior approval
from the Federal awarding agency
before making any fund or budget
transfers between the two types of
work supported.
(k) For both construction and
nonconstruction awards, Federal
awarding agencies shall require
recipients to notify the Federal
awarding agency in writing promptly
whenever the amount of Federal
authorized funds is expected to
exceed the needs of the recipient for
the project period by more than $5O0D
or five percent of the Federal award,
whichever is greater. This
notification shall not be required if
an application for additional funding
is submitted for a continuation
award.
(1) When requesting approval for
budget revisions, recipients shall
use the budget forms that were used
in the application unless the Federal
awarding agency indicates a letter of
request suffices.
(m) Within 30 calendar days from the
date of receipt of the request for
budget revisions, Federal awarding
agencies shall review the request and
notify the recipient whether the
budget revisions have been approved.
If the revision is still under
consideration at the end of 30
calendar days, the Federal awarding
agency shall inform the recipient in
writing of the date when the
recipient may expect the decision.
.26 Non -Federal audits.
(a) Recipients and subrecipients that
are institutions of higher education
or other non-profit organizations
(including hospitals) shall be
subject to the audit requirements
contained in the Single Audit Act
Amendments of 1996 (31 DSC 7501-7507)
and revised OMB Circular A-133,
"Audits of States, Local Governments,
and Non -Profit Organizations."
(b) State and local governments shall
be subject to the audit requirements
contained in the Single Audit Act
Amendments of 1996 (31 USC 7501-7507)
and revised OMB Circular A-133,
"Audits of States, Local Governments,
and Non -Profit Organizations."
(c) For-profit hospitals not covered
by the audit provisions of revised
OMB Circular A-133 shall be subject
to the audit requirements of the
Federal awarding agencies.
(d) Commercial organizations shall be
subject to the audit requirements of
the Federal awarding agency or the
prime recipient as incorporated into
the award document.
.27 Allowable costs. For each kind
of recipient, there is a set of
Federal principles for determining
allowable costs. Allowability of
costs shall be determined in
accordance with the cost principles
applicable to the entity incurring
the costs. Thus, allowability of
costs incurred by State, local or
federally -recognized Indian tribal
governments is determined in
accordance with the provisions of OMB
Circular A-87, "Cost Principles for
State, Local, and Indian Tribal
Governments." The allowability of
costs incurred by non-profit
organizations is determined in
accordance with the provisions of OMB
Circular A-122, "Cost Principles for
Non -Profit Organizations." The
allowability of costs incurred by
institutions of higher education is
determined in accordance with the
provisions of OMB Circular A-21,
"Cost Principles for Educational
Institutions." The allowability of
costs incurred by hospitals is
determined in accordance with the
provisions of Appendix E of 45 CFR
part 74, "Principles for Determining
Costs Applicable to Research and
Development Under Grants and
Contracts with Hospitals." The
allowability of costs incurred by
commercial organizations and those
non-profit organizations listed in
Attachment C to Circular A-122 is
determined in accordance with the
provisions of the Federal Acquisition
Regulation (FAR) at 48 CFR part 31.
.28 Period of availability of
funds. Where a funding period is
specified, a recipient may charge to
the grant only allowable costs
resulting from obligations incurred
during the funding period and any
pre -award costs authorized by the
Federal awarding agency.
.29 Conditional exemptions.
(al OMB authorizes conditional
31
exemption from OMB administrative
requirements and cost principles
circulars for certain Federal
programs with statutorily -authorized
consolidated planning and
consolidated administrative funding,
that are identified by a Federal
agency and approved by the head of
the Executive department or
establishment. A Federal agency shall
consult with OMB during its
consideration of whether to grant
such an exemption.
(b) To promote efficiency in State
and local program administration,
when Federal non -entitlement programs
with common purposes have specific
statutorily -authorized consolidated
planning and consolidated
administrative funding and where most
of the State agency's resources come
from non -Federal sources, Federal
agencies may exempt these covered
State -administered, non -entitlement
grant programs from certain OMB
grants management requirements. The
exemptions would be from all but the
allocability of costs provisions of
OMB Circulars A-87 (Attachment A,
subsection C.3), "Cost Principles for
State, Local, and Indian Tribal
Governments," A-21 (Section C,
subpart 4), "Cost Principles for
Educational Institutions," and A-122
(Attachment A, subsection A.4), "Cost
Principles for Non -Profit
Organizations," and from all of the
administrative requirements
provisions of OMB Circular A-110,
"Uniform Administrative Requirements
for Grants and Agreements with
Institutions of Higher Education,
Hospitals, and Other Non -Profit
Organizations," and the agencies'
grants management common rule.
(c) When a Federal agency provides
this flexibility, as a prerequisite
to a State's exercising this option,
a State must adopt its own written
fiscal and administrative
requirements for expending and
accounting for all funds, which are
consistent with the provisions of OMB
Circular A-87, and extend such
policies to all subrecipients. These
fiscal and administrative
requirements must be sufficiently
specific to ensure that: funds are
used in compliance with all
applicable Federal statutory and
regulatory provisions, costs are
reasonable and necessary for
operating these programs, and funds
are not be used for general expenses
required to carry out other
responsibilities of a State or its
subrecipients.
Property Standards
.30 Purpose of property standards.
Sections .31 through .37 set
forth uniform standards governing
management and disposition of
property furnished by the Federal
Government whose cost was charged to
a project supported by a Federal
award. Federal awarding agencies
shall require recipients to observe
these standards under awards and
shall not impose additional
requirements, unless specifically
required by Federal statute. The
recipient may use its own property
management standards and procedures
provided it observes the provisions
of Sections _.31 through .37.
.31 Insurance coverage. Recipients
shall, at a minimum, provide the
equivalent insurance coverage for
real property and equipment acquired
with Federal funds as provided to
property owned by the recipient.
Federally -owned property need not be
insured unless required by the terms
and conditions of the award.
.32 Real property. Each Federal
awarding agency shall prescribe
requirements for recipients
concerning the use and disposition of
real property acquired in whole or in
part under awards. Unless otherwise
provided by statute, such
requirements, at a minimum, shall
contain the following.
(a) Title to real property shall vest
in the recipient subject to the
condition that the recipient shall
use the real property for the
authorized purpose of the project as
long as it is needed and shall not
encumber the property without
approval of the Federal awarding
agency.
(b) The recipient shall obtain
written approval by the Federal
awarding agency for the use of real
property in other federally -sponsored
projects when the recipient
determines that the property is no
longer needed for the purpose of the
original project. Use in other
projects shall be limited to those
under federally -sponsored projects
(i.e., awards) or programs that have
purposes consistent with those
authorized for support by the Federal
awarding agency.
(c) when the real property is no
longer needed as provided in
paragraphs (a) and (b), the recipient
shall request disposition
32
instructions from the Federal
awarding agency or its successor
Federal awarding agency. The Federal
awarding agency shall observe one or
more of the following disposition
instructions.
(1) The recipient may be permitted to
retain title without further
obligation to the Federal Government
after it compensates the Federal
Government for that percentage of the
current fair market value of the
property attributable to the Federal
participation in the project.
(2) The recipient may be directed to
sell the property under guidelines
provided by the Federal awarding
agency and pay the Federal Government
for that percentage of the current
fair market value of the property
attributable to the Federal
participation in the project (after
deducting actual and reasonable
selling and fix -up expenses, if any,
from the sales proceeds). When the
recipient is authorized or required
to sell the property, proper sales
procedures shall be established that
provide for competition to the extent
practicable and result in the highest
possible return.
(3) The recipient may be directed to
transfer title to the property to the
Federal Government or to an eligible
third party provided that, in such
cases, the recipient shall be
entitled to compensation for its
attributable percentage of the
current fair market value of the
property.
.33 Federally -owned and exempt property.
(a) Federally -owned property.
(1) Title to federally -owned property
remains vested in the Federal
Government. Recipients shall submit
annually an inventory listing of
federally -owned property in their
custody to the Federal awarding
agency. Upon completion of the award
or when the property is no longer
needed, the recipient shall report
the property to the Federal awarding
agency for further Federal agency
utilization.
(2) If the Federal awarding agency
has no further need for the property,
it shall be declared excess and
reported to the General Services
Administration, unless the Federal
awarding agency has statutory
authority to dispose of the property
by alternative methods (e.g., the
authority provided by the Federal
Technology Transfer Act (15 U.S.C.
3710 (I)) to donate research
equipment to educational and non-
profit organizations in accordance
with E.O. 12821, "Improving
Mathematics and Science Education in
Support of the National Education
Goals.") Appropriate instructions
shall be issued to the recipient by
the Federal awarding agency.
(b) Exempt property. When statutory
authority exists, the Federal
awarding agency has the option to
vest title to property acquired with
Federal funds in the recipient
without further obligation to the
Federal Government and under
conditions the Federal awarding
agency considers appropriate. Such
property is "exempt property." Should
a Federal awarding agency not
establish conditions, title to exempt
property upon acquisition shall vest
in the recipient without further
obligation to the Federal Government.
.34 Equipment.
(a) Title to equipment acquired by a
recipient with Federal funds shall
vest in the recipient, subject to
conditions of this section.
(b) The recipient shall not use
equipment acquired with Federal funds
to provide services to non -Federal
outside organizations for a fee that
is less than private companies charge
for equivalent services, unless
specifically authorized by Federal
statute, for as long as the Federal
Government retains an interest in the
equipment.
(c) The recipient shall use the
equipment in the project or program
for which it was acquired as long as
needed, whether or not the project or
program continues to be supported by
Federal funds and shall not encumber
the property without approval of the
Federal awarding agency. When no
longer needed for the original
project or program, the recipient
shall use the equipment in connection
with its other federally -sponsored
activities, in the following order of
priority: (i) Activities sponsored by
the Federal awarding agency which
funded the original project, then
(ii) activities sponsored by other
Federal awarding agencies.
(d) During the time that equipment is
used on the project or program for
which it was acquired, the recipient
shall make it available for use on
other projects or programs if such
other use will not interfere with the
work on the project or program for
which the equipment was originally
acquired. First preference for such
other use shall be given to other
projects or programs sponsored by the
Federal awarding agency that financed
the equipment; second preference
33
shall be given to projects or
programs sponsored by other Federal
awarding agencies. If the equipment
is owned by the Federal Government,
use on other activities not sponsored
by the Federal Government shall be
permissible if authorized by the
Federal awarding agency. User charges
shall be treated as program income.
(e) When acquiring replacement
equipment, the recipient may use the
equipment to be replaced as trade-in
or sell the equipment and use the
proceeds to offset the costs of the
replacement equipment subject to the
approval of the Federal awarding
agency.
(f) The recipient's property
management standards for equipment
acquired with Federal funds and
federally -owned equipment shall
include all of the following.
(1) Equipment records shall be
maintained accurately and shall
include the following information.
(i) A description of the equipment.
(ii) Manufacturer's serial number,
model number, Federal stock number,
national stock number, or other
identification number.
(iii) Source of the equipment,
including the award number.
(iv) Whether title vests in the
recipient or the Federal Government.
(v) Acquisition date (or date
received, if the equipment was
furnished by the Federal Government)
and cost.
(vi) Information from which one can
calculate the percentage of Federal
participation in the cost of the
equipment (not applicable to
equipment furnished by the Federal
Government).
(vii) Location and condition of the
equipment and the date the
information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data,
including date of disposal and sales
price or the method used to determine
current fair market value where a
recipient compensates the Federal
awarding agency for its share.
(2) Equipment owned by the Federal
Government shall be identified to
indicate Federal ownership.
(3) A physical inventory of equipment
shall be taken and the results
reconciled with the equipment records
at least once every two years. Any
differences between quantities
determined by the physical inspection
and those shown in the accounting
records shall be investigated to
determine the causes of the
difference. The recipient shall, in
connection with the inventory, verify
the existence, current utilization,
and continued need for the equipment.
(4) A control system shall be in
effect to insure adequate safeguards
to prevent loss, damage, or theft of
the equipment. Any loss, damage, or
theft of equipment shall be
investigated and fully documented; if
the equipment was owned by the
Federal Government, the recipient
shall promptly notify the Federal
awarding agency.
(5) Adequate maintenance procedures
shall be implemented to keep the
equipment in good condition.
(6) Where the recipient is authorized
or required to sell the equipment,
proper sales procedures shall be
established which provide for
competition to the extent practicable
and result in the highest possible
return.
(g) When the recipient no longer
needs the equipment, the equipment
may be used for other activities in
accordance with the following
standards. For equipment with a
current per unit fair market value of
$5000 or more, the recipient may
retain the equipment for other uses
provided that compensation is made to
the original Federal awarding agency
or its successor. The amount of
compensation shall be computed by
applying the percentage of Federal
participation in the cost of the
original project or program to the
current fair market value of the
equipment. If the recipient has no
need for the equipment, the recipient
shall request disposition
instructions from the Federal
awarding agency. The Federal awarding
agency shall determine whether the
equipment can be used to meet the
agency's requirements. If no
requirement exists within that
agency, the availability of the
equipment shall be reported to the
General Services Administration by
the Federal awarding agency to
determine whether a requirement for
the equipment exists in other Federal
agencies. The Federal awarding agency
shall issue instructions to the
recipient no later than 120 calendar
days after the recipient's request
and the following procedures shall
govern.
(1) If so instructed or if
disposition instructions are not
issued within 120 calendar days after
the recipient's request, the
recipient shall sell the equipment
and reimburse the Federal awarding
agency an amount computed by applying
to the sales proceeds the percentage
of Federal participation in the cost
of the original project or program.
However, the recipient shall be
permitted to deduct and retain from
the Federal share $500 or ten percent
of the proceeds, whichever is less,
for the recipient's selling and
34
handling expenses.
(2) If the recipient is instructed to
ship the equipment elsewhere, the
recipient shall be reimbursed by the
Federal Government by an amount which
is computed by applying the
percentage of the recipient's
participation in the cost of the
original project or program to the
current fair market value of the
equipment, plus any reasonable
shipping or interim storage costs
incurred.
(3) If the recipient is instructed to
otherwise dispose of the equipment,
the recipient shall be reimbursed by
the Federal awarding agency for such
costs incurred in its disposition.
(4) The Federal awarding agency may
reserve the right to transfer the
title to the Federal Government or to
a third party named by the Federal
Government when such third party is
otherwise eligible under existing
statutes. Such transfer shall be
subject to the following standards.
(i) The equipment shall be
appropriately identified in the award
or otherwise made known to the
recipient in writing.
(ii) The Federal awarding agency
shall issue disposition instructions
within 120 calendar days after
receipt of a final inventory. The
final inventory shall list all
equipment acquired with grant funds
and federally -owned equipment. If the
Federal awarding agency fails to
issue disposition instructions within
the 120 calendar day period, the
recipient shall apply the standards
of this section, as appropriate.
(iii) When the Federal awarding
agency exercises its right to take
title, the equipment shall be subject
to the provisions for federally -owned
equipment.
.35 Supplies and other expendable
property.
(a) Title to supplies and other
expendable property shall vest in the
recipient upon acquisition. If there
is a residual inventory of unused
supplies exceeding $5000 in total
aggregate value upon termination or
completion of the project or program
and the supplies are not needed for
any other federally -sponsored project
or program, the recipient shall
retain the supplies for use on non -
Federal sponsored activities or sell
them, but shall, in either case,
compensate the Federal Government for
its share. The amount of compensation
shall be computed in the same manner
as for equipment.
(b) The recipient shall not use
supplies acquired with Federal funds
to provide services to non -Federal
outside organizations for a fee that
is less than private companies charge
for equivalent services, unless
specifically authorized by Federal
statute as long as the Federal
Government retains an interest in the
supplies.
.36 Intangible property.
(a) The recipient may copyright any
work that is subject to copyright and
was developed, or for which ownership
was purchased, under an award. The
Federal awarding agency(ies) reserve
a royalty -free, nonexclusive and
irrevocable right to reproduce,
publish, or otherwise use the work
for Federal purposes, and to
authorize others to do so.
(b) Recipients are subject to
applicable regulations governing
patents and inventions, including
government -wide regulations issued by
the Department of Commerce at 37 CFR
part 401, "Rights to Inventions Made
by Nonprofit Organizations and Small
Business Firms Under Government
Grants, Contracts and Cooperative
Agreements."
(c) The Federal Government has the
right to:
(1) obtain, reproduce, publish or
otherwise use the data first produced
under an award; and
(2) authorize others to receive,
reproduce, publish, or otherwise use
such data for Federal purposes.
(d) (1) In addition, in response to a
Freedom of Information Act (FOIA)
request for research data relating to
published research findings produced
under an award that were used by the
Federal Government in developing an
agency action that has the force and
effect of law, the Federal awarding
agency shall request, and the
recipient shall provide, within a
reasonable time, the research data so
that they can be made available to
the public through the procedures
established under the FOIA. If the
Federal awarding agency obtains the
research data solely in response to a
FOIA request, the agency may charge
the requester a reasonable fee
equaling the full incremental cost of
obtaining the research data. This fee
should reflect costs incurred by the
agency, the recipient, and applicable
subrecipients. This fee is in
addition to any fees the agency may
assess under the FOIA (5 U.S.C.
552(a) (4) (A)) .
(2) The following definitions apply
for purposes of paragraph (d) of this
section:
35
(i) Research data is defined as the
recorded factual material commonly
accepted in the scientific community
as necessary to validate research
findings, but not any of the
following: preliminary analyses,
drafts of scientific papers, plans
for future research, peer reviews, or
communications with colleagues. This
"recorded" material excludes physical
objects (e.g., laboratory samples).
Research data also do not include:
(A) Trade secrets, commercial
information, materials necessary to
be held confidential by a researcher
until they are published, or similar
information which is protected under
law; and
(B) Personnel and medical information
and similar information the
disclosure of which would constitute
a clearly unwarranted invasion of
personal privacy, such as information
that could be used to identify a
particular person in a research
study.
(ii) Published is defined as either
when:
(A) Research findings are published
in a peer-reviewed scientific or
technical journal; or
(B) A Federal agency publicly and
officially cites theresearch
findings in support of an agency
action that has the force and effect
of law.
(iii) Used by the Federal Government
in developing an agency action that
has the force and effect of law is
defined as when an agency publicly
and officially cites the research
findings in support of an agency
action that has the force and effect
of law.
(e) Title to intangible property and
debt instruments acquired under an
award or subaward vests upon
acquisition in the recipient. The
recipient shall use that property for
the originally -authorized purpose,
and the recipient shall not encumber
the property without approval of the
Federal awarding agency. When no
longer needed for the originally
authorized purpose, disposition of
the intangible property shall occur
in accordance with the provisions of
paragraph _.34(g).
.37 Property trust relationship.
Real property, equipment, intangible
property and debt instruments that
are acquired or improved with Federal
funds shall be held in trust by the
recipient as trustee for the
beneficiaries of the project or
program under which the property was
acquired or improved. Agencies may
require recipients to record liens Or
other appropriate notices of record
to indicate that personal or real
property has been acquired or
improved with Federal funds and that
use and disposition conditions apply
to the property.
Procurement Standards
.40 Purpose of procurement
standards. Sections _.41 through
.48 set forth standards for use by
recipients in establishing procedures
for the procurement of supplies and
other expendable property, equipment,
real property and other services with
Federal funds. These standards are
furnished to ensure that such
materials and services are obtained
in an effective manner and in
compliance with the provisions of
applicable Federal statutes and
executive orders. No additional
procurement standards or requirements
shall be imposed by the Federal
awarding agencies upon recipients,
unless specifically required by
Federal statute or executive order or
approved by OMB.
.41 Recipient responsibilities.
The standards contained in this
section do not relieve the recipient
of the contractual responsibilities
arising under its contract(s). The
recipient is the responsible
authority, without recourse to the
Federal awarding agency, regarding
the settlement and satisfaction of
all contractual and administrative
issues arising out of procurements
entered into in support of an award
or other agreement. This includes
disputes, claims, protests of award,
source evaluation or other matters of
a contractual nature. Matters
concerning violation of statute are
to be referred to such Federal, State
or local authority as may have proper
jurisdiction.
.42 Codes of conduct. The
recipient shall maintain written
standards of conduct governing the
performance of its employees engaged
in the award and administration of
contracts. No employee, officer, or
agent shall participate in the
selection, award, or administration
of a contract supported by Federal
funds if a real or apparent conflict
of interest would be involved. Such a
conflict would arise when the
employee, officer, or agent, any
member of his or her immediate
family, his or her partner, or an
organization which employs or is
about to employ any of the parties
indicated herein, has a financial or
36
other interest in the firm selected
for an award. The officers,
employees, and agents of the
recipient shall neither solicit nor
accept gratuities, favors, or
anything of monetary value from
contractors, or parties to
subagreements. However, recipients
may set standards for situations in
which the financial interest is not
substantial or the gift is an
unsolicited item of nominal value.
The standards of conduct shall
provide for disciplinary actions to
be applied for violations of such
standards by officers, employees, or
agents of the recipient.
.43 Competition. All procurement
transactions shall be conducted in a
manner to provide, to the maximum
extent practical, open and free
competition. The recipient shall be
alert to organizational conflicts of
interest as well as noncompetitive
practices among contractors that may
restrict or eliminate competition or
otherwise restrain trade. In order to
ensure objective contractor
performance and eliminate unfair
competitive advantage, contractors
that develop or draft specifications,
requirements, statements of work,
invitations for bids and/or requests
for proposals shall be excluded from
competing for such procurements.
Awards shall be made to the bidder or
offeror whose bid or offer is
responsive to the solicitation and is
most advantageous to the recipient,
price, quality and other factors
considered. Solicitations shall
clearly set forth all requirements
that the bidder or offeror shall
fulfill in order for the bid or offer
to be evaluated by the recipient. Any
and all bids or offers may be
rejected when it is in the
recipient's interest to do so.
.44 Procurement procedures.
(a) All recipients shall establish
written procurement procedures. These
procedures shall provide for, at a
minimum, that (1), (2) and (3) apply.
(1) Recipients avoid purchasing
unnecessary items.
(2) Where appropriate, an analysis is
made of lease and purchase
alternatives to determine which would
be the most economical and practical
procurement for the Federal
Government.
(3) Solicitations for goods and
services provide for all of the
following.
(i) A clear and accurate description
of the technical requirements for the
material, product or service to be
procured. In competitive
procurements, such a description
shall not contain features which
unduly restrict competition.
(ii) Requirements which the
bidder/offeror must fulfill and all
other factors to be used in
evaluating bids or proposals.
(iii) A description, whenever
practicable, of technical
requirements in terms of functions to
be performed or performance required,
including the range of acceptable
characteristics or minimum acceptable
standards.
(iv) The specific features of "brand
name or equal" descriptions that
bidders are required to meet when
such items are included in the
solicitation.
(v) The acceptance, to the extent
practicable and economically
feasible, of products and services
dimensioned in the metric system of
measurement.
(vi) Preference, to the extent
practicable and economically
feasible, for products and services
that conserve natural resources and
protect the environment and are
energy efficient.
(b) Positive efforts shall be made by
recipients to utilize small
businesses, minority-owned firms, and
women's business enterprises,
whenever possible. Recipients of
Federal awards shall take all of the
following steps to further this goal.
(1) Ensure that small businesses,
minority-owned firms, and women's
business enterprises are used to the
fullest extent practicable.
(2) Make information on forthcoming
opportunities available and arrange
time frames for purchases and
contracts to encourage and facilitate
participation by small businesses,
minority-owned firms, and women's
business enterprises.
(3) Consider in the contract process
whether firms competing for larger
contracts intend to subcontract with
small businesses, minority-owned
firms, and women's business
enterprises.
(4) Encourage contracting with
consortiums of small businesses,
minority-owned firms and women's
business enterprises when a contract
is too large for one of these firms
to handle individually.
(5) Use the services and assistance,
as appropriate, of such organizations
as the Small Business Administration
and the Department of Commerce's
Minority Business Development Agency
in the solicitation and utilization
of small businesses, minority- owned
firms and women's business
enterprises.
(c) The type of procuring instruments
used (e.g., fixed price contracts,
cost reimbursable contracts, purchase
orders, and incentive contracts)
shall be determined by the recipient
but shall be appropriate for the
particular procurement and for
promoting the best interest of the
program or project involved. The
"cost -plus -a -percentage -of -cost" or
"percentage of construction cost"
methods of contracting shall not be
used.
(d) Contracts shall be made only with
responsible contractors who possess
the potential ability to perform
successfully under the terms and
conditions of the proposed
procurement. Consideration shall be
given to such matters as contractor
integrity, record of past
performance, financial and technical
resources or accessibility to other
necessary resources. In certain
circumstances, contracts with certain
parties are restricted by agencies'
implementation of E.O.s 12549 and
12689, "Debarment and Suspension."
(e) Recipients shall, on request,
make available for the Federal
awarding agency, pre -award review and
procurement documents, such as
request for proposals or invitations
for bids, independent cost estimates,
etc., when any of the following
conditions apply.
(1) A recipient's procurement
procedures or operation fails to
comply with the procurement standards
in the Federal awarding agency's
implementation of this Circular.
(2) The procurement is expected to
exceed the small purchase threshold
fixed at 41 U.S.C. 403 (11)
(currently $25,000) and is to be
awarded without competition or only
one bid or offer is received in
response to a solicitation.
(3) The procurement, which is
expected to exceed the small purchase
threshold, specifies a "brand name"
product.
(4) The proposed award over the small
purchase threshold is to be awarded
to other than the apparent low bidder
under a sealed bid procurement.
(5) A proposed contract modification
changes the scope of a contract or
increases the contract amount by more
than the amount of the small purchase
threshold.
.45 Cost and price analysis. Some form of
cost or price analysis shall be made and
documented in the procurement files in
connection with every procurement action.
Price analysis may be accomplished in
various ways, including the comparison of
price quotations submitted, market prices
and similar indicia, together with
37
discounts. Cost analysis is the review and
evaluation of each element of cost to
determine reasonableness, allocability and
allowability.
.46 Procurement records. Procurement
records and files for purchases in excess of
the small purchase threshold shall include
the following at a minimum: (a) basis for
contractor selection, (b) justification for
lack of competition when competitive bids or
offers are not obtained, and (c) basis for
award cost or price.
.47 Contract administration. A system for
contract administration shall be maintained
to ensure contractor conformance with the
terms, conditions and specifications of the
contract and to ensure adequate and timely
follow up of all purchases. Recipients shall
evaluate contractor performance and
document, as appropriate, whether
contractors have met the terms, conditions
and specifications of the contract.
_.48 Contract provisions. The recipient
shall include, in addition to provisions to
define a sound and complete agreement, the
following provisions in all contracts. The
following provisions shall also be applied
to subcontracts.
(a) Contracts in excess of the small
purchase threshold shall contain
contractual provisions or conditions
that allow for administrative,
contractual, or legal remedies in
instances in which a contractor
violates or breaches the contract
terms, and provide for such remedial
actions as may be appropriate.
(b) All contracts in excess of the
small purchase threshold shall
contain suitable provisions for
termination by the recipient,
including the manner by which
termination shall be effected and the
basis for settlement. In addition,
such contracts shall describe
conditions under which the contract
may be terminated for default as well
as conditions where the contract may
be terminated because of
circumstances beyond the control of
the contractor.
(c) Except as otherwise required by
statute, an award that requires the
contracting (or subcontracting) for
construction or facility improvements
shall provide for the recipient to
follow its own requirements relating
to bid guarantees, performance bonds,
and payment bonds unless the
construction contract or subcontract
exceeds $100,000. For those contracts
or subcontracts exceeding $100,000,
the Federal awarding agency may
accept the bonding policy and
38
requirements of the recipient,
provided the Federal awarding agency
has made a determination that the
Federal Government's interest is
adequately protected. If such a
determination has not been made, the
minimum requirements shall be as
follows.
(1) A bid guarantee from each bidder
equivalent to five percent of the bid
price. The "bid guarantee" shall
consist of a firm commitment such as
a bid bond, certified check, or other
negotiable instrument accompanying a
bid as assurance that the bidder
shall, upon acceptance of his bid,
execute such contractual documents as
may be required within the time
specified.
(2) A performance bond on the part of
the contractor for 100 percent of the
contract price. A "performance bond"
is one executed in connection with a
contract to secure fulfillment of all
the contractor's obligations under
such contract.
(3) A payment bond on the part of the
contractor for 100 percent of the
contract price. A "payment bond" is
one executed in connection with a
contract to assure payment as
required by statute of all persons
supplying labor and material in the
execution of the work provided for in
the contract.
(4) Where bonds are required in the
situations described herein, the
bonds shall be obtained from
companies holding certificates of
authority as acceptable sureties
pursuant to 31 CFR part 223, "Surety
Companies Doing Business with the
United States."
(d) All negotiated contracts (except
those for less than the small
purchase threshold) awarded by
recipients shall include a provision
to the effect that the recipient, the
Federal awarding agency, the
Comptroller General of the United
States, or any of their duly
authorized representatives, shall
have access to any books, documents,
papers and records of the contractor
which are directly pertinent to a
specific program for the purpose of
making audits, examinations, excerpts
and transcriptions.
(el All contracts, including small
purchases, awarded by recipients and
their contractors shall contain the
procurement provisions of Appendix A
to this Circular, as applicable.
Reports and Reeords
.50 Purpose of reports and
records. Sections .51 through
.53 set forth the procedures for
monitoring and reporting on the
recipient's financial and program
performance and the necessary
standard reporting forms. They also
set forth record retention
requirements.
.51 Monitoring and reporting
program performance.
(a) Recipients are responsible for
managing and monitoring each project,
program, subaward, function or
activity supported by the award.
Recipients shall monitor subawards to
ensure subrecipients have met the
audit requirements as delineated in
Section .26.
(b) The Federal awarding agency shall
prescribe the frequency with which
the performance reports shall be
submitted. Except as provided in
paragraph .51(f), performance
reports shall not be required more
frequently than quarterly or, less
frequently than annually. Annual
reports shall be due 90 calendar days
after the grant year; quarterly or
semi-annual reports shall be due 30
days after the reporting period. The
Federal awarding agency may require
annual reports before the anniversary
dates of multiple year awards in lieu
of these requirements. The final
performance reports are due 90
calendar days after the expiration or
termination of the award.
(c) If inappropriate, a final
technical or performance report shall
not be required after completion of
the project.
(d) When required, performance
reports shall generally contain, for
each award, brief information on each
of the following.
(1) A comparison of actual
accomplishments with the goals and
objectives established for the
period, the findings of the
investigator, or both. Whenever
appropriate and the output of
programs or projects can be readily
quantified, such quantitative data
should be related to cost data for
computation of unit costs.
(2) Reasons why established goals
were not met, if appropriate.
(3) Other pertinent information
including, when appropriate, analysis
and explanation of cost overruns or
high unit costs.
(e) Recipients shall not be required
39
to submit more than the original and
two copies of performance reports.
(f) Recipients shall immediately
notify the Federal awarding agency of
developments that have a significant
impact on the award -supported
activities. Also, notification shall
be given in the case of problems,
delays, or adverse conditions which
materially impair the ability to meet
the objectives of the award. This
notification shall include a
statement of the action taken or
contemplated, and any assistance
needed to resolve the situation.
(g) Federal awarding agencies may
make site visits, as needed.
(h) Federal awarding agencies shall
comply with clearance requirements of
5 CFR part 1320 when requesting
performance data from recipients.
.52 Financial reporting.
(a) The following forms or such other
forms as may be approved by OMB are
authorized for obtaining financial
information from recipients.
(1) SF -269 or SF -269A, Financial
Status Report.
(i) Each Federal awarding agency
shall require recipients to use the
SF -269 or SF -269A to report the
status of funds for all
nonconstruction projects or programs.
A Federal awarding agency may,
however, have the option of not
requiring the SF -269 or SF -269A when
the SF -270, Request for Advance or
Reimbursement, or SF -272, Report of
Federal Cash Transactions, is
determined to provide adequate
information to meet its needs, except
that a final SF -269 or SF -269A shall
be required at the completion of the
project when the SF -270 is used only
for advances.
(ii) The Federal awarding agency.
shall prescribe whether the report
shall be on a cash or accrual basis.
If the Federal awarding agency
requires accrual information and the
recipient's accounting records are
not normally kept on the accrual
basis, the recipient shall not be
required to convert its accounting
system, but shall develop such
accrual information through best
estimates based on an analysis of the
documentation on hand.
(iii) The Federal awarding agency
shall determine the frequency of the
Financial Status Report for each
project or program, considering the
size and complexity of the particular
project or program. However, the
report shall not be required more
frequently than quarterly or less
frequently than annually. A final
report shall be required at the
completion of the agreement.
(iv) The Federal awarding agency
shall require recipients to submit
the SF -269 or SF -269A (an original
and no more than two copies) no later
than 30 days after the end of each
specified reporting period for
quarterly and semi-annual reports,
and 90 calendar days for annual and,
final reports. Extensions of
reporting due dates may be approved
by the Federal awarding agency upon
request of the recipient.
(2) SF -272, Report of Federal Cash
Transactions.
(il When funds are advanced to
recipients the Federal awarding
agency shall require each recipient
to submit the SF -272 and, when
necessary, its continuation sheet,
SF -272a. The Federal awarding agency
shall use this report to monitor cash
advanced to recipients and to obtain
disbursement information for each
agreement with the recipients.
(11) Federal awarding agencies may
require forecasts of Federal cash
requirements in the "Remarks" section
of the report.
(iii) When practical and deemed
necessary, Federal awarding agencies
may require recipients to report in
the "Remarks" section the amount of
cash advances received in excess of
three days. Recipients shall provide
short narrative explanations of
actions taken to reduce the excess
balances.
(iv) Recipients shall be required to
submit not more than the original and
two copies of the SF -272 15 calendar
days following the end of each
quarter. The Federal awarding
agencies may require a monthly report
from those recipients receiving
advances totaling $1 million or more
per year.
(v) Federal awarding agencies may
waive the requirement for submission
of the SF -272 for any one of the
following reasons: (1) When monthly
advances do not exceed $25,000 per
recipient, provided that such
advances are monitored through other
forms contained in this section; (2)
If, in the Federal awarding agency's
opinion, the recipient's accounting
controls are adequate to minimize
excessive Federal advances; or, (3)
When the electronic payment
mechanisms provide adequate data.
(b) When the Federal awarding agency
needs additional information or more
frequent reports, the following shall
be observed.
(1) When additional information is
needed to comply with legislative
requirements, Federal awarding
agencies shall issue instructions to
require recipients to submit such
40
information under the "Remarks"
section of the reports.
(2) When a Federal awarding agency
determines that a recipient's
accounting system does not meet the
standards in Section .21,
additional pertinent information to
further monitor awards may be
obtained upon written notice to the
recipient until such time as the
system is brought up to standard. The
Federal awarding agency, in obtaining
this information, shall comply with
report clearance requirements of 5
CFR part 1320.
(3) Federal awarding agencies are
encouraged to shade out any line item
on any report if not necessary.
(4) Federal awarding agencies may
accept the identical information from
the recipients in machine readable
format or computer printouts or
electronic outputs in lieu of
prescribed formats.
(5) Federal awarding agencies may
provide computer or electronic
outputs to recipients when such
expedites or contributes to the
accuracy of reporting.
.53 Retention and access requirements for
records.
(a) This section sets forth
requirements for record retention and
access to records for awards to
recipients. Federal awarding agencies
shall not impose any other record
retention or access requirements upon
recipients.
(b) Financial records, supporting
documents, statistical records, and
all other records pertinent to an
award shall be retained for a period
of three years from the date of
submission of the final expenditure
report or, for awards that are
renewed quarterly or annually, from
the date of the submission of the
quarterly or annual financial report,
as authorized by the Federal awarding
agency. The only exceptions are the
following.
(1) If any litigation, claim, or
audit is started before the
expiration of the 3 -year period, the
records shall be retained until all
litigation, claims or audit findings
involving the records have been
resolved and final action taken.
(2) Records for real property and
equipment acquired with Federal funds
shall be retained for 3 years after
final disposition.
(3) When records are transferred to
or maintained by the Federal awarding
agency, the 3 -year retention
requirement is not applicable to the
recipient.
(4) Indirect cost rate proposals,
cost allocations plans, etc. as
specified in paragraph _.53(g).
(c) Copies of original records may be
substituted for the original records
if authorized by the Federal awarding
agency.
(d) The Federal awarding agency shall
request transfer of certain records
to its custody from recipients when
it determines that the records
possess long term retention value.
However, in order to avoid duplicate
recordkeeping, a Federal awarding
agency may make arrangements for
recipients to retain any records that
are continuously needed for joint
use.
(e) The Federal awarding agency, the
Inspector General, Comptroller
General of the United States, or any
of their duly authorized
representatives, have the right of
timely and unrestricted access to any
books, documents, papers, or other
records of recipients that are
pertinent to the awards, in order to
make audits, examinations, excerpts,
transcripts and copies of such
documents. This right also includes
timely and reasonable access to a
recipient's personnel for the purpose
of interview and discussion related
to such documents. The rights of
access in this paragraph are not
limited to the required retention
period, but shall last as long as
records are retained.
(f) Unless required by statute, no
Federal awarding agency shall place
restrictions on recipients that limit
public access to the records of
recipients that are pertinent to an
award, except when the Federal
awarding agency can demonstrate that
such records shall be kept
confidential and would have been
exempted from disclosure pursuant to
the Freedom of Information Act (5
U.S.C. 552) if the records had
belonged to the Federal awarding
agency.
(g) Indirect cost rate proposals,
cost allocations plans, etc.
Paragraphs (g)(1) and (g)(2) apply to
the following types of documents, and
their supporting records: indirect
cost rate computations or proposals,
cost allocation plans, and any
similar accounting computations of
the rate at which a particular group
of costs is chargeable (such as
computer usage chargeback rates or
composite fringe benefit rates).
(1) If submitted for negotiation. If
the recipient submits to the Federal
awarding agency or the subrecipient
submits to the recipient the
proposal, plan, or other computation
to form the basis for negotiation of
the rate, then the 3 -year retention
41
period for its supporting records
starts on the date of such
submission.
(2) If not submitted for negotiation.
If the recipient is not required to
submit to the Federal awarding agency
or the subrecipient is not required
to submit to the recipient the
proposal, plan, or other computation
for negotiation purposes, then the 3 -
year retention period for the
proposal, plan, or other computation
and its supporting records starts at
the end of the fiscal year (or other
accounting period) covered by the
proposal, plan, or other computation.
Termination and Enforcement
.60 Purpose of termination and
enforcement. Sections .61 and .62 set
forth uniform suspension, termination and
enforcement procedures.
.61 Termination.
(a) Awards may be terminated in whole
or in part only if (1), (2) or (3)
apply.
(1) By the Federal awarding agency,
if a recipient materially fails to
comply with the terms and conditions
of an award.
(2) By the Federal awarding agency
with the consent of the recipient, in
which case the two parties shall
agree upon the termination
conditions, including the effective
date and, in the case of partial
termination, the portion to be
terminated.
(3) By the recipient upon sending to
the Federal awarding agency written
notification setting forth the
reasons for such termination, the
effective date, and, in the case of
partial termination, the portion to
be terminated. However, if the
Federal awarding agency determines in
the case of partial termination that
the reduced or modified portion of
the grant will not accomplish the
purposes for which the grant was
made, it may terminate the grant in
its entirety under either paragraphs
(a)(1) or (2).
(b) If costs are allowed under an
award, the responsibilities of the
recipient referred to in paragraph
.71(a), including those for
property management as applicable,
shall be considered in the
termination of the award, and
provision shall be made for
continuing responsibilities of the
recipient after termination, as
appropriate.
.62 Enforcement. Federal awarding agency implementing
regulations (see Section .13).
(a) Remedies for noncompliance. If a
recipient materially fails to comply
with the terms and conditions of an
award, whether stated in a Federal
statute, regulation, assurance,
application, or notice of award, the
Federal awarding agency may, in
addition to imposing any of the
special conditions outlined in
Section .14, 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 recipient or more
severe enforcement action by the
Federal awarding agency.
(2) Disallow (that is, deny both use
of funds and any applicable 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.
(4) Withhold further awards for.the
project or program.
(5) Take other remedies that may be
legally available.
(b) Hearings and appeals. In taking
an enforcement action, the awarding
agency shall provide the recipient an
opportunity for hearing, appeal, or
other administrative proceeding to
which the recipient is entitled under
any statute or regulation applicable
to the action involved.
(c) Effects of suspension and
termination. Costs of a recipient
resulting from obligations incurred
by the recipient during a suspension
or after termination of an award are
not allowable unless the awarding
agency expressly authorizes them in
the notice of suspension or
termination or subsequently. Other
recipient costs during suspension or
after termination which are necessary
and not reasonably avoidable are
allowable if (1) and (2) apply.
(1) The costs result from obligations
which were properly incurred by the
recipient before the effective date
of suspension or termination, are not
in anticipation of it, and in the
case of a termination, are
noncancellable.
(2) The costs would be allowable if
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 a recipient from being
subject to debarment and suspension
under E.O.s 12549 and 12689 and the
42
SUBPART D - After -the -Award
Requirements
.70 Purpose. Sections .71
through .73 contain closeout
procedures and other procedures for
subsequent disallowances and
adjustments.
.71 Closeout procedures.
(a) Recipients shall submit, within
90 calendar days after the date of
completion of the award, all
financial, performance, and other
reports as required by the terms and
conditions of the award. The Federal
awarding agency may approve
extensions when requested by the
recipient.
(b) Unless the Federal awarding
agency authorizes an extension, a
recipient shall liquidate all
obligations incurred under the award
not later than 90 calendar days after
the funding period or the date of
completion as specified in the terms
and conditions of the award or in
agency implementing instructions.
(c) The Federal awarding agency shall
make prompt payments to a recipient
for allowable reimbursable costs
under the award being closed out.
(d) The recipient shall promptly
refund any balances of unobligated
cash that the Federal awarding agency
has advanced or paid and that is not
authorized to be retained by the
recipient for use in other projects.
OMB Circular A-129 governs unreturned
amounts that become delinquent debts.
(e) When authorized by the terms and
conditions of the award, the Federal
awarding agency shall make a
settlement for any upward or downward
adjustments to the Federal share of
costs after closeout reports are
received.
(f) The recipient shall account for
any real and personal property
acquired with Federal funds or
received from the Federal Government
in accordance with Sections _.31
through .37.
(g) In the event a final audit has
not been performed prior to the
closeout of an award, the Federal
awarding agency shall retain the
right to recover an appropriate
amount after fully considering the
recommendations on disallowed costs
resulting from the final audit.
_.72 Subsequent adjustments and
continuing responsibilities.
(a) The closeout of an award does not
affect any of the following.
(1) The right of the Federal awarding
agency to disallow costs and recover
funds on the basis of a later audit
or other review.
(2) The obligation of the recipient
to return any funds due as a result
of later refunds, corrections, or
other transactions.
(3) Audit requirements in Section
.26.
(4) Property management requirements
in Sections .31 through .37.
(5) Records retention as required in
Section .53.
(b) After closeout of an award, a
relationship created under an award
may be modified or ended in whole or
in part with the consent of the
Federal awarding agency and the
recipient, provided the
responsibilities of the recipient
referred to in paragraph .73(a),
including those for property
management as applicable, are
considered and provisions made for
continuing responsibilities of the
recipient, as appropriate.
.73 Collection of amounts due.
(a) Any funds paid to a recipient in
excess of the amount to which the
recipient is finally determined to be
entitled under the terms and
conditions of the award constitute a
debt to the Federal Government. If
not paid within a reasonable period
after the demand for payment, the
Federal awarding agency may reduce
the debt by (1), (2) or (3).
(1) Making an administrative offset
against other requests for
reimbursements.
(2) Withholding advance payments
otherwise due to the recipient.
(3) Taking other action permitted by
statute.
(b) Except as otherwise provided by
law, the Federal awarding agency
shall charge interest on an overdue
debt in accordance with 4 CFR Chapter
II, "Federal Claims Collection
Standards."
43
Appendix A
Contract Provisions
All contracts, awarded by a recipient
including small purchases, shall
contain the following provisions as
applicable:
1. Equal Employment Opportunity - All
contracts shall contain a provision
requiring compliance with E.O. 11246,
"Equal Employment Opportunity," as
amended by E.O. 11375, "Amending
Executive Order 11246 Relating to
Equal Employment Opportunity," and as
supplemented by regulations at 41 CFR
part 60, "Office of Federal Contract
Compliance Programs, Equal Employment
Opportunity, Department of Labor."
2. Copeland "Inti-Sickback" Act (18
U.S.C. 874 and 40 O.S.C. 276c) - All
contracts and subgrants in excess of
$2000 for construction or repair
awarded by recipients and
subrecipients shall include a
provision for compliance with the
Copeland "Anti -Kickback" Act (18
O.S.C. 874), as supplemented by
Department of Labor regulations (29
CFR part 3, "Contractors and
Subcontractors on Public Building or
Public Work Financed in Whole or in
Part by Loans or Grants from the
United States"). The Act provides
that each contractor or subrecipient
shall be prohibited from inducing, by
any means, any person employed in the
construction, completion, or repair
of public work, to give up any part
of the compensation to which he is
otherwise entitled. The recipient
shall report all suspected or
reported violations to the Federal
awarding agency.
3. Davis -Bacon Act, as amended (40
U.S.C. 276a to a-7) - When required
by Federal program legislation, all
construction contracts awarded by the
recipients and subrecipients of more
than $2000 shall include a provision
for compliance with the Davis -Bacon
Act (40 U.S.C. 276a to a-7) and as
supplemented by Department of Labor
regulations (29 CFR part 5, "Labor
Standards Provisions Applicable to
Contracts Governing Federally
Financed and Assisted Construction").
Under this Act, contractors shall be
required to pay wages to laborers and
mechanics at a rate not less than the
minimum wages specified in a wage
determination made by the Secretary
of Labor. In addition, contractors
44
shall be required to pay wages not
less than once a week. The recipient
shall place a copy of the current
prevailing wage determination issued
by the Department of Labor in each
solicitation and the award of a
contract shall be conditioned upon
the acceptance of the wage
determination. The recipient shall
report all suspected or reported
violations to the Federal awarding
agency.
4. Contract Work Sours and Safety
Standards Act (40 D.S.C. 327-333) -
Where applicable, all contracts
awarded by recipients in excess of
$2000 for construction contracts and
in excess of $2500 for other
contracts that involve the employment
of mechanics or laborers shall
include a provision for compliance
with Sections 102 and 107 of the
Contract Work Hours and Safety
Standards Act (40 V.S.C. 327-333), as
supplemented by Department of Labor
regulations (29 CFR part 5). Under
Section 102 of the Act, each
contractor shall be required to
compute the wages of every mechanic
and laborer on the basis of a
standard work week of 40 hours. Work
in excess of the standard work week
is permissible provided that the
worker is compensated at a rate of
not less than 1 +f times the basic
rate of pay for all hours worked in
excess of 40 hours in the work week.
Section 107 of the Act is applicable
to construction work and provides
that no laborer or mechanic shall be
required to work in surroundings or
under working conditions which are
unsanitary, hazardous or dangerous.
These requirements do not apply to
the purchases of supplies or
materials or articles ordinarily
available on the open market, or
contracts for transportation or
transmission of intelligence.
5. Rights to Inventions Made Under a
Contract or Agreement - Contracts or
agreements for the performance of
experimental, developmental, or
research work shall provide for the
rights of the Federal Government and
the recipient in any resulting
invention in accordance with 37 CFR
part 401, "Rights to Inventions Made
by Nonprofit Organizations and Small
Business Firms Under Government
Grants, Contracts and Cooperative
Agreements," and any implementing
regulations issued by the awarding
agency.
6. Clean Air Act (42 U.S.C. 7401 et
seq.) and the Federal Water Pollution
Control Act (33 U.S.C. 1251 et meq.),
as amended - Contracts and subgrants
of amounts in excess of $100,000
shall contain a provision that
requires the recipient to agree to
comply with all applicable standards,
orders or regulations issued pursuant
to the Clean Air Act (42 U.S.C. 7401
et seq.) and the Federal Water
Pollution Control Act as amended (33
U.S.C. 1251 et seq.). Violations
shall be reported to the Federal
awarding agency and the Regional
Office of the Environmental
Protection Agency (EPA).
7. Byrd Anti -Lobbying Amendment (31
U.S.C. 1352) - Contractors who apply
or bid for an award of $100,000 or
more shall file the required
certification. Each tier certifies to
the tier above that it will not and
has not used Federal appropriated
funds to pay any person or
organization for influencing or
attempting to influence an officer or
employee of any agency, a member of
Congress, officer or employee of
Congress, or an employee of a member
of Congress in connection with
obtaining any Federal contract, grant
or any other award covered by 31
U.S.C. 1352. Each tier shall also
disclose any lobbying with non -
Federal funds that takes place in
connection with obtaining any Federal
award. Such disclosures are forwarded
from tier to tier up to the
recipient.
8. Debarment and Suspension (E.O.s
12549 and 12689) - No contract shall
be made to parties listed on the
General Services Administration's
List of Parties Excluded from Federal
Procurement or Nonprocurement
Programs in accordance with E.O.s
12549 and 12689, "Debarment and
Suspension." This list contains the
names of parties debarred, suspended,
or otherwise excluded by agencies,
and contractors declared ineligible
under statutory or regulatory
authority other than E.O. 12549.
Contractors with awards that exceed
the small purchase threshold shall
provide the required certification
regarding its exclusion status and
that of its principal employees.
45
Appendix B
24 CFR 570 CDBG Regulations Subpart C, Eligible Activities
46
WAIS Document Retrieval[Code of Federal
Regulations] -
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via
GPO Access
[CITE: 24CFR570.2011
[Page 41-44]
TITLE 24 --HOUSING AND URBAN DEVELOPMENT
CHAPTER V --OFFICE OF ASSISTANT SECRETARY FOR
COMMUNITY PLANNING AND
DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT
PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS-
-Table of Contents
Subpart C Eligible Activities
Sec. 570.201 Basic eligible activities.
CDBG funds may be used for the following
activities:
(a) Acquisition. Acquisition in whole or in
part by the recipient, or other public or
private nonprofit entity, by purchase, long-
term lease, donation, or otherwise, of real
property (including air rights, water
rights, rights-of-way, easements, and other
interests therein) for any public purpose,
subject to the limitations of Sec. 570.207.
(b) Disposition. Disposition, through sale,
lease, donation, or otherwise, of any real
property acquired with CDBG funds or its
retention for public purposes, including
reasonable costs of temporarily managing
such property or property acquired under
urban renewal, provided that the proceeds
from any such disposition shall be program
income subject to the requirements set forth
in Sec. 570.504.
(c) Public facilities and improvements.
Acquisition, construction, reconstruction,
rehabilitation or installation of public
facilities and improvements, except as
provided in Sec. 570.207(a), carried out by
the recipient or other public or private
nonprofit entities. (However, activities
under this paragraph may be directed to the
removal of material and architectural
barriers that restrict the mobility and
accessibility of elderly or severely
disabled persons to public facilities and
improvements, including those provided for
in Sec. 570.207(a)(1).) In undertaking such
activities, design features and improvements
which promote energy efficiency may be
included. Such activities may also include
the execution of architectural design
features, and similar treatments intended to
enhance the aesthetic quality of facilities
and improvements receiving CDBG assistance,
such as decorative pavements, railings,
sculptures, pools of water and fountains,
and other works of art. Facilities designed
for use in providing shelter for persons
having special needs are considered public
facilities and not subject to the
prohibition of new housing construction
described in Sec. 570.207(b)(3). Such
facilities include shelters for the
homeless; convalescent homes; hospitals,
nursing homes; battered spouse shelters;
halfway houses for run -away children, drug
offenders or parolees; group homes for
mentally retarded persons and temporary
housing for disaster victims. In certain
cases, nonprofit entities and subrecipients
including those specified in Sec. 570.204
may acquire title to public facilities. When
such facilities are owned by nonprofit
entities or subrecipients, they shall be
operated so as [(Page 42]] to be open for
use by the general public during all normal
hours of operation. Public facilities and
improvements eligible for assistance under
this paragraph are subject to the policies
in Sec. 570.200(b).
(d) Clearance activities. Clearance,
demolition, and removal of buildings and
improvements, including movement of
structures to other sites. Demolition of
HUD -assisted or HUD -owned housing units may
be undertaken only with the prior approval
of HUD.
(e) Public services. Provision of public
services (including labor, supplies, and
materials) including but not limited to
those concerned with employment, crime
prevention, child care, health, drug abuse,
education, fair housing counseling, energy
conservation, welfare (but excluding the
provision of income payments identified
under Sec. 570.207(b)(4)), homebuyer
downpayment assistance, or recreational
needs. To be eligible for CDBG assistance, a
public service must be either a new service
or a quantifiable increase in the level of
an existing service above that which has
been provided by or on behalf of the unit of
general local government (through funds
raised by the unit or received by the unit
from the State in which it is located) in
the 12 calendar months before the submission
of the action plan. (An exception to this
requirement may be made if HUD determines
that any decrease in the level of a service
was the result of events not within the
control of the unit of general local
government.) The amount of CDBG funds used
for public services shall not exceed
paragraphs (e) (1) or (2) of this section,
as applicable;
(1) The amount of CDBG funds used for
public services shall not exceed 15 percent
of each grant, except that for entitlement
grants made under subpart D of this part,
the amount shall not exceed 15 percent of
the grant plus 15 percent of program income,
as defined in Sec. 570.500(a). For
entitlement grants under subpart D of this
part, compliance is based on limiting the
amount of CDBG funds obligated for public
service activities in each program year to
an amount no greater than 15 percent of the
entitlement grant made for that program year
47
plus 15 percent of the program income
received during the grantee's immediately
preceding program year.
(2) A recipient which obligated more CDBG
funds for public services than 15 percent of
its grant funded from Federal fiscal year
1982 or 1983 appropriations (excluding
program income and any assistance received
under Public Law 98-8), may obligate more
CDBG funds than allowable under paragraph
(e)(1) of this section, so long as the total
amount obligated in any program year does
not exceed:
(i) For an entitlement grantee, 15%
of the program income it received during the
preceding program year; plus
(ii) A portion of the grant received
for the program year which is the highest of
the following amounts:
(A) The amount determined by
applying the percentage of the grant it
obligated for public services in the 1982
program year against the grant for its
current program year;
(B) The amount determined by
applying the percentage of the grant it
obligated for public services in the 1983
program year against the grant for its
current program year;
(C) The amount of funds it
obligated for public services in the 1982
program year; or,
(D) The amount of funds it
obligated for public services in the 1983
program year.
(f) Interim assistance.
(1) The following activities may be
undertaken on an interim basis in areas
exhibiting objectively determinable signs of
physical deterioration where the recipient
has determined that immediate action is
necessary to arrest the deterioration and
that permanent improvements will be carried
out as soon as practicable:
(i) The repairing of streets,
sidewalks, parks, playgrounds, publicly
owned utilities, and public buildings; and
(ii) The execution of special garbage,
trash, and debris removal, including
neighborhood cleanup campaigns, but not the
regular curbside collection of garbage or
trash in an area.
(2) In order to alleviate emergency
conditions threatening the public health and
safety in areas where the chief executive
officer of the recipient determines that
such an emergency 1(Page 43]] condition
exists and requires immediate resolution,
CDBG funds may be used for:
(i) The activities specified in
paragraph (f)(1) of this section, except for
the repair of parks and playgrounds;
(ii) The clearance of streets,
including snow removal and similar
activities, and
(iii) The improvement of private
properties.
(3) All activities authorized under
paragraph (f)(2) of this section are limited
to the extent necessary to alleviate
emergency conditions.
(g) Payment of non -Federal share. Payment
of the non -Federal share required in
connection with a Federal grant-in-aid
program undertaken as part of CDBG
activities, provided, that such payment
shall be limited to activities otherwise
eligible and in compliance with applicable
requirements under this subpart.
(h) Urban renewal completion. Payment of
the cost of completing an urban renewal
project funded under title I of the Housing
Act of 1949 as amended. Further information
regarding the eligibility of such costs is
set forth in Sec. 570.801.
(i) Relocation. Relocation payments and
other assistance for permanently and
temporarily relocated individuals families,
businesses, nonprofit organizations, and
farm operations where the assistance is
(1) required under the provisions of
Sec. 570.606 (b) or (c); or
(2) determined by the grantee to be
appropriate under the provisions of Sec.
570.606(d).
(j) Loss of rental income. Payments to
housing owners for losses of rental income
incurred in holding, for temporary periods,
housing units to be used for the relocation
of individuals and families displaced by
program activities assisted under this part.
(k) Housing services. Housing services, as
provided in section 105(a)(21) of the Act
(42 U.S.C. 5305(a)(21))_
(1) Privately owned utilities. CDBG funds
may be used to acquire, construct,
reconstruct, rehabilitate, or install the
distribution lines and facilities of
privately owned utilities, including the
placing underground of new or existing
distribution facilities and lines.
(m) Construction of housing. CDBG funds may
be used for the construction of housing
assisted under section 17 of the United
States Housing Act of 1937.
(n) Homeownership assistance. CDBG funds
may be used to provide direct homeownership
assistance to low- or moderate -income
households in accordance with section 105(a)
of the Act.
(o)
(1) The provision of assistance either
through the recipient directly or through
public and private organizations, agencies,
and other subrecipients (including nonprofit
and for-profit subrecipients) to facilitate
economic development by:
(i) Providing credit, including, but
not limited to, grants, loans. loan
guarantees, and other forms of financial
support, for the establishment,
stabilization, and expansion of
microenterprises;
(ii) Providing technical assistance,
advice, and business support services to
owners of microenterprises and persons
developing microenterprises; and
(iii) Providing general support,
including, but not limited to, peer support
programs, counseling, child care,
transportation, and other similar services,
48
to owners of microenterprises and persons
developing microenterprises.
(2) Services provided this paragraph (o)
shall not be subject to the restrictions on
public services contained in paragraph (e)
of this section.
(3) For purposes of this paragraph (o),
persons developing microenterprises"
means such persons who have expressed
interest and who are, or after an initial
screening process are expected to be,
actively working toward developing
businesses, each of which is expected to be
a microenterprise at the time it is formed.
(4) Assistance under this paragraph (o)
may also include training, technical
assistance, or other support services to
increase the capacity of the recipient or
subrecipient to carry out the activities
under this paragraph (0).
(p) Technical assistance. Provision of
technical assistance to public or nonprofit
entities to increase the capacity of such
entities to carry out eligible neighborhood
revitalization or economic development
activities. (The recipient must determine,
prior to the ((Page 4411 provision of the
assistance, that the activity for which it
is attempting to build capacity would be
eligible for assistance under this subpart
C, and that the national objective claimed
by the grantee for this assistance can
reasonably be expected to be met once the
entity has received the technical assistance
and undertakes the activity.) Capacity
building for private or public entities
(including grantees) for other purposes may
be eligible under Sec. 570.205.
(q) Assistance to institutions of higher
education. Provision of assistance by the
recipient to institutions of higher
education when the grantee determines that
such an institution has demonstrated a
capacity to carry out eligible activities
under this subpart C.
(53 FR 34439, Sept. 6, 1988, as amended at
53 FR 31239, Aug. 17, 1988; 55 FR 29308,
July 18, 1990; 57 FR 27119, June 17, 1992;
60 FR 1943, Jan. 5, 1995; 60 FR 56911, Nov.
9, 1995; 61 FR 18674, Apr. 29, 1996; 65 FR
70215, Nov. 21, 2000; 67 FR 47213, July 17,
2002)
49
Appendix C
24 CFR 570 CDBG Regulations Subpart J, Grant Administration
50
WAIS Document Retrieval[Code of Federal
Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via
GPO Access
[CITE: 24CFR570.501]
[Page 131-132]
TITLE 24 --HOUSING AND URBAN DEVELOPMENT
CHAPTER V --OFFICE OF ASSISTANT SECRETARY FOR
COMMUNITY PLANNING ANDDEVELOPMENT,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS-
-Table of Contents
Subpart J Grant Administration
Sec. 570.501 Responsibility for grant
administration.
(a) One or more public agencies, including
existing local public agencies, may be
designated by the chief executive officer of
the recipient to undertake activities
assisted by this part. A public agency so
designated shall be subject to the same
requirements as are applicable to
subrecipients.
(b) The recipient is responsible for
ensuring that CDBG funds are used in
accordance with all program requirements.
The use of designated public agencies,
subrecipients, or contractors [[Page 132)]
does not relieve the recipient of this
responsibility. The recipient is also
responsible for determining the adequacy of
performance under subrecipient agreements
and procurement contracts, and for taking
appropriate action when performance problems
arise, such as the actions described in Sec.
570.910. Where a unit of general local
government is participating with, or as part
of, an urban county, or as part of a
metropolitan city, the recipient is
responsible for applying to the unit of
general local government the same
requirements as are applicable to
subrecipients, except that the five-year
period identified under Sec.
570.503(b)(8)(i) shall begin with the date
that the unit of general local government is
no longer considered by HUD to be a part of
the metropolitan city or urban county, as
applicable, instead of the date that the
subrecipient agreement expires.
(53 FR 8058, Mar. 11, 1988, as amended at 57
FR 27120, June 17, 19921
Sec. 570.502 Applicability of uniform
administrative requirements.
(a) Recipients and subrecipients that are
governmental. entities (including public
agencies) shall comply with the requirements
and standards of OMB Circular No. A-87,
"Cost Principles for State, Local, and
Indian Tribal Governments"; OMB Circular A-
128, "Audits of State and Local
Governments" (implemented at 24 CFR part
44); and with the following sections of 24
CFR part 85 "Uniform Administrative
Requirements for Grants and Cooperative
Agreements to State and Local Governments"
or the related CDBG provision, as specified
in this paragraph:
(1) Section 85.3, —Definitions";
(2) Section 85.6, "Exceptions ";
(3) Section 85.12, "Special grant or
subgrant conditions for 'high-risk'
grantees";
(4) Section 85.20, "Standards for
financial management systems," except
paragraph (a);
(5) Section 85.21, "Payment," except as
modified by Sec. 570.513:
(6) Section 85.22, "Allowable costs";
(7) Section 85.26, "Non-federal
audits";
(8) Section 85.32, "Equipment," except
in all cases in which the equipment is sold,
the proceeds shall be program income;
(9) Section 85.33, "Supplies";
(10) Section 85.34, "Copyrights'';
(11) Section 85.35, " Subawards to
debarred and suspended parties";
(12) Section 85.36, "Procurement,''
except paragraph la);
(13) Section 85.37, " Subgrants ";
(14) Section 85.40, "Monitoring and
reporting program performance," except
paragraphs (b) through (d) and paragraph
(f);
(15) Section 85.41, "Financial
reporting, " except paragraphs (a),
(b), and (e);
(16) Section 85.42, "Retention and
access requirements for records," except
that the period shall be four years;
(17) Section 85.43, "Enforcement";
(18) Section 85.44, "Termination for
convenience";
(19) Section 85.51 "Later disallowances
and adjustments" and
(20) Section 85.52, "Collection of
amounts due."
(b) Subrecipients, except subrecipients
that are governmental entities, shall comply
with the requirements and standards of OMB
Circular No. A-122, "Cost Principles for
Non-profit Organizations," or OMB Circular
No. A-21, "Cost Principles for Educational
Institutions," as applicable, and OMB
Circular A-133, "Audits of Institutions of
Higher Education and Other Nonprofit
Institutions" (as set forth in 24 CFR part
45). Audits shall be conducted annually.
Such subrecipients shall also comply with
the following provisions of the Uniform
Administrative requirements of OMB Circular
A-110 (implemented at 24 CFR part 84,
"Uniform Administrative Requirements for
Grants and Agreements With Institutions of
Higher Education, Hospitals and Other Non -
51
Profit Organizations") or the related CDBG
provision, as specified in this paragraph:
(1) Subpart A --"General";
(2) Subpart B--"Pre-Award
Requirements," except for Sec. 84.12,
Forms for Applying for Federal
Assistance'
(3) Subpart C--"Post-Award
Requirements," except for:
(i) Section 84.22, "Payment
Requirements." Grantees shall follow the
standards of Sec. Sec. 85.20(b)(7) and 85.21
in making payments to subrecipients; [(Page
133)1
(ii) Section 84.23, "Cost Sharing
and Matching";
(iii) Section 84.24, "Program
Income." In lieu of Sec. 84.24, CDBG
subrecipients shall follow Sec. 570.504;
(iv) Section 84.25, "Revision of
Budget and Program Plans";
(v) Section 84.32, "Real Property."
In lieu of Sec. 84.32, CDBG subrecipients
shall follow Sec. 570.505;
(vi) Section 84.34(g), "Equipment."
In lieu of the disposition provisions of
Sec. 84.34(g), the following applies:
(A) In all cases in which
equipment is sold, the proceeds shall be
program income (prorated to reflect the
extent to which CDBG funds were used to
acquire the equipment); and
(B) Equipment not needed by the
subrecipient for CDBG activities shall be
transferred to the recipient for the CDBG
program or shall be retained after
compensating the recipient;
(vii) Section 84.51 (b), (c), (d),
(e), (f), (g), and (h), "Monitoring and
Reporting Program Performance";
(viii) Section 84.52, "Financial
Reporting";
(ix) Section 84.53(b), "Retention
and access requirements for records."
Section 84.53(b) applies with the following
exceptions:
(A) The retention period
referenced in Sec. 84.53(b) pertaining to
individual CDBG activities shall be four
years; and
(B) The retention period starts
from the date of submission of the annual
performance and evaluation report, as
prescribed in 24 CFR 91.520, in which the
specific activity is reported on for the
final time rather than from the date of
submission of the final expenditure report
for the award;
(x) Section 84.61, "Termination."
In lieu of the provisions of Sec. 84.61,
CDBG subrecipients shall comply with Sec.
570.503(b)(7); and
(4) Subpart D--"After-the-Award
Requirements," except for Sec. 84.71,
"Closeout Procedures."
153 FR 8058, Mar. 11, 1988, as amended at
60 FR 1916, Jan. 5, 1995; 60 FR 56915, Nov.
9, 19951
Sec. 570.503 Agreements with subrecipients.
(a) Before disbursing any CDBG funds to a
subrecipient, the recipient shall sign a
written agreement with the subrecipient. The
agreement shall remain in effect during any
period that the subrecipient has control
over CDBG funds, including program income.
(b) At a minimum, the written agreement
with the subrecipient shall include
provisions concerning the following items:
(1) Statement of work. The agreement
shall include a description of the work to
be performed, a schedule for completing the
work, and a budget. These items shall be in
sufficient detail to provide a sound basis
for the recipient effectively to monitor
performance under the agreement.
(2) Records and reports. The recipient
shall specify in the agreement the
particular records the subrecipient must
maintain and the particular reports the
subrecipient must submit in order to assist
the recipient in meeting its recordkeeping
and reporting requirements.
(3) Program income. The agreement shall
include the program income requirements set
forth in Sec. 570.504(c). The agreement
shall also specify that, at the end of the
program year, the grantee may require
remittance of all or part of any program
income balances (including investments
thereof) held by the subrecipient (except
those needed for immediate cash needs, cash
balances of a revolving loan fund, cash
balances from a lump sum drawdown, or cash
or investments held for section 108 security
needs).
(4) Uniform administrative requirements.
The agreement shall require the subrecipient
to comply with applicable uniform
administrative requirements, as described
in Sec. 570.502.
(5) Other program requirements. The
agreement shall require the subrecipient to
carry out each activity in compliance with
all Federal laws and regulations described
in subpart K of these regulations, except
that:
(i) The subrecipient does not assume
the recipient's environmental
responsibilities described at Sec. 570.604;
and
(ii) The subrecipient does not assume
the recipient's responsibility for
initiating the review process under the
provisions of 24 CFR part 52.
(6) Suspension and termination. The
agreement shall specify that, in accordance
with 24 CFR 85.43, suspension ([Page
134]] or termination may occur if the
subrecipient materially fails to comply with
any term of the award, and that the award
may be terminated for convenience in
accordance with 24 CFR 85.44.
(7) Reversion of assets. The agreement
shall specify that upon its expiration the
subrecipient shall transfer to the recipient
any CDBG funds on hand at the time of
expiration and any accounts receivable
attributable to the use of CDBG funds. It
52
shall also include provisions designed to
ensure that any real property under the
subrecipient's control that was acquired or
improved in whole or in part with CDBG
funds (including CDBG funds provided to the
subrecipient in the form of a loan) in
excess of $25,000 is either:
(i) Used to meet one of the national
objectives in Sec. 570.208 (formerly Sec.
570.901) until five years after expiration
of the agreement, or for such longer period
of time as determined to be appropriate by
the recipient; or
(ii) Not used in accordance with
paragraph (b)(7)(1) of this section, in
which event the subrecipient shall pay to
the recipient an amount equal to the current
market value of the property less any
portion of the value attributable to
expenditures of non-CDBG funds for the
acquisition of, or improvement to, the
property. The payment is program income to
the recipient. (No payment is required after
the period of time specified in paragraph
(b) (7) (i) of this section.)
[53 FR 8058, Mar. 11, 1988, as amended at 53
FR 41331, Oct. 21, 1988; 57 FR 27120, June
17, 1992; 60 FR 56915, Nov. 9, 1995; 68 FR
56405, Sept. 30, 2003]
Sec. 570.504 Program income.
(a) Recording program income. The receipt
and expenditure of program income as defined
in Sec. 570.500(a) shall be recorded as part
of the financial transactions of the grant
program.
(b) Disposition of program income received
by recipients.
(1) Program income received before grant
closeout may be retained by the recipient if
the income is treated as additional CDBG
funds subject to all applicable requirements
governing the use of CDBG funds.
(2) If the recipient chooses to retain
program income, that program income shall be
disposed of as follows:
(1) Program income in the form of
repayments to, or interest earned in, a
revolving fund as defined in Sec. 570.500(b)
shall be substantially disbursed from the
fund before additional cash withdrawals are
made from the U.S. Treasury for the same
activity. (This rule does not prevent a lump
sum disbursement to finance the
rehabilitation of privately owned properties
as provided for in Sec. 570.513.)
(ii) Substantially all other program
income shall be disbursed for eligible
activities before additional cash
withdrawals are made from the U.S. Treasury.
(iii) At the end of each program
year, the aggregate amount of program income
cash balances and any investment thereof
(except those needed for immediate cash
needs, cash balances of a revolving loan
fund, cash balances from a lump -sum
drawdown, or cash or investments held for
section 108 loan guarantee security needs)
that, as of the last day of the program
year, exceeds one -twelfth of the most recent
grant made pursuant to Sec. 570.304 shall be
remitted to HUD as soon as practicable
thereafter, to be placed in the recipient's
line of credit. This provision applies to
program income cash balances and investments
thereof held by the grantee and its
subrecipients. (This provision shall be
applied for the first time at the end of the
program year for which Federal Fiscal Year
1996 funds are provided.)
(3) Program income on hand at the time of
closeout shall continue to be subject to the
eligibility requirements in subpart C and
all other applicable provisions of this part
until it is expended.
(4) Unless otherwise provided in any
grant closeout agreement, and subject to the
requirements of paragraph (b)(5) of this
section, income received after closeout
shall not be governed by the provisions of
this part, except that, if at the time of
closeout the recipient has another ongoing
CDBG grant received directly from HUD, funds
received after closeout shall be treated as
program income of the ongoing grant
program. [[Page 1351]
(5) If the recipient does not have
another ongoing grant received directly from
HUD at the time of closeout, income received
after closeout from the disposition of real
property or from loans outstanding at the
time of closeout shall not be governed by
the provisions of this part, except that
such income shall be used for activities
that meet one of the national objectives in
Sec. 570.901 and the eligibility
requirements described in section 105 of the
Act.
(c) Disposition of program income received
by subrecipients. The written agreement
between the recipient and the subrecipient,
as required by Sec. 570.503, shall specify
whether program income received is to be
returned to the recipient or retained by the
subrecipient. Where program income is to be
retained by the subrecipient, the agreement
shall specify the activities that will be
undertaken with the program income and that
all provisions of the written agreement
shall apply to the specified activities.
When the subrecipient retains program
income, transfers of grant funds by the
recipient to the subrecipient shall be
adjusted according to the principles
described in paragraphs (b)(2) (i) and (ii)
of this section. Any program income on hand
when the agreement expires, or received
after the agreement's expiration, shall be
paid to the recipient as required by Sec.
570.503(b) (8).
(d) Disposition of certain program income
received by urban counties. Program income
derived from urban county program activities
undertaken by or within the jurisdiction of
a unit of general local government which
thereafter terminates its participation in
the urban county shall continue to be
program income of the urban county. The
urban county may transfer the program income
to the unit of general local government,
53
upon its termination of urban county
participation, provided that the unit of
general local government has become an
entitlement grantee and agrees to use the
program income in its own CDBG entitlement
program.
(53 FR 8058, Mar. 11, 1988, as amended at 60
FR 56915, Nov. 9, 1995]
Sec. 570.505 Use of real property.
The standards described in this section
apply to real property within the
recipient's control which was acquired or
improved in whole or in part using CDBG
funds in excess of $25,000. These standards
shall apply from the date CDBG funds are
first spent for the property until five
years after closeout of an entitlement
recipient's participation in the entitlement
CDBG program or, with respect to other
recipients, until five years after the
closeout of the grant from which the
assistance to the property was provided.
(a) A recipient may not change the use or
planned use of any such property (including
the beneficiaries of such use) from that for
which the acquisition or improvement was
made unless the recipient provides affected
citizens with reasonable notice of, and
opportunity to comment on, any proposed
change, and either:
(1) The new use of such property
qualifies as meeting one of the national
objectives in Sec. 570.208 (formerly Sec.
570.901) and is not a building for the
general conduct of government; or
(2) The requirements in paragraph (b) of
this section are met.
(b) If the recipient determines, after
consultation with affected citizens, that it
is appropriate to change the use of the
property to a use which does not qualify
under paragraph (a)(1) of this section, it
may retain or dispose of the property for
the changed use if the recipient's CDBG
program is reimbursed in the amount of the
current fair market value of the property,
less any portion of the value attributable
to expenditures of non-CDBG funds for
acquisition of, and improvements to, the
property.
(c) If the change of use occurs after
closeout, the provisions governing income
from the disposition of the real property in
Sec. 570.504(b)(4) or (5), as applicable,
shall apply to the use of funds reimbursed.
(d) Following the reimbursement of the CDBG
program in accordance with paragraph (b) of
this section, the property no longer will be
Subject to any CDBG requirements.
(53 FR 8050, Mar. 11, 1988, as amended at
53 FR 41331, Oct. 21, 1988) [(Page 136]]
Sec. 570.506 Records to be maintained.
Each recipient shall establish and maintain
sufficient records to enable the Secretary
to determine whether the recipient has met
the requirements of this part. At a minimum,
the following records are needed:
(a) Records providing a full description of
each activity assisted (or being assisted)
with CDBG funds, including its location (if
the activity has a geographical locus), the
amount of CDBG funds budgeted, obligated and
expended for the activity, and the provision
in subpart C under which it is eligible.
(b) Records demonstrating that each
activity undertaken meets one of the
criteria set forth in Sec. 570.208. (Where
information on income by family size is
required, the recipient may substitute
evidence establishing that the person
assisted qualifies under another program
having income qualification criteria at
least as restrictive as that used in the
definitions of "low and moderate income
person" and "low and moderate income
household" (as applicable) at Sec. 570.3,
such as Job Training Partnership Act (JTPA)
and welfare programs; or the recipient may
substitute evidence that the assisted person
is homeless; or the recipient may substitute
a copy of a verifiable certification from
the assisted person that his or her family
income does not exceed the applicable income
limit established in accordance with Sec.
570.3; or the recipient may substitute a
notice that the assisted person is a
referral from a state, county or local
employment agency or other entity that
agrees to refer individuals it determines to
be low and moderate income persons based on
HUD's criteria and agrees to maintain
documentation supporting these
determinations.) Such records shall include
the following information:
(1) For each activity determined to
benefit low and moderate income persons, the
income limits applied and the point in time
when the benefit was determined.
(2) For each activity determined to
benefit low and moderate income persons
based on the area served by the activity:
(i) The boundaries of the service
area;
(ii) The income characteristics of
families and unrelated individuals in the
service area; and
(iii) If the percent of low and
moderate income persons in the service area
is less than 51 percent, data showing that
the area qualifies under the exception
criteria set forth at Sec.
570.208 (a) (1) (ii).
(3) For each activity determined to
benefit low and moderate income persons
because the activity involves a facility or
service designed for use by a limited
clientele consisting exclusively or
predominantly of low and moderate income
persons:
(i) Documentation establishing that
the facility or service is designed for the
particular needs of or used exclusively by
senior citizens, adults meeting the Bureau
of the Census' Current Population Reports
definition of "severely disabled," persons
living with AIDS, battered spouses, abused
54
children, the homeless, illiterate adults,
or migrant farm workers, for which the
regulations provide a presumption concerning
the extent to which low- and moderate -income
persons benefit; or
(ii) Documentation describing how the
nature and, if applicable, the location of
the facility or service establishes that it
is used predominantly by low and moderate
income persons; or
(iii) Data showing the size and
annual income of the family of each person
receiving the benefit.
(4) For each activity carried out for
the purpose of providing or improving
housing which is determined to benefit low
and moderate income persons:
(i) A copy of a written agreement
with each landlord or developer receiving
CDBG assistance indicating the total number
of dwelling units in each multifamily
structure assisted and the number of those
units which will be occupied by low and
moderate income households after assistance;
(ii) The total cost of the activity,
including both CDBG and non-CDBG funds.
(iii) For each unit occupied by a low
and moderate income household, the size and
income of the household;
(iv) For rental housing only:
(A) The rent charged (or to be
charged) after assistance for each ([Page
13711 dwelling unit in each structure
assisted; and
(B) Such information as necessary
to show the affordability of units occupied
(or to be occupied) by low and moderate
income households pursuant to criteria
established and made public by the
recipient;
(v( For each property acquired on
which there are no structures, evidence of
commitmentsensuringthat the criteria in
Sec. 570.208(a)(3) will be met when the
structures are built;
(vi) Where applicable, records
demonstrating that the activity qualifies
under the special conditions at Sec.
570.208(a)(3)(i);
(vii) For any homebuyer assistance
activity qualifying under Sec. 570.201(e),
570.201(n), or 570.204, identification of
the applicable eligibility paragraph and
evidence that the activity meets the
eligibility criteria for that provision; for
any such activity qualifying under Sec.
570.208(a), the size and income of each
homebuyer's household; and
(viii) For a Sec. 570.201(k) housing
services activity, identification of the
HOME project(s) or assistance that the
housing services activity supports, and
evidence that project(s) or assistance meet
the HOME program income targeting
requirements at 24 CFR 92.252 or 92.254.
(5) For each activity determined to
benefit low and moderate income persons
based on the creation of jobs, the recipient
shall provide the documentation described
in either paragraph (b)(5)(i) or (ii) of
this section.
(i) Where the recipient chooses to
document that at least 51 percent of the
jobs will be available to low and moderate
income persons, documentation for each
assisted business shall include:
(A) A copy of a written agreement
containing:
(1) A commitment by the
business that it will make at least 51
percent of the jobs available to low and
moderate income persons and will provide
training for any of those jobs requiring
special skills or education;
(2) A listing by job title of
the permanent jobs to be created indicating
which jobs will be available to low and
moderate income persons, which jobs require
special skills or education, and which jobs
are part-time, if any; and
(3) A description of actions
to be taken by the recipient and business to
ensure that low and moderate income persons
receive first consideration for those jobs;
and
(e) A listing by job title of
the permanent jobs filled, and which jobs of
those were available to low and moderate
income persons, and a description of how
first consideration was given to such
persons for those jobs. The description
shall include what hiring process was used;
which low and moderate income persons were
interviewed for a particular job; and which
low and moderate income persons were hired.
(ii) Where the recipient chooses to
document that at least 51 percent of the
jobs will be held by low and moderate income
persons, documentation for each assisted
business shall include:
(A) A copy of a written agreement
containing:
(1) A commitment by the
business that at least 51 percent of the
jobs, on a full-time equivalent basis, will
be held by low and moderate income persons;
and
(2) A listing by job title of
the permanent jobs to be created,
identifying which are part-time, if any;
(B) A listing by job title of the
permanent jobs filled and which jobs were
initially held by low and moderate income
persons; and
(C) For each such low and
moderate income person hired, the size and
annual income of the person's family prior
to the person being hired for the job.
(6) For each activity determined to
benefit low and moderate income persons
based on the retention of jobs:
(i) Evidence that in the absence of
CDBG assistance jobs would be lost;
(ii) For each business assisted, a
listing by job title of permanent jobs
retained, indicating which of those jobs are
part-time and (where it is known) which are
held by low and moderate income persons at
the time the CDBG assistance is provided.
Where applicable, identification of any of
the retained jobs (other than those known to
be held by low and moderate income persons)
55
which are projected to become available to
low and moderate income ((Page 138))
persons through job turnover within two
years of the time CDBG assistance is
provided. Information upon which the job
turnover projections were based shall also
be included in the record;
(iii) For each retained job claimed
to be held by a low and moderate income
person, information on the size and annual
income of the person's family;
(iv) For jobs claimed to be available
to low and moderate income persons based on
job turnover, a description covering the
items required for "available to" jobs in
paragraph (b)(5) of this section; and
(v) Where jobs were claimed to be
available to low and moderate income
persons through turnover, a listing of each
job which has turned over to date,
indicating which of those jobs were either
taken by, or available to, low and moderate
income persons. For jobs made available, a
description of how first consideration was
given to such persons for those jobs shall
also be included in the record.
(7) For purposes of documenting, pursuant
to paragraph (b) (5) (i) (8), (b) (5) (ii) (C),
(b) (6) (iii) or (b) (6) (v) of this section,
that the person for whom a job was either
filled by or made available to a low- or
moderate -income person based upon the census
tract where the person resides or in which
the business is located, the recipient, in
lieu of maintaining records showing the
person's family size and income, may
substitute records showing either the
person's address at the time the
determination of income status was made or
the address of the business providing the
job, as applicable, the census tract in
which that address was located, the percent
of persons residing in that tract who either
are in poverty or who are low- and moderate -
income, as applicable, the data source used
for determining the percentage, and a
description of the pervasive poverty and
general distress in the census tract in
sufficient detail to demonstrate how the
census tract met the criteria in Sec.
570.208(a)(4)(v), as applicable.
(8) For each activity determined to aid
in the prevention or elimination of slums or
blight based on addressing one or more of
the conditions which qualified an area as a
slum or blighted area:
(i) The boundaries of the area; and
(ii) A description of the conditions
which qualified the area at the time of its
designation in sufficient detail to
demonstrate how the area met the criteria in
Sec. 570.208(b)(1).
(9) For each residential rehabilitation
activity determined to aid in the prevention
or elimination of slums or blight in a slum
or blighted area:
(i) The local definition of
"substandard";
(ii) A pre -rehabilitation inspection
report describing the deficiencies in each
structure to be rehabilitated; and
(iii) Details and scope of CDBG
assisted rehabilitation, by structure.
(10) For each activity determined to aid
in the prevention or elimination of slums or
blight based on the elimination of specific
conditions of blight or physical decay not
located in a slum or blighted area:
(i) A description of the specific
condition of blight or physical decay
treated; and
(ii) For rehabilitation carried out
under this category, a description of the
specific conditions detrimental to public
health and safety which were identified and
the details and scope of the CDBG assisted
rehabilitation by structure.
(11) For each activity determined to aid
in the prevention or elimination of slums or
blight based on addressing slums or blight
in an urban renewal area, a copy of the
Urban Renewal Plan, as in effect at the time
the activity is carried out, including maps
and supporting documentation.
(12) For each activity determined to meet
a community development need having a
particular urgency:
(i) Documentation concerning the
nature and degree of seriousness of the
condition requiring assistance;
(ii) Evidence that the recipient
certified that the CDBG activity was
designed to address the urgent need;
(iii) Information on the timing of
the development of the serious condition;
and
(iv) Evidence confirming that other
financial resources to alleviate the need
were not available. ((Page 1391)
(c) Records that demonstrate that the
recipient has made the determinations
required as a condition of eligibility of
certain activities, as prescribed in -Sec.
Sec. 570.201(f), 570.201(i)(2), 570.201(p),
570.201(q), 570.202(b)(3), 570.206(f),
570.209, and 570.309.
(d) Records which demonstrate compliance
with Sec. 570.505 regarding any change of
use of real property acquired or improved
with CDBG assistance.
(e) Records that demonstrate compliance
with the citizen participation requirements
prescribed in 24 CFR part 91, subpart 8, for
entitlement recipients, or in 24 CFR part
91, subpart C, for HUD -administered small
cities recipients.
(f) Records which demonstrate compliance
with the requirements in Sec. 570.606
regarding acquisition, displacement,
relocation, and replacement housing.
(g) Fair housing and equal opportunity
records containing:
(1) Documentation of the analysis of
impediments and the actions the recipient
has carried out with its housing and
community development and other resources to
remedy or ameliorate any impediments to fair
housing choice in the recipient's community.
(2) Data on the extent to which each
racial and ethnic group and single -headed
households (by gender of household head)
have applied for, participated in, or
56
benefited from, any program or activity
funded in whole or in part with CDBG funds.
Such information shall be used only as a
basis for further investigation 'as to
compliance with nondiscrimination
requirements. No recipient is required to
attain or maintain any particular
statistical measure by race, ethnicity, or
gender in covered programs.
(3) Data on employment in each of the
recipient's operating units funded in whole
or in part with CDBG funds, with such data
maintained in the categories prescribed on
the Equal Employment Opportunity
Commission's EEO -4 form; and documentation
of any actions undertaken to assure equal
employment opportunities to all persons
regardless of race, color, national origin,
sex or handicap in operating units funded in
whole or in part under this part.
(4) Data indicating the race and
ethnicity of households (and gender of
single heads of households) displaced as a
result of CDBG funded activities, together
with the address and census tract of the
housing units to which each displaced
household relocated. Such information shall
be used only as a basis for further
investigation as to compliance with
nondiscrimination requirements. No recipient
is required to attain or maintain any
particular statistical measure by race,
ethnicity, or gender in covered programs.
(5) Documentation of actions undertaken
to meet the requirements of Sec. 570.607(b)
which implements section 3 of the Housing
Development Act of 1968, as amended (12
U.S.C. 1701U) relative to the hiring and
training of low and moderate income persons
and the use of local businesses.
(6) Data indicating the racial/ethnic
character of each business entity receiving
a contract or subcontract of $25,000 or more
paid, or to be paid, with CDBG funds, data
indicating which of those entities are
women's business enterprises as defined in
Executive Order 12138, the amount of the
contract or subcontract, and documentation
of recipient's affirmative steps to assure
that minority business and women's business
enterprises have an equal opportunity to
obtain or compete for contracts and
subcontracts as sources of supplies,
equipment, construction and services. Such
affirmative steps may include, but are not
limited to, technical assistance open to all
businesses but designed to enhance
opportunities for these enterprises and
special outreach efforts to inform them of
contract opportunities. Such steps shall not
include preferring any business in the award
of any contract or subcontract solely or in
part on the basis of race or gender.
(7) Documentation of the affirmative
action measures the recipient has taken to
overcome prior discrimination, where the
courts or HUD have found that the recipient
has previously discriminated against persons
on the ground of race, color, national
origin or sex in administering a program or
activity funded in whole or in part with
CDBG funds. ((Page 140])
(h) Financial records, in accordance with
the applicable requirements listed in Sec.
570.502, including source documentation for
entities not subject to parts 84 and 85 of
this title. Grantees shall maintain evidence
to support how the CDBG funds provided to
such entities are expended. Such
documentation must include, to the extent
applicable, invoices, schedules containing
comparisons of budgeted amounts and actual
expenditures, construction progress
schedules signed by appropriate parties
(e.g., general contractor and/or a project
architect), and/or other documentation
appropriate to the nature of the activity.
(i) Agreements and other records related to
lump sum disbursements to private financial
institutions for financing rehabilitation as
prescribed in Sec. 570.513; and
(j) Records required to be maintained in
accordance with other applicable laws and
regulations set forth in subpart K of this
part. (Approved by the Office of Management
and Budget under control number 2506-0077)
(53 FR 34454, Sept. 6, 1988; 53 FR 41330,
Oct. 21, 1988, as amended at 60 FR 1916,
1953, Jan. 5, 1995; 60 FR 56915, Nov. 9,
1995; 61 FR 18674, Apr. 29, 1996; 64 FR
38813, July 19, 1999]
Sec. 570.508 Public access to program
records.
Notwithstanding 24 CFR 85.42(f), recipients
shall provide citizens with reasonable
access to records regarding the past use of
CDBG funds, consistent with applicable State
and local laws regarding privacy and
obligations of confidentiality.
Sec. 570.509 Grant closeout procedures.
(a) Criteria for closeout. A grant will be
closed out when HUD determines, in
consultation with the recipient, that the
following criteria have been met:
(1) All costs to be paid with CDBG funds
have been incurred, with the exception of
closeout costs (e.g., audit costs) and costs
resulting from contingent liabilities
described in the closeout agreement pursuant
to paragraph (c) of this section. Contingent
liabilities include, but are not limited to,
third -party claims against the recipient, as
well as related administrative costs.
(2) With respect to activities (such as
rehabilitation of privately owned
properties) which are financed by means of
escrow accounts, loan guarantees, or similar
mechanisms, the work to be assisted with
CDBG funds (but excluding program income)
has actually been completed.
(3) Other responsibilities of the
recipient under the grant agreement and
applicable laws and regulations appear to
have been carried out satisfactorily or
there is no further Federal interest in
57
keeping the grant agreement open for the
purpose of securing performance.
(b) Closeout actions.
(1) Within 90 days of the date it is
determined that the criteria for closeout
have been met, the recipient shall submit to
HUD a copy of the final performance and
evaluation report described in 24 CFR part
91. If an acceptable report is not
submitted, an audit of the recipient's grant
activities may be conducted by HUD.
(2) Based on the information provided in
the performance report and other relevant
information, HUD, in consultation with the
recipient, will prepare a closeout agreement
in accordance with paragraph (c) of this
section.
(3) HUD will cancel any unused portion of
the awarded grant, as shown in the signed
grant closeout agreement. Any unused grant
funds disbursed from the U.S. Treasury which
are in the possession of the recipient shall
be refunded to HUD.
(4) Any costs paid with CDBG funds which
were not audited previously shall be subject
to coverage in the recipient's next single
audit performed in accordance with 24 CFR
part 44. The recipient may be required to
repay HUD any disallowed costs based on the
results of the audit, or on additional HUD
reviews provided for in the closeout
agreement.
(c) Closeout agreement. Any obligations
remaining as of the date of the closeout
shall be covered by the terms of a closeout
agreement. The agreement shall be prepared
by the HUD field office in consultation with
the recipient. The agreement shall identify
the grant being closed out, and include
provisions with respect to the following:
(1) Identification of any closeout costs
or contingent liabilities subject to payment
with CDBG funds after the closeout agreement
is signed;
(2) Identification of any unused grant
funds to be canceled by HUD;
(3) Identification of any program income
on deposit in financial institutions at the
time the closeout agreement is signed:
(4) Description of the recipient's
responsibility after closeout for:
(i) Compliance with all program
requirements, certifications and assurances
in using program income on deposit at the
time the closeout agreement is signed and in
using any other remaining CDBG funds
available for closeout costs and contingent
liabilities; [(Page 142])
(ii) Use of real property assisted with
CDBG funds in accordance with the principles
described in Sec. 570.505;
(iii) Compliance with requirements
governing program income received subsequent
to grant closeout, as described in Sec.
570.504(b)(4) and (5); and
(iv) Ensuring that flood insurance
coverage for affected property owners is
maintained for the mandatory period;
(5) Other provisions appropriate to any
special circumstances of the grant closeout,
in modification of or in addition to the
obligations in paragraphs (c)(1) through (4)
of this section. The agreement shall
authorize monitoring by HUD, and shall
provide that findings of noncompliance may
be taken into account by HUD, as
unsatisfactory performance of the recipient,
in the consideration of any future grant
award under this part.
(d) Status of consolidated plan after
closeout. Unless otherwise provided in a
closeout agreement, the Consolidated Plan
will remain in effect after closeout until
the expiration of the program year covered
by the last approved consolidated plan.
(e) Termination of grant for convenience.
Grant assistance provided under this part
may be terminated for convenience in whole
or in part before the completion of the
assisted activities, in accordance with the
provisions of 24 CFR 85.44. The recipient
shall not incur new obligations for the
terminated portions after the effective
date, and shall cancel as many outstanding
obligations as possible. HUD shall allow
full credit to the recipient for those
portions of obligations which could not be
canceled and which had been properly
incurred by the recipient in carrying out
the activities before the termination. The
closeout policies contained in this section
shall apply in such cases, except where the
approved grant is terminated in its
entirety. Responsibility for the
environmental review to be performed under
24 CFR part 50 or 24 CFR part 58, as
applicable, shall be determined as part of
the closeout process.
(f) Termination for cause. In cases in
which the Secretary terminates the
recipient's grant under the authority of
subpart 0 of this part, or under the terms
of the grant agreement, the closeout
policies contained in this section shall
apply, except where the approved grant is
cancelled in its entirety. The provisions in
24 CFR 85.43(c) on the effects of
termination shall also apply. HUD shall
determine whether an environmental
assessment or finding of inapplicability is
required, and if such review is required,
HUD shall perform it in accordance with 24
CFR part 50.
[53 FR 8058, Mar. 11, 1988, as amended at 56
FR 56128, Oct. 31, 1991; 60 FR 1916, Jan.
5, 1995; 60 FR 16379, Mar. 30, 1995]
Sec. 570.510 Transferring projects from
urban counties to metropolitan cities.
Section 106(c)(3) of the Act authorizes the
Secretary to transfer unobligated grant
funds from an urban county to a new
metropolitan city, provided: the city was an
included unit of general local government in
the urban county immediately before its
qualification as a metropolitan city; the
funds to be transferred were received by the
county before the qualification of the city
as a metropolitan city; the funds to be
transferred had been programmed by the urban
58
county for use in the city before such
qualification; and the city and county agree
to transfer responsibility for the
administration of the funds being
transferred from the county's letter of
credit to the city's letter of credit. The
following rules apply to the transfer of
responsibility for an activity from an urban
county to the new metropolitan city.
(a) The urban county and the metropolitan
city must execute a legally binding
agreement which shall specify;
(1) The amount of funds to be transferred
from the urban county's letter of credit to
the metropolitan city's letter of credit;
(2) The activities to be carried out by
the city with thefunds being transferred;
(3) The county's responsibility for all
expenditures and unliquidated obligations
associated with the activities before the
time of transfer, including a statement that
responsibility for all audit and monitoring
findings associated with those expenditures
and obligations shall remain with the
county; [(Page 1431]
(4) The responsibility of the
metropolitan city for all other audit and
monitoring findings;
(5) How program income (if any) from the
activities specified shall be divided
between the metropolitan city and the urban
county; and
(6) Such other provisions as may be
required by HUD.
(b) Upon receipt of a request for the
transfer of funds from an urban county to a
metropolitan city and a copy of the executed
agreement, HUD, in consultation with the
Department of the Treasury, shall establish
a date upon which the funds shall be
transferred from the letter of credit of
the urban county to the letter of credit of
the metropolitan city, and shall take all
necessary actions to effect the requested
transfer of funds.
(c) HUD shall notify the metropolitan city
and urban county of any special audit and
monitoring rules which apply to the
transferred funds when the date of the
transfer is communicated to the city and the
county.
Sec. 570.511 Use of escrow accounts for
rehabilitation of privately owned
residential property.
(a) Limitations. A recipient may withdraw
funds from its letter of credit for
immediate deposit into an escrow account for
use in funding loans and grants for the
rehabilitation of privately owned
residential property under Sec.
570.202(a)(1). The following additional
limitations apply to the use of escrow
accounts for residential rehabilitation
loans and grants closed after September 7,
1990:
(1) The use of escrow accounts under this
section is limited to loans and grants for
the rehabilitation of primarily residential
properties containing no more than four
dwelling units (and accessory neighborhood -
scale non-residential space within the same
structure, if any, e.g., a store front below
a dwelling unit).
(2) An escrow account shall not be used
unless the contract between the property
owner and the contractor selected to do the
rehabilitation work specifically provides
that payment to the contractor shall be made
through an escrow account maintained by the
recipient, by a subrecipient as defined in
Sec. 570.5001c), by a public agency
designated under Sec. 570.501(a), or by an
agent under a procurement contact governed
by the requirements of 24 CFR 85.36. No
deposit to the escrow account shall be made
until after the contract has been executed
between the property owner and the
rehabilitation contractor.
(3) All funds withdrawn under this
section shall be deposited into one interest
earning account with a financial
institution. Separate bank accounts shall
not be established for individual loans and
grants.
(4) The amount of funds deposited into an
escrow account shall be limited to the
amount expected to be disbursed within 10
working days from the date of deposit. If
the escrow account, for whatever reason, at
any time contains funds exceeding 10 days
cash needs, the grantee immediately shall
transfer the excess funds to its program
account. In the program account, the excess
funds shall be treated as funds erroneously
drawn in accordance with the requirements of
U.S. Treasury Financial Manual, paragraph 6-
2075.30.
(5) Funds deposited into an escrow
account shall be used only to pay the actual
costs of rehabilitation incurred by the
owner under the contract with a private
contractor. Other eligible costs related to
the rehabilitation loan or grant a g tM
recipient's administrative costs under Sec.
570.206 or rehabilitation services costs
under Sec. 570.202(b)(9), are not
permissible uses of escrowed funds. Such
other eligible rehabilitation costs shall be
paid under normal CDBG payment procedures
(e.g., from withdrawals of grant funds under
the recipient's letter of credit with the
Treasury).
(b) Interest. Interest earned on escrow
accounts established in accordance with this
section, less any service charges for the
account, shall be remitted to HUD at least
quarterly but not more frequently than
monthly. Interest earned on escrow accounts
is not required to be remitted to HUD to the
extent the interest is attributable to the
investment of program income.
(c) Remedies for noncompliance. If HUD
determines that a recipient has failed to
use an escrow account in accordance [(Page
144))with this section, HUD may, in addition
to imposing any other sanctions provided for
under this part, require the recipient to
discontinue the use of escrow accounts, in
whole or in part.
59
[55 FR 32369, Aug. 8, 1990] Sec. 570.512
[Reserved)
Sec. 570.513 Lump sum drawdown for
financing of property rehabilitation
activities.
Subject to the conditions prescribed in this
section, recipients may draw funds from the
letter of credit in a lump sum to establish
a rehabilitation fund in one or more private
financial institutions for the purpose of
financing the rehabilitation of privately
owned properties. The fund may be used in
conjunction with various rehabilitation
financing techniques, including loans,
interest subsidies, loan guarantees, loan
reserves, or such other uses as may be
approved by HUD consistent with the
objectives of this section. The fund may
also be used for making grants, but only for
the purpose of leveraging non-CDBG funds for
the rehabilitation of the same property.
(a) Limitation on drawdown of grant funds.
(1) The funds that a recipient deposits
to a rehabilitation fund shall not exceed
the grant amount that the recipient
reasonably expects will be required,
together with anticipated program income
from interest and loan repayments, for the
rehabilitation activities during the period
specified in the agreement to undertake
activities, based on either:
(i) Prior level of rehabilitation
activity; or
(ii) Rehabilitation staffing and
management capacity during the period
specified in the agreement to undertake
activities.
(2) No grant funds may be deposited under
this section solely for the purpose of
investment, notwithstanding that the
interest or other income is to be used for
the rehabilitation activities.
(3) The recipient's rehabilitation
program administrative costs and the
administrative costs of the financial
institution may not be funded through lump
sum drawdown. Such costs must be paid from
periodic letter of credit withdrawals in
accordance with standard procedures or from
program income, other than program income
generated by the lump sum distribution.
(b) Standards to be met. The following
standards shall apply to all lump sum
drawdowns of CDBG funds for rehabilitation:
(1) Eligible rehabilitation activities.
The rehabilitation fund shall be used to
finance the rehabilitation of privately
owned properties eligible under the general
policies in Sec. 570.200 and the specific
provisions of either Sec. 570.202, including
the acquisition of properties for
rehabilitation, or Sec. 570.203.
(2) Requirements for agreement. The
recipient shall execute a written agreement
with one or more private financial
institutions for the operation of the
rehabilitation fund. The agreement shall
specify the obligations and responsibilities
of the parties, the terms and conditions on
which CDBG funds are to be deposited and
used or returned, the anticipated level of
rehabilitation activities by the financial
institution, the rate of interest and other
benefits to be provided by the financial
institution in return for the lump sum
deposit, and such other terms as are
necessary for compliance with the provisions
of this section. Upon execution of the
agreement, a copy must be provided to the
HUD field office for its record and use in
monitoring. Any modifications made during
the term of the agreement must also be
provided to HUD.
(3) Period to undertake activities. The
agreement must provide that the
rehabilitation fund may only be used for
authorized activities during a period of no
more than two years. The lump sum deposit
shall be made only after the agreement is
fully executed.
(4) Time limit on use of deposited funds.
Use of the deposited funds for
rehabilitation financing assistance must
start (e.g., first loan must be made,
subsidized or guaranteed) within 45 days of
the deposit. In addition, substantial
disbursements from the fund must occur
within 180 days of the receipt of the
deposit. (Where CDBG funds are used as a
guarantee, the funds that must be
substantially disbursed are the guaranteed
funds.) For a recipient with an agreement
specifying two years to [[Page 145]1
undertake activities, the disbursement of 25
percent of the fund (deposit plus any
interest earned) within 180 days will be
regarded as meeting this requirement. If a
recipient with an agreement specifying two
years to undertake activities determines
that it has had substantial disbursement
from the fund within the 180 days although
it had not met this 25 percent threshold,
the justification for the recipient's
determination shall be included in the
program file. Should use of deposited funds
not start within 45 days, or substantial
disbursement from such fund not occur within
180 days, the recipient may be required by
HUD to return all or part of the deposited
funds to the recipient's letter of credit.
(5) Program activity. Recipients shall
review the level of program activity on a
yearly basis. Where activity is
substantially below that anticipated,
program funds shall be returned to the
recipient's letter of credit.
(6) Termination of agreement. In the case
of substantial failure by a private
financial institution to comply with the
terms of a lump sum drawdown agreement, the
recipient shall terminate its agreement,
provide written justification for the
action, withdraw all unobligated deposited
funds from the private financial
institution, and return the funds to the
recipient's letter of credit.
(7) Return of unused deposits. At the end
of the period specified in the agreement for
undertaking activities, all unobligated
deposited funds shall be returned to the
60
recipient's letter of credit unless the
recipient enters into a new agreement
conforming to the requirements of this
section. In addition, the recipient shall
reserve the right to withdraw any
unobligated deposited funds required by HUD
in the exercise of corrective or remedial
actions authorized under Sec. 570.910(b),
Sec. 570.911, Sec. 570.912 or Sec. 570.913.
(8) Rehabilitation loans made with non-
CDBG funds. If the deposited funds or
program income derived from deposited funds
are used to subsidize or guarantee repayment
of rehabilitation loans made with non-CDBG
funds, or to provide a supplemental loan or
grant to the borrower of the non-CDBG funds,
the rehabilitation activities are considered
to be CDBG-assisted activities subject to
the requirements applicable to such
activities, except that repayment of non-
CDBG funds shall not be treated as program
income.
(9) Provision of consideration. In
consideration for the lump sum deposit by
the recipient in a private financial
institution, the deposit must result in
appropriate benefits in support of the
recipient's local rehabilitation program.
Minimum requirements for such benefits are:
(i) Grantees shall require the
financial institution to pay interest on the
lump sum deposit.
(A) The interest rate paid by the
financial institution shall be no more than
three points below the rate on one year
Treasury obligations at constant maturity.
(B) When an agreement sets a
fixed interest rate for the entire term of
the agreement, the rate should be based on
the rate at the time the agreement is
executed.
(C) The agreement may provide for
an interest rate that would fluctuate
periodically during the term of the
agreement, but at no time shall the rate be
established at more than three points below
the rate on one year Treasury obligations at
constant maturity.
61
(ii) In addition to the payment of
interest, at least one of the following
benefits must be provided by the financial
institution:
(A) Leverage of the deposited
funds so that the financial institution
commits private funds for loans in the
rehabilitation program in an amount
substantially in excess of the amount of the
lump sum deposit;
(B) Commitment of private funds
by the financial institution for
rehabilitation loans at below market
interest rates, at higher than normal risk,
or with longer than normal repayment
periods; or
(C) Provision of administrative
services in support of the rehabilitation
program by the participating financial
institution at no cost or at lower than
actual cost.
(c) Program income. Interest earned on lump
sum deposits and payments on loans made from
such deposits are program income and, during
the period of [[Page 196]] the agreement,
shall be used for rehabilitation activities
under the provisions of this section.
(d) Outstanding findings. Notwithstanding
any other provision of this section, no
recipient shall enter into a new agreement
during any period of time in which an audit
or monitoring finding on a previous lump sum
drawdown agreement remains unresolved.
(e) Prior notification. The recipient shall
provide the HDD field office with written
notification of the amount of funds to be
distributed to a private financial
institution before distribution under the
provisions of this section.
(f) Recordkeeping requirements. The
recipient shall maintain in its files a copy
of the written agreement and related
documents establishing conformance with this
section and concerning performance by a
financial institution in accordance with the
agreement.
Appendix D
24 CFR 570 CDBG Regulations Subpart K, Other Program Requirements
62
Section
(Code of Federal Regulations]
(Title 24, Volume 3]
(Revised as of April 1, 2004]
From the U.S. Government Printing Office via
GPO Access
[CITE: 24CFR570.600]
[Page 146]
TITLE 24 --HOUSING AND URBAN DEVELOPMENT
CHAPTER V --OFFICE OF ASSISTANT SECRETARY FOR
COMMUNITY PLANNING AND DEVELOPMENT,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 570_COMmUNITY DEVELOPMENT BLOCK GRANTS-
-Table of Contents
Subpart K_Other Program Requirements
Sec. 570.600 General.
Source: 53 FR 34456, Sept. 6, 1988, unless
otherwise noted.
(a) This subpart K enumerates laws that
the Secretary will treat as applicable to
grants made under section 106 of the Act,
other than grants to States made pursuant to
section 106(d) of the Act, for purposes of
the Secretary's determinations under section
104(e)(1) of the Act, including statutes
expressly made applicable by the Act and
certain other statutes and Executive Orders
for which the Secretary has enforcement
responsibility. This subpart K applies to
grants made under the Insular areas program
in Sec. 570.405, with the exception of Sec.
570.612. The absence of mention herein of
any other statute for which the Secretary
does not have direct enforcement
responsibility is not intended to be taken
as an indication that, in the Secretary's
opinion, such statute or Executive Order is
not applicable to activities assisted under
the Act. For laws that the Secretary will
treat as applicable to grants made to States
under section 106(d) of the Act for purposes
of the determination required to be made by
the Secretary pursuant to section 104(e)(2)
of the Act, see Sec. 570.487.
(b) This subpart also sets forth certain
additional program requirements which the
Secretary has determined to be applicable to
grants provided under the Act as a matter of
administrative discretion.
(c) In addition to grants made pursuant to
section 106(b) and 106(d)(2)(B) of the Act
(subparts D and F, respectively), the
requirements of this subpart K are
applicable to grants made pursuant to
sections 107 and 119 of the Act (subparts E
and G, respectively), and to loans
guaranteed pursuant to subpart M.
[53 FR 34456, Sept. 6, 1988, as amended at
61 FR 11477, Mar. 20, 1996]
Sec. 570.601 Public Law 88-352 and Public
Law 90-284; affirmatively furthering fair
housing; Executive Order 11063.
(a) The following requirements apply
according to sections 104(b) and 107 of the
Act:
(1) Public Law 88-352, which is title
VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d et seq.), and implementing
regulations in 24 CFR part 1.
(2) Public Law 90-284, which is the
Fair Housing Act (42 U.S.C. 3601-3620). In
accordance with the Fair Housing Act, the
Secretary requires that grantees administer
all programs and activities related to
housing and community development in a
manner to affirmatively further the policies
of the Fair Housing Act. Furthermore, in
accordance with section 104(b)(2) of the
Act, for each community receiving a grant
under subpart D of this part, the
certification that the grantee will
affirmatively further fair housing shall
specifically require the grantee to assume
the responsibility of fair housing planning
by conducting an analysis to identify
impediments to fair housing choice within
its jurisdiction, taking appropriate actions
to overcome the effects of any impediments
identified through that analysis, and
maintaining records reflecting the analysis
and actions in this regard.
(b) Executive Order 11063, as amended by
Executive Order 12259 (3 CFR, 1959-1963
Comp., p. 652; 3 CFR, 1980 Comp., p. 307)
(Equal Opportunity in Housing), [(Page 147]]
and implementing regulations in 24 CFR part
107, also apply.
(61 FR 11477, Mar. 20, 1996]
Sec. 570.602 Section 109 of the Act.
Section 109 of the Act requires that no
person in the United States shall on the
grounds of race, color, national origin,
religion, or sex be excluded from
participation in, be denied the benefits of,
or be subjected to discrimination under any
program or activity receiving Federal
financial assistance made available pursuant
to the Act. Section 109 also directs that
the prohibitions against discrimination on
the basis of age under the Age
Discrimination Act and the prohibitions
against discrimination on the basis of
disability under Section 504 shall apply to
programs or activities receiving Federal
financial assistance under Title I programs.
The policies and procedures necessary to
ensure enforcement of section 109 are
codified in 24 CFR part 6.
[64 FR 3802, Jan. 25, 1999]
Sec. 570.603 Labor standards.
(a) Section 110(a) of the Act contains
labor standards that apply to non volunteer
labor financed in whole or in part with
63
assistance received under the Act. In
accordance with section 110(a) of the Act,
the Contract Work Hours and Safety Standards
Act (40 U.S.C. 327 et seq.) also applies.
However, these requirements apply to the
rehabilitation of residential property only
if such property contains not less than 8
units.
(b) The regulations in 24 CFR part 70
apply to the use of volunteers.
[61 FR 11477, Mar. 20, 1996]
Sec. 570.604 Environmental standards.
For purposes of section 104(g) of the Act,
the regulations in 24 CFR part 58 specify
the other provisions of law which further
the purposes of the National Environmental
Policy Act of 1969, and the procedures by
which grantees must fulfill their
environmental responsibilities. In certain
cases, grantees assume these environmental
review, decision making, and action
responsibilities by execution of grant
agreements with the Secretary.
(61 FR 11477, Mar. 20, 1996]
Sec. 570.605 National Flood Insurance
Program.
Notwithstanding the date of HUD approval of
the recipient's application (or, in the case
of grants made under subpart D of this part
or HUD -administered small cities recipients
in Hawaii, the late of submission of the
grantee's consolidated plan, in accordance
with 24 CFR part 91), section 202(a) of the
Flood Disaster Protection Act of 1973 (42
U.S.C. 4106) and the regulations in 44 CFR
parts 59 through 79 apply to funds provided
under this part 570.
(61 FR 11477, Mar. 20, 1996]
Sec. 570.606 Displacement, relocation,
acquisition, and replacement of housing.
(a) General policy for minimizing
displacement. Consistent with the other
goals and objectives of this part, grantees
(or States or state recipients, as
applicable) shall assure that they have
taken all reasonable steps to minimize the
displacement of persons (families,
individuals, businesses, nonprofit
organizations, and farms) as a result of
activities assisted under this part.
(b) Relocation assistance for displaced
persons at ORA levels.
(1) A displaced person shall be
provided with relocation assistance at the
levels described in, and in accordance with
the requirements of 49 CFR part 24, which
contains the government -wide regulations
implementing the Uniform Relocation
Assistance and Real Property Acquisition
Policies Act of 1970 (URA) (42 U.S.C. 4601-
4655).
(2) Displaced person.
(i) For purposes of paragraph (b)
of this section, the term "displaced
person" means any person (family,
individual, business, nonprofit
organization, or farm) that moves from real
property, or moves his or her personal
property from real property, permanently and
involuntarily, as a direct result of
rehabilitation, demolition, or acquisition
for an activity assisted under this part. A
permanent, involuntary move for an assisted
activity includes a permanent move from real
property that is made:
(A) After notice by the grantee
(or the state recipient, if applicable) to
move permanently from the property, if the
move occurs after the initial official
submission to HUD (or the State, ([Page
148]] as applicable) for grant, loan, or
loan guarantee funds under this part that
are later provided or granted.
(B) After notice by the
property owner to move permanently from the
property, if the move occurs after the date
of the submission of a request for financial
assistance by the property owner (or person
in control of the site) that is later
approved for the requested activity.
(C) Before the date described
in paragraph (b)(2)(i)(A) or (8) of this
section, if either HUD or the grantee (or
State, as applicable) determines that the
displacement directly resulted from
acquisition, rehabilitation, or demolition
for the requested activity.
(D) After the "initiation of
negotiations" if the person is the tenant -
occupant of a dwelling unit and any one of
the following three situations occurs:
(1) The tenant has not been
provided with a reasonable opportunity to
lease and occupy. a suitable decent, safe,
and sanitary dwelling in the same
building/complex upon the completion of the
project, including a monthly rent that does
not exceed the greater of the tenant's
monthly rent and estimated average utility
costs before the initiation of negotiations
or 30 percent of the household's average
monthly gross income; or
(2) The tenant is required
to relocate temporarily for the activity but
the tenant is not offered payment for all
reasonable out-of-pocket expenses incurred
in connection with the temporary relocation,
including the cost of moving to and from the
temporary location and any increased housing
costs, or other conditions of the temporary
relocation are not reasonable; and the
tenant does not return to the
building/complex; or
(3) The tenant is required
to move to another unit in the
building/complex, but is not offered
reimbursement for all reasonable out-of-
pocket expenses incurred in connection with
the move.
(ii) Notwithstanding the provisions of
paragraph (b) (2) (i) of this section, the
term "displaced person-" does not include:
64
(A) A person who is evicted for
cause based upon serious or repeated
violations of material terms of the lease or
occupancy agreement. To exclude a person on
this basis, the grantee (or State or state
recipient, as applicable) must determine
that the eviction was not undertaken for the
purpose of evading the obligation to provide
relocation assistance under this section;
(B) A person who moves into the
property after the date of the notice
described in paragraph (b)(2)(1)(A) or (B)
of this section, but who received a written
notice of the expected displacement before
occupancy.
(C) A person who is not displaced
as described in 49 CFR 24.2(g)(2).
(D) A person who the grantee (or
State, as applicable) determines is not
displaced as a direct result of the
acquisition, rehabilitation, or demolition
for an assisted activity. To exclude a
person on this basis, HUD must concur in
that determination.
(iii) A grantee (or State or state
recipient, as applicable) may, at any time,
request HUD to determine whether a person is
a displaced person under this section. (3)
Initiation of negotiations. For purposes of
determining the type of replacement housing
assistance to be provided under paragraph
(b) of this section, if the displacement is
the direct result of privately undertaken
rehabilitation, demolition, or acquisition
of real property, the term "initiation of
negotiations" means the execution of the
grant or loan agreement between the grantee
(or State or state recipient, as
(applicable) and the person owning or
controlling the real property.
(c) Residential antidisplacement and
relocation assistance plan. The grantee
shall comply with the requirements of 24 CFR
part 42, subpart B.
(d) Optional relocation assistance. Under
section 105(a)(1.1) of the Act, the grantee
may provide (or the State may permit the
state recipient to provide, as applicable)
relocation payments and other relocation
assistance to persons displaced by
activities that are not subject to paragraph
(b) or (c) of this section. The grantee may
also provide (or the State may also permit
the state recipient to provide, as
applicable) relocation assistance to persons
receiving assistance under paragraphs (b) or
(c) of this section at levels in excess of
those required by these paragraphs. Unless
such assistance is provided [(Page 14911
under State or local law, the grantee (or
state recipient, as applicable) shall
provide such assistance only upon the basis
of a written determination that the
assistance is appropriate (see, e.g., 24 CFR
570.201(i), as applicable). The grantee (or
state recipient, as applicable) must adopt a
written policy available to the public that
describes the relocation assistance that the
grantee (or state recipient, as applicable)
has elected to provide and that provides for
equal relocation assistance within each
class of displaced persons.
(e) Acquisition of real property. The
acquisition of real property for an assisted
activity is subject to 49 CFR part 24,
subpart B.
(f) Appeals. If a person disagrees with
the determination of the grantee (or the
state recipient, as applicable) concerning
the person's eligibility for, or the amount
of, a relocation payment under this section,
the person may file a written appeal of that
determination with the grantee (or state
recipient, as applicable). The appeal
procedures to be followed are described in
49 CFR 24.10. In addition, a low- or
moderate -income household that has been
displaced from a dwelling may file a written
request for review of the grantee's decision
to the HUD Field Office. For purposes of the
State CDBG program, a low- or moderate -
income household may file a written request
for review of the state recipient's decision
with the State.
(g) Responsibility of grantee or State.
(1) The grantee (or State, if applicable) is
responsible for ensuring compliance with the
requirements of this section,
notwithstanding any third party's
contractual obligation to the grantee to
comply with the provisions of this section.
For purposes of the State CDBG program, the
State shall require state recipients to
certify that they will comply with the
requirements of this section.
(2) The cost of assistance required
under this section may be paid from local
public funds, funds provided under this
part, or funds available from other sources.
(3) The grantee (or State and state
recipient, as applicable) must maintain
records in sufficient detail to demonstrate
compliance with the provisions of this
section.
(Approved by the Office of Management and
Budget under OMB control number 2506-0102)
[61 FR 11477, Mar. 20, 1996, as amended at
61 FR 51760, Oct. 3, 1996)
Sec. 570.607 Employment and contracting
opportunities.
To the extent that they are otherwise
applicable, grantees shall comply with:
(a) Executive Order 11246, as amended by
Executive Orders 11375, 11478, 12086, and
12107 (3 CFR 1964-1965 Comp. p. 339; 3 CFR,
1966-1970 Comp., p. 684; 3 CFR, 1966-1970.,
p. 803; 3 CFR, 1978 Comp., p. 230; 3 CFR,
1978 Comp., p. 264 (Equal Employment
Opportunity), and Executive Order 13279
(Equal Protection of the Laws for Faith -
Based and Community Organizations), 67 FR
77141, 3 CFR, 2002 Comp., p. 258; and the
implementing regulations at 41 CFR chapter
60; and (b) Section 3 of the Housing and
Urban Development Act of 1968 (12 U.S.C.
1701u) and implementing regulations at 24
CFR part 135.
65
[68 FR 56405, Sept. 30, 2003]
Sec. 570.606 Lead-based paint.
The Lead -Based Paint Poisoning Prevention
Act (42 U.S.C. 4821-4846), the Residential
Lead -Based Paint Hazard Reduction Act of
1992 (42 U.S.C. 4851-4856), and implementing
regulations at part 35, subparts A, B, J, K,
and R of this part apply to activities under
this program.
[64 FR 50226, Sept. 15, 1999]
Sec. 570.609 Use of debarred, suspended or
ineligible contractors or subrecipients.
The requirements set forth in 24 CFR part 5
apply to this program.
[61 FR 5209, Feb. 9, 1996]
Sec. 570.610 Uniform administrative
requirements and cost principles.
The recipient, its agencies or
instrumentalities, and subrecipients shall
comply with the policies, guidelines, and
requirements of 24 CFR part 85 and OMB
Circulars A-87, A-110 (implemented at 24 CFR
part 84), A-122, A-133 (implemented at 24
CFR part 45), and )[Page 15011 A-128 2
(implemented at 24 CFR part 44), as
applicable, as they relate to the acceptance
and use of Federal funds under this part.
The applicable sections of 24 CFR parts 84
and 85 are set forth at Sec. 570.502. \2\
See footnote 1 at Sec. 570.200(a)(5).
[60 FR 56916, Nov. 9, 1995]
Sec. 570.611 Conflict of interest.
(a) Applicability.
(1) In the procurement of supplies,
equipment, construction, and services by
recipients and by subrecipients, the
conflict of interest provisions in 24 CFR
85.36 and 24 CFR 84.42, respectively, shall
apply.
(2) In all cases not governed by 24 CFR
85.36 and 84.42, the provisions of this
section shall apply. Such cases include the
acquisition and disposition of real property
and the provision of assistance by the
recipient or by its subrecipients to
individuals, businesses, and other private
entities under eligible activities that
authorize such assistance (e.g.,
rehabilitation, preservation, and other
improvements of private properties or
facilities pursuant to Sec. 570.202; or
grants, loans, and other assistance to
businesses, individuals, and other private
entities pursuant to Sec. 570.203, 570.204,
570.455, or 570.703(1)).
(b) Conflicts prohibited. The general rule
is that no persons described in paragraph
(c) of this section who exercise or have
exercised any functions or responsibilities
with respect to CDBG activities assisted
under this part, or who are in a position to
participate in a decision making process or
gain inside information with regard to such
activities, may obtain a financial interest
or benefit from a CDBG-assisted activity, or
have a financial interest in any contract,
subcontract, or agreement with respect to a
CDBG-assisted activity, or with respect to
the proceeds of the CDBG-assisted activity,
either for themselves or those with whom
they have business or immediate family ties,
during their tenure or for one year
thereafter. For the UDAG program, the above
restrictions shall apply to all activities
that are a part of the UDAG project, and
shall cover any such financial interest or
benefit during, or at any time after, such
person's tenure.
(c) Persons covered. The conflict of
interest provisions of paragraph (b) of this
section apply to any person who is an
employee, agent, consultant, officer, or
elected official or appointed official of
the recipient, or of any designated public
agencies, or of subrecipients that are
receiving funds under this part. (d)
Exceptions. Upon the written request of the
recipient, HUD may grant an exception to the
provisions of paragraph (b) of this section
on a case-by-case basis when it has
satisfactorily met the threshold
requirements of (d)(1) of this section,
taking into account the cumulative effects
of paragraph (d)(2) of this section.
(1) Threshold requirements. HUD will
consider an exception only after the
recipient has provided the following
documentation:
(i) A disclosure of the nature of the
conflict, accompanied by an assurance that
there has been public disclosure of the
conflict and a description of how the public
disclosure was made; and
(ii) An opinion of the recipient's
attorney that the interest for which the
exception is sought would not violate State
or local law.
(2) Factors to be considered for
exceptions. In determining whether to grant
a requested exception after the recipient
has satisfactorily met the requirements of
paragraph (d)(1) of this section, HUD shall
conclude that such an exception will serve
to further the purposes of the Act and the
effective and efficient administration of
the recipient's program or project, taking
into account the cumulative effect of the
following factors, as applicable:
(i) Whether the exception would
provide a significant cost benefit or an
essential degree of expertise to the program
or project that would otherwise not be
available;
(ii) Whether an opportunity was
provided for open competitive bidding or
negotiation;
(iii) Whether the person affected is a
member of a group or class of low- or
moderate -income persons intended to be the
beneficiaries of the assisted activity, and
the exception will permit such person to
66
receive generally the same interests or
benefits as are being [[Page 151]]
made available or provided to the group or
class;
(iv) Whether the affected person has
withdrawn from his or her functions or
responsibilities, or the decision making
process with respect to the specific
assisted activity in question;
(v) Whether the interest or benefit
was present before the affected person was
in a position as described in paragraph (b)
of this section;
(vi) Whether undue hardship will
result either to the recipient or the person
affected when weighed against the public
interest served by avoiding the prohibited
conflict; and
(vii) Any other relevant
considerations.
(60 FR 56916, Nov. 9, 1995]
Sec. 570.612 Executive Order 12372.
(a) General. Executive Order 12372,
Intergovernmental Review of Federal
Programs, and the Department's implementing
regulations at 24 CFR part 52, allow each
State to establish its own process for
review and comment on proposed Federal
financial assistance programs.
(b) Applicability. Executive Order 12372
applies to the CDBG Entitlement program and
the UDAG program. The Executive Order
applies to all activities proposed to be
assisted under UDAG, but it applies to the
Entitlement program only where a grantee
proposes to use funds for the planning or
construction (reconstruction or
installation) of water or sewer facilities.
Such facilities include storm sewers as well
as all sanitary sewers, but do not include
water and sewer lines connecting a structure
to the lines in the public right-of-way or
easement. It is the responsibility of the
grantee to initiate the Executive Order
review process if it proposes to use its
CDBG or UDAG funds for activities subject to
review.
Sec. 570.613 Eligibility restrictions for
certain resident aliens.
(a) Restriction. Certain newly legalized
aliens, as described in 24 CFR part 49, are
not eligible to apply for benefits under
covered activities funded by the programs
listed in paragraph (e) of this section.
"Benefits" under this section means
financial assistance, public services, jobs
and access to new or rehabilitated housing
and other facilities made available under
covered activities funded by programs listed
in paragraph le) of this section.
"Benefits" do not include relocation
services and payments to which displacees
are entitled by law.
(b) Covered activities. "Covered
activities" under this section means
activities meeting the requirements of Sec.
570.208(a) that either:
(1) Have income eligibility requirements
limiting the benefits exclusively to low and
moderate income persons; or
(2) Are targeted geographically or
otherwise to primarily benefit low and
moderate income persons (excluding
activities serving the public at large, such
as sewers, roads, sidewalks, and parks), and
that provide benefits to persons on the
basis of an application.
(c) Limitation on coverage. The
restrictions under this section apply only
to applicants for new benefits not being
received by covered resident aliens as of
the effective date of this section.
(d) Compliance. Compliance can be
accomplished by obtaining certification as
provided in 24 CFR 49.20.
(e) Programs affected.
(1) The Community Development Block Grant
program for small cities, administered under
subpart F of part 570 of this title until
closeout of the recipient's grant.
(2) The Community Development Block Grant
program for entitlement grants, administered
under subpart D of part 570 of this title.
(3) The Community Development Block Grant
program for States, administered under
subpart I of part 570 of this title until
closeout of the unit of general local
government's grant by the State.
(4) The Urban Development Action Grants
program, administered under subpart G of
part 570 of this title until closeout of the
recipient's grant.
[55 FR 18494, May 2, 1990)
Sec. 570.614 Architectural Barriers Act and
the Americans with Disabilities Act.
(a) The Architectural Barriers Act of 1968
(42 U.S.C. 4151-4157) requires certain
Federal and Federally funded[(Page 152)]
buildings and other facilities to be
designed, constructed, or altered in
accordance with standards that insure
accessibility to, and use by, physically
handicapped people. A building or facility
designed, constructed, or altered with funds
allocated or reallocated under this part
after December 11, 1995, and that meets the
definition of "residential structure" as
defined in 24 CFR 40.2 or the definition of
"building" as defined in 41 CFR 101-
19.602(a) is subject to the requirements of
the Architectural Barriers Act of 1968 (42
U.S.C. 4151-4157) and shall comply with the
Uniform Federal Accessibility Standards
(appendix A to 24 CFR part 40 for
residential structures,and appendix A to 41
CFR part 101-19, subpart 101-19.6, for
general type buildings).
(b) The Americans with Disabilities Act (42
U.S.C. 12131; 47 U.S.C. 155, 201, 218 and
225) (ADA) provides comprehensive civil
rights to individuals with disabilities in
the areas of employment, public
accommodations, State and Local government
67
services, and telecommunications. It further
provides that discrimination includes a
failure to design and construct facilities
for first occupancy no later than January
26, 1993, that are readily accessible to and
usable by individuals with disabilities.
Further, the ADA requires the removal of
architectural barriers and communication
barriers that are structural in nature in
existing facilities, where such removal is
readily achievable --that is, easily
accomplishable and able to be carried out
without much difficulty or expense.
[60 FR 56917, Nov. 9, 1995]
68