R-05-10-13-10H2 - 10/13/2005 RESOLUTION NO. R-05-10-13-101-12
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
Area Serving Center to assist the City in utilizing said funds, and
WHEREAS, the City Council desires to enter into a Community
Development Block Grant Agreement with the Round Rock Area Serving
Center, 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 Area Serving Center, 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 13th day of October, 0 5 .
NY E , Mayor
D it of Round Rock, Texas
CHRISTINE R. MARTINEZ, City Sec etary
@PFDesktop\::ODMA/WORLDOX/O:/WDOX/RESOLUT3:/R51013H2.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 Area Serving Center(herein called the "CENTER").
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 CENTER 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 CENTER 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: the Serving Center Food Pantry
Project. Under this program,the CENTER agrees to provide these services for:
Persons Assisted
Total Unduplicated Persons 1000
Total Unduplicated Low to Moderate Income Persons 1000
1.2. Level of Accomplishments
In addition to normal administrative services required as part of this Agreement, the
CENTER agrees to provide the households/persons the following program services:
LEXHIBIT
00091833
Activity #of Weeks Times# Equals Units of Service
Unduplicated
Persons
Food Pantry 52 1000 52000
1.3. Staffing
To undertake the activities described above and accomplish the levels of service
described above, the CENTER will allocate staff time in support of the program funded under
this Agreement as follows:
Title I Hrs.per Week #of Weeks = Estimated Hours
Executive Director 12 50 = 100
Timeframe: October 1, 2004 through December 30,2005
1.4. Performance Monitoring
The CITY will monitor the performance of the CENTER 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 CENTER 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 CENTER shall start on the 1st day of October, 2004 and end on the 301h
day of December,2005. The term of this Agreement and the provisions herein shall be extended
to cover any additional time period during which the CENTER 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 $35,000.00. 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
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.
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Payments will be contingent upon certification of the CENTER'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: CENTER:
Mona Ryan, Round Rock Area Serving Center
Community Development Coordinator Lori Scott
City of Round Rock Executive Director
301 West Bagdad, Suite 140 PO Box 5006
Round Rock, Texas 78664 Round Rock TX 78680-5006
SECTION V:
SPECIAL CONDITIONS
The CENTER 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 CENTER further agrees to utilize funds available under this
Agreement to supplement rather than supplant funds otherwise available.
SECTION VI:
GENERAL CONDITIONS
6.1. General Comnliance
The CENTER 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 CENTER is an independent contractor and shall not be
considered an employee of the CITY. CENTER shall not be within protection or 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 CENTER 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
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work done as result of this Agreement and arising out of a willful or negligent act or omission of the
CENTER,its officers,agents,servants,and employees ;provided,however,that the CENTER 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—Self Certification Form
b. Exhibit B—Client Data/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 K, Other 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 tennination. 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 CENTER 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
CENTER 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 CENTER ineligible
for any further participation in CITY contracts, in addition to other remedies as provided by law.
Should the CENTER 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 CENTER under this Agreement.
The CENTER 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 CENTER and the CITY may
withhold any payments to the CENTER for the purpose as set out and until such time as the
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exact amount of damages due the CITY from the CENTER is determined. Should the CITY
become aware of any activity by the CENTER 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 CENTER 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 CENTER 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 CENTER 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. Other records necessary to document compliance with Subpart K of 24
CFR 570.
B. Retention
The CENTER 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.
5
C. Client Data
The CENTER 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 ss Reports
The CENTER 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 CENTER 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 CENTER'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 CENTER 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 CENTER'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 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 CENTER'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,
6
to audit, examine, and make excerpts or transcripts of all relevant data. Any deficiencies noted
in audit reports must be fully cleared by the CENTER within thirty(30) days after receipt by the
CENTER. Failure by the CENTER to comply with the above audit requirements will constitute
a violation of this contract and may result in the withholding of future payments. The CENTER
hereby agrees to have an annual agency audit conducted in accordance with current city policy
concerning the CENTER audits.
7.2. Financial Mannem
A. Budgets
A detailed contract budget is attached hereto and incorporated herein as Exhibit "C". The
CITY and the CENTER may agree to revise the budget from time to time in accordance with
existing city policies.
B. Program Income
The CENTER 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 CENTER shall comply with requirements set forth in 24 CFR
570.504. By way of further limitations, the CENTER 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.
C. Indirect Costs
If indirect costs are charged, the CENTER 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 CENTER funds available under this contract based on
information submitted by the CENTER 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 CENTER, 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
CENTER.
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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 CENTER shall procure materials in accordance with the requirements of Attachment
O 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 CENTER 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.
SECTION VIII:
PERSONNEL &PARTICIPANT CONDITIONS
8.1. Civil Rights
A. Compliance
The CENTER 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 CENTER 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
CENTER 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.
8
The CENTER 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 CENTER 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 CENTER 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 CENTER 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 CENTER with any guidelines necessary for compliance
with that portion of the regulations in force during the term of this contract.
8.2. Conduct
A. Assignability
The CENTER shall not assign or transfer any interest in this Agreement without the prior
written consent of the CITY.
B. Hatch Act
The CENTER 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 CENTER 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 CENTER which are receiving
funds under the CDBG Entitlement program.
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D. Subcontracts
1. Approvals
The CENTER 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 CENTER 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 CENTER 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
The CENTER 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 CENTER 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 570.2000).
F. Pending Liti ag tion
The CENTER agrees to inform CITY about any litigation the CENTER is or becomes in
involved in.
G. Background Checks
The CENTER agrees to conduct a criminal background check on all employees working
directly with youth.
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IN WITNESS WHEREOF,this Agreement is executed on this day of
52005.
Approved as to form:
Stephan L. Sheets, City Attorney
CITY: CENTER:
City of Round Rock Round Rock Area Serving Center
NYLE MAXWELL, Mayor Name:
Title:
ATTEST:
CHRISTINE R. MARTINEZ
City Secretary
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Exhibit A
Self Certification Form
12
Self Declaration of Income October 2004
This activity is funded with federal Community Development Block Grant(CDBG)funds and is designed to primarily benefit
low to moderate-income households (LMI). This requires that the Applicant meet and certify the amount of their annual
household income in order to participate in the program. Applicant should not provide his/her signature unless he/she has read
and understands the income information they are certifying under penalty of law. At the discretion of the program,Applicant
may be required to provide documentation to support the self-declaration of income.
Applicant/Program Partici ant Information
Applicant Name: SSN#:
Co-Applicant Name: SSN#:
Applicant Address:
Child's Full Name: Age
Female Head of Household:❑Yes []No
Ethnicity(check one):
❑White ❑Am Indian/Alaskan Native ❑Asian&White
❑Black/African-American ❑Native Hawaiian/Other Pacific Islander ❑Black African American&White
❑Asian ❑Am.Indian/Alaskan Native&White ❑Am Indian/Alaskan Native&Blk
❑Other Multi-Racial
Applicant Household Income Information
Estimate the annual income of the household by projecting the prevailing rate of income of each person at the time
assistance is provided for the individual,family,or household(as applicable). Estimated annual income shall
include income from all sources of household members as applicable. Income or asset enhancement derived from
the CDBG-assisted activity shall not be considered in calculating estimated annual income.
,V,
Income
80%of median 39,800 45,500 51,200 56,900 61,450 66,000 70,550 75,100
50%of median 24,900 28,450 32,000 35,550 38,400 41 250 44,100 46P950
30%of median 14,950 17,050 19,200 21,350 23,050 24,750 26,450 28,150
Number of persons living in household: Number of adults(18 yrs and older)living in household:
During the last 12 months,was your gross annual household income for all adults 18 yrs and older
❑ less than ❑more than the amount listed above for your family size. (Please circle amount above)
Applicant Self Declaration Certification
Evidenced by the signature below, Applicant certifies his or her annual household income. Applicant certifies that the
information herein provided is true and accurate. Applicant further acknowledges that any inaccuracy and/or misrepresentation
provided herein may constitute fraud,which is punishable by law. Applicant certifies that all information provided herein and
any attachments hereto, are true and correct as of the date set forth opposite signature. Applicant acknowledges that Title 18,
Section 1001 of the U.S. Code states that any person that makes intentional or negligent statements to any department of the
United States Government is guilty of a felony that could result in but not be limited to a fine,imprisonment,or both.
Applicant Signature Date
Program Use Only:
Prog am/ActivityName: HUD Income guidelines
used to certify client dated 1/28/04.HUD maximum income allowance based upon the size of household is$
Based upon client information provided,client household(dx&ow) ❑Does❑Does not meet income qualifications.
Reviewer's Signature: Date:
13
Exhibit B
Client/ Beneficiary Data
This report is prepared in digital format. The following exhibit is an example of the information
required to complete the client/beneficiary data.
14
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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
Bricks for use in the construction of the food pantry $35,000.00
Total: $35,000.00
16
Appendix A
OMB Circular A-110
RRASC Bricks contact 04-05.DOC
subawards made by State and local
CIRCULAR A-110 governments to organizations covered by this
(REVISED 11/19/93, As Further Amended Circular. Federal agencies may apply the
9/30/99) provisions of this Circular to commercial
organizations, foreign governments,
organizations under the jurisdiction of
CIRCULAR NO. A-110 foreign governments, and international
Revised organizations.
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND 4. Definitions. Definitions of key terms
ESTABLISHMENTS used in this Circular are contained in
Section .2 in the Attachment.
SUBJECT: Uniform Administrative Requirements
for Grants and Agreements With 5. Required Action. The specific
Institutions of Higher Education, requirements and responsibilities of Federal
Hospitals, and Other Non-Profit agencies and institutions of higher
Organizations education, hospitals, and other non-profit
organizations are set forth in this
Circular. Federal agencies responsible for
1. Purpose. This Circular sets forth awarding and administering grants to and
standards for obtaining consistency and other agreements with organizations
uniformity among Federal agencies in the described in paragraph 1 shall adopt the
administration of grants to and agreements language in the Circular unless different
with institutions of higher education, provisions are required by Federal statute
hospitals, and other non-profit or are approved by OMB.
organizations.
6. CHID Responsibilities. OMB will review
2. Authority. Circular A-110 is issued under agency regulations and implementation of
the authority of 31 U.S.C. 503 (the Chief this Circular, and will provide
Financial Officers Act), 31 U.S.C. 1111, 41 interpretations of policy requirements and
U.S.C. 405 (the Office of Federal assistance to insure effective and efficient
Procurement Policy Act), Reorganization Plan implementation. Any exceptions will be
No. 2 of 1970, and E.O. 11541 ("Prescribing subject to approval by OMB, as indicated in
the Duties of the Office of Management and Section —.4 in the Attachment. Exceptions
Budget and the Domestic Policy Council in will only be made in particular cases where
the Executive Office of the President") . adequate justification is presented.
3. Policy. Except as provided herein, the 7. Information Contact. Further information
standards set forth in this Circular are concerning this Circular may be obtained by
applicable to all Federal agencies. If any contacting the Office of Federal Financial
statute specifically prescribes policies or Management, Office of Management and Budget,
specific requirements that differ from the Washington, DC 20503, telephone (202) 395-
standards provided herein, the provisions of 3993.
the statute shall govern.
S. Termination Review Date. This Circular
The provisions of the sections of this will have a policy review three years from
Circular shall be applied by Federal date of issuance.
agencies to recipients. Recipients shall
apply the provisions of this Circular to 9. Effective Date. The standards set forth
subrecipients performing substantive work in this Circular which affect Federal
under grants and agreements that are passed agencies will be effective 30 days after
through or awarded by the primary recipient, publication of the final revision in the
if such subrecipients are organizations Federal Register. Those standards which
described in paragraph 1. Federal agencies impose on grantees will be
adopted by agencies in codified regulations
This Circular does not apply to grants, within six months after publication in the
contracts, or other agreements between the Federal Register. Earlier implementation is
Federal Government and units of State or encouraged.
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
RRASC Bricks contract 04-05.DOC
Grants and Agreements with Institutions of .26 Non-Federal audits.
Higher Education,
Hospitals, and Other Non-Profit .27 Allowable costs.
Organizations -
SUBPART A - GENERAL -.28 Period of availability of funds.
Sec. -.29 Conditional exemptions.
.1 Purpose. Property Standards
.2 Definitions. -.30 Purpose of property standards.
.3 Effect on other issuances. -.31 Insurance coverage.
.4 Deviations. -
32 Real property.
.5 Subawards. -.33 Federally-owned and exempt property.
SUBPART B - PRS-ANARD REQUIREMENTS -.34 Equipment.
.10 Purpose. -.35 Supplies and other expendable
property.
-.11 Pre-award policies. .36 Intangible property.
12 Forms for applying for Federal
assistance. - 37 Property trust relationship.
.13 Debarment and suspension. Procurement Standards
.14 Special award conditions. -.40 Purpose of procurement standards.
.15 Metric system of measurement. -.41 Recipient responsibilities.
_.16 Resource Conservation and Recovery -.42 Codes of conduct.
Act.
.43 Competition.
.17 Certifications and representations.
44 Procurement procedures.
SUBPART C - POST-AWARD REQUIREMENTS
.45 Cost and price analysis.
Financial and Program Management
.46 Procurement records.
_.20 Purpose of financial and program
management. .47 Contract administration.
.21 Standards for financial management .48 Contract provisions.
systems.
Reports and Records
-.22 Payment.
50 Purpose of reports and records.
-.23 Cost sharing or matching.
-.51 Monitoring and reporting program
_.24 Program income. performance.
-.25 Revision of budget and program plans. .52 Financial reporting.
19
—.53 _Retention and access requirements for owed to the recipient for which no
records. current services or performance is
required by the recipient.
Termination and Enforcement (c) Acquisition cost of equipment
means the net invoice price of the
equipment, including the cost of
_.60 Purpose of termination and modifications, attachments,
enforcement. accessories, or auxiliary apparatus
necessary to make the property usable
for the purpose for which it was
_.61 Termination. acquired. other charges, such as the
cost of installation, transportation,
_.62 Enforcement. taxes, duty or protective in-transit
insurance, shall be included or
SUBPART D - AFTER-THE-AWARD REQUIREMENTS excluded from the unit acquisition
cost in accordance with the
recipient's regular accounting
.70 Purpose. practices.
(d) Advance means a payment made by
Treasury check or other appropriate
_.71 Closeout procedures. payment mechanism to a recipient upon
its request either before outlays are
_.72 Subsequent adjustments and continuing made by the recipient or through the
responsibilities. use of predetermined payment
schedules.
(e) Award means financial assistance
_.73 Collection of amounts due that provides support or stimulation
to accomplish a public purpose.
APPENDZX A - CONTRACT PROVISIONS 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:
SUBPART A - General technical assistance, which provides
services instead of money; other
assistance in the form of loans, loan
_.1 Purpose. This Circular establishes guarantees, interest subsidies, or
uniform administrative requirements for insurance; direct payments of any
Federal grants and agreements awarded to kind to individuals; and, contracts
institutions of higher education, hospitals, which are required to be entered into
and other non-profit organizations. Federal and administered under procurement
awarding agencies shall not impose laws and regulations.
additional or inconsistent requirements, (f) Cash contributions means the
except as provided in Sections _.4, and recipient's cash outlay, including
—.14 or unless specifically required by the outlay of money contributed to
Federal statute or executive order. Non- the recipient by third parties.
profit organizations that implement Federal (g) Closeout means the process by
programs for the States are also subject to which a Federal awarding agency
State requirements. determines that all applicable
administrative actions and all
.2 Definitions.
required work of the award have been
completed by the recipient and
Federal awarding agency.
(a) Accrued expenditures means the (h) Contract means a procurement
charges incurred by the recipient contract under an award or subaward,
during a given period requiring the and a procurement subcontract under a
provision of funds for: (1) goods and recipient's or subrecipient's
other tangible property received; (2) contract.
services performed by employees, (i) Cost sharing or matching means
contractors, subrecipients, and other that portion of project or program
payees; and, (3) other amounts costs not borne by the Federal
becoming owed under programs for Government.
which no current services or (j) Date of completion means the date
performance is required. on which all work under an award is
(b) Accrued income means the sum of: completed or the date on the award
(1) earnings during a given period document, or any supplement or
from (i) services performed by the amendment thereto, on which Federal
recipient, and (ii) goods and other sponsorship ends.
tangible property delivered to (k) Disallowed costs means those
purchasers, and (2) amounts becoming charges to an award that the Federal
awarding agency determines to be
20
unallowable, in accordance with the recipient during the same or a future
applicable Federal cost principles or period.
other terms and conditions contained (u) Outlays or expenditures means
in the award. charges made to the project or
(1) Equipment means tangible program. They may be reported on a
nonexpendable personal property cash or accrual basis. For reports
including exempt property charged prepared on a cash basis, outlays are
directly to the award having a useful the sum of cash disbursements for
life of more than one year and an direct charges for goods and
acquisition cost of $5000 or more per services, the amount of indirect
unit. However, consistent with expense charged, the value of third
recipient policy, lower limits may be party in-kind contributions applied
established. and the amount of cash advances and
(m) Excess property means property payments made to subrecipients. For
under the control of any Federal reports prepared on an accrual basis,
awarding agency that, as determined outlays are the sum of cash
by the head thereof, is no longer disbursements for direct charges for
required for its needs or the goods and services, the amount of
discharge of its responsibilities. indirect expense incurred, the value
(n) Exempt property means tangible of in-kind contributions applied, and
personal property acquired in whole the net increase (or decrease) in the
or in part with Federal funds, where amounts owed by the recipient for
the Federal awarding agency has goods and other property received,
statutory authority to vest title in for services performed by employees,
the recipient without further contractors, subrecipients and other
obligation to the Federal Government. payees and other amounts becoming
An example of exempt property owed under programs for which no
authority is contained in the Federal current services or performance are
Grant and Cooperative Agreement Act required.
(31 U.S.C. 6306), for property (v) Personal property means property
acquired under an award to conduct of any kind except real property. It
basic or applied research by a non- may be tangible, having physical
profit institution of higher existence, or intangible, having no
education or non-profit organization physical existence, such as
whose principal purpose is conducting copyrights, patents, or securities.
scientific research. (w) Prior approval means written
(o) Federal awarding agency means the approval by an authorized official
Federal agency that provides an award evidencing prior consent.
to the recipient. (x) Program income means gross income
(p) Federal funds authorized means earned by the recipient that is
the total amount of Federal funds directly generated by a supported
obligated by the Federal Government activity or earned as a result of the
for use by the recipient. This amount award (see exclusions in paragraphs
may include any authorized carryover —.24 (e) and (h)). Program income
of unobligated funds from prior includes, but is not limited to,
funding periods when permitted by income from fees for services
agency regulations or agency performed, the use or rental of real
implementing instructions. or personal property acquired under
(q) Federal share of real property, federally-funded
projects, the sale
equipment, or supplies means that of commodities or items fabricated
percentage of the property's under an award, license fees and
acquisition costs and any improvement royalties on patents and copyrights,
expenditures paid with Federal funds. and interest on loans made with award
(r) Funding period means the period funds. Interest earned on advances of
of time when Federal funding is Federal funds is not program income.
available for obligation by the Except as otherwise provided in
recipient. Federal awarding agency regulations
(s) Intangible property and debt or the terms and conditions of the
Instruments means, but is not limited award, program income does not
to, trademarks, copyrights, patents include the receipt of principal on
and patent applications and such loans, rebates, credits, discounts,
property as loans, notes and other etc., or interest earned on any of
debt instruments, lease agreements, them.
stock and other instruments of (y) Project costs means all allowable
property ownership, whether costs, as set forth in the applicable
considered tangible or intangible. Federal cost principles, incurred by
(t) Obligations means the amounts of a recipient and the value of the
orders placed, contracts and grants contributions made by third parties
awarded, services received and in accomplishing the objectives of
similar transactions during a given the award during the project period.
period that require payment by the (z) Project period means the period
21
established in the award document financial assistance in the form of
during which Federal sponsorship money, or property in lieu of money,
begins and ends. made under an award by a recipient to
(aa) Property means, unless otherwise an eligible subrecipient or by a
stated, real property, equipment, subrecipient to a lower tier
intangible property and debt subrecipient. The term includes
instruments. financial assistance when provided by
(bb) Real property means land, any legal agreement, even if the
including land improvements, agreement is called a contract, but
structures and appurtenances thereto, does not include procurement of goods
but excludes movable machinery and and services nor does it include any
equipment. form of assistance which is excluded
(cc) Recipient means an organization from the definition of "award" in
receiving financial assistance paragraph (e) .
directly from Federal awarding (gg) Subrecipient means the legal
agencies to carry out a project or entity to which a subaward is made
program. The term includes public and and which is accountable to the
private institutions of higher recipient for the use of the funds
education, public and private provided. The term may include
hospitals, and other quasi-public and foreign or international
private non-profit organizations such organizations (such as agencies of
as, but not limited to, community the United Nations) at the discretion
action agencies, research institutes, of the Federal awarding agency.
educational associations, and health (hh) Supplies means all personal
centers. The term may include property excluding equipment,
commercial organizations, foreign or intangible property, and debt
international organizations (such as instruments as defined in this
agencies of the United Nations) which section, and inventions of a
are recipients, subrecipients, or contractor conceived or first
contractors or subcontractors of actually reduced to practice in the
recipients or subrecipients at the performance of work under a funding
discretion of the Federal awarding agreement ("subject inventions"), as
agency. The term does not include defined in 37 CFR part 401, "Rights
government-owned contractor-operated to Inventions Made by Nonprofit
facilities or research centers Organizations and Small Business
providing continued support for Firms Under Government Grants,
mission-oriented, large-scale Contracts, and Cooperative
programs that are government-owned or Agreements."
controlled, or are designated as (ii) Suspension means an action by a
federally-funded research and Federal awarding agency that
development centers. temporarily withdraws Federal
(dd) Research and development means sponsorship under an award, pending
all research activities, both basic corrective action by the recipient or
and applied, and all development pending a decision to terminate the
activities that are supported at award by the Federal awarding agency.
universities, colleges, and other Suspension of an award is a separate
non-profit institutions. "Research" action from suspension under Federal
is defined as a systematic study agency regulations implementing E.O.s
directed toward fuller scientific 12549 and 12689, "Debarment and
knowledge or understanding of the Suspension."
subject studied. "Development" is the (jj) Termination means the
systematic use of knowledge and cancellation of Federal sponsorship,
understanding gained from research in whole or in part, under an
directed toward the production of agreement at any time prior to the
useful materials, devices, systems, date of completion.
or methods, including design and (kk) Third party in-kind
development of prototypes and contributions means the value of non-
processes. The term research also cash contributions provided by non-
includes activities involving the Federal third parties. Third party
training of individuals in research in-kind contributions may be in the
techniques where such activities form of real property, equipment,
utilize the same facilities as other supplies and other expendable
research and development activities property, and the value of goods and
and where such activities are not services directly benefiting and
included in the instruction function. specifically identifiable to the
(ee) Small awards means a grant or project or program.
cooperative agreement not exceeding (11) Unliquidated obligations, for
the small purchase threshold fixed at financial reports prepared on a cash
41 U.S.C. 403(11) (currently basis, means the amount of
$25,000) . obligations incurred by the recipient
(ff) Subaward means an award of that have not been paid. For reports
22
prepared on an accrued expenditure subject to the provisions of
basis, they represent the amount of regulations implementing the grants
obligations incurred by the recipient management common rule,"Uniform
for which an outlay has not been Administrative Requirements for
recorded. Grants and Cooperative Agreements to
(mm) Unobligated balance means the State and Local Governments,"
portion of the funds authorized by published at 53 FR 8034 (3/11/88).
the Federal awarding agency that has
not been obligated by the recipient
and is determined by deducting the SUBPART B - Pre-Award Requirements
cumulative obligations from the
cumulative funds authorized. _.10 Purpose. Sections _.11
(nn) Unrecovered indirect cost means through _.17 prescribes forms and
the difference between the amount instructions and other pre-award
awarded and the amount which could matters to be used in applying for
have been awarded under the Federal awards.
recipient's approved negotiated
indirect cost rate.
(oo) Working capital advance means a _.11 Pre-award policies.
procedure where by funds are advanced
to the recipient to cover its (a) Use of Grants and Cooperative
estimated disbursement needs for a Agreements, and Contracts. In each
given initial period.
instance, the Federal awarding agency
shall decide on the appropriate award
_.3 Effect on other issuances. For instrument (i.e., grant, cooperative
awards subject to this Circular, all agreement, or contract) . The Federal
administrative requirements of Grant and Cooperative Agreement Act
codified program regulations, program (31 U.S.C. 6301-08) governs the use
manuals, handbooks and other of grants, cooperative agreements and
nonregulatory materials which are contracts. A grant or cooperative
inconsistent with the requirements of agreement shall be used only when the
this Circular shall be superseded, principal purpose of a transaction is
except to the extent they are to accomplish a public purpose of
required by statute, or authorized in support or stimulation authorized by
accordance with the deviations Federal statute. The statutory
provision in Section .4. criterion for choosing between grants
and cooperative agreements is that
for the latter, "substantial
_.4 Deviations. The Office of involvement is expected between the
Management and Budget (OMB) may grant executive agency and the State, local
exceptions for classes of grants or government, or other recipient when
recipients subject to the carrying out the activity
requirements of this Circular when contemplated in the agreement."
exceptions are not prohibited by Contracts shall be used when the
statute. However, in the interest of principal purpose is acquisition of
maximum uniformity, exceptions from property or services for the direct
the requirements of this Circular benefit or use of the Federal
shall be permitted only in unusual Government.
circumstances. Federal awarding (b) Public Notice and Priority
agencies may apply more restrictive Setting. Federal awarding agencies
requirements to a class of recipients shall notify the public of its
when approved by OMB. Federal intended funding priorities for
awarding agencies may apply less discretionary grant programs, unless
restrictive requirements when funding priorities are established by
awarding small awards, except for Federal statute.
those requirements which are
statutory. Exceptions on a case-by-
case basis may also be made by _.12 Forms for applying for Federal
Federal awarding agencies. assistance.
5 Subawards. Unless sections of (a) Federal awarding agencies shall
this Circular specifically exclude comply with the applicable report
subrecipients from coverage, the clearance requirements of 5 CFR part
provisions of this Circular shall be 1320, "Controlling Paperwork Burdens
applied to subrecipients performing on the Public," with regard to all
work under awards if such forms used by the Federal awarding
subrecipients are institutions of agency in place of or as a supplement
higher education, hospitals or other to the Standard Form 424 (SF-424)
non-profit organizations. State and series.
local government subrecipients are (b) Applicants shall use the SF-424
23
series or those forms and by the Omnibus Trade and
instructions prescribed by the Competitiveness Act (15 U.S.C. 205)
Federal awarding agency. declares that the metric system is
(c) For Federal programs covered by the preferred measurement system for
E.O. 12372, "Intergovernmental Review U.S. trade and commerce. The Act
of Federal Programs," the applicant requires each Federal agency to
shall complete the appropriate establish a date or dates in
sections of the SF-424 (Application consultation with the Secretary of
for Federal Assistance) indicating Commerce, when the metric system of
whether the application was subject measurement will be used in the
to review by the State Single Point agency's procurements, grants, and
of Contact (SPOC) . The name and other business-related activities.
address of the SPOC for a particular Metric implementation may take longer
State can be obtained from the where the use of the system is
Federal awarding agency or the initially impractical or likely to
Catalog of Federal Domestic cause significant inefficiencies in
Assistance. The SPDC shall advise the the accomplishment of federally-
applicant whether the program for funded activities. Federal awarding
which application is made has been agencies shall follow the provisions
selected by that State for review. of E.O. 12770, "Metric Usage in
(d) Federal awarding agencies that do Federal Government Programs."
not use the SF-424 form should
indicate whether the application is _.16 Resource Conservation and
subject to review by the State under Recovery Act (RCRA) (Pub. L. 94-580
E.O. 12372. codified at 42 U.S.C. 6962) . Under
the Act, any State agency or agency
_.13 Debarment and suspension. of a political subdivision of a State
Federal awarding agencies and which is using appropriated Federal
recipients shall comply with the funds must comply with Section 6002.
nonprocurement debarment and Section 6002 requires that preference
suspension common rule implementing be given in procurement programs to
E.O.s 12549 and 12689, "Debarment and the purchase of specific products
Suspension." This common rule containing recycled materials
restricts subawards and contracts identified in guidelines developed by
with certain parties that are the Environmental Protection Agency
debarred, suspended or otherwise (EPA) (40 CFR parts 247-254) .
excluded from or ineligible for Accordingly, State and local
participation in Federal assistance institutions of higher education,
programs or activities. hospitals, and non-profit
organizations that receive direct
_.14 Special award conditions. If Federal awards or other Federal funds
an applicant or recipient: (a) has a shall give preference in their
history of poor performance, (b) is procurement programs funded with
not financially stable, (c) has a Federal funds to the purchase of
management system that does not meet recycled products pursuant to the EPA
the standards prescribed in this guidelines.
Circular, (d) has not conformed to
the terms and conditions of a _.17 Certifications and
previous award, or (e) is not representations. Unless prohibited by
otherwise responsible, Federal statute or codified regulation, each
awarding agencies may impose Federal awarding agency is authorized
additional requirements as needed, and encouraged to allow recipients to
provided that such applicant or submit certifications and
recipient is notified in writing as representations required by statute,
to: the nature of the additional executive order, or regulation on an
requirements, the reason why the annual basis, if the recipients have
additional requirements are being ongoing and continuing relationships
imposed, the nature of the corrective with the agency. Annual
action needed, the time allowed for certifications and representations
completing the corrective actions, shall be signed by responsible
and the method for requesting officials with the authority to
reconsideration of the additional ensure recipients' compliance with
requirements imposed. Any special the pertinent requirements.
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
SUBPART C - Post-Award Requirements for program purposes by the
recipient. To the extent that the
Financial and Program Management provisions of the Cash Management
Improvement Act (CMIA) (Pub. L. 101-
453) govern, payment methods of State
_.20 Purpose of financial and agencies, instrumentalities, and
program management. Sections _.21 fiscal agents shall be consistent
through _.28 prescribe standards with CMIA Treasury-State Agreements
for financial management systems, or the CMIA default procedures
methods for making payments and rules codified at 31 CFR part 205,
for: satisfying cost sharing and "Withdrawal of Cash from the Treasury
matching requirements, accounting for for Advances under Federal Grant and
program income, budget revision Other Programs."
approvals, making audits, determining (6) Written procedures for
allowability of cost, and determining the reasonableness,
establishing fund availability. allocability and allowability of
costs in accordance with the
provisions of the applicable Federal
_.21 Standards for financial cost principles and the terms and
management systems. conditions of the award.
(7) Accounting records including cost
(a) Federal awarding agencies shall accounting records that are supported
require recipients to relate by source documentation.
financial data to performance data (c) Where the Federal Government
and develop unit cost information guarantees or insures the repayment
whenever practical. of money borrowed by the recipient,
(b) Recipients' financial management the Federal awarding agency, at its
systems shall provide for the discretion, may require adequate
following. bonding and insurance if the bonding
(1) Accurate, current and complete and insurance requirements of the
disclosure of the financial results recipient are not deemed adequate to
of each federally-sponsored project protect the interest of the Federal
or program in accordance with the Government.
reporting requirements set forth in (d) The Federal awarding agency may
Section —.52. If a Federal awarding require adequate fidelity bond
agency requires reporting on an coverage where the recipient lacks
accrual basis from a recipient that sufficient coverage to protect the
maintains its records on other than Federal Government's interest.
an accrual basis, the recipient shall (e) Where bonds are required in the
not be required to establish an situations described above, the bonds
accrual accounting system. These shall be obtained from companies
recipients may develop such accrual holding certificates of authority as
data for its reports on the basis of acceptable sureties, as prescribed in
an analysis of the documentation on 31 CFR part 223, "Surety Companies
hand. Doing Business with the United
(2) Records that identify adequately States."
the source and application of funds
for federally-sponsored activities. .22 payment.
These records shall contain
information pertaining to Federal
awards, authorizations, obligations, (a) Payment methods shall minimize
unobligated balances, assets, the time elapsing between the
outlays, income and interest. transfer of funds from the United
(3) Effective control over and States Treasury and the issuance or
accountability for all funds, redemption of checks, warrants, or
property and other assets. Recipients payment by other means by the
shall adequately safeguard all such recipients. Payment methods of State
assets and assure they are used agencies or instrumentalities shall
solely for authorized purposes. be consistent with Treasury-State
(4) Comparison of outlays with budget CMIA agreements or default procedures
amounts for each award. Whenever codified at 31 CFR part 205.
appropriate, financial information (b) Recipients are to be paid in
should be related to performance and advance, provided they maintain or
unit cost data. demonstrate the willingness to
(5) Written procedures to minimize maintain: (1) written procedures that
the time elapsing between the minimize the time elapsing between
transfer of funds to the recipient the transfer of funds and
from the U.S. Treasury and the disbursement by the recipient, and
issuance or redemption of checks, (2) financial management systems that
warrants or payments by other means meet the standards for fund control
25
and accountability as established in Federal awarding agency may provide
Section —.21. Cash advances to a cash on a working capital advance
recipient organization shall be basis. Under this procedure, the
limited to the minimum amounts needed Federal awarding agency shall advance
and be timed to be in accordance with cash to the recipient to cover its
the actual, immediate cash estimated disbursement needs for an
requirements of the recipient initial period generally geared to
organization in carrying out the the awardee's disbursing cycle.
purpose of the approved program or Thereafter, the Federal awarding
project. The timing and amount of agency shall reimburse the recipient
cash advances shall be as close as is for its actual cash disbursements.
administratively feasible to the The working capital advance method of
actual disbursements by the recipient payment shall not be used for
organization for direct program or recipients unwilling or unable to
project costs and the proportionate provide timely advances to their
share of any allowable indirect subrecipient to meet the
costs. subrecipient's actual cash
(c) Whenever possible, advances shall disbursements.
be consolidated to cover anticipated (g) To the extent available,
cash needs for all awards made by the recipients shall disburse funds
Federal awarding agency to the available from repayments to and
recipient. interest earned on a revolving fund,
(1) Advance payment mechanisms program income, rebates, refunds,
include, but are not limited to, contract settlements, audit
Treasury check and electronic funds recoveries and interest earned on
transfer. such funds before requesting
(2) Advance payment mechanisms are additional cash payments.
subject to 31 CFR part 205. (h) Unless otherwise required by
(3) Recipients shall be authorized to statute, Federal awarding agencies
submit requests for advances and shall not withhold payments for
reimbursements at least monthly when proper charges made by recipients at
electronic fund transfers are not any time during the project period
used. unless (1) or (2) apply.
(d) Requests for Treasury check (1) A recipient has failed to comply
advance payment shall be submitted on with the project objectives, the
SF-270, "Request for Advance or terms and conditions of the award, or
Reimbursement," or other forms as may Federal reporting requirements.
be authorized by OMB. This form is (2) The recipient or subrecipient is
not to be used when Treasury check delinquent in a debt to the United
advance payments are made to the States as defined in OMB Circular A-
recipient automatically through the 129, "Managing Federal Credit
use of a predetermined payment Programs." Under such conditions, the
schedule or if precluded by special Federal awarding agency may, upon
Federal awarding agency instructions reasonable notice, inform the
for electronic funds transfer. recipient that payments shall not be
(e) Reimbursement is the preferred made for obligations incurred after a
method when the requirements in specified date until the conditions
paragraph (b) cannot be met. Federal are corrected or the indebtedness to
awarding agencies may also use this the Federal Government is liquidated.
method on any construction agreement, (i) Standards governing the use of
or if the major portion of the banks and other institutions as
construction project is accomplished depositories of funds advanced under
through private market financing or awards are as follows.
Federal loans, and the Federal (1) Except for situations described
assistance constitutes a minor in paragraph (i) (2), Federal awarding
portion of the project. agencies shall not require separate
(1) When the reimbursement method is depository accounts for funds
used, the Federal awarding agency provided to a recipient or establish
shall make payment within 30 days any eligibility requirements for
after receipt of the billing, unless depositories for funds provided to a
the billing is improper. recipient. However, recipients must
(2) Recipients shall be authorized to be able to account for the receipt,
submit request for reimbursement at obligation and expenditure of funds.
least monthly when electronic funds (2) Advances of Federal funds shall
transfers are not used. be deposited and maintained in
(f) If a recipient cannot meet the insured accounts whenever possible.
criteria for advance payments and the (j) Consistent with the national goal
Federal awarding agency has of expanding the opportunities for
determined that reimbursement is not women-owned and minority-owned
feasible because the recipient lacks business enterprises, recipients
sufficient working capital, the shall be encouraged to use women-
26
owned and minority-owned banks (a that it provides adequate information
bank which is owned at least 50 to meet Federal needs.
percent by women or minority group
members) .
(k) Recipients shall maintain _.23 Cost sharing or matching.
advances of Federal funds in interest
bearing accounts, unless (1), (2) or (a) All contributions, including cash
(3) apply. and third party in-kind, shall be
(1) The recipient receives less than accepted as part of the recipient's
$120,000 in Federal awards per year. cost sharing or matching when such
(2) The best reasonably available contributions meet all of the
interest bearing account would not be following criteria.
expected to earn interest in excess (1) Are verifiable from the
of $250 per year on Federal cash recipient's records.
balances. (2) Are not included as contributions
(3) The depository would require an for any other federally-assisted
average or minimum balance so high project or program.
that it would not be feasible within (3) Are necessary and reasonable for
the expected Federal and non-Federal proper and efficient accomplishment
cash resources. of project or program objectives.
(1) For those entities where CMIA and (4) Are allowable under the
its implementing regulations do not applicable cost principles.
apply, interest earned on Federal (5) Are not paid by the Federal
advances deposited in interest Government under another award,
bearing accounts shall be remitted except where authorized by Federal
annually to Department of Health and statute to be used for cost sharing
Human Services, Payment Management or matching.
System, Rockville, MD 20852. Interest (6) Are provided for in the approved
amounts up to $250 per year may be budget when required by the Federal
retained by the recipient for awarding agency.
administrative expense. State (7) Conform to other provisions of
universities and hospitals shall this Circular, as applicable.
comply with CMIA, as it pertains to (b) Unrecovered indirect costs may be
interest. If an entity subject to included as part of cost sharing or
CMIA uses its own funds to pay pre- matching only with the prior approval
award costs for discretionary awards of the Federal awarding agency.
without prior written approval from (c) Values for recipient
the Federal awarding agency, it contributions of services and
waives its right to recover the property shall be established in
interest under CMIA. accordance with the applicable cost
(m) Except as noted elsewhere in this principles. If a Federal awarding
Circular, only the following forms agency authorizes recipients to
shall be authorized for the donate buildings or land for
recipients in requesting advances and construction/facilities acquisition
reimbursements. Federal agencies projects or long-term use, the value
shall not require more than an of the donated property for cost
original and two copies of these sharing or matching shall be the
forms. lesser of (1) or (2) .
(1) SF-270, Request for Advance or (1) The certified value of the
Reimbursement. Each Federal awarding remaining life of the property
agency shall adopt the SF-270 as a recorded in the recipient's
standard form for all nonconstruction accounting records at the time of
programs when electronic funds donation.
transfer or predetermined advance (2) The current fair market value.
methods are not used. Federal However, when there is sufficient
awarding agencies, however, have the justification, the Federal awarding
option of using this form for agency may approve the use of the
construction programs in lieu of the current fair market value of the
SF-271, "Outlay Report and Request donated property, even if it exceeds
for Reimbursement for Construction the certified value at the time of
Programs." donation to the project.
(2) SF-271, Outlay Report and Request (d) Volunteer services furnished by
for Reimbursement for Construction professional and technical personnel,
Programs. Each Federal awarding consultants, and other skilled and
agency shall adopt the SF-271 as the unskilled labor may be counted as
standard form to be used for cost sharing or matching if the
requesting reimbursement for service is an integral and necessary
construction programs. However, a part of an approved project or
Federal awarding agency may program. Rates for volunteer services
substitute the SF-270 when the shall be consistent with those paid
Federal awarding agency determines
27
for similar work in the recipient's (2) The value of donated equipment
organization. In those instances in shall not exceed the fair market
which the required skills are not value of equipment of the same age
found in the recipient organization, and condition at the time of
rates shall be consistent with those donation.
paid for similar work in the labor (3) The value of donated space shall
market in which the recipient not exceed the fair rental value of
competes for the kind of services comparable space as established by an
involved. In either case, paid fringe independent appraisal of comparable
benefits that are reasonable, space and facilities in a privately-
allowable, and allocable may be owned building in the same locality.
included in the valuation. (4) The value of loaned equipment
(e) When an employer other than the shall not exceed its fair rental
recipient furnishes the services of value.
an employee, these services shall be (5) The following requirements
valued at the employee's regular rate pertain to the recipient's supporting
of pay (plus an amount of fringe records for in-kind contributions
benefits that are reasonable, from third parties.
allowable, and allocable, but (i) Volunteer services shall be
exclusive of overhead costs), documented and, to the extent
provided these services are in the feasible, supported by the same
same skill for which the employee is methods used by the recipient for its
normally paid. own employees.
(f) Donated supplies. may include such (ii) The basis for determining the
items as expendable equipment, office valuation for personal service,
supplies, laboratory supplies or material, equipment, buildings and
workshop and classroom supplies. land shall be documented.
Value assessed to donated supplies
included in the cost sharing or .24 Program income.
matching share shall be reasonable
and shall not exceed the fair market
value of the property at the time of (a) Federal awarding agencies shall
the donation. apply the standards set forth in this
(g) The method used for determining section in requiring recipient
cost sharing or matching for donated organizations to account for program
equipment, buildings and land for income related to projects financed
which title passes to the recipient in whole or in part with Federal
may differ according to the purpose funds.
of the award, if (1) or (2) apply. (b) Except as provided in paragraph
(1) If the purpose of the award is to e
P P (h) below, program income earned
assist the recipient in the during the project period shall be
acquisition of equipment, buildings retained by the recipient and, in
or land, the total value of the accordance with Federal awarding
donated property may be claimed as agency regulations or the terms and
cost sharing or matching. conditions of the award, shall be
(2) If the purpose of the award is to used in one or more of the ways
support activities that require the listed in the following.
use of equipment, buildings or land, (1) Added to funds committed to the
normally only depreciation or use project by the Federal awarding
charges for equipment and buildings agency and recipient and used to
may be made. However, the full value further eligible project or program
of equipment or other capital assets objectives.
and fair rental charges for land may (2) Used to finance the non-Federal
be allowed, provided that the Federal share of the project or program.
awarding agency has approved the (3) Deducted from the total project
charges. or program allowable cost in
(h) The value of donated property determining the net allowable costs
shall be determined in accordance on which the Federal share of costs
with the usual accounting policies of is based.
the recipient, with the following (c) When an agency authorizes the
qualifications. disposition of program income as
(1) The value of donated land and described in paragraphs (b) (1) or
buildings shall not exceed its fair (b) (2), program income in excess of
market value at the time of donation any limits stipulated shall be used
to the recipient as established by an in accordance with paragraph (b) (3) .
independent appraiser (e.g., (d) In the event that the Federal
certified real property appraiser or awarding agency does not specify in
General Services Administration its regulations or the terms and
representative) and certified by a conditions of the award how program
responsible official of the income is to be used, paragraph
recipient.
28
(b) (3) shall apply automatically to agencies for one or more of the
all projects or programs except following program or budget related
research. For awards that support reasons.
research, paragraph (b) (1) shall (1) Change in the scope or the
apply automatically unless the objective of the project or program
awarding agency indicates in the (even if there is no associated
terms and conditions another budget revision requiring prior
alternative on the award or the written approval).
recipient is subject to special award (2) Change in a key person specified
conditions, as indicated in Section in the application or award document.
_•14. (3) The absence for more than three
(e) Unless Federal awarding agency months, or a 25 percent reduction in
regulations or the terms and time devoted to the project, by the
conditions of the award provide approved project director or
otherwise, recipients shall have no principal investigator.
obligation to the Federal Government (4) The need for additional Federal
regarding program income earned after funding.
the end of the project period. (5) The transfer of amounts budgeted
(f) If authorized by Federal awarding for indirect costs to absorb
agency regulations or the terms and increases in direct costs, or vice
conditions of the award, costs versa, if approval is required by the
incident to the generation of program Federal awarding agency.
income may be deducted from gross (6) The inclusion, unless waived by
income to determine program income, the Federal awarding agency, of costs
provided these costs have not been that require prior approval in
charged to the award. accordance with OMB Circular A-21,
(g) Proceeds from the sale of "Cost Principles for Educational
property shall be handled in Institutions," OMB Circular A-122,
accordance with the requirements of "Cost Principles for Non-Profit
the Property Standards (See Sections Organizations," or 45 CFR part 74
_.30 through _.37) . Appendix E, "Principles for
(h) Unless Federal awarding agency Determining Costs Applicable to
regulations or the terms and Research and Development under Grants
condition of the award provide and Contracts with Hospitals," or 48
otherwise, recipients shall have no CFR part 31, "Contract Cost
obligation to the Federal Government Principles and Procedures," as
with respect to program income earned applicable.
from license fees and royalties for (7) The transfer of funds allotted
copyrighted material, patents, patent for training allowances (direct
applications, trademarks, and payment to trainees) to other
inventions produced under an award. categories of expense.
However, Patent and Trademark (8) Unless described in the
Amendments (35 U.S.C. 18) apply to application and funded in the
inventions made under an approved awards, the subaward,
experimental, developmental, or transfer or contracting out of any
research award. work under an award. This provision
does not apply to the purchase of
.25 Revision of budget and program supplies, material, equipment or
plans. general support services.
(d) No other prior approval
requirements for specific items may
(a) The budget plan is the financial be imposed unless a deviation has
expression of the project or program been approved by OMB.
as approved during the award process. (e) Except for requirements listed in
It may include either the Federal and paragraphs (c) (1). and (c) (4) of this
non-Federal share, or only the section, Federal awarding agencies
Federal share, depending upon Federal are authorized, at their option, to
awarding agency requirements. It waive cost-related and administrative
shall be related to performance for prior written approvals required by
program evaluation purposes whenever this Circular and OMB Circulars A-21
appropriate. and A-122. Such waivers may include
(b) Recipients are required to report authorizing recipients to do any one
deviations from budget and program or more of the following.
plans, and request prior approvals (1) Incur pre-award costs 90 calendar
for budget and program plan days prior to award or more than 90
revisions, in accordance with this calendar days with the prior approval
section. of the Federal awarding agency. All
(c) For nonconstruction awards, pre-award costs are incurred at the
recipients shall request prior recipient's risk (i.e., the Federal
approvals from Federal awarding awarding agency is under no
obligation to reimburse such costs if
29
for any reason the recipient does not (3) A revision is desired which
receive an award or if the award is involves specific costs for which
less than anticipated and inadequate prior written approval requirements
to cover such costs) . may be imposed consistent with
(2) Initiate a one-time extension of applicable OMB cost principles listed
the expiration date of the award of in Section _.27.
up to 12 months unless one or more of (i) No other prior approval
the following conditions apply. For requirements for specific items may
one-time extensions, the recipient be imposed unless a deviation has
must notify the Federal awarding been approved by OMB.
agency in writing with the supporting (j) When a Federal awarding agency
reasons and revised expiration date makes an award that provides support
at least 10 days before the for both construction and
expiration date specified in the nonconstruction work, the Federal
award. This one-time extension may awarding agency may require the
not be exercised merely for the recipient to request prior approval
purpose of using unobligated from the Federal awarding agency
balances. before making any fund or budget
(i) The terms and conditions of award transfers between the two types of
prohibit the extension. work supported.
(ii) The extension requires (k) For both construction and
additional Federal funds. nonconstruction awards, Federal
(iii) The extension involves any awarding agencies shall require
change in the approved objectives or recipients to notify the Federal
scope of the project. awarding agency in writing promptly
(3) Carry forward unobligated whenever the amount of Federal
balances to subsequent funding authorized funds is expected to
periods. exceed the needs of the recipient for
(4) For awards that support research, the project period by more than $5000
unless the Federal awarding agency or five percent of the Federal award,
provides otherwise in the award or in whichever is greater. This
the agency's regulations, the prior notification shall not be required if
approval requirements described in an application for additional funding
paragraph (e) are automatically is submitted for a continuation
waived (i.e., recipients need not award.
obtain such prior approvals) unless (1) When requesting approval for
one of the conditions included in budget revisions, recipients shall
paragraph (e) (2) applies. use the budget forms that were used
(f) The Federal awarding agency may, in the application unless the Federal
at its option, restrict the transfer awarding agency indicates a letter of
of funds among direct cost categories request suffices.
or programs, functions and activities (m) Within 30 calendar days from the
for awards in which the Federal share date of receipt of the request for
of the project exceeds $100,000 and budget revisions, Federal awarding
the cumulative amount of such agencies shall review the request and
transfers exceeds or is expected to notify the recipient whether the
exceed 10 percent of the total budget budget revisions have been approved.
as last approved by the Federal If the revision is still under
awarding agency. No Federal awarding consideration at the end of 30
agency shall permit a transfer that calendar days, the Federal awarding
would cause any Federal appropriation agency shall inform the recipient in
or part thereof to be used for writing of the date when the
purposes other than those consistent recipient may expect the decision.
with the original intent of the
appropriation.
(g) All other changes to _.26 Non-Federal audits.
nonconstruction budgets, except for
the changes described in paragraph (a) Recipients and subrecipients that
(j), do not require prior approval. are institutions of higher education
(h) For construction awards, or other non-profit organizations
recipients shall request prior (including hospitals) shall be
written approval promptly from subject to the audit requirements
Federal awarding agencies for budget contained in the Single Audit Act
revisions whenever (1), (2) or (3) Amendments of 1996 (31 USC 7501-7507)
apply. and revised OMB Circular A-133,
(1) The revision results from changes "Audits of States, Local Governments,
in the scope or the objective of the and Non-Profit Organizations."
project or program. (b) State and local governments shall
(2) The need arises for additional be subject to the audit requirements
Federal funds to complete the contained in the Single Audit Act
project.
30
Amendments of 1996 (31 USC 7501-7507) exemption from OMB administrative
and revised OMB Circular A-133, requirements and cost principles
"Audits of States, Local Governments, circulars for certain Federal
and Non-Profit Organizations." programs with statutorily-authorized
(c) For-profit hospitals not covered consolidated planning and
by the audit provisions of revised consolidated administrative funding,
OMB Circular A-133 shall be subject that are identified by a Federal
to the audit requirements of the agency and approved by the head of
Federal awarding agencies. the Executive department or
(d) Commercial organizations shall be establishment. A Federal agency shall
subject to the audit requirements of consult with OMB during its
the Federal awarding agency or the consideration of whether to grant
prime recipient as incorporated into such an exemption.
the award document. (b) To promote efficiency in State
and local program administration,
_.27 Allowable costs. For each kind when Federal non-entitlement programs
of recipient, there is—a set of with common purposes have specific
Federal principles for determining statutorily-authorized consolidated
allowable costs. Allowability of planning and consolidated
costs shall be determined in administrative funding and where most
accordance with the cost principles of the State agency's resources come
applicable to the entity incurring from non-Federal sources, Federal
the costs. Thus, allowability of agencies may exempt these covered
costs incurred by State, local or State-administered, non-entitlement
federally-recognized Indian tribal grant programs from certain OMB
governments is determined in grants management requirements. The
accordance with the provisions of OMB exemptions would be from all but the
Circular A-87, "Cost Principles for allocability of costs provisions of
State, Local, and Indian Tribal OMB Circulars A-87 (Attachment A,
Governments." The allowability of subsection C.3), "Cost Principles for
costs incurred by non-profit State, Local, and Indian Tribal
organizations is determined in Governments," A-21 (Section C,
accordance with the provisions of OMB subpart 4), "Cost Principles for
Circular A-122, "Cost Principles for Educational Institutions," and A-122
Non-Profit Organizations." The (Attachment A, subsection A.4), "Cost
allowability of costs incurred by Principles for Non-Profit
institutions of higher education is Organizations," and from all of the
determined in accordance with the administrative requirements
provisions of OMB Circular A-21, provisions of OMB Circular A-110,
"Cost Principles for Educational "Uniform Administrative Requirements
Institutions." The allowability of for Grants and Agreements with
costs incurred by hospitals is Institutions of Higher Education,
determined in accordance with the Hospitals, and Other Non-Profit
provisions of A Organizations," and the agencies'
p iples f E De 45 CFR grants management common rule.
part 74, "Principles for Determining agency da
Federal Costs Applicable -to Research and (c) When a g y provides
Development Under Grants and this flexibility, as a prerequisite
Contracts with Hospitals." The to a State's exercising this option,
allowability of costs incurred by a State must adopt its own written
commercial organizations and those fiscal and administrative
non-profit organizations listed in requirements for expending and
Attachment C to Circular A-122 is accounting for all funds, which are
determined in accordance with the consistent with the provisions of OMB
provisions of the Federal Acquisition Circular A-87, and extend such
Regulation (FAR) at 48 CFR part 31. policies to all subrecipients. These
fiscal and administrative
requirements must be sufficiently
_.28 Period of availability of specific to ensure that: funds are
funds. Where a funding period is used in compliance with all
specified, a recipient may charge to applicable Federal statutory and
the grant only allowable costs regulatory provisions, costs are
resulting from obligations incurred reasonable and necessary for
during the funding period and any operating these programs, and funds
pre-award costs authorized by the are not be used for general expenses
Federal awarding agency. required to carry out other
responsibilities of a State or its
_.29 Conditional exemptions. subrecipients.
(a) OMB authorizes conditional
31
instructions from the Federal
Property Standards awarding agency or its successor
Federal awarding agency. The Federal
awarding agency shall observe one or
_.30 Purpose of property standards. more of the following disposition
Sections 31 through _.37 set instructions.
forth uniform standards governing (1) The recipient may be permitted to
management and disposition of retain title without further
property furnished by the Federal obligation to the Federal Government
Government whose cost was charged to after it compensates the Federal
a project supported by a Federal Government for that percentage of the
award. Federal awarding agencies current fair market value of the
shall require recipients to observe property attributable to the Federal
these standards under awards and participation in the project.
shall not impose additional (2) The recipient may be directed to
requirements, unless specifically sell the property under guidelines
required by Federal statute. The provided by the Federal awarding
recipient may use its own property agency and pay the Federal Government
management standards and procedures for that percentage of the current
provided it observes the provisions fair market value of the property
of Sections _.31 through _.37. attributable to the Federal
participation in the project (after
_.31 Insurance coverage. Recipients deducting actual and reasonable
shall, at a minimum selling and fix-up expenses, if any,
provide the from the sales proceeds) . When the
equivalent insurance coverage for
real property and equipment acquired recipient is authorized or requiredert to sell the property,with Federal funds as provided to P P y. Proper sales
property owned by the recipient. procedures shall be established that
Federally-owned property need not be Provide for competition to the extent
insured unless required by the terms practicable and result in the highest
and conditions of the award. possible return.
(3) The recipient may be directed to
transfer title to the property to the
_.32 Real property: Each Federal Federal Government or to an eligible
awarding agency shall prescribe third party provided that, in such
requirements for recipients cases, the recipient shall be
concerning the use and disposition of entitled to compensation for its
real property acquired in whole or in attributable percentage of the
part under awards. Unless otherwise current fair market value of the
provided by statute, such property.
requirements, at a minimum, shall
contain the following. _.33 Federally-owned and exempt property.
(a) Title to real property shall vest (a) Federally-owned owned
in the recipient subject to the y- property.
condition that the recipient shall (1) Title to federally-owned property
use the real property for the remains vested in the Federal
authorizedpurpose of the project as Government. Recipients shall submit long as it is needed and shall not annually an inventory listing of
encumber the property without federally-owned property in their
approval of the Federal awarding custody to the Federal awarding
agency. agency. Upon completion of the award
(b) The recipient shall obtain or when the property is no longer
written approval by the Federal needed, the recipient shall report
awarding agency for the use of real the property to the Federal awarding
property in other federally-sponsored agency for further Federal agency
projects when the recipient utilization.
determines that the property is no (2) If the Federal awarding agency
longer needed for the purpose of the has no further need for the property,
original project. Use in other it shall be declared excess and
projects shall be limited to those reported to the General Services
under federally-sponsored projects Administration, unless the Federal
(i.e., awards) or programs that have awarding agency has statutory
purposes consistent with those authority to dispose of the property
authorized for support by the Federal by alternative methods (e.g., the
awarding agency. authority provided by the Federal
(c) When the real property is no Technology Transfer Act (15 U.S.C.
longer needed as provided in 3710 (i)) to donate research
paragraphs (a) and (b), the recipient equipment to educational and non-
shall request disposition profit organizations in accordance
32
with E.O. 12821, "Improving shall be given to projects or
Mathematics and Science Education in programs sponsored by other Federal
Support of the National Education awarding agencies. If the equipment
Goals.") Appropriate instructions is owned by the Federal Government,
shall be issued to the recipient by use on other activities not sponsored
the Federal awarding agency. by the Federal Government shall be
(b) Exempt property. When statutory permissible if authorized by the
authority exists, the Federal Federal awarding agency. User charges
awarding agency has the option to shall be treated as program income.
vest title to property acquired with (e) When acquiring replacement
Federal funds in the recipient equipment, the recipient may use the
without further obligation to the equipment to be replaced as trade-in
Federal Government and under or sell the equipment and use the
conditions the Federal awarding proceeds to offset the costs of the
agency considers appropriate. Such replacement equipment subject to the
property is "exempt property." Should approval of the Federal awarding
a Federal awarding agency not agency.
establish conditions, title to exempt (f) The recipient's property
property upon acquisition shall vest management standards for equipment
in the recipient without further acquired with Federal funds and
obligation to the Federal Government. federally-owned equipment shall
include all of the following.
34 Equipment. (1) Equipment records shall be
maintained accurately and shall
include the following information.
(a) Title to equipment acquired by a (i) A description of the equipment.
recipient with Federal funds shall (ii) Manufacturer's serial number,
vest in the recipient, subject to model number, Federal stock number,
conditions of this section. national stock number, or other
(b) The recipient shall not use identification number.
equipment acquired with Federal funds (iii) Source of the equipment,
to provide services to non-Federal including the award number.
outside organizations for a fee that (iv) Whether title vests in the
is less than private companies charge recipient or the Federal Government.
for equivalent services, unless (v) Acquisition date (or date
specifically authorized by Federal received, if the equipment was
statute, for as long as the Federal furnished by the Federal Government)
Government retains an interest in the and cost.
equipment. (vi) Information from which one can
(c) The recipient shall use the calculate the percentage of Federal
equipment in the project or program participation in the cost of the
for which it was acquired as long as equipment (not applicable to
needed, whether or not the project or equipment furnished by the Federal
program continues to be supported by Government) .
Federal funds and shall not encumber (vii) Location and condition of the
the property without approval of the equipment and the date the
Federal awarding agency. When no information was reported.
longer needed for the original (viii) Unit acquisition cost.
project or program, the recipient (ix) Ultimate disposition data,
shall use the equipment in connection including date of disposal and sales
with its other federally-sponsored price or the method used to determine
activities, in the following order of current fair market value where a
priority: (i) Activities sponsored by recipient compensates the Federal
the Federal awarding agency which awarding agency for its share.
funded the original project, then (2) Equipment owned by the Federal
(ii) activities sponsored by other Government shall be identified to
Federal awarding agencies. indicate Federal ownership.
(d) During the time that equipment is (3) A physical inventory of equipment
used on the project or program for shall be taken and the results
which it was acquired, the recipient reconciled with the equipment records
shall make it available for use on at least once every two years. Any
other projects or programs if such differences between quantities
other use will not interfere with the determined by the physical inspection
work on the project or program for and those shown in the accounting
which the equipment was originally records shall be investigated to
acquired. First preference for such determine the causes of the
other use shall be given to other difference. The recipient shall, in
projects or programs sponsored by the connection with the inventory, verify
Federal awarding agency that financed the existence, current utilization,
the equipment; second preference and continued need for the equipment.
(4) A control system shall be in
33
effect to insure adequate safeguards handling expenses.
to prevent loss, damage, or theft of (2) If the recipient is instructed to
the equipment. Any loss, damage, or ship the equipment elsewhere, the
theft of equipment shall be recipient shall be reimbursed by the
investigated and fully documented; if Federal Government by an amount which
the equipment was owned by the is computed by applying the
Federal Government, the recipient percentage of the recipient's
shall promptly notify the Federal participation in the cost of the
awarding agency. original project or program.to the
(5) Adequate maintenance procedures current fair market value of the
shall be implemented to keep the equipment, plus any reasonable
equipment in good condition. shipping or interim storage costs
(6) Where the recipient is authorized incurred.
or required to sell the equipment, (3) If the recipient is instructed to
proper sales procedures shall be otherwise dispose of the equipment,
established which provide for the recipient shall be reimbursed by
competition to the extent practicable the Federal awarding agency for such
and result in the highest possible costs incurred in its disposition.
return. (4) The Federal awarding agency may
(g) When the recipient no longer reserve the right to transfer the
needs the equipment, the equipment title to the Federal Government or to
may be used for other activities in a third party named by the Federal
accordance with the following Government when such third party is
standards. For equipment with a otherwise eligible under existing
current per unit fair market value of statutes. Such transfer shall be
$5000 or more, the recipient may subject to the following standards.
retain the equipment for other uses (i) The equipment shall be
provided that compensation is made to appropriately identified in the award
the original Federal awarding agency or otherwise made known to the
or its successor. The amount of recipient in writing.
compensation shall be computed by (ii) The Federal awarding agency
applying the percentage of Federal shall issue disposition instructions
participation in the cost of the within 120 calendar days after
original project or program to the receipt of a final inventory. The
current fair market value of the final inventory shall list all
equipment. If the recipient has no equipment acquired with grant funds
need for the equipment, the recipient and federally-owned equipment. If the
shall request disposition Federal awarding agency fails to
instructions from the Federal issue disposition instructions within
awarding agency. The Federal awarding the 120 calendar day period, the
agency shall determine whether the recipient shall apply the standards
equipment can be used to meet the of this section, as appropriate.
agency's requirements. If no (iii) When the Federal awarding
requirement exists within that agency exercises its right to take
agency, the availability of the title, the equipment shall be subject
equipment shall be reported to the to the provisions for federally-owned
General Services Administration by equipment.
the Federal awarding agency to
determine whether a requirement for
the equipment exists in other Federal _•35 Supplies and other expendable
agencies. The Federal awarding agency property.
shall issue instructions to the
recipient. no later than 120 calendar (a) Title to supplies and other
days after the recipient's request expendable property shall vest in the
and the following procedures shall recipient upon acquisition. If there
govern. is a residual inventory of unused
(1) If so instructed or if supplies exceeding $5000 in total
disposition instructions are not aggregate value upon termination or
issued within 120 calendar days after completion of the project or program
the recipient's request, the and the supplies are not needed for
recipient shall sell the equipment any other federally-sponsored project
and reimburse the Federal awarding or program, the recipient shall
agency an amount computed by applying retain the supplies for use on non-
to the sales proceeds the percentage Federal sponsored activities or sell
of Federal participation in the cost them, but shall, in either case,
of the original project or program. compensate the Federal Government for
However, the recipient shall be its share. The amount of compensation
permitted to deduct and retain from shall be computed in the same manner
the Federal share $500 or ten percent as for equipment.
of the proceeds, whichever is less, (b) The recipient shall not use
for the recipient's selling and
34
supplies acquired with Federal funds (i) Research data is defined as the
to provide services to non-Federal recorded factual material commonly
outside organizations for a fee that accepted in the scientific community
is less than private companies charge as necessary to validate research
for equivalent services, unless findings, but not any of the
specifically authorized by Federal following: preliminary analyses,
statute as long as the Federal drafts of scientific papers, plans
Government retains an interest in the for future research, peer reviews, or
supplies. communications with colleagues. This
"recorded" material excludes physical
.36 Intangible property. objects (e.g., laboratory samples).
Research data also do not include:
(A) Trade secrets, commercial
(a) The recipient may copyright any information, materials necessary to
work that is subject to copyright and be held confidential by a researcher
was developed, or for which ownership until they are published, or similar
was purchased, under an award. The information which is protected under
Federal awarding agency(ies) reserve law; and
a royalty-free, nonexclusive and (B) Personnel and medical information
irrevocable right to reproduce, and similar information the
publish, or otherwise use the work disclosure of which would constitute
for Federal purposes, and to a clearly unwarranted invasion of
authorize others to do so. personal privacy, such as information
(b) Recipients are subject to that could be used to identify a
applicable regulations governing particular person in a research
patents and inventions, including study.
government-wide regulations issued by (ii) Published is defined as either
the Department of Commerce at 37 CFR when:
part 401, "Rights to Inventions Made (A) Research findings are published
by Nonprofit Organizations and Small in a peer-reviewed scientific or
Business Firms Under Government technical journal; or
Grants, Contracts and Cooperative (B) A Federal agency publicly and
Agreements." officially cites the research
(c) The Federal Government has the findings in support of an agency
right to: action that has the force and effect
(1) obtain, reproduce, publish or of law.
otherwise use the data first produced (iii) Used by the Federal Government
under an award; and in developing an agency action that
(2) authorize others to receive, has the force and effect of law is
reproduce, publish, or otherwise use defined as when an agency publicly
such data for Federal purposes. and officially cites the research
(d) (1) In addition, in response to a findings in support of an agency
Freedom of Information Act (FOIA) action that has the force and effect
request for research data relating to of law.
published research findings produced (e) Title to intangible property and
under an award that were used by the debt instruments acquired under an
Federal Government in developing an award or subaward vests upon
agency action that has the force and acquisition in the recipient. The
effect of law, the Federal awarding recipient shall use that property for
agency shall request, and the the originally-authorized purpose,
recipient shall provide, within a and the recipient shall not encumber
reasonable time, the research data so the property without approval of the
that they can be made available to Federal awarding agency. When no
the public through the procedures longer needed for the originally
established under the FOIA. If the authorized purpose, disposition of
Federal awarding agency obtains the the intangible property shall occur
research data solely in response to a in accordance with the provisions of
FOIA request, the agency may charge paragraph _.34(g).
the requester a reasonable fee
equaling the full incremental cost of _.37 Property trust relationship.
obtaining the research data. This fee Real property, equipment, intangible
should reflect costs incurred by the property and debt instruments that
agency, the recipient, and applicable are acquired or improved with Federal
additisubrecon
any fees the agency may ipientThis fee is in funds shall be held in trust by the
addition to a
assess under the FOIA (5 U.S.C. recipient as trustee for the
552(a) (4) (A)) . beneficiaries of the project or
(2) The following definitions apply program under which the property was
for purposes of acquired or improved. Agencies may
p p paragraph (d) of this
section: q P require recipients to record liens or
other appropriate notices of record
35
to indicate that personal or real other interest in the firm selected
property has been acquired or for an award. The officers,
improved with Federal funds and that employees, and agents of the
use and disposition conditions apply recipient shall neither solicit nor
to the property. accept gratuities, favors, or
anything of monetary value from
Procurement Standards contractors, or parties to
subagreements. However, recipients
may set standards for situations in
_.40 Purpose of procurement which the financial interest is not
standards. Sections —.41 through substantial or the gift is an
—.48 set forth standards for use by unsolicited item of nominal value.
recipients in establishing procedures The standards of conduct shall
for the procurement of supplies and provide for disciplinary actions to
other expendable property, equipment, be applied for violations of such
real property and other services with standards by officers, employees, or
Federal funds. These standards are agents of the recipient.
furnished to ensure that such
materials and services are obtained _.43 Competition. All procurement
in an effective manner and in transactions shall be conducted in a
compliance with the provisions of
applicable Federal statutes and manner to provide, to the maximum executive orders. No additional extent practical, open and free
The recipient competition.procurement standards or requirements com P shall be
shall be imposed by the Federal alert to organizational conflicts of
awarding agencies upon recipients, interest as well as noncompetitive
unless specifically required by practices among contractors that may Federal statute or executive order or restrict or eliminate competition or
otherwise restrain trade. In order to
approved by OMB. ensure objective contractor
performance and eliminate unfair
_.41 Recipient responsibilities. competitive advantage, contractors
The standards contained in this that develop or draft specifications,
section do not relieve the recipient requirements, statements of work,
of the contractual responsibilities invitations for bids and/or requests
arising under its contract(s) . The for proposals shall be excluded from
recipient is the responsible competing for such procurements.
authority, without recourse to the Awards shall be made to the bidder or
Federal awarding agency, regarding offeror whose bid or offer is
the settlement and satisfaction of responsive to the solicitation and is
all contractual and administrative most advantageous to the recipient,
issues arising out of procurements price, quality and other factors
entered into in support of an award considered. Solicitations shall
or other agreement. This includes clearly set forth all requirements
disputes, claims, protests of award, that the bidder or offeror shall
source evaluation or other matters of fulfill in order for the bid or offer
a contractual nature. Matters to be evaluated by the recipient. Any
concerning violation of statute are and all bids or offers may be
to be referred to such Federal, State rejected when it is in the
or local authority as may have proper recipient's interest to do so.
jurisdiction.
.44 Procurement procedures.
_.42 Codes of conduct. The
recipient shall maintain written (a) All recipients shall establish
standards of conduct governing the writtenrocurement
performance of its employees engaged P procedures. These
procedures shall provide for, at a
in the award and administration of
contracts. No employee, officer, or minimum, that (1), (2) and (3) apply.
agent shall participate in the Recipients avoid purchasing
selection, award, or administration unn necessary items.
of a contract supported by Federal (2) Where appropriate, an analysis is
funds if a real or apparent conflict made of lease and purchase
of interest would be involved. Such a alternatives to determine which would
conflict would arise when the be the most economical and practical
employee, officer, or agent, any procurement for the Federal
member of his or her immediate Government.
family, his or her partner, or an (3) Solicitations for goods and
organization which employs or is services provide for all of the
about to employ an of the following.
P Y Y parties
indicated herein, has a financial or (i) A clear and accurate descriptionof the technical requirements for the
36
material, product or service to be (c) The type of procuring instruments
procured. In competitive used (e.g., fixed price contracts,
procurements, such a description cost reimbursable contracts, purchase
shall not contain features which orders, and incentive contracts)
unduly restrict competition. shall be determined by the recipient
(ii) Requirements which the but shall be appropriate for the
bidder/offeror must fulfill and all particular procurement and for
other factors to be used in promoting the best interest of the
evaluating bids or proposals. program or project involved. The
(iii) A description, whenever "cost-plus-a-percentage-of-cost" or
practicable, of technical "percentage of construction cost"
requirements in terms of functions to methods of contracting shall not be
be performed or performance required, used.
including the range of acceptable (d) Contracts shall be made only with
characteristics or minimum acceptable responsible contractors who possess
standards. the potential ability to perform
(iv) The specific features of "brand successfully under the terms and
name or equal" descriptions that conditions of the proposed
bidders are required to meet when procurement. Consideration shall be
such items are included in the given to such matters as contractor
solicitation. integrity, record of past
(v) The acceptance, to the extent performance, financial and technical
practicable and economically resources or accessibility to other
feasible, of products and services necessary resources. In certain
dimensioned in the metric system of circumstances, contracts with certain
measurement. parties are restricted by agencies'
(vi) Preference, to the extent implementation of E.O.s 12549 and
practicable and economically 12689, "Debarment and Suspension."
feasible, for products and services (e) Recipients shall, on request,
that conserve natural resources and make available for the Federal
protect the environment and are awarding agency, pre-award review and
energy efficient. procurement documents, such as
(b) Positive efforts shall be made by request for proposals or invitations
recipients to utilize small for bids, independent cost estimates,
businesses, minority-owned firms, and etc., when any of the following
women's business enterprises, conditions apply.
whenever possible. Recipients of (1) A recipient's procurement
Federal awards shall take all of the procedures or operation fails to
following steps to further this goal. comply with the procurement standards
(1) Ensure that small businesses, in the Federal awarding agency's
minority-owned firms, and women's implementation of this Circular.
business enterprises are used to the (2) The procurement is expected to
fullest extent practicable. exceed the small purchase threshold
(2) Make information on forthcoming fixed at 41 U.S.C. 403 (11)
opportunities available and arrange (currently $25,000) and is to be
time frames for purchases and awarded without competition or only
contracts to encourage and facilitate one bid or offer is received in
participation by small businesses, response to a solicitation.
minority-owned firms, and women's (3) The procurement, which is
business enterprises. expected to exceed the small purchase
(3) Consider in the contract process threshold, specifies a "brand name"
whether firms competing for larger product.
contracts intend to subcontract with (4) The proposed award over the small
small businesses, minority-owned purchase threshold is to be awarded
firms, and women's business to other than the apparent low bidder
enterprises. under a sealed bid procurement.
(4) Encourage contracting with (5) A proposed contract modification
consortiums of small businesses, changes the scope of a contract or
minority-owned firms and women's increases the contract amount by more
business enterprises when a contract than the amount of the small purchase
is too large for one of these firms threshold.
to handle individually.
(5) Use the services and assistance,
as appropriate, of such organizations 45 Cost and price analysis. Some form of
—
as the Small Business Administration cost or price analysis shall be made and
and the Department of Commerce's documented in the procurement files in
Minority Business Development Agency connection with every procurement action.
in the solicitation and utilization Price analysis may be accomplished in
of small businesses, minority- owned various ways, including the comparison of
firms and women's business price quotations submitted, market prices
enterprises. and similar indicia, together with
37
discounts. Cost analysis is the review and requirements of the recipient,
evaluation of each element of cost to provided the Federal awarding agency
determine reasonableness, allocability and has made a determination that the
allowability. Federal Government's interest is
adequately protected. If such a
_.46 Procurement records. Procurement determination has not been made, the
records and files for purchases in excess of minimum requirements shall be as
the small purchase threshold shall include follows.
the following at a minimum: (a) basis for A bid guarantee from each bidder
contractor selection shall(b) justification for equivalent to five percent the bid
lack of competition when competitive bids or price. The "bid guarantee" shall
offers are not obtained, and (c) basis for consist of a firm commitment such as
award cost or price. a bid bond, certified check, or other
negotiable instrument accompanying a
bid as assurance that the bidder
_.47 Contract administration. A system for shall, upon acceptance of his bid,
contract administration shall be maintained execute such contractual documents as
to ensure contractor conformance with the may be required within the time
terms, conditions and specifications of the specified.
contract and to ensure adequate and timely (2) A performance bond on the part of
follow up of all purchases. Recipients shall the contractor for 100 percent of the
evaluate contractor performance and contract price. A "performance bond"
document, as appropriate, whether is one executed in connection with a
contractors have met the terms, conditions contract to secure fulfillment of all
and specifications of the contract. the contractor's obligations under
such contract.
_.48 Contract provisions. The recipient (3) A payment bond on the part of the
shall include, in addition to provisions to contractor for 100 percent of the
define a sound and complete agreement, the contract price. A "payment bond" is
one executed in connection with a
following provisions in all contracts. The contract to assure payment as
following provisions shall also be applied
to subcontracts. required by statute of all persons
supplying labor and material in the
execution of the work provided for in
(a) Contracts in excess of the small the contract.
purchase threshold shall contain (4) Where bonds are required in the
contractual provisions or conditions situations described herein, the
that allow for administrative, bonds shall be obtained from
contractual, or legal remedies in companies holding certificates of
instances in which a contractor authority as acceptable sureties
violates or breaches the contract pursuant to 31 CFR part 223, "Surety
terms, and provide for such remedial Companies Doing Business with the
actions as may be appropriate. United States."
(b) All contracts in excess of the (d) All negotiated contracts (except
small purchase threshold shall those for less than the small
contain suitable provisions for purchase threshold) awarded by
termination by the recipient, recipients shall include a provision
including the manner by which to the effect that the recipient, the
termination shall be effected and the Federal awarding agency, the
basis for settlement. In addition, Comptroller General of the United
such contracts shall describe States, or any of their duly
conditions under which the contract authorized representatives, shall
may be terminated for default as well have access to any books, documents,
as conditions where the contract may papers and records of the contractor
be terminated because of which are directly pertinent to a
circumstances beyond the control of specific program for the purpose of
the contractor. making audits, examinations, excerpts
(c) Except as otherwise required by and transcriptions.
statute, an award that requires the (e) All contracts, including small
contracting (or subcontracting) for purchases, awarded by recipients and
construction or facility improvements their contractors shall contain the
shall provide for the recipient to procurement provisions of Appendix A
follow its own requirements relating to this Circular, as applicable.
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
to submit more than the original and
Reports and Records two copies of performance reports.
(f) Recipients shall immediately
notify the Federal awarding agency of
_.50 Purpose of reports and developments that have a significant
records. Sections _.51 through impact on the award-supported
_.53 set forth the procedures for activities. Also, notification shall
monitoring and reporting on the be given in the case of problems,
recipient's financial and program delays, or adverse conditions which
performance and the necessary materially impair the ability to meet
standard reporting forms. They also the objectives of the award. This
set forth record retention notification shall include a
requirements. statement of the action taken or
contemplated, and any assistance
needed to resolve the situation.
_.51 Monitoring and reporting (g) Federal awarding agencies may
program performance. make site visits, as needed.
(h) Federal awarding agencies shall
(a) Recipients are responsible for comply with clearance requirements of
managing and monitoring each project, 5 CFR part 1320 when requesting
program, subaward, function or performance data from recipients.
activity supported by the award.
Recipients shall monitor subawards to .52 Financial reporting.
ensure subrecipients have met the
audit requirements as delineated in
Section _.26. (a) The following forms or such other
(b) The Federal awarding agency shall forms as may be approved by OMB are
prescribe the frequency with which authorized for obtaining financial
the performance reports shall be information from recipients.
submitted. Except as provided in (1) SF-269 or SF-269A, Financial
paragraph _.51(f), performance Status Report.
reports shall not be required more (i) Each Federal awarding agency
frequently than quarterly or, less shall require recipients to use the
frequently than annually. Annual SF-269 or SF-269A to report the
reports shall be due 90 calendar days status of funds for all
after the grant year; quarterly or nonconstruction projects or programs.
semi-annual reports shall be due 30 A Federal awarding agency may,
days after the reporting period. The however, have the option of not
Federal awarding agency may require requiring the SF-269 or SF-269A when
annual reports before the anniversary the SF-270, Request for Advance or
dates of multiple year awards in lieu Reimbursement, or SF-272, Report of
of these requirements. The final Federal Cash Transactions, is
performance reports are due 90 determined to provide adequate
calendar days after the expiration or information to meet its needs, except
termination of the award. that a final SF-269 or SF-269A shall
(c) If inappropriate, a final be required at the completion of the
technical or performance report shall project when the SF-270 is used only
not be required after completion of for advances.
the project. (ii) The Federal awarding agency
(d) When required, performance shall prescribe whether the report
reports shall generally contain, for shall be on a cash or accrual basis.
each award, brief information on each If the Federal awarding agency
of the following. requires accrual information and the
(1) A comparison of actual recipient's accounting records are
accomplishments with the goals and not normally kept on the accrual
objectives established for the basis, the recipient shall not be
period, the findings of the required to convert its accounting
investigator, or both. Whenever system, but shall develop such
appropriate and the output of accrual information through best
programs or projects can be readily estimates based on an analysis of the
quantified, such quantitative data documentation on hand.
should be related to cost data for (iii) The Federal awarding agency
computation of unit costs. shall determine the frequency of the
(2) Reasons why established goals Financial Status Report for each
were not met, if appropriate. project or program, considering the
(3) Other pertinent information size and complexity of the particular
including, when appropriate, analysis project or program. However, the
and explanation of cost overruns or report shall not be required more
high unit costs. frequently than quarterly or less
(e) Recipients shall not be required frequently than annually. A final
39
report shall be required at the information under the "Remarks"
completion of the agreement. section of the reports.
(iv) The Federal awarding agency (2) When a Federal awarding agency
shall require recipients to submit determines that a recipient's
the SF-269 or SF-269A (an original accounting system does not meet the
and no more than two copies) no later standards in Section _.21,
than 30 days after the end of each additional pertinent information to
specified reporting period for further monitor awards may be
quarterly and semi-annual reports, obtained upon written notice to the
and 90 calendar days for annual and recipient until such time as the
final reports. Extensions of system is brought up to standard. The
reporting due dates may be approved Federal awarding agency, in obtaining
by the Federal awarding agency upon this information, shall comply with
request of the recipient. report clearance requirements of 5
(2) SF-272, Report of Federal Cash CFR part 1320.
Transactions. (3) Federal awarding agencies are
(i) When funds are advanced to encouraged to shade out any line item
recipients the Federal awarding on any report if not necessary.
agency shall require each recipient (9) Federal awarding agencies may
to submit the SF-272 and, when accept the identical information from
necessary, its continuation sheet, the recipients in machine readable
SF-272a. The Federal awarding agency format or computer printouts or
shall use this report to monitor cash electronic outputs in lieu of
advanced to recipients and to obtain prescribed formats.
disbursement information for each (5) Federal awarding agencies may
agreement with the recipients. provide computer or electronic
(ii) Federal awarding agencies may outputs to recipients when such
require forecasts of Federal cash expedites or contributes to the
requirements in the "Remarks" section accuracy of reporting.
of the report.
(iii) When practical and deemed
_.53 Retention and access requirements for
necessary, Federal awarding agencies
may require recipients to report in records.
the "Remarks" section the amount of
cash advances received in excess of (a) This section sets forth
three days. Recipients shall provide requirements for record retention and
short narrative explanations of access to records for awards to
actions taken to reduce the excess recipients. Federal awarding agencies
balances. shall not impose any other record
(iv) Recipients shall be required to retention or access requirements upon
submit not more than the original and recipients.
two copies of the SF-272 15 calendar (b) Financial records, supporting
days following the end of each documents, statistical records, and
quarter. The Federal awarding all other records pertinent to an
agencies may require a monthly report award shall be retained for a period
from those recipients receiving of three years from the date of
advances totaling $1 million or more submission of the final expenditure
per year. report or, for awards that are
(v) Federal awarding agencies may renewed quarterly or annually, from
waive the requirement for submission the date of the submission of the
of the SF-272 for any one of the quarterly or annual financial report,
following reasons: (1) When monthly as authorized by the Federal awarding
advances do not exceed $25,000 per agency. The only exceptions are the
recipient, provided that such following.
advances are monitored through other (1) If any litigation, claim, or
forms contained in this section; (2) audit is started before the
If, in the Federal awarding agency's expiration of the 3-year period, the
opinion, the recipient's accounting records shall be retained until all
controls are adequate to minimize litigation, claims or audit findings
excessive Federal advances; or, (3) involving the records have been
When the electronic payment resolved and final action taken.
mechanisms provide adequate data. (2) Records for real property and
(b) When the Federal awarding agency equipment acquired with Federal funds
needs additional information or more shall be retained for 3 years after
frequent reports, the following shall final disposition.
be observed. (3) When records are transferred to
(1) When additional information is or maintained by the Federal awarding
needed to comply with legislative agency, the 3-year retention
requirements, Federal awarding requirement is not applicable to the
agencies shall issue instructions to recipient.
require recipients to submit such
40
(4) Indirect cost rate proposals, period for its supporting records
cost allocations plans, etc. as starts on the date of such
specified in paragraph _.53(g) . submission.
(c) Copies of original records may be (2) If not submitted for negotiation.
substituted for the original records If the recipient is not required to
if authorized by the Federal awarding submit to the Federal awarding agency
agency. or the subrecipient is not required
(d) The Federal awarding agency shall to submit to the recipient the
request transfer of certain records proposal, plan, or other computation
to its custody from recipients when for negotiation purposes, then the S-
it determines that the records year retention period for the
possess long term retention value. proposal, plan, or other computation
However, in order to avoid duplicate and its supporting records starts at
recordkeeping, a Federal awarding the end of the fiscal year (or other
agency may make arrangements for accounting period) covered by the
recipients to retain any records that proposal, plan, or other computation.
are continuously needed for joint
use.
(e) The Federal awarding agency, the Termination and Enforcement
Inspector General, Comptroller
General of the United States, or any _.60 Purpose of termination and
of their duly authorized enforcement. Sections _.61 and .62 set
representatives, have the right of forth uniform suspension, termination and
timely and unrestricted access to any enforcement procedures.
books, documents, papers, or other
records of recipients that are
pertinent to the awards, in order to _.61 Termination.
make audits, examinations, excerpts,
transcripts and copies of such (a) Awards may be terminated in whole
documents. This right also includes or in part only if (1), (2) or (3)
timely and reasonable access to a apply.
recipient's personnel for the purpose (1) By the Federal awarding agency,
of interview and discussion related if a recipient materially fails to
to such documents. The rights of comply with the terms and conditions
access in this paragraph are not of an award.
limited to the required retention (2) By the Federal awarding agency
period, but shall last as long as with the consent of the recipient, in
records are retained. which case the two parties shall
(f) Unless required by statute, no agree upon the termination
Federal awarding agency shall place conditions, including the effective
restrictions on recipients that limit date and, in the case of partial
public access to the records of termination the
portion to be
terminated
recipients that are pertinent to an .
award, except when the Federal (3) By the recipient upon sending to
awarding agency can demonstrate that the Federal awarding agency written
such records shall be kept notification setting forth the
confidential and would have been reasons for such termination, the
exempted from disclosure pursuant to effective date, and, in the case of
the Freedom of Information Act (5 partial termination, the portion to
U.S.C. 552) if the records had be terminated. However, if the
belonged to the Federal awarding Federal awarding agency determines in
agency. the case of partial termination that
(g) Indirect cost rate proposals, the reduced or modified portion of
cost allocations plans, etc. the grant will not accomplish the
Paragraphs (g) (1) and (g) (2) apply to purposes for which the grant was
the following types of documents, and made, it may terminate the grant in
their supporting records: indirect
cost rate computations or its entirety under either paragraphs
p proposals, (a) (1) or (2) .
cost allocation plans, and any (b) If costs are allowed under an
similar accounting computations of award, the responsibilities of the
the rate at which a particular group recipient referred to in paragraph
of costs is chargeable (such as .71(a), including those for
computer usage chargeback rates or property management as applicable,
composite fringe benefit rates) . shall be considered in the
(1) If submitted for negotiation. If termination of the award, and
the recipient submits to the Federal provision shall be made for
awarding agency or the subrecipient continuing responsibilities of the
submits to the recipient the recipient after termination, as
proposal, plan, or other computation appropriate.
to form the basis for negotiation of
the rate, then the 3-year retention
41
_.62 Enforcement. Federal awarding agency implementing
regulations (see Section .13).
(a) Remedies for noncompliance. If a
recipient materially fails to comply SUBPART D - After-the-Award
with the terms and conditions of an Requirements
award, whether stated in a Federal
statute, regulation, assurance, _.70 Purpose. Sections 71
application, or notice of award, the —
Federal awarding agency may, in through —.73 contain closeout
addition to imposing any of the procedures and other procedures for
special conditions outlined in subsequent disallowances and
Section _.14, take one or more of adjustments.
the following actions, as appropriate
in the circumstances. .71 Closeout procedures.
(1) Temporarily withhold cash —
payments pending correction of the
deficiency by the recipient or more (a) Recipients shall submit, within
severe enforcement action by the 90 calendar days after the date of
Federal awarding agency. completion of the award, all
(2) Disallow (that is, deny both use financial, performance, and other
of funds and any applicable matching reports as required by the terms and
credit for) all or part of the cost conditions of the award. The Federal
of the activity or action not in awarding agency may approve
compliance. extensions when requested by the
(3) Wholly or partly suspend or recipient.
terminate the current award. (b) Unless the Federal awarding
(4) Withhold further awards for the agency authorizes an extension, a
project or program. recipient shall liquidate all
(5) Take other remedies that may be obligations incurred under the award
legally available. not later than 90 calendar days after
(b) Hearings and appeals. In taking the funding period or the date of
an enforcement action, the awarding completion as specified in the terms
agency shall provide the recipient an and conditions of the award or in
opportunity for hearing, appeal, or agency implementing instructions.
other administrative proceeding to (c) The Federal awarding agency shall
which the recipient is entitled under make prompt payments to a recipient
any statute or regulation applicable for allowable reimbursable costs
to the action involved. under the award being closed out.
(c) Effects of suspension and (d) The recipient shall promptly
termination. Costs of a recipient refund any balances of unobligated
resulting from obligations incurred cash that the Federal awarding agency
by the recipient during a suspension has advanced or paid and that is not
or after termination of an award are authorized to be retained by the
not allowable unless the awarding recipient for use in other projects.
agency expressly authorizes them in OMB Circular A-129 governs unreturned
the notice of suspension or amounts that become delinquent debts.
termination or subsequently. Other (e) When authorized by the terms and
recipient costs during suspension or conditions of the award, the Federal
after termination which are necessary awarding agency shall make a
and not reasonably avoidable are settlement for any upward or downward
allowable if (1) and (2) apply. adjustments to the Federal share of
(1) The costs result from obligations costs after closeout reports are
which were properly incurred by the received.
recipient before the effective date (f) The recipient shall account for
of suspension or termination, are not any real and personal property
in anticipation of it, and in the acquired with Federal funds or
case of a termination, are received from the Federal Government
noncancellable. in accordance with Sections .31
(2) The costs would be allowable if through —.37.
the award were not suspended or (g) In the event a final audit has
expired normally at the end of the not been performed prior to the
funding period in which the closeout of an award, the Federal
termination takes effect. awarding agency shall retain the
(d) Relationship to debarment and right to recover an appropriate
suspension. The enforcement remedies amount after fully considering the
identified in this section, including recommendations on disallowed costs
suspension and termination, do not resulting from the final audit.
preclude a recipient from being
subject to debarment and suspension
under E.O.s 12549 and 12689 and the
42
_.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
shall be required to pay wages not
Appendix A less than once a week. The recipient
shall place a copy of the current
prevailing wage determination issued
Contract Provisions by the Department of Labor in each
solicitation and the award of a
All contracts, awarded by a recipient contract shall be conditioned upon
the acceptance of the wage
including small purchases, shall determination. The recipient shall
contain the following provisions as report all suspected or reported
applicable: violations to the Federal awarding
agency.
1. Equal Employment opportunity - All
contracts shall contain a provision 4. Contract Work Sours and Safety
requiring compliance with E.O. 11246, Standards Act (40 U.S.C. 327-333) -
amendeEqual Employment Opportunity," as Where applicable, all contracts
amended by E.O. 11375, "Amending awarded by recipients in excess of
Executive Order 11246 Relating to $2000 for construction contracts and
Equal Employment Opportunity," and as in excess of $2500 for other
supplemented by regulations at 41 CFR contracts that involve the employment
part 60, "Office of Federal Contract of mechanics or laborers shall
Compliance Programs, Equal Employment include a provision for compliance
Opportunity, Department of Labor. with Sections 102 and 107 of the
Contract Work Hours and Safety
2. Copeland "Anti-Kickback" Act (18 Standards Act (40 U.S.C. 327-333), as
U.S.C. 874 and 40 U.S.C. 276c) - All supplemented by Department of Labor
contracts and subgrants in excess of regulations (29 CFR part 5) . Under
$2000 for construction or repair Section 102 of the Act, each
awarded by recipients and contractor shall be required to
subrecipients shall include a compute the wages of every mechanic
provision for compliance with the and laborer on the basis of a
Copeland "Anti-Kickback" Act (18 standard work week of 40 hours. Work
U.S.C. 874), as supplemented by in excess of the standard work week
Department of Labor regulations (29 is permissible provided that the
CFR part 3, "Contractors and worker is compensated at a rate of
Subcontractors on Public Building or not less than 1 'h times the basic
Public Work Financed in Whole or in rate of pay for all hours worked in
Part by Loans or Grants from the excess of 40 hours in the work week.
United States") . The Act provides Section 107 of the Act is applicable
that each contractor or subrecipient to construction work and provides
shall be prohibited from inducing, by that no laborer or mechanic shall be
any means, any person employed in the required to work in surroundings or
construction, completion, or repair under working conditions which are
of public work, to give up any part unsanitary, hazardous or dangerous.
of the compensation to which he is These requirements do not apply to
otherwise entitled. The recipient the purchases of supplies or
shall report all suspected or materials or articles ordinarily
reported violations to the Federal available on the open market, or
awarding agency. contracts for transportation or
transmission of intelligence.
3. Davis-Bacon Act, as amended (40
U.S.C. 276a to a-7) - When required 5. Rights to Inventions Made Under a
by Federal program legislation, all Contract or Agreement -. Contracts or
construction contracts awarded by the agreements for the performance of
recipients and subrecipients of more experimental, developmental, or
than $2000 shall include a provision research work shall provide for the
for compliance with the Davis-Bacon rights of the Federal Government and
Act (40 U.S.C. 276a to a-7) and as the recipient in any resulting
supplemented by Department of Labor invention in accordance with 37 CFR
regulations (29 CFR part 5, "Labor part 401, "Rights to Inventions Made
Standards Provisions Applicable to by Nonprofit Organizations and Small
Contracts Governing Federally Business Firms Under Government
Financed and Assisted Construction") . Grants, Contracts and Cooperative
Under this Act, contractors shall be Agreements," and any implementing
required to pay wages to laborers and regulations issued by the awarding
mechanics at a rate not less than the agency.
minimum wages specified in a wage
determination made by the Secretary 6. Clean Air Act (42 U.S.C. 7401 et
of Labor. In addition, contractors 8eq.) and the Federal Water Pollution
44
Control Act (33 V.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
V.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.
S. 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 facilities and not subject to the
Regulations] prohibition of new housing construction
[Title 24, Volume 31 described in Sec. 570.207(b) (3) . Such
[Revised as of April 1, 2004] facilities include shelters for the
From the U.S. Government Printing Office via homeless; convalescent homes; hospitals,
GPO Access nursing homes; battered spouse shelters;
[CITE: 24CFR570.201] halfway houses for run-away children, drug
[Page 41-44] offenders or parolees; group homes for
mentally retarded persons and temporary
TITLE 24--HOUSING AND URBAN DEVELOPMENT housing for disaster victims. In certain
cases, nonprofit entities and subrecipients
CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR including those specified in Sec. 570.204
COMMUNITY PLANNING AND may acquire title to public facilities. When
DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN such facilities are owned by nonprofit
DEVELOPMENT entities or subrecipients, they shall be
operated so as [[Page 42]] to be open for
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS- use by the general public during all normal
-Table of Contents hours of operation. Public facilities and
improvements eligible for assistance under
Subpart C_Eligible Activities this paragraph are subject to the policies
in Sec. 570.200(b).
Sec. 570.201 Basic eligible activities. (d) Clearance activities. Clearance,
demolition, and removal of buildings and
CDBG funds may be used for the following improvements, including movement of
activities: structures to other sites. Demolition of
(a) Acquisition. Acquisition in whole or in HUD-assisted or HUD-owned housing units may
part by the recipient, or other public or be undertaken only with the prior approval
private nonprofit entity, by purchase, long- of HUD.
term lease, donation, or otherwise, of real (e) Public services. Provision of public
property (including air rights, water services (including labor, supplies, and
rights, rights-of-way, easements, and other materials) including but not limited to
interests therein) for any public purpose, those concerned with employment, crime
subject to the limitations of Sec. 570.207. prevention, child care, health, drug abuse,
(b) Disposition. Disposition, through sale, education, fair housing counseling, energy
lease, donation, or otherwise, of any real conservation, welfare (but excluding the
property acquired with CDBG funds or its provision of income payments identified
retention for public purposes, including under Sec. 570.207(b) (4)), homebuyer
reasonable costs of temporarily managing downpayment assistance, or recreational
such property or property acquired under needs. To be eligible for CDBG assistance, a
urban renewal, provided that the proceeds public service must be either a new service
from any such disposition shall be program or a quantifiable increase in the level of
income subject to the requirements set forth an existing service above that which has
in Sec. 570.504. been provided by or on behalf of the unit of
(c) Public facilities and improvements. general local government (through funds
Acquisition, construction, reconstruction, raised by the unit or received by the unit
rehabilitation or installation of public from the State in which it is located) in
facilities and improvements, except as the 12 calendar months before the submission
provided in Sec. 570.207(a), carried out by of the action plan. (An exception to this
the recipient or other public or private requirement may be made if HUD determines
nonprofit entities. (However, activities that any decrease in the level of a service
under this paragraph may be directed to the was the result of events not within the
removal of material and architectural control of the unit of general local
barriers that restrict the mobility and government.) The amount of CDBG funds used
accessibility of elderly or severely for public services shall not exceed
disabled persons to public facilities and paragraphs (e) (1) or (2) of this section,
improvements, including those provided for as applicable:
in Sec. 570.207(a) (1) .) In undertaking such (1) The amount of CDBG funds used for
activities, design features and improvements public services shall not exceed 15 percent
which promote energy efficiency may be of each grant, except that for entitlement
included. Such activities may also include grants made under subpart D of this part,
the execution of architectural design the amount shall not exceed 15 percent of
features, and similar treatments intended to the grant plus 15 percent of program income,
enhance the aesthetic quality of facilities as defined in Sec. 570.500(a) . For
and improvements receiving CDBG assistance, entitlement grants under subpart D of this
such as decorative pavements, railings, part, compliance is based on limiting the
sculptures, pools of water and fountains, amount of CDBG funds obligated for public
and other works of art. Facilities designed service activities in each program year to
for use in providing shelter for persons an amount no greater than 15 percent of the
having special needs are considered public entitlement grant made for that program year
47
plus 15 percent of the program income (g) Payment of non-Federal share. Payment
received during the grantee's immediately of the non-Federal share required in
preceding program year. connection with a Federal grant-in-aid
(2) A recipient which obligated more CDBG program undertaken as part of CDBG
funds for public services than 15 percent of activities, provided, that such payment
its grant funded from Federal fiscal year shall be limited to activities otherwise
1982 or 1983 appropriations (excluding eligible and in compliance with applicable
program income and any assistance received requirements under this subpart.
under Public Law 98-8), may obligate more (h) Urban renewal completion. Payment of
CDBG funds than allowable under paragraph the cost of completing an urban renewal
(e) (1) of this section, so long as the total project funded under title I of the Housing
amount obligated in any program year does Act of 1949 as amended. Further information
not exceed: regarding the eligibility of such costs is
(i) For an entitlement grantee, 15% set forth in Sec. 570.801.
of the program income it received during the (i) Relocation. Relocation payments and
preceding program year; plus other assistance for permanently and
(ii) A portion of the grant received temporarily relocated individuals families,
for the program year which is the highest of businesses, nonprofit organizations, and
the following amounts: farm operations where the assistance is
(A) The amount determined by (1) required under the provisions of
applying the percentage of the grant it Sec. 570.606 (b) or (c); or
obligated for public services in the 1982 (2) determined by the grantee to be
program year against the grant for its appropriate under the provisions of Sec.
current program year; 570.606(d) .
(B) The amount determined by (j) Loss of rental income. Payments to
applying the percentage of the grant it housing owners for losses of rental income
obligated for public services in the 1983 incurred in holding, for temporary periods,
program year against the grant for its housing units to be used for the relocation
current program year; of individuals and families displaced by
(C) The amount of funds it program activities assisted under this part.
obligated for public services in the 1982 (k) Housing services. Housing services, as
program year; or, provided in section 105(a) (21) of the Act
(D) The amount of funds it (42 U.S.C. 5305(a) (21)) .
obligated for public services in the 1983 (1) Privately owned utilities. CDBG funds
program year. may be used to acquire, construct,
(f) Interim assistance. reconstruct, rehabilitate, or install the
(1) The following activities may be distribution lines and facilities of
undertaken on an interim basis in areas privately owned utilities, including the
exhibiting objectively determinable signs of placing underground of new or existing
physical deterioration where the recipient distribution facilities and lines.
has determined that immediate action is (m) Construction of housing. CDBG funds may
necessary to arrest the deterioration and be used for the construction of housing
that permanent improvements will be carried assisted under section 17 of the United
out as soon as practicable: States Housing Act of 1937.
(i) The repairing of streets, (n) Homeownership assistance. CDBG funds
sidewalks, parks, playgrounds, publicly may be used to provide direct homeownership
owned utilities, and public buildings; and assistance to low- or moderate-income
(ii) The execution of special garbage, households in accordance with section 105(a)
trash, and debris removal, including of the Act.
neighborhood cleanup campaigns, but not the (o)
regular curbside collection of garbage or (1) The provision of assistance either
trash in an area. through the recipient directly or through
(2) In order to alleviate emergency public and private organizations, agencies,
conditions threatening the public health and and other subrecipients (including nonprofit
safety in areas where the chief executive and for-profit subrecipients) to facilitate
officer of the recipient determines that economic development by:
such an emergency [[Page 43)) condition (i) Providing credit, including, but
exists and requires immediate resolution, not limited to, grants, loans, loan
CDBG funds may be used for: guarantees, and other forms of financial
(i) The activities specified in support, for the establishment,
paragraph (f) (1) of this section, except for stabilization, and expansion of
the repair of parks and playgrounds; microenterprises;
(ii) The clearance of streets, (ii) Providing technical assistance,
including snow removal and similar advice, and business support services to
activities, and owners of microenterprises and persons
(iii) The improvement of private developing microenterprises; and
properties. (iii) Providing general support,
(3) All activities authorized under including, but not limited to, peer support
paragraph (f) (2) of this section are limited programs, counseling, child care,
to the extent necessary to alleviate transportation, and other similar services,
emergency conditions.
48
to owners of microenterprises and persons assistance, that the activity for which it
developing microenterprises. is attempting to build capacity would be
(2) Services provided this paragraph (o) eligible for assistance under this subpart
shall not be subject to the restrictions on C, and that the national objective claimed
public services contained in paragraph (e) by the grantee for this assistance can
of this section. reasonably be expected to be met once the
(3) For purposes of this paragraph (o), entity has received the technical assistance
persons developing microenterprises'' and undertakes the activity.) Capacity
means such persons who have expressed building for private or public entities
interest and who are, or after an initial (including grantees) for other purposes may
screening process are expected to be, be eligible under Sec. 570.205.
actively working toward developing (q) Assistance to institutions of higher
businesses, each of which is expected to be education. Provision of assistance by the
a microenterprise at the time it is formed. recipient to institutions of higher
(4) Assistance under this paragraph (o) education when the grantee determines that
may also include training, technical such an institution has demonstrated a
assistance, or other support services to capacity to carry out eligible activities
increase the capacity of the recipient or under this subpart C.
subrecipient to carry out the activities
under this paragraph (o). [53 FR 34439, Sept. 6, 1988, as amended at
(p) Technical assistance. Provision of 53 FR 31239, Aug. 17, 1988; 55 FR 29308,
technical assistance to public or nonprofit July 18, 1990; 57 FR 27119, June 17, 1992;
entities to increase the capacity of such 60 FR 1943, Jan. 5, 1995; 60 FR 56911, Nov.
entities to carry out eligible neighborhood 9, 1995; 61 FR 18674, Apr. 29, 1996; 65 FR
revitalization or economic development 70215, Nov. 21, 2000; 67 FR 47213, July 17,
activities. (The recipient must determine, 20021
prior to the [[Page 44]] provision of the
49
Appendix C
24 CFR 570 CDBG Regulations Subpart J, Grant Administration
50
WAIS Document Retrieval[Code of Federal and standards of OMB Circular No. A-87,
Regulations] "Cost Principles for State, Local, and
[Title 24, Volume 31 Indian Tribal Governments"; OMB Circular A-
[Revised as of April 1, 2004] 128, "Audits of State and Local
From the U.S. Government Printing Office via Governments" (implemented at 24 CFR part
GPO Access 44); and with the following sections of 24
[CITE: 24CFR570.501] CFR part 85 "Uniform Administrative
Requirements for Grants and Cooperative
[Page 131-132] Agreements to State and Local Governments"
or the related CDBG provision, as specified
TITLE 24--HOUSING AND URBAN DEVELOPMENT in this paragraph:
(1) Section 85.3, ''Definitions'';
CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR (2) Section 85.6, "Exceptions'';
COMMUNITY PLANNING ANDDEVELOPMENT, (3) Section 85.12, "Special grant or
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT subgrant conditions for 'high-risk'
grantees'';
PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS- (4) Section 85.20, "Standards for
-Table of Contents financial management systems, '' except
paragraph (a);
Subpart J_Grant Administration (5) Section 85.21, "Payment,'' except as
modified by Sec. 570.513;
Sec. 570.501 Responsibility for grant (6) Section 85.22, "Allowable costs";
administration. (7) Section 85.26, "Non-federal
audits' '
(a) One or more public agencies, including (8) Section 85.32, "Equipment,' ' except
existing local public agencies, may be in all cases in which the equipment is sold,
designated by the chief executive officer of the proceeds shall be program income;
the recipient to undertake activities (9) Section 85.33, ''Supplies'';
assisted by this part. A public agency so (10) Section 85.34, "Copyrights'';
designated shall be subject to the same (11) Section 85.35, "Subawards to
requirements as are applicable to debarred and suspended parties";
subrecipients. (12) Section 85.36, "Procurement, ''
(b) The recipient is responsible for except paragraph (a);
ensuring that CDBG funds are used in (13) Section 85.37, "Subgrants";
accordance with all program requirements. (14) Section 85.40, "Monitoring and
The use of designated public agencies, reporting program performance, '' except
subrecipients, or contractors [[Page 132]] paragraphs (b) through (d) and paragraph
does not relieve the recipient of this (f);
responsibility. The recipient is also (15) Section 85.41, "Financial
responsible for determining the adequacy of reporting, ' ' except paragraphs (a),
performance under subrecipient agreements (b), and (e);
and procurement contracts, and for taking (16) Section 85.42, ''Retention and
appropriate action when performance problems access requirements for records, '' except
arise, such as the actions described in Sec. that the period shall be four years;
570.910. Where a unit of general local (17) Section 85.43, "Enforcement'';
government is participating with, or as part (18) Section 85.44, "Termination for
of, an urban county, or as part of a convenience";
metropolitan city, the recipient is (19) Section 85.51 "Later disallowances
responsible for applying to the unit of and adjustments" and
general local government the same (20) Section 85.52, "Collection of
requirements as are applicable to amounts due.' '
subrecipients, except that the five-year (b) Subrecipients, except subrecipients
period identified under Sec. that are governmental entities, shall comply
570.503(b) (8) (i) shall begin with the date with the requirements and standards of OMB
that the unit of general local government is Circular No. A-122, "Cost Principles for
no longer considered by HUD to be a part of Non-profit organizations, '' or OMB Circular
the metropolitan city or urban county, as No. A-21, "Cost Principles for Educational
applicable, instead of the date that the Institutions, ' ' as applicable, and OMB
subrecipient agreement expires. Circular A-133, "Audits of Institutions of
Higher Education and Other Nonprofit
(53 FR 8058, Mar. 11, 1988, as amended at 57 Institutions" (as set forth in 24 CFR part
FR 27120, June 17, 1992] 45) . Audits shall be conducted annually.
Such subrecipients shall also comply with
Sec. 570.502 Applicability of uniform the following provisions of the Uniform
administrative requirements. Administrative requirements of OMB Circular
A-110 (implemented at 24 CFR part 84,
(a) Recipients and subrecipients that are "Uniform Administrative Requirements for
governmental entities (including public Grants and Agreements With Institutions of
agencies) shall comply with the requirements Higher Education, Hospitals and Other Non-
51
Profit Organizations") or the related CDBG Sec. 570.503 Agreements with subrecipients.
provision, as specified in this paragraph:
(1) Subpart A--"General''; (a) Before disbursing any CDBG funds to a
(2) Subpart B--"Pre-Award subrecipient, the recipient shall sign a
Requirements, '' except for Sec. 84.12, written agreement with the subrecipient. The
"Forms for Applying for Federal agreement shall remain in effect during any
Assistance' '; period that the subrecipient has control
(3) Subpart C--"Post-Award over CDBG funds, including program income.
Requirements, '' except for: (b) At a minimum, the written agreement
(i) Section 84.22, "Payment with the subrecipient shall include
Requirements.'' Grantees shall follow the provisions concerning the following items:
standards of Sec. Sec. 85.20(b) (7) and 85.21 (1) Statement of work. The agreement
in making payments to subrecipients; [[Page shall include a description of the work to
133]) be performed, a schedule for completing the
(ii) Section 84.23, "Cost Sharing work, and a budget. These items shall be in
and Matching' '; sufficient detail to provide a sound basis
(iii) Section 84.24, "Program for the recipient effectively to monitor
Income.' ' In lieu of Sec. 84.24, CDBG performance under the agreement.
subrecipients shall follow Sec. 570.504; (2) Records and reports. The recipient
(iv) Section 84.25, "Revision of shall specify in the agreement the
Budget and Program Plans"; particular records the subrecipient must
(v) Section 84.32, "Real Property." maintain and the particular reports the
In lieu of Sec. 84.32, CDBG subrecipients subrecipient must submit in order to assist
shall follow Sec. 570.505; the recipient in meeting its recordkeeping
(vi) Section 84.34(g), "Equipment." and reporting requirements.
In lieu of the disposition provisions of (3) Program income. The agreement shall
Sec. 84.34(g), the following applies: include the program income requirements set
(A) In all cases in which forth in Sec. 570.504(c) . The agreement
equipment is sold, the proceeds shall be shall also specify that, at the end of the
program income (prorated to reflect the program year, the grantee may require
extent to which CDBG funds were used to remittance of all or part of any program
acquire the equipment); and income balances (including investments
(B) Equipment not needed by the thereof) held by the subrecipient (except
subrecipient for CDBG activities shall be those needed for immediate cash needs, cash
transferred to the recipient for the CDBG balances of a revolving loan fund, cash
program or shall be retained after balances from a lump sum drawdown, or cash
compensating the recipient; or investments held for section 108 security
(vii) Section 84.51 (b), (c), (d), needs) .
(e), (f), (g), and (h), "Monitoring and (4) Uniform administrative requirements.
Reporting Program Performance' '; The agreement shall require the subrecipient
(viii) Section 84.52, "Financial to comply with applicable uniform
Reporting''; administrative requirements, as described
(ix) Section 84.53(b), "Retention in Sec. 570.502.
and access requirements for records.'' (5) Otherro ram
p g requirements. The
Section 84.53(b) applies with the following agreement shall require the subrecipient to
exceptions: carry out each activity in compliance with
(A) The retention period all Federal laws and regulations described
referenced in Sec. 84.53(b) pertaining to in subpart K of these regulations, except
individual CDBG activities shall be four that:
years; and (i) The subrecipient does not assume
(B) The retention period starts the recipient's environmental
from the date of submission of the annual responsibilities described at Sec. 570.604;
performance and evaluation report, as and
prescribed in 24 CFR 91.520, in which the (ii) The subrecipient does not assume
specific activity is reported on for the the recipient's responsibility for
final time rather than from the date of initiating the review process under the
submission of the final expenditure report provisions of 24 CFR part 52.
for the award; (6) Suspension and termination. The
(x) Section 84.61, "Termination.' ' agreement shall specify that, in accordance
In lieu of the provisions of Sec. 84.61, with 24 CFR 85.43, suspension [[Page
CDBG subrecipients shall comply with Sec. 134]) or termination may occur if the
570.503(b) (7); and subrecipient materially fails to comply with
(4) Subpart D--"After-the-Award any term of the award, and that the award
Requirements, '' except for Sec. 84.71, may be terminated for convenience in
"Closeout Procedures." accordance with 24 CFR 85.44.
(7) Reversion of assets. The agreement
[53 FR 8058, Mar. 11, 1988, as amended at shall specify that upon its expiration the
60 FR 1916, Jan. 5, 1995; 60 FR 56915, Nov. subrecipient shall transfer to the recipient
9, 19951 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 year, exceeds one-twelfth of the most recent
ensure that any real property under the grant made pursuant to Sec. 570.304 shall be
subrecipient's control that was acquired or remitted to HUD as soon as practicable
improved in whole or in part with CDBG thereafter, to be placed in the recipient's
funds (including CDBG funds provided to the line of credit. This provision applies to
subrecipient in the form of a loan) in program income cash balances and investments
excess of $25,000 is either: thereof held by the grantee and its
(i) Used to meet one of the national subrecipients. (This provision shall be
objectives in Sec. 570.208 (formerly Sec. applied for the first time at the end of the
570.901) until five years after expiration program year for which Federal Fiscal Year
of the agreement, or for such longer period 1996 funds are provided.)
of time as determined to be appropriate by (3) Program income on hand at the time of
the recipient; or closeout shall continue to be subject to the
(ii) Not used in accordance with eligibility requirements in subpart C and
paragraph (b) (7) (i) of this section, in all other applicable provisions of this part
which event the subrecipient shall pay to until it is expended.
the recipient an amount equal to the current (4) Unless otherwise provided in any
market value of the property less any grant closeout agreement, and subject to the
portion of the value attributable to requirements of paragraph (b) (5) of this
expenditures of non-CDBG funds for the section, income received after closeout
acquisition of, or improvement to, the shall not be governed by the provisions of
property. The payment is program income to this part, except that, if at the time of
the recipient. (No payment is required after closeout the recipient has another ongoing
the period of time specified in paragraph CDBG grant received directly from HUD, funds
(b) (7) (i) of this section.) received after closeout shall be treated as
program income of the ongoing grant
[53 FR 8058, Mar. 11, 1988, as amended at 53 program. [[Page 135])
FR 41331, Oct. 21, 1988; 57 FR 27120, June (5) If the recipient does not have
17, 1992; 60 FR 56915, Nov. 9, 1995; 68 FR another ongoing grant received directly from
56405, Sept. 30, 20031 HUD at the time of closeout, income received
after closeout from the disposition of real
Sec. 570.504 Program income. property or from loans outstanding at the
time of closeout shall not be governed by
(a) Recording program income. The receipt the provisions of this part, except that
and expenditure of program income as defined such income shall be used for activities
in Sec. 570.500(a) shall be recorded as part that meet one of the national objectives in
of the financial transactions of the grant Sec. 570.901 and the eligibility
program. requirements described in section 105 of the
(b) Disposition of program income received Act.
by recipients. (c) Disposition of program income received
(1) Program income received before grant by subrecipients. The written agreement
closeout may be retained by the recipient if between the recipient and the subrecipient,
the income is treated as additional CDBG as required by Sec. 570.503, shall specify
funds subject to all applicable requirements whether program income received is to be
governing the use of CDBG funds. returned to the recipient or retained by the
(2) If the recipient chooses to retain subrecipient. Where program income is to be
program income, that program income shall be retained by the subrecipient, the agreement
disposed of as follows: shall specify the activities that will be
(i) Program income in the form of undertaken with the program income and that
repayments to, or interest earned in, a all provisions of the written agreement
revolving fund as defined in Sec. 570.500(b) shall apply to the specified activities.
shall be substantially disbursed from the When the subrecipient retains program
fund before additional cash withdrawals are income, transfers of grant funds by the
made from the U.S. Treasury for the same recipient to the subrecipient shall be
activity. (This rule does not prevent a lump adjusted according to the principles
sum disbursement to finance the described in paragraphs (b) (2) (i) and (ii)
rehabilitation of privately owned properties of this section. Any program income on hand
as provided for in Sec. 570.513.) when the agreement expires, or received
(ii) Substantially all other program after the agreement's expiration, shall be
income shall be disbursed for eligible paid to the recipient as required by Sec.
activities before additional cash 570.503(b) (8) .
withdrawals are made from the U.S. Treasury. (d) Disposition of certain program income
(iii) At the end of each program received by urban counties. Program income
year, the aggregate amount of program income derived from urban county program activities
cash balances and any investment thereof undertaken by or within the jurisdiction of
(except those needed for immediate cash a unit of general local government which
needs, cash balances of a revolving loan thereafter terminates its participation in
fund, cash balances from a lump-sum the urban county shall continue to be
drawdown, or cash or investments held for program income of the urban county. The
section 108 loan guarantee security needs) urban county may transfer the program income
that, as of the last day of the program to the unit of general local government,
53
upon its termination of urban county the requirements of this part. At a minimum,
participation, provided that the unit of the following records are needed:
general local government has become an (a) Records providing a full description of'
entitlement grantee and agrees to use the each activity assisted (or being assisted)
program income in its own CDBG entitlement with CDBG funds, including its location (if
program. the activity has a geographical locus), the
amount of CDBG funds budgeted, obligated and
[53 FR 8058, Mar. 11, 1988, as amended at 60 expended for the activity, and the provision
FR 56915, Nov. 9, 19951 in subpart C under which it is eligible.
(b) Records demonstrating that each
Sec. 570.505 Use of real property. activity undertaken meets one of the
criteria set forth in Sec. 570.208. (Where
The standards described in this section information on income by family size is
apply to real property within the required, the recipient may substitute
recipient's control which was acquired or evidence establishing that the person
improved in whole or in part using CDBG assisted qualifies under another program
funds in excess of $25,000. These standards having income qualification criteria at
shall apply from the date CDBG funds are least as restrictive as that used in the
first spent for the property until five definitions of "low and moderate income
years after closeout of an entitlement person'' and "low and moderate income
recipient's participation in the entitlement household'' (as applicable) at Sec. 570.3,
CDBG program or, with respect to other such as Job Training Partnership Act (DTPA)
recipients, until five years after the and welfare programs; or the recipient may
closeout of the grant from which the substitute evidence that the assisted person
assistance to the property was provided. is homeless; or the recipient may substitute
(a) A recipient may not change the use or a copy of a verifiable certification from
planned use of any such property (including the assisted person that his or her family
the beneficiaries of such use) from that for income does not exceed the applicable income
which the acquisition or improvement was limit established in accordance with Sec.
made unless the recipient provides affected 570.3; or the recipient may substitute a
citizens with reasonable notice of, and notice that the assisted person is a
opportunity to comment on, any proposed referral from a state, county or local
change, and either: employment agency or other entity that
(1) The new use of such property agrees to refer individuals it determines to
qualifies as meeting one of the national be low and moderate income persons based on
objectives in Sec. 570.208 (formerly Sec. HUD's criteria and agrees to maintain
570.901) and is not a building for the documentation supporting these
general conduct of government; or determinations.) Such records shall include
(2) The requirements in paragraph (b) of the following information:
this section are met. (1) For each activity determined to
(b) If the recipient determines, after benefit low and moderate income persons, the
consultation with affected citizens, that it income limits applied and the point in time
is appropriate to change the use of the when the benefit was determined.
property to a use which does not qualify (2) For each activity determined to
under paragraph (a) (1) of this section, it benefit low and moderate income persons
may retain or dispose of the property for based on the area served by the activity:
the changed use if the recipient's CDBG (i) The boundaries of the service
program is reimbursed in the amount of the area;
current fair market value of the property, (ii) The income characteristics of
less any portion of the value attributable families and unrelated individuals in the
to expenditures of non-CDBG funds for service area; and
acquisition of, and improvements to, the (iii) If the percent of low and
property. moderate income persons in the service area
(c) If the change of use occurs after is less than 51 percent, data showing that
closeout, the provisions governing income the area qualifies under the exception
from the disposition of the real property in criteria set forth at Sec.
Sec. 570.504(b) (4) or (5), as applicable, 570.208(a) (1) (ii) .
shall apply to the use of funds reimbursed. (3) For each activity determined to
(d) Following the reimbursement of the CDBG benefit low and moderate income persons
program in accordance with paragraph (b) of because the activity involves a facility or
this section, the property no longer will be service designed for use by a limited
subject to any CDBG requirements. clientele consisting exclusively or
predominantly of low and moderate income
[53 FR 8058, Mar. 11, 1988, as amended at persons:
53 FR 41331, Oct.. 21, 1988] [[Page 136]] (i) Documentation establishing that
the facility or service is designed for the
Sec. 570.506 Records to be maintained. particular needs of or used exclusively by
senior citizens, adults meeting the Bureau
Each recipient shall establish and maintain of the Census' Current Population Reports
sufficient records to enable the Secretary definition of "severely disabled, '' persons
to determine whether the recipient has met living with AIDS, battered spouses, abused
54
children, the homeless, illiterate adults, (i) Where the recipient chooses to
or migrant farm workers, for which the document that at least 51 percent of the
regulations provide a presumption concerning jobs will be available to low and moderate
the extent to which low- and moderate-income income persons, documentation for each
persons benefit; or assisted business shall include:
(ii) Documentation describing how the (A) A copy of a written agreement
nature and, if applicable, the location of containing:
the facility or service establishes that it (1) A commitment by the
is used predominantly by low and moderate business that it will make at least 51
income persons; or percent of the jobs available to low and
(iii) Data showing the size and moderate income persons and will provide
annual income of the family of each person training for any of those jobs requiring
receiving the benefit. special skills or education;
(4) For each activity carried out for (2) A listing by job title of
the purpose of providing or improving the permanent jobs to be created indicating
housing which is determined to benefit low which jobs will be available to low and
and moderate income persons: moderate income persons, which jobs require
(i) A copy of a written agreement special skills or education, and which jobs
with each landlord or developer receiving are part-time, if any; and
CDBG assistance indicating the total number (3) A description of actions
of dwelling units in each multifamily to be taken by the recipient and business to
structure assisted and the number of those ensure that low and moderate income persons
units which will be occupied by low and receive first consideration for those jobs;
moderate income households after assistance; and
(ii) The total cost of the activity, (B) A listing by job title of
including both CDBG and non-CDBG funds. the permanent jobs filled, and which jobs of
(iii) For each unit occupied by a low those were available to low and moderate
and moderate income household, the size and income persons, and a description of how
income of the household; first consideration was given to such
(iv) For rental housing only: persons for those jobs. The description
(A) The rent charged (or to be shall include what hiring process was used;
charged) after assistance for each [[Page which low and moderate income persons were
137]] dwelling unit in each structure interviewed for a particular job; and which
assisted; and low and moderate income persons were hired.
(B) Such information as necessary (ii) Where the recipient chooses to
to show the affordability of units occupied document that at least 51 percent of the
(or to be occupied) by low and moderate jobs will be held by low and moderate income
income households pursuant to criteria persons, documentation for each assisted
established and made public by the business shall include:
recipient; (A) A copy of a written agreement
(v) For each property acquired on containing:
which there are no structures, evidence of (1) A commitment by the
commitments ensuring that the criteria in business that at least 51 percent of the
Sec. 570.208(a) (3) will be met when the jobs, on a full-time equivalent basis, will
structures are built; be held by low and moderate income persons;
(vi) Where applicable, records and
demonstrating that the activity qualifies (2) A listing by job title of
under the special conditions at Sec. the permanent jobs to be created,
570.208(a) (3) (i); identifying which are part-time, if any;
(vii) For any homebuyer assistance (B) A listing by job title of the
activity qualifying under Sec. 570.201(e), permanent jobs filled and which jobs were
570.201(n), or 570.204, identification of initially held by low and moderate income
the applicable eligibility paragraph and persons; and
evidence that the activity meets the (C) For each such low and
eligibility criteria for that provision; for moderate income person hired, the size and
any such activity qualifying under Sec. annual income of the person's family prior
570.208(a), the size and income of each to the person being hired for the job.
homebuyer's household; and (6) For each activity determined to
(viii) For a Sec. 570.201(k) housing benefit low and moderate income persons
services activity, identification of the based on the retention of jobs:
HOME project(s) or assistance that the (i) Evidence that in the absence of
housing services activity supports, and CDBG assistance jobs would be lost;
evidence that project(s) or assistance meet (ii) For each business assisted, a
the HOME program income targeting listing by job title of permanent jobs
requirements at 24 CFR 92.252 or 92.254. retained, indicating which of those jobs are
(5) For each activity determined to part-time and (where it is known) which are
benefit low and moderate income persons held by low and moderate income persons at
based on the creation of jobs, the recipient the time the CDBG assistance is provided.
shall provide the documentation described Where applicable, identification of any of
in either paragraph (b) (5) (i) or (ii) of the retained jobs (other than those known to
this section. be held by low and moderate income persons)
55
which are projected to become available to (iii) Details and scope of CDBG
low and moderate income [[Page 138]] assisted rehabilitation, by structure.
persons through job turnover within two (10) For each activity determined to aid
years of the time CDBG assistance is in the prevention or elimination of slums or
provided. Information upon which the job blight based on the elimination of specific
turnover projections were based shall also conditions of blight or physical decay not
be included in the record; located in a slum or blighted area:
(iii) For each retained job claimed (i) A description of the specific
to be held by a low and moderate income condition of blight or physical decay
person, information on the size and annual treated; and
income of the person's family; (ii) For rehabilitation carried out
(iv) For jobs claimed to be available under this category, a description of the
to low and moderate income persons based on specific conditions detrimental to public
job turnover, a description covering the health and safety which were identified and
items required for "available to'' jobs in the details and scope of the CDBG assisted
paragraph (b) (5) of this section; and rehabilitation by structure.
(v) Where jobs were claimed to be (11) For each activity determined to aid
available to low and moderate income in the prevention or elimination of slums or
persons through turnover, a listing of each blight based on addressing slums or blight
job which has turned over to date, in an urban renewal area, a copy of the
indicating which of those jobs were either Urban Renewal Plan, as in effect at the time
taken by, or available to, low and moderate the activity is carried out, including maps
income persons. For jobs made available, a and supporting documentation.
description of how first consideration was (12) For each activity determined to meet
given to such persons for those jobs shall a community development need having a
also be included in the record. particular urgency:
(7) For purposes of documenting, pursuant (i) Documentation concerning the
to paragraph (b) (5) (i) (B), (b) (5) (ii) (C), nature and degree of seriousness of the
(b) (6) (iii) or (b) (6) (v) of this section, condition requiring assistance;
that the person for whom a job was either (ii) Evidence that the recipient
filled by or made available to a low- or certified that the CDBG activity was
moderate-income person based upon the census designed to address the urgent need;
tract where the person resides or in which (iii) Information on the timing of
the business is located, the recipient, in the development of the serious condition;
lieu of maintaining records showing the and
person's family size and income, may (iv) Evidence confirming that other
substitute records showing either the financial resources to alleviate the need
person's address at the time the were not available. [[Page 139]]
determination of income status was made or (c) Records that demonstrate that the
the address of the business providing the recipient has made the determinations
job, as applicable, the census tract in required as a condition of eligibility of
which that address was located, the percent certain activities, as prescribed in Sec.
of persons residing in that tract who either Sec. 570.201(f), 570.201(i) (2), 570.201(p),
are in poverty or who are low- and moderate- 570.201(q), 570.202(b) (3), 570.206(f),
income, as applicable, the data source used 570.209, and 570.309.
for determining the percentage, and a (d) Records which demonstrate compliance
description of the pervasive poverty and with Sec. 570.505 regarding any change of
general distress in the census tract in use of real property acquired or improved
sufficient detail to demonstrate how the with CDBG assistance.
census tract met the criteria in Sec. (e) Records that demonstrate compliance
570.208(a) (4) (v), as applicable. with the citizen participation requirements
(8) For each activity determined to aid prescribed in 24 CFR part 91, subpart B, for
in the prevention or elimination of slums or entitlement recipients, or in 24 CFR part
blight based on addressing one or more of 91, subpart C, for HUD-administered small
the conditions which qualified an area as a cities recipients.
slum or blighted area: (f) Records which demonstrate compliance
(i) The boundaries of the area; and with the requirements in Sec. 570.606
(ii) A description of the conditions regarding acquisition, displacement,
which qualified the area at the time of its relocation, and replacement housing.
designation in sufficient detail to (g) Fair housing and equal opportunity
demonstrate how the area met the criteria in records containing:
Sec. 570.208(b) (1) . (1) Documentation of the analysis of
(9) For each residential rehabilitation impediments and the actions the recipient
activity determined to aid in the prevention has carried out with its housing and
or elimination of slums or blight in a slum community development and other resources to
or blighted area: remedy or ameliorate any impediments to fair
(i) The local definition of housing choice in the recipient's community.
substandard' '; (2) Data on the extent to which each
(ii) A pre-rehabilitation inspection racial and ethnic group and single-headed
report describing the deficiencies in each households (by gender of household head)
structure to be rehabilitated; and have applied for, participated in, or
56
benefited from, any program or activity activity funded in whole or in part with
funded in whole or in part with CDBG funds. CDBG funds. [[Page 140)]
Such information shall be used only as a (h) Financial records, in accordance with
basis for further investigation as to the applicable requirements listed in Sec.
compliance with nondiscrimination 570.502, including source documentation for
requirements. No recipient is required to entities not subject to parts 84 and 85 of
attain or maintain any particular this title. Grantees shall maintain evidence
statistical measure by race, ethnicity, or to support how the CDBG funds provided to
gender in covered programs. such entities are expended. Such
(3) Data on employment in each of the documentation must include, to the extent
recipient's operating units funded in whole applicable, invoices, schedules containing
or in part with CDBG funds, with such data comparisons of budgeted amounts and actual
maintained in the categories prescribed on expenditures, construction progress
the Equal Employment Opportunity schedules signed by appropriate parties
Commission's EEO-4 form; and documentation (e.g., general contractor and/or a project
of any actions undertaken to assure equal architect), and/or other documentation
employment opportunities to all persons appropriate to the nature of the activity.
regardless of race, color, national origin, (i) Agreements and other records related to
sex or handicap in operating units funded in lump sum disbursements to private financial
whole or in part under this part. institutions for financing rehabilitation as
(4) Data indicating the race and prescribed in Sec. 570.513; and
ethnicity of households (and gender of (j) Records required to be maintained in
single heads of households) displaced as a accordance with other applicable laws and
result of CDBG funded activities, together regulations set forth in subpart K of this
with the address and census tract of the part. (Approved by the Office of Management
housing units to which each displaced and Budget under control number 2506-0077)
household relocated. Such information shall
be used only as a basis for further (53 FR 34454, Sept. 6, 1988; 53 FR 41330,
investigation as to compliance with Oct. 21, 1988, as amended at 60 FR 1916,
nondiscrimination requirements. No recipient 1953, Jan. 5, 1995; 60 FR 56915, Nov. 9,
is required to attain or maintain any 1995; 61 FR 18674, Apr. 29, 1996; 64 FR
particular statistical measure by race, 38813, July 19, 1999)
ethnicity, or gender in covered programs.
(5) Documentation of actions undertaken Sec. 570.508 Public access to program
to meet the requirements of Sec. 570.607(b) records.
which implements section 3 of the Housing
Development Act of 1968, as amended (12 Notwithstanding 24 CFR 85.42(f), recipients
U.S.C. 1701U) relative to the hiring and shall provide citizens with reasonable
training of low and moderate income persons access to records regarding the past use of
and the use of local businesses. CDBG funds, consistent with applicable State
(6) Data indicating the racial/ethnic and local laws regarding privacy and
character of each business entity receiving obligations of confidentiality.
a contract or subcontract of $25,000 or more
paid, or to be paid, with CDBG funds, data Sec. 570.509 Grant closeout procedures.
indicating which of those entities are
women's business enterprises as defined in (a) Criteria for closeout. A grant will be
Executive Order 12138, the amount of the closed out when HUD determines, in
contract or subcontract, and documentation consultation with the recipient, that the
of recipient's affirmative steps to assure following criteria have been met:
that minority business and women's business (1) All costs to be paid with CDBG funds
enterprises have an equal opportunity to have been incurred, with the exception of
obtain or compete for contracts and closeout costs (e.g., audit costs) and costs
subcontracts as sources of supplies, resulting from contingent liabilities
equipment, construction and services. Such described in the closeout agreement pursuant
affirmative steps may include, but are not to paragraph (c) of this section. Contingent
limited to, technical assistance open to all liabilities include, but are not limited to,
businesses but designed to enhance third-party claims against the recipient, as
opportunities for these enterprises and well as related administrative costs.
special outreach efforts to inform them of (2) With respect to activities (such as
contract opportunities. Such steps shall not rehabilitation of privately owned
include preferring any business in the award properties) which are financed by means of
of any contract or subcontract solely or in escrow accounts, loan guarantees, or similar
part on the basis of race or gender. mechanisms, the work to be assisted with
(7) Documentation of the affirmative CDBG funds (but excluding program income)
action measures the recipient has taken to has actually been completed.
overcome prior discrimination, where the (3) Other responsibilities of the
courts or HUD have found that the recipient recipient under the grant agreement and
has previously discriminated against persons applicable laws and regulations appear to
on the ground of race, color, national have been carried out satisfactorily or
origin or sex in administering a program or there is no further Federal interest in
57
keeping the grant agreement open for the obligations in paragraphs (c) (1) through (4)
purpose of securing performance. of this section. The agreement shall
(b) Closeout actions. authorize monitoring by HUD, and shall
(1) Within 90 days of the date it is provide that findings of noncompliance may
determined that the criteria for closeout be taken into account by HUD, as
have been met, the recipient shall submit to unsatisfactory performance of the recipient,
HUD a copy of the final performance and in the consideration of any future grant
evaluation report described in 24 CFR part award under this part.
91. If an acceptable report is not (d) Status of consolidated plan after
submitted, an audit of the recipient's grant closeout. Unless otherwise provided in a
activities may be conducted by HUD. closeout agreement, the Consolidated Plan
(2) Based on the information provided in will remain in effect after closeout until
the performance report and other relevant the expiration of the program year covered
information, HUD, in consultation with the by the last approved consolidated plan.
recipient, will prepare a closeout agreement (e) Termination of grant for convenience.
in accordance with paragraph (c) of this Grant assistance provided under this part
section. may be terminated for convenience in whole
(3) HUD will cancel any unused portion of or in part before the completion of the
the awarded grant, as shown in the signed assisted activities, in accordance with the
grant closeout agreement. Any unused grant provisions of 24 CFR 85.44. The recipient
funds disbursed from the U.S. Treasury which shall not incur new obligations for the
are in the possession of the recipient shall terminated portions after the effective
be refunded to HUD. date, and shall cancel as many outstanding
(4) Any costs paid with CDBG funds which obligations as possible. HUD shall allow
were not audited previously shall be subject full credit to the recipient for those
to coverage in the recipient's next single portions of obligations which could not be
audit performed in accordance with 24 CFR canceled and which had been properly
part 44. The recipient may be required to incurred by the recipient in carrying out
repay HUD any disallowed costs based on the the activities before the termination. The
results of the audit, or on additional HUD closeout policies contained in this section
reviews provided for in the closeout shall apply in such cases, except where the
agreement. approved grant is terminated in its
(c) Closeout agreement. Any obligations entirety. Responsibility for the
remaining as of the date of the closeout environmental review to be performed under
shall be covered by the terms of a closeout 24 CFR part 50 or 24 CFR part 58, as
agreement. The agreement shall be prepared applicable, shall be determined as part of
by the HUD field office in consultation with the closeout process.
the recipient. The agreement shall identify (f) Termination for cause. In cases in
the grant being closed out, and include which the Secretary terminates the
provisions with respect to the following: recipient's grant under the authority of
(1) Identification of any closeout costs subpart O of this part, or under the terms
or contingent liabilities subject to payment of the grant agreement, the closeout
with CDBG funds after the closeout agreement policies contained in this section shall
is signed; apply, except where the approved pproved grant is
(2) Identification of any unused grant cancelled in its entirety. The provisions in
funds to be canceled by HUD; 24 CFR 85.43(c) on the effects of
(3) Identification of any program income termination shall also apply. HUD shall
on deposit in financial institutions at the determine whether an environmental
time the closeout agreement is signed: assessment or finding of inapplicability is
(4) Description of the recipient's required, and if such review is required,
responsibility after closeout for: HUD shall perform it in accordance with 24
(i) Compliance with all program CFR part 50.
requirements, certifications and assurances
in using program income on deposit at the [53 FR 8058, Mar. 11, 1988, as amended at 56
time the closeout agreement is signed and in FR 56128, Oct. 31, 1991; 60 FR 1916, Jan.
using any other remaining CDBG funds 5, 1995; 60 FR 16379, Mar. 30, 1995]
available for closeout costs and contingent
liabilities; [[Page 142]] Sec. 570.510 Transferring projects from
(ii) Use of real property assisted with urban counties to metropolitan cities.
CDBG funds in accordance with the principles
described in Sec. 570.505; Section 106(c) (3) of the Act authorizes the
(iii) Compliance with requirements Secretary to transfer unobligated grant
governing program income received subsequent funds from an urban county to a new
to grant closeout, as described in Sec. metropolitan city, provided: the city was an
570.504(b) (4) and (5); and included unit of general local government in
(iv) Ensuring that flood insurance the urban county immediately before its
coverage for affected property owners is qualification as a metropolitan city; the
maintained for the mandatory period; funds to be transferred were received by the
(5) Other provisions appropriate to any county before the qualification of the city
special circumstances of the grant closeout, as a metropolitan city; the funds to be
in modification of or in addition to the transferred had been programmed by the urban
58
county for use in the city before such dwelling units (and accessory neighborhood-
qualification; and the city and county agree scale non-residential space within the same
to transfer responsibility for the structure, if any, e.g., a store front below
administration of -the funds being a dwelling unit) .
transferred from the county's letter of (2) An escrow account shall not be used
credit to the city's letter of credit. The unless the contract between the property
following rules apply to the transfer of owner and the contractor selected to do the
responsibility for an activity from an urban rehabilitation work specifically provides
county to the new metropolitan city. that payment to the contractor shall be made
(a) The urban county and the metropolitan through an escrow account maintained by the
city must execute a legally binding recipient, by a subrecipient as defined in
agreement which shall specify: Sec. 570.500(c), by a public agency
(1) The amount of funds to be transferred designated under Sec. 570.501(a), or by an
from the urban county's letter of credit to agent under a procurement contact governed
the metropolitan city's letter of credit; by the requirements of 24 CFR 85.36. No
(2) The activities to be carried out by deposit to the escrow account shall be made
the city with the funds being transferred; until after the contract has been executed
(3) The county's responsibility for all between the property owner and the
expenditures and unliquidated obligations rehabilitation contractor.
associated with the activities before the (3) All funds withdrawn under this
time of transfer, including a statement that section shall be deposited into one interest
responsibility for all audit and monitoring earning account with a financial
findings associated with those expenditures institution. Separate bank accounts shall
and obligations shall remain with the not be established for individual loans and
county; [[Page 143]] grants.
(4) The responsibility of the (4) The amount of funds deposited into an
metropolitan city for all other audit and escrow account shall be limited to the
monitoring findings; amount expected to be disbursed within 10
(5) How program income (if any) from the working days from the date of deposit. If
activities specified shall be divided the escrow account, for whatever reason, at
between the metropolitan city and the urban any time contains funds exceeding 10 days
county; and cash needs, the grantee immediately shall
(6) Such other provisions as may be transfer the excess funds to its program
required by HUD. account. In the program account, the excess
(b) Upon receipt of a request for the funds shall be treated as funds erroneously
transfer of funds from an urban county to a drawn in accordance with the requirements of
metropolitan city and a copy of the executed U.S. Treasury Financial Manual, paragraph 6-
agreement, HUD, in consultation with the 2075.30.
Department of the Treasury, shall establish (5) Funds deposited into an escrow
a date upon which the funds shall be account shall be used only to pay the actual
transferred from the letter of credit of costs of rehabilitation incurred by the
the urban county to the letter of credit of owner under the contract with a private
the metropolitan city, and shall take all contractor. Other eligible costs related to
necessary actions to effect the requested the rehabilitation loan or grant, e.g., the
transfer of funds. recipient's administrative costs under Sec.
(c) HUD shall notify the metropolitan city 570.206 or rehabilitation services costs
and urban county of any special audit and under Sec. 570.202(b) (9), are not
monitoring rules which apply to the permissible uses of escrowed funds. Such
transferred funds when the date of the other eligible rehabilitation costs shall be
transfer is communicated to the city and the paid under normal CDBG payment procedures
county. (e.g., from withdrawals of grant funds under
the recipient's letter of credit with the
Sec. 570.511 Use of escrow accounts for Treasury) .
rehabilitation of privately owned (b) Interest. Interest earned on escrow
residential property. accounts established in accordance with this
section, less any service charges for the
(a) Limitations. A recipient may withdraw account, shall be remitted to HUD at least
funds from its letter of credit for quarterly but not more frequently than
immediate deposit into an escrow account for monthly. Interest earned on escrow accounts
use in funding loans and grants for the is not required to be remitted to HUD to the
rehabilitation of privately owned extent the interest is attributable to the
residential property under Sec. investment of program income.
570.202(a) (1) . The following additional (c) Remedies for noncompliance. If HUD
limitations apply to the use of escrow determines that a recipient has failed to
accounts for residential rehabilitation use an escrow account in accordance [[Page
loans and grants closed after September 7, 144))with this section, HUD may, in addition
1990: to imposing any other sanctions provided for
(1) The use of escrow accounts under this under this part, require the recipient to
section is limited to loans and grants for discontinue the use of escrow accounts, in
the rehabilitation of primarily residential whole or in part.
properties containing no more than four
59
[55 FR 32369, Aug. 8, 1990] Sec. 570.512 which CDBG funds are to be deposited and
[Reserved] used or returned, the anticipated level of
rehabilitation activities by the financial
Sec. 570.513 Lump sum drawdown for institution, the rate of interest and other
financing of property rehabilitation benefits to be provided by the financial
activities. institution in return for the lump sum
deposit, and such other terms as are
Subject to the conditions prescribed in this necessary for compliance with the provisions
section, recipients may draw funds from the of this section. Upon execution of the
letter of credit in a lump sum to establish agreement, a copy must be provided to the
a rehabilitation fund in one or more private HUD field office for its record and use in
financial institutions for the purpose of monitoring. Any modifications made during
financing the rehabilitation of privately the term of the agreement must also be
owned properties. The fund may be used in provided to HUD.
conjunction with various rehabilitation (3) Period to undertake activities. The
financing techniques, including loans, agreement must provide that the
interest subsidies, loan guarantees, loan rehabilitation fund may only be.used for
reserves, or such other uses as may be authorized activities during a period of no
approved by HUD consistent with the more than two years. The lump sum deposit
objectives of this section. The fund may shall be made only after the agreement is
also be used for making grants, but only for fully executed.
the purpose of leveraging non-CDBG funds for (4) Time limit on use of deposited funds.
the rehabilitation of the same property. Use of the deposited funds for
(a) Limitation on drawdown of grant funds. rehabilitation financing assistance must
(1) The funds that a recipient deposits start (e.g., first loan must be made,
to a rehabilitation fund shall not exceed subsidized or guaranteed) within 45 days of
the grant amount that the recipient the deposit. In addition, substantial
reasonably expects will be required, disbursements from the fund must occur
together with anticipated program income within 180 days of the receipt of the
from interest and loan repayments, for the deposit. (Where CDBG funds are used as a
rehabilitation activities during the period guarantee, the funds that must be
specified in the agreement to undertake substantially disbursed are the guaranteed
activities, based on either: funds.) For a recipient with an agreement
(i) Prior level of rehabilitation specifying two years to [[Page 145]]
activity; or undertake activities, the disbursement of 25
(ii) Rehabilitation staffing and percent of the fund (deposit plus any
management capacity during the period interest earned) within 180 days will be
specified in the agreement to undertake regarded as meeting this requirement. If a
activities. recipient with an agreement specifying two
(2) No grant funds may be deposited under years to undertake activities determines
this section solely for the purpose of that it has had substantial disbursement
investment, notwithstanding that the from the fund within the 180 days although
interest or other income is to be used for it had not met this 25 percent threshold,
the rehabilitation activities. the justification for the recipient's
(3) The recipient's rehabilitation determination shall be included in the
program administrative costs and the program file. Should use of deposited funds
administrative costs of the financial not start within 45 days, or substantial
institution may not be funded through lump disbursement from such fund not occur within
sum drawdown. Such costs must be paid from 180 days, the recipient may be required by
periodic letter of credit withdrawals in HUD to return all or part of the deposited
accordance with standard procedures or from funds to the recipient's letter of credit.
program income, other than program income (5) Program activity. Recipients shall
generated by the lump sum distribution. review the level of program activity on a
(b) Standards to be met. The following yearly basis. Where activity is
standards shall apply to all lump sum substantially below that anticipated,
drawdowns of CDBG funds for rehabilitation: program funds shall be returned to the
(1) Eligible rehabilitation activities. recipient's letter of credit.
The rehabilitation fund shall be used to (6) Termination of agreement. In the case
finance the rehabilitation of privately of substantial failure by a private
owned properties eligible under the general financial institution to comply with the
policies in Sec. 570.200 and the specific terms of a lump sum drawdown agreement, the
provisions of either Sec. 570.202, including recipient shall terminate its agreement,
the acquisition of properties for provide written justification for the
rehabilitation, or Sec. 570.203. action, withdraw all unobligated deposited
(2) Requirements for agreement. The funds from the private financial
recipient shall execute a written agreement institution, and return the funds to the
with one or more private financial recipient's letter of credit.
institutions for the operation of the (7) Return of unused deposits. At the end
rehabilitation fund. The agreement shall of the period specified in the agreement for
specify the obligations and responsibilities undertaking activities, all unobligated
of the parties, the terms and conditions on deposited funds shall be returned to the
60
recipient's letter of credit unless the (ii) In addition to the payment of
recipient enters into a new agreement interest, at least one of the following
conforming to the requirements of this benefits must be provided by the financial
section. In addition, the recipient shall institution:
reserve the right to withdraw any (A) Leverage of the deposited
unobligated deposited funds required by HUD funds so that the financial institution
in the exercise of corrective or remedial commits private funds for loans in the
actions authorized under Sec. 570.910(b), rehabilitation program in an amount
Sec. 570.911, Sec. 570.912 or Sec. 570.913. substantially in excess of the amount of the
(8) Rehabilitation loans made with non- lump sum deposit;
CDBG funds. If the deposited funds or (B) Commitment of private funds
program income derived from deposited funds by the financial institution for
are used to subsidize or guarantee repayment rehabilitation loans at below market
of rehabilitation loans made with non-CDBG interest rates, at higher than normal risk,
funds, or to provide a supplemental loan or or with longer than normal repayment
grant to the borrower of the non-CDBG funds, periods; or
the rehabilitation activities are considered (C) Provision of administrative
to be CDBG-assisted activities subject to services in support of the rehabilitation
the requirements applicable to such program by the participating financial
activities, except that repayment of non- institution at no cost or at lower than
CDBG funds shall not be treated as program actual cost.
income. (c) Program income. Interest earned on lump
(9) Provision of consideration. In sum deposits and payments on loans made from
consideration for the lump sum deposit by such deposits are program income and, during
the recipient in a private financial the period of [[Page 146]] the agreement,
institution, the deposit must result in shall be used for rehabilitation activities
appropriate benefits in support of the under the provisions of this section.
recipient's local rehabilitation program. (d) Outstanding findings. Notwithstanding
Minimum requirements for such benefits are: any other provision of this section, no
(i) Grantees shall require the recipient shall enter into a new agreement
financial institution to pay interest on the during any period of time in which an audit
lump sum deposit. or monitoring finding on a previous lump sum
(A) The interest rate paid by the drawdown agreement remains unresolved.
financial institution shall be no more than (e) Prior notification. The recipient shall
three points below the rate on one year provide the HUD field office with written
Treasury obligations at constant maturity. notification of the amount of funds to be
(B) When an agreement sets a distributed to a private financial
fixed interest rate for the entire term of institution before distribution under the
the agreement, the rate should be based on provisions of this section.
the rate at the time the agreement is (f) Recordkeeping requirements. The
executed. recipient shall maintain in its files a copy
(C) The agreement may provide for of the written agreement and related
an interest rate that would fluctuate documents establishing conformance with this
periodically during the term of the section and concerning performance by a
agreement, but at no time shall the rate be financial institution in accordance with the
established at more than three points below agreement.
the rate on one year Treasury obligations at
constant maturity.
61
Appendix D
24 CFR 570 CDBG Regulations Subpart K, Other Program Requirements
62
Section Sec. 570.601 Public Law 88-352 and Public
Law 90-284; affirmatively furthering fair
[Code of Federal Regulations] housing; Executive Order 11063.
[Title 24, Volume 3] (a) The following requirements apply
(Revised as of April 1, 2004] according to sections 104(b) and 107 of the
From the U.S. Government Printing Office via Act:
GPO Access (1) Public Law 88-352, which is title
[CITE: 24CFR570.6001 VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d et seq.), and implementing
[Page 146] regulations in 24 CFR part 1.
(2) Public Law 90-284, which is the
TITLE 24--HOUSING AND URBAN DEVELOPMENT Fair Housing Act (42 U.S.C. 3601-3620) . In
accordance with the Fair Housing Act, the
CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR Secretary requires that grantees administer
COMMUNITY PLANNING AND DEVELOPMENT, all programs and activities related to
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT housing and community development in a
manner to affirmatively further the policies
PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS- of the Fair Housing Act. Furthermore, in
-Table of Contents accordance with section 104(b) (2) of the
Act, for each community receiving a grant
Subpart K_Other Program Requirements under subpart D of this part, the
certification that the grantee will
Sec. 570.600 General. affirmatively further fair housing shall
specifically require the grantee to assume
Source: 53 FR 34456, Sept. 6, 1988, unless the responsibility of fair housing planning
otherwise noted. by conducting an analysis to identify
impediments to fair housing choice within
(a) This subpart K enumerates laws that its jurisdiction, taking appropriate actions
the Secretary will treat as applicable to to overcome the effects of any impediments
grants made under section 106 of the Act, identified through that analysis,- and
other than grants to States made pursuant to maintaining records reflecting the analysis
section 106(d) of the Act, for purposes of and actions in this regard.
the Secretary's determinations under section (b) Executive Order 11063, as amended by
104(e) (1) of the Act, including statutes Executive Order 12259 (3 CFR, 1959-1963
expressly made applicable by the Act and Comp., p. 652; 3 CFR, 1980 Comp., p. 307)
certain other statutes and Executive Orders (Equal Opportunity in Housing), [[Page 147]]
for which the Secretary has enforcement and implementing regulations in 24 CFR part
responsibility. This subpart K applies to 107, also apply.
grants made under the Insular areas program
in Sec. 570.405, with the exception of Sec. [61 FR 11477, Mar. 20, 1996]
570.612. The absence of mention herein of
any other statute for which the Secretary Sec. 570.602 Section 109 of the Act.
does not have direct enforcement
responsibility is not intended to be taken Section 109 of the Act requires that no
as an indication that, in the Secretary's person in the United States shall on the
opinion, such statute or Executive Order is grounds of race, color, national origin,
not applicable to activities assisted under religion, or sex be excluded from
the Act. For laws that the Secretary will participation in, be denied the benefits of,
treat as applicable to grants made to States or be subjected to discrimination under any
under section 106(d) of the Act for purposes program or activity receiving Federal
of the determination required to be made by financial assistance made available pursuant
the Secretary pursuant to section 104(e) (2) to the Act. Section 109 also directs that
of the Act, see Sec. 570.487. the prohibitions against discrimination on
(b) This subpart also sets forth certain the basis of age under the Age
additional program requirements which the Discrimination Act and the prohibitions
Secretary has determined to be applicable to against discrimination on the basis of
grants provided under the Act as a matter of disability under Section 504 shall apply to
administrative discretion. programs or activities receiving Federal
(c) In addition to grants made pursuant to financial assistance under Title I programs.
section 106(b) and 106(d) (2) (B) of the Act The policies and procedures necessary to
(subparts D and F, respectively), the ensure enforcement of section 109 are
requirements of this subpart K are codified in 24 CFR part 6.
applicable to grants made pursuant to
sections 107 and 119 of the Act (subparts E [64 FR 3802, Jan. 25, 1999]
and G, respectively), and to loans
guaranteed pursuant to subpart M. Sec. 570.603 Labor standards.
[53 FR 34456, Sept. 6, 1988, as amended at
61 FR 11477, Mar. 20, 19961 (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 (i) For purposes of paragraph (b)
accordance with section 110(a) of the Act, of this section, the term ''displaced
the Contract Work Hours and Safety Standards person' ' means any person (family,
Act (40 U.S.C. 327 et seq.) also applies. individual, business, nonprofit
However, these requirements apply to the organization, or farm) that moves from real
rehabilitation of residential property only property, or moves his or her personal
if such property contains not less than 8 property from real property, permanently and
units. involuntarily, as a direct result of
(b) The regulations in 24 CFR part 70 rehabilitation, demolition, or acquisition
apply to the use of volunteers. for an activity assisted under this part. A
[61 FR 11477, Mar. 20, 1996] permanent, involuntary move for an assisted
activity includes a permanent move from real
Sec. 570.604 Environmental standards. property that is made:
(A) After notice by the grantee
For purposes of section 104(g) of the Act, (or the state recipient, if applicable) to
the regulations in 24 CFR part 58 specify move permanently from the property, if the
the other provisions of law which further move occurs after the initial official
the purposes of the National Environmental submission to HUD (or the State, [[Page
Policy Act of 1969, and the procedures by 148]] as applicable) for grant, loan, or
which grantees must fulfill their loan guarantee funds under this part that
environmental responsibilities. In certain are later provided or granted.
cases, grantees assume these environmental (B) After notice by the
review, decision making, and action property owner to move permanently from the
responsibilities by execution of grant property, if the move occurs after the date
agreements with the Secretary. of the submission of a request for financial
assistance by the property owner (or person
[61 FR 11477, Mar. 20, 1996] in control of the site) that is later
approved for the requested activity.
Sec. 570.605 National Flood Insurance (C) Before the date described
Program. in paragraph (b) (2) (i) (A) or (B) of this
section, if either HUD or the grantee (or
Notwithstanding the date of HUD approval of State, as applicable) determines that the
the recipient's application (or, in the case displacement directly resulted from
of grants made under subpart D of this part acquisition, rehabilitation, or demolition
or HUD-administered small cities recipients for the requested activity.
in Hawaii, the date of submission of the (D) After the —initiation of
grantee's consolidated plan, in accordance negotiations" if the person is the tenant-
with 24 CFR part 91), section 202(a) of the occupant of a dwelling unit and any one of
Flood Disaster Protection Act of 1973 (42 the following three situations occurs:
U.S.C. 4106) and the regulations in 44 CFR (1) The tenant has not been
parts 59 through 79 apply to funds provided provided with a reasonable opportunity to
under this part 570. lease and occupy a suitable decent, safe,
and sanitary dwelling in the same
[61 FR 11477, Mar. 20, 19961 building/complex upon the completion of the
project, including a monthly rent that does
Sec. 570.606 Displacement, relocation, not exceed the greater of the tenant's
acquisition, and replacement of housing. monthly rent and estimated average utility
costs before the initiation of negotiations
(a) General policy for minimizing or 30 percent of the household's average
displacement. Consistent with the other monthly gross income; or
goals and objectives of this part, grantees (2) The tenant is required
(or States or state recipients, as to relocate temporarily for the activity but
applicable) shall assure that they have the tenant is not offered payment for all
taken all reasonable steps to minimize the reasonable out-of-pocket expenses incurred
displacement of persons (families, in connection with the temporary relocation,
individuals, businesses, nonprofit including the cost of moving to and from the
organizations, and farms) as a result of temporary location and any increased housing
activities assisted under this part. costs, or other conditions of the temporary
(b) Relocation assistance for displaced relocation are not reasonable; and the
persons at URA levels. tenant does not return to the
(1) A displaced person shall be building/complex; or
provided with relocation assistance at the (3) The tenant is required
levels described in, and in accordance with to move to another unit in the
the requirements of 49 CFR part 24, which building/complex, but is not offered
contains the government-wide regulations reimbursement for all reasonable out-of-
implementing the Uniform Relocation pocket expenses incurred in connection with
Assistance and Real Property Acquisition the move.
Policies Act of 1970 (URA) (42 U.S.C. 4601- (ii) Notwithstanding the provisions of
4655) . paragraph (b) (2) (i) of this section, the
(2) Displaced person. term "displaced person-'' does not include:
64
(A) A person who is evicted for equal relocation assistance within each
cause based upon serious or repeated class of displaced persons.
violations of material terms of the lease or (e) Acquisition of real property. The
occupancy agreement. To exclude a person on acquisition of real property for an assisted
this basis, the grantee (or State or state activity is subject to 49 CFR part 24,
recipient, as applicable) must determine subpart B.
that the eviction was not undertaken for the (f) Appeals. If a person disagrees with
purpose of evading the obligation to provide the determination of the grantee (or the
relocation assistance under this section; state recipient, as applicable) concerning
(B) A person who moves into the the person's eligibility for, or the amount
property after the date of the notice of, a relocation payment under this section,
described in paragraph (b) (2) (i) (A) or (B) the person may file a written appeal of that
of this section, but who received a written determination with the grantee (or state
notice of the expected displacement before recipient, as applicable) . The appeal
occupancy. procedures to be followed are described in
(C) A person who is not displaced 49 CFR 24.10. In addition, a low- or
as described in 49 CFR 24.2(g) (2) . moderate-income household that has been
(D) A person who the grantee (or displaced from a dwelling may file a written
State, as applicable) determines is not request for review of the grantee's decision
displaced as a direct result of the to the HUD Field Office. For purposes of the
acquisition, rehabilitation, or demolition State CDBG program, a low- or moderate-
for an assisted activity. To exclude a income household may file a written request
person on this basis, HUD must concur in for review of the state recipient's decision
that determination. with the State.
(iii) A grantee (or State or state (g) Responsibility of grantee or State.
recipient, as applicable) may, at any time, (1) The grantee (or State, if applicable) is
request HUD to determine whether a person is responsible for ensuring compliance with the
a displaced person under this section. (3) requirements of this section,
Initiation of negotiations. For purposes of notwithstanding any third party's
determining the type of replacement housing contractual obligation to the grantee to
assistance to be provided under paragraph comply with the provisions of this section.
(b) of this section, if the displacement is For purposes of the State CDBG program, the
the direct result of privately undertaken State shall require state recipients to
rehabilitation, demolition, or acquisition certify that they will comply with the
of real property, the term -initiation of requirements of this section.
negotiations'' means the execution of the (2) The cost of assistance required
grant or loan agreement between the grantee under this section may be paid from local
(or State or state recipient, as public funds, funds provided under this
(applicable) and the person owning or part, or funds available from other sources.
controlling the real property. (3) The grantee (or State and state
(c) Residential antidisplacement and recipient, as applicable) must maintain
relocation assistance plan. The grantee records in sufficient detail to demonstrate
shall comply with the requirements of 24 CFR compliance with the provisions of this
part 42, subpart B. section.
(d) Optional relocation assistance. Under
section 105(a) (11) of the Act, the grantee (Approved by the Office of Management and
may provide (or the State may permit the Budget under OMB control number 2506-0102)
state recipient to provide, as applicable) [61 FR 11477, Mar. 20, 1996, as amended at
relocation payments and other relocation 61 FR 51760, Oct. 3, 19961
assistance to persons displaced by
activities that are not subject to paragraph Sec. 570.607 Employment and contracting
(b) or (c) of this section. The grantee may opportunities.
also provide (or the State may also permit
the state recipient to provide, as To the extent that they are otherwise
applicable) relocation assistance to persons applicable, grantees shall comply with:
receiving assistance under paragraphs (b) or (a) Executive Order 11246, as amended by
(c) of this section at levels in excess of Executive Orders 11375, 11478, 12086, and
those required by these paragraphs. Unless 12107 (3 CFR 1964-1965 Comp. p. 339; 3 CFR,
such assistance is provided [[Page 149]] 1966-1970 Comp., p. 684; 3 CFR, 1966-1970.,
under State or local law, the grantee (or p. 803; 3 CFR, 1978 Comp., p. 230; 3 CFR,
state recipient, as applicable) shall 1978 Comp., p. 264 (Equal Employment
provide such assistance only upon the basis Opportunity), and Executive Order 13279
of a written determination that the (Equal Protection of the Laws for Faith-
assistance is appropriate (see, e.g., 24 CFR Based and Community Organizations), 67 FR
570.201(i), as applicable) . The grantee (or 77141, 3 CFR, 2002 Comp., p. 258; and the
state recipient, as applicable) must adopt a implementing regulations at 41 CFR chapter
written policy available to the public that 60; and (b) Section 3 of the Housing and
describes the relocation assistance that the Urban Development Act of 1968 (12 U.S.C.
grantee (or state recipient, as applicable) 1701u) and implementing regulations at 24
has elected to provide and that provides for CFR part 135.
65
[68 FR 56405, Sept. 30, 20031 participate in a decision making process or
gain inside information with regard to such
Sec. 570.608 Lead-based paint. activities, may obtain a financial interest
or benefit from a CDBG-assisted activity, or
The Lead-Based Paint Poisoning Prevention have a financial interest in any contract,
Act (42 U.S.C. 4821-4846), the Residential subcontract, or agreement with respect to a
Lead-Based Paint Hazard Reduction Act of CDBG-assisted activity, or with respect to
1992 (42 U.S.C. 4851-4856), and implementing the proceeds of the CDBG-assisted activity,
regulations at part 35, subparts A. B, J, K, either for themselves or those with whom
and R of this part apply to activities under they have business or immediate family ties,
this program. during their tenure or for one year
thereafter. For the UDAG program, the above
[64 FR 50226, Sept. 15, 1999] restrictions shall apply to all activities
that are a part of the UDAG project, and
Sec. 570.609 Use of debarred, suspended or shall cover any such financial interest or
ineligible contractors or subrecipients. benefit during, or at any time after, such
person's tenure.
The requirements set forth in 24 CFR part 5 (c) Persons covered. The conflict of
apply to this program. interest provisions of paragraph (b) of this
[61 FR 5209, Feb. 9, 1996] section apply to any person who is an
employee, agent, consultant, officer, or
Sec. 570.610 Uniform administrative elected official or appointed official of
requirements and cost principles. the recipient, or of any designated public
agencies, or of subrecipients that are
The recipient, its agencies or receiving funds under this part. (d)
instrumentalities, and subrecipients shall Exceptions. Upon the written request of the
comply with the policies, guidelines, and recipient, HUD may grant an exception to the
requirements of 24 CFR part 85 and OMB provisions of paragraph (b) of this section
Circulars A-87, A-110 (implemented at 24 CFR on a case-by-case basis when it has
part 84), A-122, A-133 (implemented at 24 satisfactorily met the threshold
CFR part 45), and [[Page 150]] A-128 2 requirements of (d) (1) of this section,
(implemented at 24 CFR part 44), as taking into account the cumulative effects
applicable, as they relate to the acceptance of paragraph (d) (2) of this section.
and use of Federal funds under this part. (1) Threshold requirements. HUD will
The applicable sections of 24 CFR parts 84 consider an exception only after the
and 85 are set forth at Sec. 570.502. \2\ recipient has provided the following
See footnote 1 at Sec. 570.200(a) (5) . documentation:
(i) A disclosure of the nature of the
[60 FR 56916, Nov. 9, 1995] conflict, accompanied by an assurance that
there has been public disclosure of the
Sec. 570.611 Conflict of interest. conflict and a description of how the public
disclosure was made; and
(a) Applicability. (ii) An opinion of the recipient's
(1) In the procurement of supplies, attorney that the interest for which the
equipment, construction, and services by exception is sought would not violate State
recipients and by subrecipients, the or local law.
conflict of interest provisions in 24 CFR (2) Factors to be considered for
85.36 and 24 CFR 84.42, respectively, shall exceptions. In determining whether to grant
apply. a requested exception after the recipient
(2) In all cases not governed by 24 CFR has satisfactorily met the requirements of
85.36 and 84.42, the provisions of this paragraph (d) (1) of this section, HUD shall
section shall apply. Such cases include the conclude that such an exception will serve
acquisition and disposition of real property to further the purposes of the Act and the
and the provision of assistance by the effective and efficient administration of
recipient or by its subrecipients to the recipient's program or project, taking
individuals, businesses, and other private into account the cumulative effect of the
entities under eligible activities that following factors, as applicable:
authorize such assistance (e.g., (i) Whether the exception would
rehabilitation, preservation, and other provide a significant cost benefit or an
improvements of private properties or essential degree of expertise to the program
facilities pursuant to Sec. 570.202; or or project that would otherwise not be
grants, loans, and other assistance to available;
businesses, individuals, and other private (ii) Whether an opportunity was
entities pursuant to Sec. 570.203, 570.204, provided for open competitive bidding or
570.455, or 570.703(i)) . negotiation;
(b) Conflicts prohibited. The general rule (iii) Whether the person affected is a
is that no persons described in paragraph member of a group or class of low- or
(c) of this section who exercise or have moderate-income persons intended to be the
exercised any functions or responsibilities beneficiaries of the assisted activity, and
with respect to CDBG activities assisted the exception will permit such person to
under this part, or who are in a position to
66
receive generally the same interests or activities meeting the requirements of Sec.
benefits as are being [[Page 151]] 570.208(a) that either:
made available or provided to the group or (1) Have income eligibility requirements
class; limiting the benefits exclusively to low and
(iv) Whether the affected person has moderate income persons; or
withdrawn from his or her functions or (2) Are targeted geographically or
responsibilities, or the decision making otherwise to primarily benefit low and
process with respect to the specific moderate income persons (excluding
assisted activity in question; activities serving the public at large, such
(v) Whether the interest or benefit as sewers, roads, sidewalks, and parks), and
was present before the affected person was that provide benefits to persons on the
in a position as described in paragraph (b) basis of an application.
of this section; (c) Limitation on coverage. The
(vi) Whether undue hardship will restrictions under this section apply only
result either to the recipient or the person to applicants for new benefits not being
affected when weighed against the public received by covered resident aliens as of
interest served by avoiding the prohibited the effective date of this section.
conflict; and (d) Compliance. Compliance can be
(vii) Any other relevant accomplished by obtaining certification as
considerations. provided in 24 CFR 49.20.
(e) Programs affected.
[60 FR 56916, Nov. 9, 1995] (1) The Community Development Block Grant
program for small cities, administered under
Sec. 570.612 Executive Order 12372. subpart F of part 570 of this title until
closeout of the recipient's grant.
(a) General. Executive Order 12372, (2) The Community Development Block Grant
Intergovernmental Review of Federal program for entitlement grants, administered
Programs, and the Department's implementing under subpart D of part 570 of this title.
regulations at 24 CFR part 52, allow each (3) The Community Development Block Grant
State to establish its own process for program for States, administered under
review and comment on proposed Federal subpart I of part 570 of this title until
financial assistance programs. closeout of the unit of general local
(b) Applicability. Executive Order 12372 government's grant by the State.
applies to the CDBG Entitlement program and (4) The Urban Development Action Grants
the UDAG program. The Executive Order program, administered under subpart G of
applies to all activities proposed to be part 570 of this title until closeout of the
assisted under UDAG, but it applies to the recipient's grant.
Entitlement program only where a grantee
proposes to use funds for the planning or [55 FR 18494, May 2, 1990]
construction (reconstruction or
installation) of water or sewer facilities. Sec. 570.614 Architectural Barriers Act and
Such facilities include storm sewers as well the Americans with Disabilities Act.
as all sanitary sewers, but do not include
water and sewer lines connecting a structure (a) The Architectural Barriers Act of 1968
to the lines in the public right-of-way or (42 U.S.C. 4151-4157) requires certain
easement. It is the responsibility of the Federal and Federally funded[[Page 152]]
grantee to initiate the Executive Order buildings and other facilities to be
review process if it proposes to use its designed, constructed, or altered in
CDBG or UDAG funds for activities subject to accordance with standards that insure
review. accessibility to, and use by, physically
handicapped people. A building or facility
Sec. 570.613 Eligibility restrictions for designed, constructed, or altered with funds
certain resident aliens. allocated or reallocated under this part
after December 11, 1995, and that meets the
(a) Restriction. Certain newly legalized definition of "residential structure'' as
aliens, as described in 24 CFR part 49, are defined in 24 CFR 40.2 or the definition of
not eligible to apply for benefits under "building'' as defined in 41 CFR 101-
covered activities funded by the programs 19.602(a) is subject to the requirements of
listed in paragraph (e) of this section. the Architectural Barriers Act of 1968 (42
"Benefits'' under this section means U.S.C. 4151-4157) and shall comply with the
financial assistance, public services, jobs Uniform Federal Accessibility Standards
and access to new or rehabilitated housing (appendix A to 24 CFR part 40 for
and other facilities made available under residential structures, and appendix A to 41
covered activities funded by programs listed CFR part 101-19, subpart 101-19.6, for
in paragraph (e) of this section. general type buildings) .
—Benefits— do not include relocation (b) The Americans with Disabilities Act (42
services and payments to which displacees U.S.C. 12131; 47 U.S.C. 155, 201, 218 and
are entitled by law. 225) (ADA) provides comprehensive civil
(b) Covered activities. "Covered rights to individuals with disabilities in
activities" under this section means 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
DATE: October 7, 2005
SUBJECT: City Council Meeting - October 13, 2005
ITEM: 10.H.2. Consider a resolution authorizing the Mayor to execute a
Community Development Block Grant Agreement with the
Round Rock Area Serving Center in the amount of $35,000.
Deuartment: Planning and Community Development
Staff Person: Mona Ryan
Justification:
This activity is approved in the 2004-2005 Community Development Action Plan that was
adopted by Resolution R-04-07-22-13C1 along with the Five Year Plan.
Funding:
Cost: $35,000
Source of funds: Community Development Block Grant
Outside Resources: N/A
Background Information:
The Serving Center applied for funds to purchase bricks that will be used to complete the
siding on their new facility. This contract allows the Serving Center 15 months to use
these funds due to construction involved. The contract period begins 10/1/04 and
expires 12/30/05.
Public Comment: N/A
EXECUTED
DOCUMENT
FOLLOWS
THE STATE OF TEXAS §
COUNTY OF WILLIAMSON §
COMMUNITY DEVELOPMENT BLOCK GRANT AGREEMENT
(B-04-MC-48-0514)
THIS AGREEMENT, entered into this )3 day of 2005 by and
between the City of Round Rock, a Texas home-rule municipality(herein called the "CITY") and
the Round Rock Area Serving Center(herein called the "CENTER").
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 CENTER 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 CENTER 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: the Serving Center Food Pantry
Project. Under this program, the CENTER agrees to provide these services for:
Persons Assisted
Total Unduplicated Persons 1000
Total Unduplicated Low to Moderate Income Persons 1000
1.2. Level of Accomplishments
In addition to normal administrative services required as part of this Agreement, the
CENTER agrees to provide the households/persons the following program services:
00091833
R-05-10-13-IOH�,
Activity #of Weeks Times# Equals Units of Service
Unduplicated
Persons
Food Pantry 52 1000 52000
1.3. Staffing
To undertake the activities described above and accomplish the levels of service
described above, the CENTER will allocate staff time in support of the program funded under
this Agreement as follows:
Title I Hrs. per Week #of Weeks = Estimated Hours
Executive Director 1 2 50 = 100
Timeframe: October 1, 2004 through December 30,2005
1.4. Performance Monitoring
The CITY will monitor the performance of the CENTER 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 CENTER 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 CENTER shall start on the 1st day of October, 2004 and end on the 301h
day of December,2005. The term of this Agreement and the provisions herein shall be extended
to cover any additional time period during which the CENTER 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 $35,000.00. 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
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 CENTER's financial management
system in accordance with the standards specified in Appendix A to this Agreement.
2
SECTION IV:
NOTICES
Notices made pursuant to this Agreement shall be directed to the following
representatives:
CITY: CENTER:
Mona Ryan, Round Rock Area Serving Center
Community Development Coordinator Lori Scott
City of Round Rock Executive Director
301 West Bagdad, Suite 140 PO Box 5006
Round Rock, Texas 78664 Round Rock TX 78680-5006
SECTION V:
SPECIAL CONDITIONS
The CENTER 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 CENTER 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 CENTER 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 CENTER is an independent contractor and shall not be
considered an employee of the CITY. CENTER shall not be within protection or 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 CENTER 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
CENTER,its officers,agents, servants,and employees ;provided,however,that the CENTER shall
3
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—Self Certification Form
b. Exhibit B—Client Data/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 K, Other 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 CENTER 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
CENTER 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 CENTER ineligible
for any further participation in CITY contracts, in addition to other remedies as provided by law.
Should the CENTER 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 CENTER under this Agreement.
The CENTER 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 CENTER and the CITY may
withhold any payments to the CENTER for the purpose as set out and until such time as the
exact amount of damages due the CITY from the CENTER is determined. Should the CITY
become aware of any activity by the CENTER which would jeopardize the CITY's position with
4
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 CENTER 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 CENTER 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 CENTER 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. Other records necessary to document compliance with Subpart K of 24
CFR 570.
B. Retention
The CENTER 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
5
The CENTER 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 CENTER 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 CENTER 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 CENTER'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 CENTER 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 CENTER'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 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 CENTER'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 CENTER within thirty(30) days after receipt by the
6
CENTER. Failure by the CENTER to comply with the above audit requirements will constitute
a violation of this contract and may result in the withholding of future payments. The CENTER
hereby agrees to have an annual agency audit conducted in accordance with current city policy
concerning the CENTER audits.
7.2. Financial Management
A. Budgets
A detailed contract budget is attached hereto and incorporated herein as Exhibit "C". The
CITY and the CENTER may agree to revise the budget from time to time in accordance with
existing city policies.
B. Program Income
The CENTER 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 CENTER shall comply with requirements set forth in 24 CFR
570.504. By way of further limitations, the CENTER 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.
C. Indirect Costs
If indirect costs are charged, the CENTER 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 CENTER funds available under this contract based on
information submitted by the CENTER 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 CENTER, 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
CENTER.
7
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 CENTER shall procure materials in accordance with the requirements of Attachment
O 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 CENTER 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.
SECTION VIII:
PERSONNEL & PARTICIPANT CONDITIONS
8.1. Civil Rights
A. Compliance
The CENTER 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 CENTER 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
CENTER 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.
8
The CENTER 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 CENTER 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 CENTER 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 CENTER 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 CENTER with any guidelines necessary for compliance
with that portion of the regulations in force during the term of this contract.
8.2. Conduct
A. Assignability
The CENTER shall not assign or transfer any interest in this Agreement without the prior
written consent of the CITY.
B. Hatch Act
The CENTER 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 CENTER 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 CENTER which are receiving
funds under the CDBG Entitlement program.
9
D. Subcontracts
1. Approvals
The CENTER 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 CENTER 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 CENTER 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
The CENTER 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 CENTER 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 570.2006).
F. Pending Litigation
The CENTER agrees to inform CITY about any litigation the CENTER is or becomes in
involved in.
G. Background Checks
The CENTER agrees to conduct a criminal background check on all employees working
directly with youth.
10
IN WITNESS WHEREOF,this Agreement is executed on this 13 day of
b , 2005.
Approved as to form:
- X:-nv- I z
Stephan V. Sheets, City Attordey
CITY: CENTER:
City of Rppnd goc Round Rock Area Serving Center
LL, Mayor Name:
Title: 4E XeeCC�i"1/'e Z)rec-�o r
ATTEST:
0&-�tv�- k. n0jZnVj-,
CHRISTINE R. MARTINEZ
City Secretary
11
Exhibit A
Self Certification Form
12
Self Declaration of Income October 2004
This activity is funded with federal Community Development Block Grant(CDBG)funds and is designed to primarily benefit
low to moderate-income households (LMI). This requires that the Applicant meet and certify the amount of their annual
household income in order to participate in the program. Applicant should not provide his/her signature unless he/she has read
and understands the income information they are certifying under penalty of law. At the discretion of the program,Applicant
may be required to provide documentation to support the self-declaration of income.
Applicant/Pr ram Partici ant Information
Applicant Name: SSN#:
Co-Applicant Name: SSN#:
Applicant Address:
Child's Full Name: Age
Female Head of Household:❑Yes ❑No
Ethnicity(check one):
❑White ❑Am Indian/Alaskan Native ❑Asian&White
❑Black/African-American ❑Native Hawaiian/Other Pacific Islander ❑Black African American&White
❑Asian ❑Am.Indian/Alaskan Native&White []Am Indian/Alaskan Native&Blk
❑Other Multi-Racial
Applicant Household Income Information
Estimate the annual income of the household by projecting the prevailing rate of income of each person at the time
assistance is provided for the individual,family,or household(as applicable). Estimated annual income shall
include income from all sources of household members as applicable. Income or asset enhancement derived from
the CDBG-assisted activity shall not be considered in calculating estimated annual income.
Farr i_ Slze 2 . 3 4......._ -4
Income
80%of median 39,800 45,500 51,200 56,900 61,450 66,000 70,550 75,100
50%of median 24,900 28,450 32,000 35,550 3-8,40-0- 41,250 44,100 46,950
30%of median 14,950 17,050 19,200 21,350 23,050 24,750 26,450 28,150
Number of persons living in household: Number of adults(18 yrs and older)living in household:
During the last 12 months,was your gross annual household income for all adults 18 yrs and older
❑ less than ❑ more than the amount listed above for your family size. (Please circle amount above)
Applicant Self Declaration Certification
Evidenced by the signature below, Applicant certifies his or her annual household income. Applicant certifies that the
information herein provided is true and accurate. Applicant further acknowledges that any inaccuracy and/or misrepresentation
provided herein may constitute fraud,which is punishable by law. Applicant certifies that all information provided herein and
any attachments hereto, are true and correct as of the date set forth opposite signature. Applicant acknowledges that Title 18,
Section 1001 of the U.S. Code states that any person that makes intentional or negligent statements to any department of the
United States Government is guilty of a felony that could result in but not be limited to a fine,imprisonment,or both.
Applicant Signature Date
Program Use Only-
Program/Activity Name:
nly:Program/ActivityName: HUD Income guidelines
used to certify client dated 1/28/04•HUD maximum income allowance based upon the size of household is$
Based upon client information provided,client household:(dam* ❑Does❑Does not meet income qualifications.
Reviewer's Signature: Date:
13
Exhibit B
Client/ Beneficiary Data
This report is prepared in digital format. The following exhibit is an example of the information
required to complete the client/beneficiary data.
14
Client I senefrcla.�Cy D"at
Unduplicated Clients'
A49enGy
Contact:
Activity.N+a __ .
�..��...��._ _.r ,� �...�_.� . �..� _w.�Wim., �� � �. _�.�._.
Phone:
2004.05,UndvOlostod ClIontm Q
Esl rated chants:
Race Categorise: W Whho(not Hispanic origin) WH Whho t Hispanic Al Am Indian or Alos'ho-Native
$ 81ack(not Hispanie origin) BH 44ck»,H14panic A3 Asian'or Pedk Islander
0 04*muiti-racial&NOT Hispanic OH Oftw muhi-racial 8,-""nic
.,.eX WWW
� .
r
i
i
i ¢
—,..,, ..,.. .�._.„. .o-.,.„.y
I
3 .............. .,..._
t g
... ..,... ...�.,. ......_..„_... i
3 _. .9_, ..... 3 ..^.,,,.,......-. .,.,,yam.,..,.,....
""-—— : 3
........,.....�,. .� ...... _..::, a �
.. _
..,. 11,11-11-
} -rn
__. i
Y
W . .....
...,...... «..�,....., W
fi
d _..._
.......................
t1
........... _._.- ..
�...... .......... -------
.., ..... � F � til
.............
..._.r _ .. ..
._
.......
...........
_. .._..............,. E _.
......... ......._ ..._.. tI I tt _� gx. t1 4 t1_.,.,.,._.D U 0......_._. . f
Program Yew 2004-05
Cly of Round Rock
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
Bricks for use in the construction of the food pantry $35,000.00
Total: $35,000.00
16
Appendix A
OMB Circular A-110
RRASC Bricks contract 04-05.DOC
subawards made by State and local
CIRCULAR A-110 governments to organizations covered by this
(REVISED 11/19/93, As Further Amended Circular. Federal agencies may apply the
9/30/99) provisions of this Circular to commercial
organizations, foreign governments,
organizations under the jurisdiction of
CIRCULAR NO. A-110 foreign governments, and international
Revised organizations.
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND 4. Definitions. Definitions of key terms
ESTABLISHMENTS used in this Circular are contained in
Section .2 in the Attachment.
SUBJECT: Uniform Administrative Requirements
for Grants and Agreements With 5. Required Action. The specific
Institutions of Higher Education, requirements and responsibilities of Federal
Hospitals, and Other Non-Profit agencies and institutions of higher
Organizations education, hospitals, and other non-profit
organizations are set forth in this
Circular. Federal agencies responsible for
1. Purpose. This Circular sets forth awarding and administering grants to and
standards for obtaining consistency and other agreements with organizations
uniformity among Federal agencies in the described in paragraph 1 shall adopt the
administration of grants to and agreements language in the Circular unless different
with institutions of higher education, provisions are required by Federal statute
hospitals, and other non-profit or are approved by OMB.
organizations.
6. CNB Responsibilities. OMB will review
2. Authority. Circular A-110 is issued under agency regulations and implementation of
the authority of 31 U.S.C. 503 (the Chief this Circular, and will provide
Financial Officers Act), 31 U.S.C. 1111, 41 interpretations of policy requirements and
U.S.C. 405 (the Office of Federal assistance to insure effective and efficient
Procurement Policy Act), Reorganization Plan implementation. Any exceptions will be
No. 2 of 1970, and E.O. 11541 ("Prescribing subject to approval by OMB, as indicated in
the Duties of the Office of Management and Section _.4 in the Attachment. Exceptions
Budget and the Domestic Policy Council in will only be made in particular cases where
the Executive Office of the President") . adequate justification is presented.
3. Policy. Except as provided herein, the 7. Information Contact. Further information
standards set forth in this Circular are concerning this Circular may be obtained by
applicable to all Federal agencies. If any contacting the Office of Federal Financial
statute specifically prescribes policies or Management, Office of Management and Budget,
specific requirements that differ from the Washington, DC 20503, telephone (202) 395-
standards provided herein, the provisions of 3993.
the statute shall govern.
S. Termination Review Date. This Circular
The provisions of the sections of this will have a policy review three years from
Circular shall be applied by Federal date of issuance.
agencies to recipients. Recipients shall
apply the provisions of this Circular to 9. Effective Date. The standards set forth
subrecipients performing substantive work in this Circular which affect Federal
under grants and agreements that are passed agencies will be effective 30 days after
through or awarded by the primary recipient, publication of the final revision in the
if such subrecipients are organizations Federal Register. Those standards which
described in paragraph 1. Federal agencies impose on grantees will be
adopted by agencies in codified regulations
This Circular does not apply to grants, within six months after publication in the
contracts, or other agreements between the Federal Register. Earlier implementation is
Federal Government and units of State or encouraged.
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
RRASC Bricks contract-04-05.DOC
Grants and Agreements with Institutions of .26 Non-Federal audits.
Higher Education,
Hospitals, and Other Non-Profit 27 Allowable costs.
Organizations -
SUBPART A - GENERAL _.28 Period of availability of funds.
Sec. -
29 Conditional exemptions.
.1 Purpose. Property Standards
.2 Definitions. -.30 Purpose of property standards.
.3 Effect on other issuances. -.31 Insurance coverage.
.4 Deviations. -.32 Real property.
.5 Subawards. -.33 Federally-owned and exempt property.
SUBPART B - PRE-AFARD REQUIRffiHENTS -.34 Equipment.
.10 Purpose. -.35 Supplies and other expendable
property.
11 Pre-award policies.
- .36 intangible property.
12 Forms for applying for Federal .37 Property trust relationship.
assistance.
13 Debarment and suspension. Procurement Standards
.14 Special award conditions. -.40 Purpose of procurement standards.
.15 Metric system of measurement. -.41 Recipient responsibilities.
_.16 Resource Conservation and Recovery -.42 Codes of conduct.
Act.
.43 Competition.
.17 Certifications and representations.
.44 Procurement procedures.
SUBPART C - POST-AiARD REQUIREMENTS
_.45 Cost and price analysis.
Financial and Program Management
.46 Procurement records.
_.20 Purpose of financial and program
management. .47 Contract administration.
-.21 Standards for financial management .48 Contract provisions.
systems.
.22 Payment. -
Reports and Records
.23 Cost sharing or matching. 50 Purpose of reports and records.
-
-.51 Monitoring and reporting program
_.24 Program income. performance.
_.25 Revision of budget and program plans. .52 Financial reporting.
19
—.53 Retention and access requirements for owed to the recipient for which no
records. current services or performance is
required by the recipient.
Termination and Enforcement (c) Acquisition cost of equipment
means the net invoice price of the
equipment, including the cost of
_.60 Purpose of termination and modifications, attachments,
enforcement. accessories, or auxiliary apparatus
necessary to make the property usable
for the purpose for which it was
_.61 Termination. acquired. Other charges, such as the
cost of installation, transportation,
_.62 Enforcement. taxes, duty or protective in-transit
insurance, shall be included or
SUBPART D - ASTER-TEE-WAARD REQUIREMENTS excluded from the unit acquisition
cost in accordance with the
recipient's regular accounting
.70 Purpose. practices.
(d) Advance means a payment made by
Treasury check or other appropriate
_.71 Closeout procedures. payment mechanism to a recipient upon
its request either before outlays are
_.72 Subsequent adjustments and continuing made by the recipient or through the
responsibilities. use of predetermined payment
schedules.
(e) Award means financial assistance
_.73 Collection of amounts due that provides support or stimulation
to accomplish a public purpose.
APPENDIX A - CONTRACT PROVISICKS 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:
SUBPART A - General technical assistance, which provides
services instead of money; other
assistance in the form of loans, loan
_.1 Purpose. This Circular establishes guarantees, interest subsidies, or
uniform administrative requirements for insurance; direct payments of any
Federal grants and agreements awarded to kind to individuals; and, contracts
institutions of higher education, hospitals, which are required to be entered into
and other non-profit organizations. Federal and administered under procurement
awarding agencies shall not impose laws and regulations.
additional or inconsistent requirements, (f) Cash contributions means the
except as provided in Sections —.4, and recipient's cash outlay, including
_.14 or unless specifically required by the outlay of money contributed to
Federal statute or executive order. Non- the recipient by third parties.
profit organizations that implement Federal (g) Closeout means the process by
programs for the States are also subject to which a Federal awarding agency
State requirements. determines that all applicable
administrative actions and all
required work of the award have been
_.2 Definitions. completed by the recipient and
Federal awarding agency.
(a) Accrued expenditures means the (h) Contract means a procurement
charges incurred by the recipient contract under an award or subaward,
during a given period requiring the and a procurement subcontract under a
provision of funds for: (1) goods and recipient's or subrecipient's
other tangible property received; (2) contract.
services performed by employees, (i) Cost sharing or matching means
contractors, subrecipients, and other that portion of project or program
payees; and, (3) other amounts costs not borne by the Federal
becoming owed under programs for Government.
which no current services or (j) Date of completion means the date
performance is required. on which all work under an award is
(b) Accrued income means the sum of: completed or the date on the award
(1) earnings during a given period document, or any supplement or
from (i) services performed by the amendment thereto, on which Federal
recipient, and (ii) goods and other sponsorship ends.
tangible property delivered to (k) Disallowed costs means those
purchasers, and (2) amounts becoming charges to an award that the Federal
awarding agency determines to be
20
unallowable, in accordance with the recipient during the same or a future
applicable Federal cost principles or period.
other terms and conditions contained (u) Outlays or expenditures means
in the award. charges made to the project or
(1) Equipment means tangible program. They may be reported on a
nonexpendable personal property cash or accrual basis. For reports
including exempt property charged prepared on a cash basis, outlays are
directly to the award having a useful the sum of cash disbursements for
life of more than one year and an direct charges for goods and
acquisition cost of $5000 or more per services, the amount of indirect
unit. However, consistent with expense charged, the value of third
recipient policy, lower limits may be party in-kind contributions applied
established. and the amount of cash advances and
(m) Excess property means property payments made to subrecipients. For
under the control of any Federal reports prepared on an accrual basis,
awarding agency that, as determined outlays are the sum of cash
by the head thereof, is no longer disbursements for direct charges for
required for its needs or the goods and services, the amount of
discharge of its responsibilities. indirect expense incurred, the value
(n) Exempt property means tangible of in-kind contributions applied, and
personal property acquired in whole the net increase (or decrease) in the
or in part with Federal funds, where amounts owed by the recipient for
the Federal awarding agency has goods and other property received,
statutory authority to vest title in for services performed by employees,
the recipient without further contractors, subrecipients and other
obligation to the Federal Government. payees and other amounts becoming
An example of exempt property owed under programs for which no
authority is contained in the Federal current services or performance are
Grant and Cooperative Agreement Act required.
(31 U.S.C. 6306), for property (v) Personal property means property
acquired under an award to conduct of any kind except real property. It
basic or applied research by a non- may be tangible, having physical
profit institution of higher existence, or intangible, having no
education or non-profit organization physical existence, such as
whose principal purpose is conducting copyrights, patents, or securities.
scientific research. (w) Prior approval means written
(o) Federal awarding agency means the approval by an authorized official
Federal agency that provides an award evidencing prior consent.
to the recipient. (x) Program income means gross income
(p) Federal funds authorized means earned by the recipient that is
the total amount of Federal funds directly generated by a supported
obligated by the Federal Government activity or earned as a result of the
for use by the recipient. This amount award (see exclusions in paragraphs
may include any authorized carryover _.24 (e) and (h)) . Program income
of unobligated funds from prior includes, but is not limited to,
funding periods when permitted by income from fees for services
agency regulations or agency performed, the use or rental of real
implementing instructions. or personal property acquired under
(q) Federal share of real property, federally-funded projects, the sale
equipment, or supplies means that of commodities or items fabricated
percentage of the property's under an award, license fees and
acquisition costs and any improvement royalties on patents and copyrights,
expenditures paid with Federal funds. and interest on loans made with award
(r) Funding period means the period funds. Interest earned on advances of
of time when Federal funding is Federal funds is not program income.
available for obligation by the Except as otherwise provided in
recipient. Federal awarding agency regulations
(s) Intangible property and debt or the terms and conditions of the
instruments means, but is not limited award, program income does not
to, trademarks, copyrights, patents include the receipt of principal on
and patent applications and such loans, rebates, credits, discounts,
property as loans, notes and other etc., or interest earned on any of
debt instruments, lease agreements, them.
stock and other instruments of (y) Project costs means all allowable
property ownership, whether costs, as set forth in the applicable
considered tangible or intangible. Federal cost principles, incurred by
(t) Obligations means the amounts of a recipient and the value of the
orders placed, contracts and grants contributions made by third parties
awarded, services received and in accomplishing the objectives of
similar transactions during a given the award during the project period.
period that require payment by the (z) Project period means the period
21
established in the award document financial assistance in the form of
during which Federal sponsorship money, or property in lieu of money,
begins and ends. made under an award by a recipient to
(aa) Property means, unless otherwise an eligible subrecipient or by a
stated, real property, equipment, subrecipient to a lower tier
intangible property and debt subrecipient. The term includes
instruments. financial assistance when provided by
(bb) Real property means land, any legal agreement, even if the
including land improvements, agreement is called a contract, but
structures and appurtenances thereto, does not include procurement of goods
but excludes movable machinery and and services nor does it include any
equipment. form of assistance which is excluded
(cc) Recipient means an organization from the definition of "award" in
receiving financial assistance paragraph (e) .
directly from Federal awarding (gg) Subrecipient means the legal
agencies to carry out a project or entity to which a subaward is made
program. The term includes public and and which is accountable to the
private institutions of higher recipient for the use of the funds
education, public and private provided. The term may include
hospitals, and other quasi-public and foreign or international
private non-profit organizations such organizations (such as agencies of
as, but not limited to, community the United Nations) at the discretion
action agencies, research institutes, of the Federal awarding agency.
educational associations, and health (hh) Supplies means all personal
centers. The term may include property excluding equipment,
commercial organizations, foreign or intangible property, and debt
international organizations (such as instruments as defined in this
agencies of the United Nations) which section, and inventions of a
are recipients, subrecipients, or contractor conceived or first
contractors or subcontractors of actually reduced to practice in the
recipients or subrecipients at the performance of work under a funding
discretion of the Federal awarding agreement ("subject inventions"), as
agency. The term does not include defined in 37 CFR part 401, "Rights
government-owned contractor-operated to Inventions Made by Nonprofit
facilities or research centers Organizations and Small Business
providing continued support for Firms Under Government Grants,
mission-oriented, large-scale Contracts, and Cooperative
programs that are government-owned or Agreements."
controlled, or are designated as (ii) Suspension means an action by a
federally-funded research and Federal awarding agency that
development centers. temporarily withdraws Federal
(dd) Research and development means sponsorship under an award, pending
all research activities, both basic corrective action by the recipient or
and applied, and all development pending a decision to terminate the
activities that are supported at award by the Federal awarding agency.
universities, colleges, and other Suspension of an award is a separate
non-profit institutions. "Research" action from suspension under Federal
is defined as a systematic study agency regulations implementing E.O.s
directed toward fuller scientific 12549 and 12689, "Debarment and
knowledge or understanding of the Suspension."
subject studied. "Development" is the (jj) Termination means the
systematic use of knowledge and cancellation of Federal sponsorship,
understanding gained from research in whole or in part, under an
directed toward the production of agreement at any time prior to the
useful materials, devices, systems, date of completion.
or methods, including design and (kk) Third party in-kind
development of prototypes and contributions means the value of non-
processes. The term research also cash contributions provided by non-
includes activities involving the Federal third parties. Third party
training of individuals in research in-kind contributions may be in the
techniques where such activities form of real property, equipment,
utilize the same facilities as other supplies and other expendable
research and development activities property, and the value of goods and
and where such activities are not services directly benefiting and
included in the instruction function. specifically identifiable to the
(ee) Small awards means a grant or project or program.
cooperative agreement not exceeding (11) Unliquidated obligations, for
the small purchase threshold fixed at financial reports prepared on a cash
41 U.S.C. 403(11) (currently basis, means the amount of
$25,000) . obligations incurred by the recipient
(ff) Subaward means an award of that have not been paid. For reports
22
prepared on an accrued expenditure subject to the provisions of
basis, they represent the amount of regulations implementing the grants
obligations incurred by the recipient management common rule,"Uniform
for which an outlay has not been Administrative Requirements for
recorded. Grants and Cooperative Agreements to
(mm) Unobligated balance means the State and Local Governments,"
portion of the funds authorized by published at 53 FR 8034 (3/11/88) .
the Federal awarding agency that has
not been obligated by the recipient SUBPART B - Pro-Award Requirements
and is determined by deducting the
cumulative obligations from the
cumulative funds authorized. _.10 Purpose. Sections _.11
(nn) Unrecovered indirect coat means through _.17 prescribes forms and
the difference between the amount instructions and other pre-award
awarded and the amount which could matters to be used in applying for
have been awarded under the Federal awards.
recipient's approved negotiated
indirect cost rate.
(oo) Working capital advance means a _.11 Pre-award policies.
procedure where by funds are advanced
to the recipient to cover its (a) Use of Grants and Cooperative
estimated disbursement needs for a Agreements, and Contracts. In each
given initial period. instance, the Federal awarding agency
shall decide on the appropriate award
_.3 Effect on other issuances. For instrument (i.e., grant, cooperative
awards subject to this Circular, all agreement, or contract) . The Federal
administrative requirements of Grant and Cooperative Agreement Act
codified program regulations, program (31 U.S.C. 6301-08) governs the use
manuals, handbooks and other of grants, cooperative agreements and
nonregulatory materials which are contracts. A grant or cooperative
inconsistent with the requirements of agreement shall be used only when the
this Circular shall be superseded, principal purpose of a transaction is
except to the extent they are to accomplish a public purpose of
required by statute, or authorized in support or stimulation authorized by
accordance with the deviations Federal statute. The statutory
provision in Section .4. criterion for choosing between grants
and cooperative agreements is that
for the latter, "substantial
_.4 Deviations. The Office of involvement is expected between the
Management and Budget (OMB) may grant executive agency and the State, local
exceptions for classes of grants or government, or other recipient when
recipients subject to the carrying out the activity
requirements of this Circular when contemplated in the agreement."
exceptions are not prohibited by Contracts shall be used when the
statute. However, in the interest of principal purpose is acquisition of
maximum uniformity, exceptions from property or services for the direct
the requirements of this Circular benefit or use of the Federal
shall be permitted only in unusual Government.
circumstances. Federal awarding (b) Public Notice and Priority
agencies may apply more restrictive Setting. Federal awarding agencies
requirements to a class of recipients shall notify the public of its
when approved by OMB. Federal intended funding priorities for
awarding agencies may apply less discretionary grant programs, unless
restrictive requirements when funding priorities are established by
awarding small awards, except for Federal statute.
those requirements which are
statutory. Exceptions on a case-by-
case basis may also be made by 12 Forms for applying for Federal
Federal awarding agencies. assistance.
_.5 Subawards. Unless sections of (a) Federal awarding agencies shall
this Circular specifically exclude comply with the applicable report
subrecipients from coverage, the clearance requirements of 5 CFR part
provisions of this Circular shall be 1320, "Controlling Paperwork Burdens
applied to subrecipients performing on the Public," with regard to all
work under awards if such forms used by the Federal awarding
subrecipients are institutions of agency in place of or as a supplement
higher education, hospitals or other to the Standard Form 424 (SF-424)
non-profit organizations. State and series.
local government subrecipients are (b) Applicants shall use the SF-424
23
series or those forms and by the Omnibus Trade and
instructions prescribed by the Competitiveness Act (15 U.S.C. 205)
Federal awarding agency. declares that the metric system is
(c) For Federal programs covered by the preferred measurement system for
E.O. 12372, "Intergovernmental Review U.S. trade and commerce. The Act
of Federal Programs," the applicant requires each Federal agency to
shall complete the appropriate establish a date or dates in
sections of the SF-424 (Application consultation with the Secretary of
for Federal Assistance) indicating Commerce, when the metric system of
whether the application was subject measurement will be used in the
to review by the State Single Point agency's procurements, grants, and
of Contact (SPOC) . The name and other business-related activities.
address of the SPOC for a particular Metric implementation may take longer
State can be obtained from the where the use of the system is
Federal awarding agency or the initially impractical or likely to
Catalog of Federal Domestic cause significant inefficiencies in
Assistance. The SPOC shall advise the the accomplishment of federally-
applicant whether the program for funded activities. Federal awarding
which application is made has been agencies shall follow the provisions
selected by that State for review. of E.O. 12770, "Metric Usage in
(d) Federal awarding agencies that do Federal Government Programs."
not use the SF-424 form should
indicate whether the application is _.16 Resource Conservation and
subject to review by the State under Recovery Act (RCRA) (Pub. L. 94-580
E.O. 12372. codified at 42 U.S.C. 6962) . Under
the Act, any State agency or agency
_.13 Debarment and suspension. of a political subdivision of a State
Federal awarding agencies and which is using appropriated Federal
recipients shall comply with the funds must comply with Section 6002.
nonprocurement debarment and Section 6002 requires that preference
suspension common rule implementing be given in procurement programs to
E.O.s 12549 and 12689, "Debarment and the purchase of specific products
Suspension." This common rule containing recycled materials
restricts subawards and contracts identified in guidelines developed by
with certain parties that are the Environmental Protection Agency
debarred, suspended or otherwise (EPA) (40 CFR parts 247-254) .
excluded from or ineligible for Accordingly, State and local
participation in Federal assistance institutions of higher education,
programs or activities. hospitals, and non-profit
organizations that receive direct
_.14 Special award conditions. If Federal awards or other Federal funds
shall give preference in their
an applicant or recipient: (a) has a procurement programs funded with
history of poor performance, (b) is
not financially stable, (c) has a Federal funds to the purchase of
management system that does not meet recycled products pursuant to the EPA
the standards prescribed in this guidelines.
Circular, (d) has not conformed to
the terms and conditions of a _.17 Certifications and
previous award, or (e) is not representations. Unless prohibited by
otherwise responsible, Federal statute or codified regulation, each
awarding agencies may impose Federal awarding agency is authorized
additional requirements as needed, and encouraged to allow recipients to
provided that such applicant or submit certifications and
recipient is notified in writing as representations required by statute,
to: the nature of the additional executive order, or regulation on an
requirements, the reason why the annual basis, if the recipients have
additional requirements are being ongoing and continuing relationships
imposed, the nature of the corrective with the agency. Annual
action needed, the time allowed for certifications and representations
completing the corrective actions, shall be signed by responsible
and the method for requesting officials with the authority to
reconsideration of the additional ensure recipients' compliance with
requirements imposed. Any special the pertinent requirements.
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
SUBPART C - Post-Award Requirements for program purposes by the
recipient. To the extent that the
Financial and Program Management provisions of the Cash Management
Improvement Act (CMIA) (Pub. L. 101-
453) govern, payment methods of State
_.20 Purpose of financial and agencies, instrumentalities, and
program management. Sections _.21 fiscal agents shall be consistent
through _.28 prescribe standards with CMIA Treasury-State Agreements
for financial management systems, or the CMIA default procedures
methods for making payments and rules codified at 31 CFR part 205,
for: satisfying cost sharing and "Withdrawal of Cash from the Treasury
matching requirements, accounting for for Advances under Federal Grant and
program income, budget revision Other Programs."
approvals, making audits, determining (6) Written procedures for
allowability of cost, and determining the reasonableness,
establishing fund availability. allocability and allowability of
costs in accordance with the
provisions of the applicable Federal
_.21 Standards for financial cost principles and the terms and
management systems. conditions of the award.
(7) Accounting records including cost
(a) Federal awarding agencies shall accounting records that are supported
require recipients to relate by source documentation.
financial data to performance data (c) Where the Federal Government
and develop unit cost information guarantees or insures the repayment
whenever practical. of money borrowed by the recipient,
(b) Recipients' financial management the Federal awarding agency, at its
systems shall provide for the discretion, may require adequate
following. bonding and insurance if the bonding
(1) Accurate, current and complete and insurance requirements of the
disclosure of the financial results recipient are not deemed adequate to
of each federally-sponsored project protect the interest of the Federal
or program in accordance with the Government.
reporting requirements set forth in (d) The Federal awarding agency may
Section _.52. If a Federal awarding require adequate fidelity bond
agency requires reporting on an coverage where the recipient lacks
accrual basis from a recipient that sufficient coverage to protect the
maintains its records on other than Federal Government's interest.
an accrual basis, the recipient shall (e) Where bonds are required in the
not be required to establish an situations described above, the bonds
accrual accounting system. These shall be obtained from companies
recipients may develop such accrual holding certificates of authority as
data for its reports on the basis of acceptable sureties, as prescribed in
an analysis of the documentation on 31 CFR part 223, "Surety Companies
hand. Doing Business with the United
(2) Records that identify adequately States."
the source and application of funds
for federally-sponsored activities. .22 payment.
These records shall contain —
information pertaining to Federal
awards, authorizations, obligations, (a) Payment methods shall minimize
unobligated balances, assets, the time elapsing between the
outlays, income and interest. transfer of funds from the United
(3) Effective control over and States Treasury and the issuance or
accountability for all funds, redemption of checks, warrants, or
property and other assets. Recipients payment by other means by the
shall adequately safeguard all such recipients. Payment methods of State
assets and assure they are used agencies or instrumentalities shall
solely for authorized purposes. be consistent with Treasury-State
(4) Comparison of outlays with budget CMIA agreements or default procedures
amounts for each award. Whenever codified at 31 CFR part 205.
appropriate, financial information (b) Recipients are to be paid in
should be related to performance and advance, provided they maintain or
unit cost data. demonstrate the willingness to
(5) Written procedures to minimize maintain: (1) written procedures that
the time elapsing between the minimize the time elapsing between
transfer of funds to the recipient the transfer of funds and
from the U.S. Treasury and the disbursement by the recipient, and
issuance or redemption of checks, (2) financial management systems that
warrants or payments by other means meet the standards for fund control
25
and accountability as established in Federal awarding agency may provide
Section —.21. Cash advances to a cash on a working capital advance
recipient organization shall be basis. Under this procedure, the
limited to the minimum amounts needed Federal awarding agency shall advance
and be timed to be in accordance with cash to the recipient to cover its
the actual, immediate cash estimated disbursement needs for an
requirements of the recipient initial period generally geared to
organization in carrying out the the awardee's disbursing cycle.
purpose of the approved program or Thereafter, the Federal awarding
project. The timing and amount of agency shall reimburse the recipient
cash advances shall be as close as is for its actual cash disbursements.
administratively feasible to the The working capital advance method of
actual disbursements by the recipient payment shall not be used for
organization for direct program or recipients unwilling or unable to
project costs and the proportionate provide timely advances to their
share of any allowable indirect subrecipient to meet the
costs. subrecipient's actual cash
(c) Whenever possible, advances shall disbursements.
be consolidated to cover anticipated (g) To the extent available,
cash needs for all awards made by the recipients shall disburse funds
Federal awarding agency to the available from repayments to and
recipient. interest earned on a revolving fund,
(1) Advance payment mechanisms program income, rebates, refunds,
include, but are not limited to, contract settlements, audit
Treasury check and electronic funds recoveries and interest earned on
transfer. such funds before requesting
(2) Advance payment mechanisms are additional cash payments.
subject to 31 CFR part 205. (h) Unless otherwise required by
(3) Recipients shall be authorized to statute, Federal awarding agencies
submit requests for advances and shall not withhold payments for
reimbursements at least monthly when proper charges made by recipients at
electronic fund transfers are not any time during the project period
used. unless (1) or (2) apply.
(d) Requests for Treasury check (1) A recipient has failed to comply
advance payment shall be submitted on with the project objectives, the
SF-270, "Request for Advance or terms and conditions of the award, or
Reimbursement," or other forms as may Federal reporting requirements.
be authorized by OMB. This form is (2) The recipient or subrecipient is
not to be used when Treasury check delinquent in a debt to the United
advance payments are made to the States as defined in OMB Circular A-
recipient automatically through the 129, "Managing Federal Credit
use of a predetermined payment Programs." Under such conditions, the
schedule or if precluded by special Federal awarding agency may, upon
Federal awarding agency instructions reasonable notice, inform the
for electronic funds transfer. recipient that payments shall not be
(e) Reimbursement is the preferred made for obligations incurred after a
method when the requirements in specified date until the conditions
paragraph (b) cannot be met. Federal are corrected or the indebtedness to
awarding agencies may also use this the Federal Government is liquidated.
method on any construction agreement, (i) Standards governing the use of
or if the major portion of the banks and other institutions as
construction project is accomplished depositories of funds advanced under
through private market financing or awards are as follows.
Federal loans, and the Federal (1) Except for situations described
assistance constitutes a minor in paragraph (i) (2), Federal awarding
portion of the project. agencies shall not require separate
(1) When the reimbursement method is depository accounts for funds
used, the Federal awarding agency provided to a recipient or establish
shall make payment within 30 days any eligibility requirements for
after receipt of the billing, unless depositories for funds provided to a
the billing is improper. recipient. However, recipients must
(2) Recipients shall be authorized to be able to account for the receipt,
submit request for reimbursement at obligation and expenditure of funds.
least monthly when electronic funds (2) Advances of Federal funds shall
transfers are not used. be deposited and maintained in
(f) If a recipient cannot meet the insured accounts whenever possible.
criteria for advance payments and the (j) Consistent with the national goal
Federal awarding agency has of expanding the opportunities for
determined that reimbursement is not women-owned and minority-owned
feasible because the recipient lacks business enterprises, recipients
sufficient working capital, the shall be encouraged to use women-
26
owned and minority-owned banks (a that it provides adequate information
bank which is owned at least 50 to meet Federal needs.
percent by women or minority group
members) . .23 Cost sharing or matching.
(k) Recipients shall maintain —
advances of Federal funds in interest
bearing accounts, unless (1), (2) or (a) All contributions, including cash
(3) apply. and third party in-kind, shall be
(1) The recipient receives less than accepted as part of the recipient's
$120,000 in Federal awards per year. cost sharing or matching when such
(2) The best reasonably available contributions meet all of the
interest bearing account would not be following criteria.
expected to earn interest in excess (1) Are verifiable from the
of $250 per year on Federal cash recipient's records.
balances. (2) Are not included as contributions
(3) The depository would require an for any other federally-assisted
average or minimum balance so high project or program.
that it would not be feasible within (3) Are necessary and reasonable for
the expected Federal and non-Federal proper and efficient accomplishment
cash resources. of project or program objectives.
(1) For those entities where CMIA and (4) Are allowable under the
its implementing regulations do not applicable cost principles.
apply, interest earned on Federal (5) Are not paid by the Federal
advances deposited in interest Government under another award,
bearing accounts shall be remitted except where authorized by Federal
annually to Department of Health and statute to be used for cost sharing
Human Services, Payment Management or matching.
System, Rockville, MD 20852. Interest (6) Are provided for in the approved
amounts up to $250 per year may be budget when required by the Federal
retained by the recipient for awarding agency.
administrative expense. State (7) Conform to other provisions of
universities and hospitals shall this Circular, as applicable.
comply with CMIA, as it pertains to (b) Unrecovered indirect costs may be
interest. If an entity subject to included as part of cost sharing or
CMIA uses its own funds to pay pre- matching only with the prior approval
award costs for discretionary awards of the Federal awarding agency.
without prior written approval from (c) Values for recipient
the Federal awarding agency, it contributions of services and
waives its right to recover the property shall be established in
interest under CMIA. accordance with the applicable cost
(m) Except as noted elsewhere in this principles. If a Federal awarding
Circular, only the following forms agency authorizes recipients to
shall be authorized for the donate buildings or land for
recipients in requesting advances and construction/facilities acquisition
reimbursements. Federal agencies projects or long-term use, the value
shall not require more than an of the donated property for cost
original and two copies of these sharing or matching shall be the
forms. lesser of (1) or (2) .
(1) SF-270, Request for Advance or (1) The certified value of the
Reimbursement. Each Federal awarding remaining life of the property
agency shall adopt the SF-270 as a recorded in the recipient's y
standard form for all nonconstruction accounting records at the time of
programs when electronic funds donation.
transfer or predetermined advance (2) The current fair market value.
methods are not used. Federal However, when there is sufficient
awarding agencies, however, have the justification, the Federal awarding
option of using this form for agency may approve the use of the
construction programs in lieu of the current fair market value of the
SF-271, "Outlay Report and Request donated property, even if it exceeds
for Reimbursement for Construction the certified value at the time of
Programs." donation to the project.
(2) SF-271, Outlay Report and Request (d) Volunteer services furnished by
for Reimbursement for Construction professional and technical personnel,
Programs. Each Federal awarding consultants, and other skilled and
agency shall adopt the SF-271 as the unskilled labor may be counted as
standard form to be used for cost sharing or matching if the
requesting reimbursement for service is an integral and necessary
construction programs. However, a part of an approved project or
Federal awarding agency may program. Rates for volunteer services
substitute the SF-270 when the shall be consistent with those paid
Federal awarding agency determines
27
for similar work in the recipient's (2) The value of donated equipment
organization. In those instances in shall not exceed the fair market
which the required skills are not value of equipment of the same age
found in the recipient organization, and condition at the time of
rates shall be consistent with those donation.
paid for similar work in the labor (3) The value of donated space shall
market in which the recipient not exceed the fair rental value of
competes for the kind of services comparable space as established by an
involved. In either case, paid fringe independent appraisal of comparable
benefits that are reasonable, space and facilities in a privately-
allowable, and allocable may be owned building in the same locality.
included in the valuation. (4) The value of loaned equipment
(e) When an employer other than the shall not exceed its fair rental
recipient furnishes the services of value.
an employee, these services shall be (5) The following requirements
valued at the employee's regular rate pertain to the recipient's supporting
of pay (plus an amount of fringe records for in-kind contributions
benefits that are reasonable, from third parties.
allowable, and allocable, but (i) Volunteer services shall be
exclusive of overhead costs), documented and, to the extent
provided these services are in the feasible, supported by the same
same skill for which the employee is methods used by the recipient for its
normally paid. own employees.
(f) Donated supplies may include such (ii) The basis for determining the
items as expendable equipment, office valuation for personal service,
supplies, laboratory supplies or material, equipment, buildings and
workshop and classroom supplies. land shall be documented.
Value assessed to donated supplies
included in the cost sharing or 24 Program income.
matching share shall be reasonable —
and shall not exceed the fair market
value of the property at the time of (a) Federal awarding agencies shall
the donation. apply the standards set forth in this
(g) The method used for determining section in requiring recipient
cost sharing or matching for donated organizations to account for program
equipment, buildings and land for income related to projects financed
which title passes to the recipient in whole or in part with Federal
may differ according to the purpose funds.
of the award, if (1) or (2) apply. (b) Except as provided in paragraph
(1) If the purpose of the award is to (h) below, program income earned
assist the recipient in the during the project period shall be
acquisition of equipment, buildings retained by the recipient and, in
or land, the total value of the accordance with Federal awarding
donated property may be claimed as agency regulations or the terms and
cost sharing or matching. conditions of the award, shall be
(2) If the purpose of the award is to used in one or more of the ways
support activities that require the listed in the following.
use of equipment, buildings or land, (1) Added to funds committed to the
normally only depreciation or use project by the Federal awarding
charges for equipment and buildings agency and recipient and used to
may be made. However, the full value further eligible project or program
of equipment or other capital assets objectives.
and fair rental charges for land may (2) Used to finance the non-Federal
be allowed, provided that the Federal share of the project or program.
awarding agency has approved the (3) Deducted from the total project
charges. or program allowable cost in
(h) The value of donated property determining the net allowable costs
shall be determined in accordance on which the Federal share of costs
with the usual accounting policies of is based.
the recipient, with the following (c) When an agency authorizes the
qualifications. disposition of program income as
(1) The value of donated land and described in paragraphs (b) (1) or
buildings shall not exceed its fair (b) (2), program income in excess of
market value at the time of donation any limits stipulated shall be used
to the recipient as established by an in accordance with paragraph (b) (3) .
independent appraiser (e.g., (d) In the event that the Federal
certified real property appraiser or awarding agency does not specify in
General Services Administration its regulations or the terms and
representative) and certified by a conditions of the award how program
responsible official of the income is to be used, paragraph
recipient.
28
(b) (3) shall apply automatically to agencies for one or more of the
all projects or programs except following program or budget related
research. For awards that support reasons.
research, paragraph (b) (1) shall (1) Change in the scope or the
apply automatically unless the objective of the project or program
awarding agency indicates in the (even if there is no associated
terms and conditions another budget revision requiring prior
alternative on the award or the written approval) .
recipient is subject to special award (2) Change in a key person specified
conditions, as indicated in Section in the application or award document.
_.14. (3) The absence for more than three
(e) Unless Federal awarding agency months, or a 25 percent reduction in
regulations or the terms and time devoted to the project, by the
conditions of the award provide approved project director or
otherwise, recipients shall have no principal investigator.
obligation to the Federal Government (4) The need for additional Federal
regarding program income earned after funding.
the end of the project period. (5) The transfer of amounts budgeted
(f) If authorized by Federal awarding for indirect costs to absorb
agency regulations or the terms and increases in direct costs, or vice
conditions of the award, costs versa, if approval is required by the
incident to the generation of program Federal awarding agency.
income may be deducted from gross (6) The inclusion, unless waived by
income to determine program income, the Federal awarding agency, of costs
provided these costs have not been that require prior approval in
charged to the award. accordance with OMB Circular A-21,
(g) Proceeds from the sale of "Cost Principles for Educational
property shall be handled in Institutions," OMB Circular A-122,
accordance with the requirements of "Cost Principles for Non-Profit
the Property Standards (See Sections Organizations," or 45 CFR part 74
_.30 through _.37) . Appendix E, "Principles for
(h) Unless Federal awarding agency Determining Costs Applicable to
regulations or the terms and Research and Development under Grants
condition of the award provide and Contracts with Hospitals," or 48
otherwise, recipients shall have no CFR part 31, "Contract Cost
obligation to the Federal Government Principles and Procedures," as
with respect to program income earned applicable.
from license fees and royalties for (7) The transfer of funds allotted
copyrighted material, patents, patent for training allowances (direct
applications, trademarks, and payment to trainees) to other
inventions produced under an award. categories of expense.
However, Patent and Trademark (8) Unless described in the
Amendments (35 U.S.C. 18) apply to application and funded in the
inventions made under an approved awards, the subaward,
experimental, developmental, or transfer or contracting out of any
research award. work under an award. This provision
does not apply to the purchase of
_.25 _Revision of budget and program supplies, material, equipment or
Tans. general support services.
(d) No other prior approval
requirements for specific items may
(a) The budget plan is the financial be imposed unless a deviation has
expression of the project or program been approved by OMB.
as approved during the award process. (e) Except for requirements listed in
It may include either the Federal and paragraphs (c) (1) and (c) (4) of this
non-Federal share, or only the section, Federal awarding agencies
Federal share, depending upon Federal are authorized, at their option, to
awarding agency requirements. It waive cost-related and administrative
shall be related to performance for prior written approvals required by
program evaluation purposes whenever this Circular and OMB Circulars A-21
appropriate. and A-122. Such waivers may include
(b) Recipients are required to report authorizing recipients to do any one
deviations from budget and program or more of the following.
plans, and request prior approvals (1) Incur pre-award costs 90 calendar
for budget and program plan days prior to award or more than 90
revisions, in accordance with this calendar days with the prior approval
section. of the Federal awarding agency. All
(c) For nonconstruction awards, pre-award costs are incurred at the
recipients shall request prior recipient's risk (i.e., the Federal
approvals from Federal awarding awarding agency is under no
obligation to reimburse such costs if
29
for any reason the recipient does not (3) A revision is desired which
receive an award or if the award is involves specific costs for which
less than anticipated and inadequate prior written approval requirements
to cover such costs) . may be imposed consistent with
(2) Initiate a one-time extension of applicable OMB cost principles listed
the expiration date of the award of in Section _.27.
up to 12 months unless one or more of (i) No other prior approval
the following conditions apply. For requirements for specific items may
one-time extensions, the recipient be imposed unless a deviation has
must notify the Federal awarding been approved by OMB.
agency in writing with the supporting (j) When a Federal awarding agency
reasons and revised expiration date makes an award that provides support
at least 10 days before the for both construction and
expiration date specified in the nonconstruction work, the Federal
award. This one-time extension may awarding agency may require the
not be exercised merely for the recipient to request prior approval
purpose of using unobligated from the Federal awarding agency
balances. before making any fund or budget
(i) The terms and conditions of award transfers between the two types of
prohibit the extension.
work supported.
(ii) The extension requires (k) For both construction and
additional Federal funds. nonconstruction awards, Federal
(iii) The extension involves any awarding agencies shall require
change in the approved objectives or recipients to notify the Federal
scope of the project. awarding agency in writing promptly
(3) Carry forward unobligated whenever the amount of Federal
balances to subsequent funding authorized funds is expected to
periods. exceed the needs of the recipient for
(4) For awards that support research, the project period by more than $5000
unless the Federal awarding agency or five percent of the Federal award,
provides otherwise in the award or in whichever is greater. This
the agency's regulations, the prior notification shall not be required if
approval requirements described in an application for additional funding
paragraph (e) are automatically is submitted for a continuation
waived (i.e., recipients need not
award.
obtain such prior approvals) unless (1) when requesting approval for
one of the conditions included in budget revisions, recipients shall
paragraph (e) (2) applies. use the budget forms that were used
(f) The Federal awarding agency may, in the application unless the Federal
at its option, restrict the transfer awarding agency indicates a letter of
of funds among direct cost categories request suffices.
or programs, functions and activities (m) Within 30 calendar days from the
for awards in which the Federal share date of receipt of the request for
of the project exceeds $100,000 and budget revisions, Federal awarding
the cumulative amount of such agencies shall review the request and
transfers exceeds or is expected to notify the recipient whether the
exceed 10 percent of the total budget budget revisions have been approved.
as last approved by the Federal If the revision is still under
awarding agency. No Federal awarding consideration at the end of 30
agency shall permit a transfer that calendar days, the Federal awarding
would cause any Federal appropriation agency shall inform the recipient in
or part thereof to be used for writing of the date when the
purposes other than those consistent recipient may expect the decision.
with the original intent of the
appropriation.
(g) All other changes to _.26 Non-Federal audits.
nonconstruction budgets, except for
the changes described in paragraph (a) Recipients and subrecipients that
(j), do not require prior approval. are institutions of higher education
(h) For construction awards, or other non-profit organizations
recipients shall request prior (including hospitals) shall be
written approval promptly from subject to the audit requirements
Federal awarding agencies for budget contained in the Single Audit Act
revisions whenever (1), (2) or (3) Amendments of 1996 (31 USC 7501-7507)
apply. and revised OMB Circular A-133,
(1) The revision results from changes "Audits of States, Local Governments,
in the scope or the objective of the and Non-Profit Organizations."
project or program. (b) State and local governments shall
(2) The need arises for additional be subject to the audit requirements
Federal funds to complete the contained in the Single Audit Act
project.
30
Amendments of 1996 (31 USC 7501-7507) exemption from OMB administrative
and revised OMB Circular A-133, requirements and cost principles
"Audits of States, Local Governments, circulars for certain Federal
and Non-Profit Organizations." programs with statutorily-authorized
(c) For-profit hospitals not covered consolidated planning and
by the audit provisions of revised consolidated administrative funding,
OMB Circular A-133 shall be subject that are identified by a Federal
to the audit requirements of the agency and approved by the head of
Federal awarding agencies. the Executive department or
(d) Commercial organizations shall be establishment. A Federal agency shall
subject to the audit requirements of consult with OMB during its
the Federal awarding agency or the consideration of whether to grant
prime recipient as incorporated into such an exemption.
the award document. (b) To promote efficiency in State
and local program administration,
_.27 Allowable costs. For each kind when Federal non-entitlement programs
of recipient, there is a set of with common purposes have specific
Federal principles for determining statutorily-authorized consolidated
allowable costs. Allowability of planning and consolidated
administrative funding and where most
costs shall be determined in of the State agency's resources come
accordance with the cost principles
applicable to the entity incurring from non-Federal sources, Federal
agencies may exempt these covered
the costs. Thus, allowability of
costs incurred by State, local or State-administered, non-entitlement federally-recognized Indian tribal grant programs from certain OMB
governments is determined in grants management requirements. The accordance with the provisions of OMB exemptions would be from all but the
allocability of costs provisions of
Circular A-87, "Cost Principles for OMB Circulars A-87 (Attachment A,
State, Local, and Indian Tribal subsection C.3), "Cost Principles for
Governments." The allowability of
costs incurred by non-profit State, Local, and Indian Tribal organizations is determined in Governments," A-21 (Section C,subpart 4), "Cost Principles for
accordance with the provisions of OMB Educational Institutions," and A-122
Non-Profit
Organizations." The
Circular "Cost Principles for (Attachment A, subsection A.9), "Cost
rg
allowability of costs incurred by Principles for Non-Profit
Organizations," and from all of the
institutions of higher education is administrative requirements
determined in accordance with the Cost Principles for Educational provisions of OMB Circular A-110,
provisions OMB Circular A-21, "Uniform Administrative Requirements
Principles
Institutions." The allowability of for Grants and Agreements with
costs incurred by hospitals is Institutions of Higher Education,determined in accordance with the Hospitals, and Other Non-Profit
Organizations," and the agencies'
provisions of Appendix E of CFR
part 74, "Principles for Determining
grants management common rule.mining
Costs Applicable to Research and (c) When a Federal agency provides Development Under Grants and this flexibility, as a prerequisite
Contracts with Hospitals." The to a State's exercising this option,
allowability of costs incurred by a State must adopt its own written
commercial organizations and those fiscal and administrative
non-profit organizations listed in requirements for expending and
Attachment C to Circular A-122 is accounting for all funds, which are
determined in accordance with the consistent with the provisions of OMB
provisions of the Federal Acquisition Circular A-87, and extend such
Regulation (FAR) at 48 CFR part 31. policies to all subrecipients. These
fiscal and administrative
requirements must be sufficiently
_.28 Period of availability of specific to ensure that: funds are
funds. Where a funding period is used in compliance with all
specified, a recipient may charge to applicable Federal statutory and
the grant only allowable costs regulatory provisions, costs are
resulting from obligations incurred reasonable and necessary for
during the funding period and any operating these programs, and funds
pre-award costs authorized by the are not be used for general expenses
Federal awarding agency. required to carry out other
responsibilities of a State or its
_.29 Conditional exemptions.
subrecipients.
(a) OMB authorizes conditional
31
instructions from the Federal
Property standards awarding agency or its successor
Federal awarding agency. The Federal
awarding agency shall observe one or
_.30 Purpose of property standards. more of the following disposition
Sections —.31 through _.37 set instructions.
forth uniform standards governing (1) The recipient may be permitted to
management and disposition of retain title without further
property furnished by the Federal obligation to the Federal Government
Government whose cost was charged to after it compensates the Federal
a project supported by a Federal Government for that percentage of the
award. Federal awarding agencies current fair market value of the
shall require recipients to observe property attributable to the Federal
these standards under awards and participation in the project.
shall not impose additional (2) The recipient may be directed to
requirements, unless specifically sell the property under guidelines
required by Federal statute. The provided by the Federal awarding
recipient may use its own property agency and pay the Federal Government
management standards and procedures for that percentage of the current
provided it observes the provisions fair market value of the property
of Sections _.31 through _.37. attributable to the Federal
participation in the project (after
deducting actual and reasonable
_.31 Insurance coverage. Recipients selling and fix-up expenses, if any,
shall, at a minimum, provide the from the sales proceeds) . When the
equivalent insurance coverage for recipient is authorized or required
real property and equipment acquired to sell the property, proper sales
with Federal funds as provided to procedures shall be established that
property owned by the recipient. provide for competition to the extent
Federally-owned property need not be practicable and result in the highest
insured unless required by the terms possible return.
and conditions of the award. (3) The recipient may be directed to
transfer title to the property to the
_.32 Real property. Each Federal Federal Government or to an eligible
awarding agency shall prescribe third party provided that, in such
requirements for recipients cases, the recipient shall be
concerning the use and disposition of entitled to compensation for its
real property acquired in whole or in attributable percentage of the
part under awards. Unless otherwise current fair market value of the
provided by statute, such property.
requirements, at a minimum, shall
contain the following. .33 Federally-owned and exempt property.
(a) Title to real property shall vest (a) Federally-owned property.
in the recipient subject to the (1) Title to federally-owned property
condition that the recipient shall remains vested in the Federal
use the real property for the Government. Recipients shall submit
authorized purpose of the project as annually an inventory listing of
long as it is needed and shall not federally-owned property in their
encumber the property without custody to the Federal awarding
approval of the Federal awarding agency. Upon completion of the award
agency. or when the property is no longer
(b) The recipient shall obtain needed, the recipient shall report
written approval by the Federal the property to the Federal awarding
awarding agency for the use of real agency for further Federal agency
property in other federally-sponsored
utilization.
projects when the recipient
(2) If the Federal awarding agency
determines that the property is no has no further need for the property,
longer needed for the purpose of the it shall be declared excess and
original project. Use in other reported to the General Services
projects shall be limited to those Administration, unless the Federal
under federally-sponsored projects
(i.e., awards) or programs that have awarding agency has statutory
authority to dispose of the property
purposes consistent with those
authorized for support by the Federal by alternative methods (e.
Fe the
authority provided by the Federal
awarding agency. Technology Transfer Act (15 U.S.C.
(c) When the real property is no 3710 (I)) to donate research
longer needed as provided in equipment to educational and non-
paragraphs (a) and (b), the recipient profit organizations in accordance
shall request disposition
32
with E.O. 12821, "Improving shall be given to projects or
Mathematics and Science Education in programs sponsored by other Federal
Support of the National Education awarding agencies. If the equipment
Goals.") Appropriate instructions is owned by the Federal Government,
shall be issued to the recipient by use on other activities not sponsored
the Federal awarding agency. by the Federal Government shall be
(b) Exempt property. When statutory permissible if authorized by the
authority exists, the Federal Federal awarding agency. User charges
awarding agency has the option to shall be treated as program income.
vest title to property acquired with (e) When acquiring replacement
Federal funds in the recipient equipment, the recipient may use the
without further obligation to the equipment to be replaced as trade-in
Federal Government and under or sell the equipment and use the
conditions the Federal awarding proceeds to offset the costs of the
agency considers appropriate. Such replacement equipment subject to the
property is "exempt property." Should approval of the Federal awarding
a Federal awarding agency not agency.
establish conditions, title to exempt (f) The recipient's property
property upon acquisition shall vest management standards for equipment
in the recipient without further acquired with Federal funds and
obligation to the Federal Government. federally-owned equipment shall
include all of the following.
.34 Equipment. (1) Equipment records shall be
maintained accurately and shall
include the following information.
(a) Title to equipment acquired by a (i) A description of the equipment.
recipient with Federal funds shall (ii) Manufacturer's serial number,
vest in the recipient, subject to model number, Federal stock number,
conditions of this section. national stock number, or other
(b) The recipient shall not use identification number.
equipment acquired with Federal funds (iii) Source of the equipment,
to provide services to non-Federal including the award number.
outside organizations for a fee that (iv) Whether title vests in the
is less than private companies charge recipient or the Federal Government.
for equivalent services, unless (v) Acquisition date (or date
specifically authorized by Federal received, if the equipment was
statute, for as long as the Federal furnished by the Federal Government)
Government retains an interest in the and cost.
equipment. (vi) Information from which one can
(c) The recipient shall use the calculate the percentage of Federal
equipment in the project or program participation in the cost of the
for which it was acquired as long as equipment (not applicable to
needed, whether or not the project or equipment furnished by the Federal
program continues to be supported by Government) .
Federal funds and shall not encumber (vii) Location and condition of the
the property without approval of the equipment and the date the
Federal awarding agency. When no information was reported.
longer needed for the original (viii) Unit acquisition cost.
project or program, the recipient (ix) Ultimate disposition data,
shall use the equipment in connection including date of disposal and sales
with its other federally-sponsored price or the method used to determine
activities, in the following order of current fair market value where a
priority: (i) Activities sponsored by recipient compensates the Federal
the Federal awarding agency which awarding agency for its share.
funded the original project, then (2) Equipment owned by the Federal
(ii) activities sponsored by other Government shall be identified to
Federal awarding agencies. indicate Federal ownership.
(d) During the time that equipment is (3) A physical inventory of equipment
used on the project or program for shall be taken and the results
which it was acquired, the recipient reconciled with the equipment records
shall make it available for use on at least once every two years. Any
other projects or programs if such differences between quantities
other use will not interfere with the determined by the physical inspection
work on the project or program for and those shown in the accounting
which the equipment was originally records shall be investigated to
acquired. First preference for such determine the causes of the
other use shall be given to other difference. The recipient shall, in
projects or programs sponsored by the connection with the inventory, verify
Federal awarding agency that financed the existence, current utilization,
the equipment; second preference and continued need for the equipment.
(4) A control system shall be in
33
effect to insure adequate safeguards handling expenses.
to prevent loss, damage, or theft of (2) If the recipient is instructed to
the equipment. Any loss, damage, or ship the equipment elsewhere, the
theft of equipment shall be recipient shall be reimbursed by the
investigated and fully documented; if Federal Government by an amount which
the equipment was owned by the is computed by applying the
Federal Government, the recipient percentage of the recipient's
shall promptly notify the Federal participation in the cost of the
awarding agency. original project or program to the
(5) Adequate maintenance procedures current fair market value of the
shall be implemented to keep the equipment, plus any reasonable
equipment in good condition. shipping or interim storage costs
(6) Where the recipient is authorized incurred.
or required to sell the equipment, (3) If the recipient is instructed to
proper sales procedures shall be otherwise dispose of the equipment,
established which provide for the recipient shall be reimbursed by
competition to the extent practicable the Federal awarding agency for such
and result in the highest possible costs incurred in its disposition.
return. (4) The Federal awarding agency may
(g) When the recipient no longer reserve the right to transfer the
needs the equipment, the equipment title to the Federal Government or to
may be used for other activities in a third party named by the Federal
accordance with the following Government when such third party is
standards. For equipment with a otherwise eligible under existing
current per unit fair market value of statutes. Such transfer shall be
$5000 or more, the recipient may subject to the following standards.
retain the equipment for other uses (i) The equipment shall be
provided that compensation is made to appropriately identified in the award
the original Federal awarding agency or otherwise made known to the
or its successor. The amount of recipient in writing.
compensation shall be computed by (ii) The Federal awarding agency
applying the percentage of Federal shall issue disposition instructions
participation in the cost of the within 120 calendar days after
original project or program to the receipt of a final inventory. The
current fair market value of the final inventory shall list all
equipment. If the recipient has no equipment acquired with grant funds
need for the equipment, the recipient and federally-owned equipment. If the
shall request disposition Federal awarding agency fails to
instructions from the Federal issue disposition instructions within
awarding agency. The Federal awarding the 120 calendar day period, the
agency shall determine whether the recipient shall apply the standards
equipment can be used to meet the of this section, as appropriate.
agency's requirements. If no (iii) When the Federal awarding
requirement exists within that agency exercises its right to take
agency, the availability of the title, the equipment shall be subject
equipment shall be reported to the to the provisions for federally-owned
General Services Administration by equipment.
the Federal awarding agency to
determine whether a requirement for 35 Supplies and other expendable
the equipment exists in other Federal —
agencies. The Federal awarding agency property.
shall issue instructions to the
recipient no later than 120 calendar (a) Title to supplies and other
days after the recipient's request expendable property shall vest in the
and the following procedures shall recipient upon acquisition. If there
govern. is a residual inventory of unused
(1) If so instructed or if supplies exceeding $5000 in total
disposition instructions are not aggregate value upon termination or
issued within 120 calendar days after completion of the project or program
the recipient's request, the and the supplies are not needed for
recipient shall sell the equipment any other federally-sponsored project
and reimburse the Federal awarding or program, the recipient shall
agency an amount computed by applying retain the supplies for use on non-
to the sales proceeds the percentage Federal sponsored activities or sell
of Federal participation in the cost them, but shall, in either case,
of the original project or program. compensate the Federal Government for
However, the recipient shall be its share. The amount of compensation
permitted to deduct and retain from shall be computed in the same manner
the Federal share $500 or ten percent as for equipment.
of the proceeds, whichever is less, (b) The recipient shall not use
for the recipient's selling and
34
supplies acquired with Federal funds (i) Research data is defined as the
to provide services to non-Federal recorded factual material commonly
outside organizations for a fee that accepted in the scientific community
is less than private companies charge as necessary to validate research
for equivalent services, unless findings, but not any of the
specifically authorized by Federal following: preliminary analyses,
statute as long as the Federal drafts of scientific papers, plans
Government retains an interest in the for future research, peer reviews, or
supplies. communications with colleagues. This
"recorded" material excludes physical
objects (e.g., laboratory samples) .
_.36 Intangible property. Research data also do not include:
(A) Trade secrets, commercial
(a) The recipient may copyright any information, materials necessary to
work that is subject to copyright and be held confidential by a researcher
was developed, or for which ownership until they are published, or similar
was purchased, under an award. The information which is protected under
Federal awarding agency(ies) reserve law; and
a royalty-free, nonexclusive and (B) Personnel and medical information
irrevocable right to reproduce, and similar information the
publish, or otherwise use the work disclosure of which would constitute
for Federal purposes, and to a clearly unwarranted invasion of
authorize others to do so. personal privacy, such as information
(b) Recipients are subject to that could be used to identify a
applicable regulations governing particular person in a research
patents and inventions, including study.
government-wide regulations issued by (ii) Published is defined as either
the Department of Commerce at 37 CFR when:
part 401, "Rights to Inventions Made (A) Research findings are published
by Nonprofit Organizations and Small in a peer-reviewed scientific or
Business Firms Under Government technical journal; or
Grants, Contracts and Cooperative (B) A Federal agency publicly and
Agreements." officially cites the research
(c) The Federal Government has the findings in support of an agency
right to: action that has the force and effect
(1) obtain, reproduce, publish or of law.
otherwise use the data first produced (iii) Used by the Federal Government
under an award; and in developing an agency action that
(2) authorize others to receive, has the force and effect of law is
reproduce, publish, or otherwise use defined as when an agency publicly
such data for Federal purposes. and officially cites the research
(d) (1) In addition, in response to a findings in support of an agency
Freedom of Information Act (FOIA) action that has the force and effect
request for research data relating to of law.
published research findings produced (e) Title to intangible property and
under an award that were used by the debt instruments acquired under an
Federal Government in developing an award or subaward vests upon
agency action that has the force and acquisition in the recipient. The
effect of law, the Federal awarding recipient shall use that property for
agency shall request, and the the originally-authorized purpose,
recipient shall provide, within a and the recipient shall not encumber
reasonable time, the research data so the property without approval of the
that they can be made available to Federal awarding agency. When no
the public through the procedures longer needed for the originally
established under the FOIA. If the authorized purpose, disposition of
Federal awarding agency obtains the the intangible property shall occur
research data solely in response to a in accordance with the provisions of
FOIA request, the agency may charge paragraph _.34(g) .
the requester a reasonable fee
equaling the full incremental cost of _.37 Property trust relationship.
obtaining the research data. This fee Real property, equipment, intangible
should reflect costs incurred by the property and debt instruments that
agency, the recipient, and applicable are acquired or improved with Federal
additisubrecon
any fees the agency may ipientThis fee is in funds shall be held in trust by the
addition to arecipient as trustee for the
assess under the FOIA (5 U.S.C. beneficiaries of the project or
(2) The
under which the
(2) The following definitions apply program property was
for purposes of paragraph (d) of this acquired or improved. Agencies may
require recipients to record liens or
section: other appropriate notices of record
35
to indicate that personal or real other interest in the firm selected
property has been acquired or for an award. The officers,
improved with Federal funds and that employees, and agents of the
use and disposition conditions apply recipient shall neither solicit nor
to the property. accept gratuities, favors, or
anything of monetary value from
Procurement Standards contractors, or parties to
subagreements. However, recipients
may set standards for situations in
_.40 Purpose of procurement which the financial interest is not
standards. Sections _.41 through substantial or the gift is an
—.48 set forth standards for use by unsolicited item of nominal value.
recipients in establishing procedures The standards of conduct shall
for the procurement of supplies and provide for disciplinary actions to
other expendable property, equipment, be applied for violations of such
real property and other services with standards by officers, employees, or
Federal funds. These standards are agents of the recipient.
furnished to ensure that such
materials and services are obtained _.43 Competition. All procurement
in an effective manner and in transactions shall be conducted in a
compliance with the provisions of
applicable Federal statutes and manner to provide, to the maximum executive orders. No additional extent practical, open and freecompetition. The recipient
shall be
procurement standards or requirements
shall be imposed by the Federal alert to organizational conflicts of awarding agencies upon recipients, interest as well as noncompetitive
unless specifically required by practices among contractors that may Federal statute or executive order or restrict or eliminate competition or
approved by OMB. otherwise restrain trade. In order to
ensure objective contractor
performance and eliminate unfair
_.41 Recipient responsibilities. competitive advantage, contractors
The standards contained in this that develop or draft specifications,
section do not relieve the recipient requirements, statements of work,
of the contractual responsibilities invitations for bids and/or requests
arising under its contract(s) . The for proposals shall be excluded from
recipient is the responsible competing for such procurements.
authority, without recourse to the Awards shall be made to the bidder or
Federal awarding agency, regarding offeror whose bid or offer is
the settlement and satisfaction of responsive to the solicitation and is
all contractual and administrative most advantageous to the recipient,
issues arising out of procurements price, quality and other factors
entered into in support of an award considered. Solicitations shall
or other agreement. This includes clearly set forth all requirements
disputes, claims, protests of award, that the bidder or offeror shall
source evaluation or other matters of fulfill in order for the bid or offer
a contractual nature. Matters to be evaluated by the recipient. Any
concerning violation of statute are and all bids or offers may be
to be referred to such Federal, State rejected when it is in the
or local authority as may have proper recipient's interest to do so.
jurisdiction.
.44 Procurement procedures.
_.42 Codes of conduct. The
recipient shall maintain written (a) All recipients shall establish
standards of conduct governing the written procurement procedures. These
performance of its employees engaged
in the award and administration of procedures shall provide for, at a
contracts. No employee, officer, or minimum, that (1), (2) and (3) apply.
agent shall participate in the (1) Recipients avoid purchasing
unnecessary items.
selection, award, or administration
of a contract supported by Federal (2) Where appropriate, an analysis is
made of lease and purchase
funds if a real or apparent conflict alternatives to determine which would
conflict would arise when the interest would be involved. Such a be the most economical and practical
co
employee, officer, or agent, any procurement for the Federal
Government.
member of his or her immediate (3) Solicitations for goods and
family, his or her partner, or an services provide for all of the
organization which employs or is
about to employ any of the parties following.
(i) A clear and accurate description
indicated herein, has a financial or of the technical requirements for the
36
material, product or service to be (c) The type of procuring instruments
procured. In competitive used (e.g., fixed price contracts,
procurements, such a description cost reimbursable contracts, purchase
shall not contain features which orders, and incentive contracts)
unduly restrict competition. shall be determined by the recipient
(ii) Requirements which the but shall be appropriate for the
bidder/offeror must fulfill and all particular procurement and for
other factors to be used in promoting the best interest of the
evaluating bids or proposals. program or project involved. The
(iii) A description, whenever "cost-plus-a-percentage-of-cost" or
practicable, of technical "percentage of construction cost"
requirements in terms of functions to methods of contracting shall not be
be performed or performance required, used.
including the range of acceptable (d) Contracts shall be made only with
characteristics or minimum acceptable responsible contractors who possess
standards. the potential ability to perform
(iv) The specific features of "brand successfully under the terms and
name or equal" descriptions that conditions of the proposed
bidders are required to meet when procurement. Consideration shall be
such items are included in the given to such matters as contractor
solicitation. integrity, record of past
(v) The acceptance, to the extent performance, financial and technical
practicable and economically resources or accessibility to other
feasible, of products and services necessary resources. In certain
dimensioned in the metric system of circumstances, contracts with certain
measurement. parties are restricted by agencies'
(vi) Preference, to the extent implementation of E.O.s 12549 and
practicable and economically 12689, "Debarment and Suspension."
feasible, for products and services (e) Recipients shall, on request,
that conserve natural resources and make available for the Federal
protect the environment and are awarding agency, pre-award review and
energy efficient. procurement documents, such as
(b) Positive efforts shall be made by request for proposals or invitations
recipients to utilize small for bids, independent cost estimates,
businesses, minority-owned firms, and etc., when any of the following
women's business enterprises, conditions apply.
whenever possible. Recipients of (1) A recipient's procurement
Federal awards shall take all of the procedures or operation fails to
following steps to further this goal. comply with the procurement standards
(1) Ensure that small businesses, in the Federal awarding agency's
minority-owned firms, and women's implementation of this Circular.
business enterprises are used to the (2) The procurement is expected to
fullest extent practicable. exceed the small purchase threshold
(2) Make information on forthcoming fixed at 41 U.S.C. 403 (11)
opportunities available and arrange (currently $25,000) and is to be
time frames for purchases and awarded without competition or only
contracts to encourage and facilitate one bid or offer is received in
participation by small businesses, response to a solicitation.
minority-owned firms, and women's (3) The procurement, which is
business enterprises. expected to exceed the small purchase
(3) Consider in the contract process threshold, specifies a "brand name"
whether firms competing for larger product.
contracts intend to subcontract with (4) The proposed award over the small
small businesses, minority-owned purchase threshold is to be awarded
firms, and women's business to other than the apparent low bidder
enterprises. under a sealed bid procurement.
(4) Encourage contracting with (5) A proposed contract modification
consortiums of small businesses, changes the scope of a contract or
minority-owned firms and women's increases the contract amount by more
business enterprises when a contract than the amount of the small purchase
is too large for one of these firms threshold.
to handle individually.
(5) Use the services and assistance,
as appropriate, of such organizations —
45 Cost and price analysis. Some form of
as the Small Business Administration cost or price analysis shall be made and
and the Department of Commerce's documented in the procurement files in
Minority Business Development Agency connection with every procurement action.
in the solicitation and utilization Price analysis may be accomplished in
of small businesses, minority- owned various ways, including the comparison of
firms and women's business price quotations submitted, market prices
enterprises. and similar indicia, together with
37
discounts. Cost analysis is the review and requirements of the recipient,
evaluation of each element of cost to provided the Federal awarding agency
determine reasonableness, allocability and has made a determination that the
allowability. Federal Government's interest is
adequately protected. If such a
_.46 Procurement records. Procurement determination has not been made, the
records and files for purchases in excess of minimum requirements shall be as
the small purchase threshold shall include follows.
the following at a minimum: (a) basis for (1) A bid guarantee from each bidder
contractor selection (b) justification for equivalent to five percent of the bid lack of competition when competitive bids or price. The "bid guarantee" shall
offers are not obtained, and (c) basis for consist of a firm commitment such as
award cost or price. a bid bond, certified check, or other
negotiable instrument accompanying a
bid as assurance that the bidder
_.47 Contract administration. A system for shall, upon acceptance of his bid,
contract administration shall be maintained execute such contractual documents as
to ensure contractor conformance with the may be required within the time
terms, conditions and specifications of the specified.
contract and to ensure adequate and timely (2) A performance bond on the part of
follow up of all purchases. Recipients shall the contractor for 100 percent of the
evaluate contractor performance and contract price. A "performance bond"
document, as appropriate, whether is one executed in connection with a
contractors have met the terms, conditions contract to secure fulfillment of all
and specifications of the contract. the contractor's obligations under
such contract.
_.48 Contract provisions. The recipient (3) A payment bond on the part of the
shall include, in addition to provisions to contractor for 100 percent of the
contract price. A "payment bond" is
define a sound and complete agreement, the one executed in connection with a
following provisions in all contracts. The contract to assure payment as
following provisions shall also be applied required by statute of all persons
to subcontracts. supplying labor and material in the
execution of the work provided for in
(a) Contracts in excess of the small the contract.
purchase threshold shall contain (4) Where bonds are required in the
contractual provisions or conditions situations described herein, the
that allow for administrative, bonds shall be obtained from
contractual, or legal remedies in companies holding certificates of
instances in which a contractor authority as acceptable sureties
violates or breaches the contract pursuant to 31 CFR part 223, "Surety
terms, and provide for such remedial Companies Doing Business with the
actions as may be appropriate. United States."
(b) All contracts in excess of the (d) All negotiated contracts (except
small purchase threshold shall those for less than the small
contain suitable provisions for purchase threshold) awarded by
termination by the recipient, recipients shall include a provision
including the manner by which to the effect that the recipient, the
termination shall be effected and the Federal awarding agency, the
basis for settlement. In addition, Comptroller General of the United
such contracts shall describe States, or any of their duly
conditions under which the contract authorized representatives, shall
may be terminated for default as well have access to any books, documents,
as conditions where the contract may papers and records of the contractor
be terminated because of which are directly pertinent to a
circumstances beyond the control of specific program for the purpose of
the contractor. making audits, examinations, excerpts
(c) Except as otherwise required by and transcriptions.
statute, an award that requires the (e) All contracts, including small
contracting (or subcontracting) for purchases, awarded by recipients and
construction or facility improvements their contractors shall contain the
shall provide for the recipient to procurement provisions of Appendix A
follow its own requirements relating to this Circular, as applicable.
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
to submit more than the original and
Reports and Records two copies of performance reports.
(f) Recipients shall immediately
notify the Federal awarding agency of
_.50 Purpose of reports and developments that have a significant
records. Sections _.51 through impact on the award-supported
_.53 set forth the procedures for activities. Also, notification shall
monitoring and reporting on the be given in the case of problems,
recipient's financial and program delays, or adverse conditions which
performance and the necessary materially impair the ability to meet
standard reporting forms. They also the objectives of the award. This
set forth record retention notification shall include a
requirements. statement of the action taken or
contemplated, and any assistance
needed to resolve the situation.
_.51 Monitoring and reporting (g) Federal awarding agencies may
program performance. make site visits, as needed.
(h) Federal awarding agencies shall
(a) Recipients are responsible for comply with clearance requirements of
managing and monitoring each project, 5 CFR part 1320 when requesting
program, subaward, function or performance data from recipients.
activity supported by the award.
Recipients shall monitor subawards to .52 Financial reporting.
ensure subrecipients have met the
audit requirements as delineated in
Section _.26. (a) The following forms or such other
(b) The Federal awarding agency shall forms as may be approved by OMB are
prescribe the frequency with which authorized for obtaining financial
the performance reports shall be information from recipients.
submitted. Except as provided in (1) SF-269 or SF-269A, Financial
paragraph _.51(f), performance Status Report.
reports shall not be required more (i) Each Federal awarding agency
frequently than quarterly or, less shall require recipients to use the
frequently than annually. Annual SF-269 or SF-269A to report the
reports shall be due 90 calendar days status of funds for all
after the grant year; quarterly or nonconstruction projects or programs.
semi-annual reports shall be due 30 A Federal awarding agency may,
days after the reporting period. The however, have the option of not
Federal awarding agency may require requiring the SF-269 or SF-269A when
annual reports before the anniversary the SF-270, Request for Advance or
dates of multiple year awards in lieu Reimbursement, or SF-272, Report of
of these requirements. The final Federal Cash Transactions, is
performance reports are due 90 determined to provide adequate
calendar days after the expiration or information to meet its needs, except
termination of the award. that a final SF-269 or SF-269A shall
(c) If inappropriate, a final be required at the completion of the
technical or performance report shall project when the SF-270 is used only
not be required after completion of for advances.
the project. (ii) The Federal awarding agency
(d) When required, performance shall prescribe whether the report
reports shall generally contain, for shall be on a cash or accrual basis.
each award, brief information on each If the Federal awarding agency
of the following. requires accrual information and the
(1) A comparison of actual recipient's accounting records are
accomplishments with the goals and not normally kept on the accrual
objectives established for the basis, the recipient shall not be
period, the findings of the required to convert its accounting
investigator, or both. Whenever system, but shall develop such
appropriate and the output of accrual information through best
programs or projects can be readily estimates based on an analysis of the
quantified, such quantitative data documentation on hand.
should be related to cost data for (iii) The Federal awarding agency
computation of unit costs. shall determine the frequency of the
(2) Reasons why established goals Financial Status Report for each
were not met, if appropriate. project or program, considering the
(3) Other pertinent information size and complexity of the particular
including, when appropriate, analysis project or program. However, the
and explanation of cost overruns or report shall not be required more
high unit costs. frequently than quarterly or less
(e) Recipients shall not be required frequently than annually. A final
39
report shall be required at the information under the "Remarks"
completion of the agreement. section of the reports.
(iv) The Federal awarding agency (2) When a Federal awarding agency
shall require recipients to submit determines that a recipient's
the SF-269 or SF-269A (an original accounting system does not meet the
and no more than two copies) no later standards in Section —.21,
than 30 days after the end of each additional pertinent information to
specified reporting period for further monitor awards may be
quarterly and semi-annual reports, obtained upon written notice to the
and 90 calendar days for annual and recipient until such time as the
final reports. Extensions of system is brought up to standard. The
reporting due dates may be approved Federal awarding agency, in obtaining
by the Federal awarding agency upon this information, shall comply with
request of the recipient. report clearance requirements of 5
(2) SF-272, Report of Federal Cash CFR part 1320.
Transactions. (3) Federal awarding agencies are
(i) When funds are advanced to encouraged to shade out any line item
recipients the Federal awarding on any report if not necessary.
agency shall require each recipient (4) Federal awarding agencies may
to submit the SF-272 and, when accept the identical information from
necessary, its continuation sheet, the recipients in machine readable
SF-272a. The Federal awarding agency format or computer printouts or
shall use this report to monitor cash electronic outputs in lieu of
advanced to recipients and to obtain prescribed formats.
disbursement information for each (5) Federal awarding agencies may
agreement with the recipients. provide computer or electronic
(ii) Federal awarding agencies may outputs to recipients when such
require forecasts of Federal cash expedites or contributes to the
requirements in the "Remarks" section accuracy of reporting.
of the report.
(iii) When practical and deemed
necessary, Federal awarding agencies _.53 Retention and access requirements for
may require recipients to report in records.
the "Remarks" section the amount of
cash advances received in excess of (a) This section sets forth
three days. Recipients shall provide requirements for record retention and
short narrative explanations of access to records for awards to
actions taken to reduce the excess recipients. Federal awarding agencies
balances. shall not impose any other record
(iv) Recipients shall be required to retention or access requirements upon
submit not more than the original and recipients.
two copies of the SF-272 15 calendar (b) Financial records, supporting
days following the end of each documents, statistical records, and
quarter. The Federal awarding all other records pertinent to an
agencies may require a monthly report award shall be retained for a period
from those recipients receiving of three years from the date of
advances totaling $1 million or more submission of the final expenditure
per year. report or, for awards that are
(v) Federal awarding agencies may renewed quarterly or annually, from
waive the requirement for submission the date of the submission of the
of the SF-272 for any one of the quarterly or annual financial report,
following reasons: (1) When monthly as authorized by the Federal awarding
advances do not exceed $25,000 per agency. The only exceptions are the
recipient, provided that such following.
advances are monitored through other (1) If any litigation, claim, or
forms contained in this section; (2) audit is started before the
If, in the Federal awarding agency's expiration of the 3-year period, the
opinion, the recipient's accounting records shall be retained until all
controls are adequate to minimize litigation, claims or audit findings
excessive Federal advances; or, (3) involving the records have been
When the electronic payment resolved and final action taken.
mechanisms provide adequate data. (2) Records for real property and
(b) When the Federal awarding agency equipment acquired with Federal funds
needs additional information or more shall be retained for 3 years after
frequent reports, the following shall final disposition.
be observed. (3) When records are transferred to
(1) When additional information is or maintained by the Federal awarding
needed to comply with legislative agency, the 3-year retention
requirements, Federal awarding requirement is not applicable to the
agencies shall issue instructions to recipient.
require recipients to submit such
40
(4) Indirect cost rate proposals, period for its supporting records
cost allocations plans, etc. as starts on the date of such
specified in paragraph _.53(g) . submission.
(c) Copies of original records may be (2) If not submitted for negotiation.
substituted for the original records If the recipient is not required to
if authorized by the Federal awarding submit to the Federal awarding agency
agency. or the subrecipient is not required
(d) The Federal awarding agency shall to submit to the recipient the
request transfer of certain records proposal, plan, or other computation
to its custody from recipients when for negotiation purposes, then the S-
it determines that the records year retention period for the
possess long term retention value. proposal, plan, or other computation
However, in order to avoid duplicate and its supporting records starts at
recordkeeping, a Federal awarding the end of the fiscal year (or other
agency may make arrangements for accounting period) covered by the
recipients to retain any records that proposal, plan, or other computation.
are continuously needed for joint
use.
(e) The Federal awarding agency, the Termination and Enforcement
Inspector General, Comptroller
General of the United States, or any _.60 Purpose of termination and
of their duly authorized enforcement. Sections _.61 and .62 set
representatives, have the right of forth uniform suspension, termination and
timely and unrestricted access to any enforcement procedures.
books, documents, papers, or other
records of recipients that are
pertinent to the awards, in order to _.61 Termination.
make audits, examinations, excerpts,
transcripts and copies of such (a) Awards may be terminated in whole
documents. This right also includes or in part only if (1), (2) or (3)
timely and reasonable access to a apply.
recipient's personnel for the purpose (1) By the Federal awarding agency,
of interview and discussion related if a recipient materially fails to
to such documents. The rights of comply with the terms and conditions
access in this paragraph are not of an award.
limited to the required retention (2) By the Federal awarding agency
period, but shall last as long as with the consent of the recipient, in
records are retained. which case the two parties shall
(f) Unless required by statute, no agree upon the termination
Federal awarding agency shall place conditions, including the effective
restrictions on recipients that limit date and, in the case of partial
public access to the records of termination, the portion to be
recipients that are pertinent to an terminated.
award, except when the Federal (3) By the recipient upon sending to
awarding agency can demonstrate that the Federal awarding agency written
such records shall be kept notification setting forth the
confidential and would have been reasons for such termination, the
exempted from disclosure pursuant to effective date, and, in the case of
the Freedom of Information Act (5 partial termination, the portion to
U.S.C. 552) if the records had be terminated. However, if the
belonged to the Federal awarding Federal awarding agency determines in
agency. the case of partial termination that
(g) Indirect cost rate proposals, the reduced or modified portion of
cost allocations plans, etc. the grant will not accomplish the
Paragraphs (g) (1) and (g) (2) apply to purposes for which the grant was
the following types of documents, and made, it may terminate the grant in
their supporting records: indirect its entirety under either paragraphs
cost rate computations or proposals, (a) (1) or (2) .
cost allocation plans, and any (b) If costs are allowed under an
similar accounting computations of award, the responsibilities of the
the rate at which a particular group recipient referred to in paragraph
of costs is chargeable (such as _.71(a), including those for
computer usage chargeback rates or property management as applicable,
composite fringe benefit rates) . shall be considered in the
(1) If submitted for negotiation. If termination of the award, and
the recipient submits to the Federal provision shall be made for
awarding agency or the subrecipient continuing responsibilities of the
submits to the recipient the recipient after termination, as
proposal, plan, or other computation appropriate.
to form the basis for negotiation of
the rate, then the 3-year retention
41
_.62 Enforcement. Federal awarding agency implementing
regulations (see Section .13) .
(a) Remedies for noncompliance. If a
recipient materially fails to comply SUBPART D - After-the-Award
with the terms and conditions of an Requirements
award, whether stated in a Federal
statute, regulation, assurance,
application, or notice of award, the _•70 Purpose. Sections _.71
Federal awarding agency may, in through _.73 contain closeout
addition to imposing any of the procedures and other procedures for
special conditions outlined in subsequent disallowances and
Section _.14, take one or more of adjustments.
the following actions, as appropriate
in the circumstances. .71 Closeout procedures.
(1) Temporarily withhold cash
payments pending correction of the
deficiency by the recipient or more (a) Recipients shall submit, within
severe enforcement action by the 90 calendar days after the date of
Federal awarding agency. completion of the award, all
(2) Disallow (that is, deny both use financial, performance, and other
of funds and any applicable matching reports as required by the terms and
credit for) all or part of the cost conditions of the award. The Federal
of the activity or action not in awarding agency may approve
compliance. extensions when requested by the
(3) Wholly or partly suspend or recipient.
terminate the current award. (b) Unless the Federal awarding
(4) Withhold further awards for the agency authorizes an extension, a
project or program. recipient shall liquidate all
(5) Take other remedies that may be obligations incurred under the award
legally available. not later than 90 calendar days after
(b) Hearings and appeals. In taking the funding period or the date of
an enforcement action, the awarding completion as specified in the terms
agency shall provide the recipient an and conditions of the award or in
opportunity for hearing, appeal, or agency implementing instructions.
other administrative proceeding to (c) The Federal awarding agency shall
which the recipient is entitled under make prompt payments to a recipient
any statute or regulation applicable for allowable reimbursable costs
to the action involved. under the award being closed out.
(c) Effects of suspension and (d) The recipient shall promptly
termination. Costs of a recipient refund any balances of unobligated
resulting from obligations incurred cash that the Federal awarding agency
by the recipient during a suspension has advanced or paid and that is not
or after termination of an award are authorized to be retained by the
not allowable unless the awarding recipient for use in other projects.
agency expressly authorizes them in OMB Circular A-129 governs unreturned
the notice of suspension or amounts that become delinquent debts.
termination or subsequently. Other (e) When authorized by the terms and
recipient costs during suspension or conditions of the award, the Federal
after termination which are necessary awarding agency shall make a
and not reasonably avoidable are settlement for any upward or downward
allowable if (1) and (2) apply. adjustments to the Federal share of
(1) The costs result from obligations costs after closeout reports are
which were properly incurred by the received.
recipient before the effective date (f) The recipient shall account for
of suspension or termination, are not any real and personal property
in anticipation of it, and in the acquired with Federal funds or
case of a termination, are received from the Federal Government
noncancellable. in accordance with Sections _.31
(2) The costs would be allowable if through _.37.
the award were not suspended or (g) In the event a final audit has
expired normally at the end of the not been performed prior to the
funding period in which the closeout of an award, the Federal
termination takes effect. awarding agency shall retain the
(d) Relationship to debarment and right to recover an appropriate
suspension. The enforcement remedies amount after fully considering the
identified in this section, including recommendations on disallowed costs
suspension and termination, do not resulting from the final audit.
preclude a recipient from being
subject to debarment and suspension
under E.O.s 12549 and 12669 and the
42
_.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.
-F4) 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
shall be required to pay wages not
Appendix A less than once a week. The recipient
shall place a copy of the current
prevailing wage determination issued
Contract Provisions by the Department of Labor in each
solicitation and the award of a
contract shall be conditioned upon
All contracts, awarded by a recipient the acceptance of the wage
including small purchases, shall determination. The recipient shall
contain the following provisions as report all suspected or reported
applicable: violations to the Federal awarding
agency.
1. Equal Employment Opportunity - All
contracts shall contain a provision 4. Contract Work Hours and Safety
requiring compliance with E.O. 11246, Standards Act (40 U.S.C. 327-333) -
"Equal Employment Opportunity," as Where applicable, all contracts
amended by E.O. 11375, "Amending awarded by recipients in excess of
Executive Order 11246 Relating to $2000 for construction contracts and
Equal Employment Opportunity," and as in excess of $2500 for other
supplemented by regulations at 41 CFR contracts that involve the employment
part 60, "Office of Federal Contract of mechanics or laborers shall
Compliance Programs, Equal Employment include a provision for compliance
Opportunity, Department of Labor." with Sections 102 and 107 of the
Contract Work Hours and Safety
2. Copeland "Anti-Kickback" Act (18 Standards Act (40 U.S.C. 327-333), as
V.S.C. 874 and 40 U.S.C. 276c) - All supplemented by Department of Labor
contracts and subgrants in excess of regulations (29 CFR part 5) . Under
$2000 for construction or repair Section 102 of the Act, each
awarded by recipients and contractor shall be required to
subrecipients shall include a compute the wages of every mechanic
provision for compliance with the and laborer on the basis of a
Copeland "Anti-Kickback" Act (18 standard work week of 40 hours. Work
U.S.C. 874), as supplemented by in excess of the standard work week
Department of Labor regulations (29 is permissible provided that the
CFR part 3, "Contractors and worker is compensated at a rate of
Subcontractors on Public Building or not less than 1 11 times the basic
Public Work Financed in Whole or in rate of pay for all hours worked in
Part by Loans or Grants from the excess of 40 hours in the work week.
United States") . The Act provides Section 107 of the Act is applicable
that each contractor or subrecipient to construction work and provides
shall be prohibited from inducing, by that no laborer or mechanic shall be
any means, any person employed in the required to work in surroundings or
construction, completion, or repair under working conditions which are
of public work, to give up any part unsanitary, hazardous or dangerous.
of the compensation to which he is These requirements do not apply to
otherwise entitled. The recipient the purchases of supplies or
shall report all suspected or materials or articles ordinarily
reported violations to the Federal available on the open market, or
awarding agency. contracts for transportation or
transmission of intelligence.
3. Davis-Bacon Act, as amended (40
U.S.C. 276a to a-7) - When required 5. Rights to Inventions Made Under a
by Federal program legislation, all Contract or Agreement - Contracts or
construction contracts awarded by the agreements for the performance of
recipients and subrecipients of more experimental, developmental, or
than $2000 shall include a provision research work shall provide for the
for compliance with the Davis-Bacon rights of the Federal Government and
Act (40 U.S.C. 276a to a-7) and as the recipient in any resulting
supplemented by Department of Labor invention in accordance with 37 CFR
regulations (29 CFR part 5, "Labor part 401, "Rights to Inventions Made
Standards Provisions Applicable to by Nonprofit Organizations and Small
Contracts Governing Federally Business Firms Under Government
Financed and Assisted Construction") . Grants, Contracts and Cooperative
Under this Act, contractors shall be Agreements," and any implementing
required to pay wages to laborers and regulations issued by the awarding
mechanics at a rate not less than the agency.
minimum wages specified in a wage
determination made by the Secretary 6. Clean Air Act (42 U.S.C. 7401 et
of Labor. In addition, contractors
seq.) and the Federal Water Pollution
44
Control Act (33 V.S.C. 1251 at 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.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.
S. 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 facilities and not subject to the
Regulations] prohibition of new housing construction
[Title 24, Volume 3] described in Sec. 570.207(b) (3) . Such
[Revised as of April 1, 2004] facilities include shelters for the
From the U.S. Government Printing Office via homeless; convalescent homes; hospitals,
GPO Access nursing homes; battered spouse shelters;
[CITE: 24CFR570.201] halfway houses for run-away children, drug
[Page 41-44] offenders or parolees; group homes for
mentally retarded persons and temporary
TITLE 24--HOUSING AND URBAN DEVELOPMENT housing for disaster victims. In certain
cases, nonprofit entities and subrecipients
CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR including those specified in Sec. 570.204
COMMUNITY PLANNING AND may acquire title to public facilities. When
DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN such facilities are owned by nonprofit
DEVELOPMENT entities or subrecipients, they shall be
operated so as [[Page 42]] to be open for
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS- use by the general public during all normal
-Table of Contents hours of operation. Public facilities and
improvements eligible for assistance under
Subpart C_Eligible Activities this paragraph are subject to the policies
in Sec. 570.200(b) .
Sec. 570.201 Basic eligible activities. (d) Clearance activities. Clearance,
demolition, and removal of buildings and
CDBG funds may be used for the following improvements, including movement of
activities: structures to other sites. Demolition of
(a) Acquisition. Acquisition in whole or in HUD-assisted or HUD-owned housing units may
part by the recipient, or other public or be undertaken only with the prior approval
private nonprofit entity, by purchase, long- of HUD.
term lease, donation, or otherwise, of real (e) Public services. Provision of public
property (including air rights, water services (including labor, supplies, and
rights, rights-of-way, easements, and other materials) including but not limited to
interests therein) for any public purpose, those concerned with employment,
subject to the limitations of Sec. 570.207. P yment, crime
7 prevention, child care, health, drug abuse,
(b) Disposition. Disposition, through sale, education, fair housing counseling, energy
lease, donation, or otherwise, of any real conservation, welfare (but excluding the
property acquired with CDBG funds or its provision of income payments identified
retention for public purposes, including under Sec. 570.207(b) (4)), homebuyer
reasonable costs of temporarily managing downpayment assistance, or recreational
such property or property acquired under needs. To be eligible for CDBG assistance, a
urban renewal, provided that the proceeds public service must be either a new service
from any such disposition shall be program or a quantifiable increase in the level of
income subject to the requirements set forth an existing service above that which has
in Sec. 570.504. been provided by or on behalf of the unit of
(c) Public facilities and improvements. general local government (through funds
Acquisition, construction, reconstruction, raised by the unit or received by the unit
rehabilitation or installation of public from the State in which it is located) in
facilities and improvements, except as the 12 calendar months before the submission
provided in Sec. 570.207(a), carried out by of the action plan. (An exception to this
the recipient or other public or private requirement may be made if HUD determines
nonprofit entities. (However, activities that any decrease in the level of a service
under this paragraph may be directed to the was the result of events not within the
removal of material and architectural control of the unit of general local
barriers that restrict the mobility and government.) The amount of CDBG funds used
accessibility of elderly or severely for public services shall not exceed
disabled persons to public facilities and paragraphs (e) (1) or (2) of this section,
improvements, including those provided for as applicable:
in Sec. 570.207(a) (1) .) In undertaking such (1) The amount of CDBG funds used for
activities, design features and improvements public services shall not exceed 15 percent
which promote energy efficiency may be of each grant, except that for entitlement
included. Such activities may also include grants made under subpart D of this part
the execution of architectural design the amount shall not exceed 15 percent of
features, and similar treatments intended to the grant plus 15 percent of program income,
enhance the aesthetic quality of facilities as defined in Sec. 570.500(a) . For
and improvements receiving CDBG assistance, entitlement grants under subpart D of this
such as decorative pavements, railings, part, compliance is based on limiting the
sculptures, pools of water and fountains, amount of CDBG funds obligated for public
and other works of art. Facilities designed service activities in each program year to
for use in providing shelter for persons an amount no greater than 15 percent of the
having special needs are considered public entitlement grant made for that program year
47
plus 15 percent of the program income (g) Payment of non-Federal share. Payment
received during the grantee's immediately of the non-Federal share required in
preceding program year. connection with a Federal grant-in-aid
(2) A recipient which obligated more CDBG program undertaken as part of CDBG
funds for public services than 15 percent of activities, provided, that such payment
its grant funded from Federal fiscal year shall be limited to activities otherwise
1982 or 1983 appropriations (excluding eligible and in compliance with applicable
program income and any assistance received requirements under this subpart.
under Public Law 98-8), may obligate more (h) Urban renewal completion. Payment of
CDBG funds than allowable under paragraph the cost of completing an urban renewal
(e) (1) of this section, so long as the total project funded under title I of the Housing
amount obligated in any program year does Act of 1949 as amended. Further information
not exceed: regarding the eligibility of such costs is
(i) For an entitlement grantee, 15% set forth in Sec. 570.801.
of the program income it received during the (i) Relocation. Relocation payments and
preceding program year; plus other assistance for permanently and
(ii) A portion of the grant received temporarily relocated individuals families,
for the program year which is the highest of businesses, nonprofit organizations, and
the following amounts: farm operations where the assistance is
(A) The amount determined by (1) required under the provisions of
applying the percentage of the grant it Sec. 570.606 (b) or (c); or
obligated for public services in the 1982 (2) determined by the grantee to be
program year against the grant for its appropriate under the provisions of Sec.
current program year; 570.606(d) .
(B) The amount determined by (j) Loss of rental income. Payments to
applying the percentage of the grant it housing owners for losses of rental income
obligated for public services in the 1983 incurred in holding, for temporary periods,
program year against the grant for its housing units to be used for the relocation
current program year; of individuals and families displaced by
(C) The amount of funds it program activities assisted under this part.
obligated for public services in the 1982 (k) Housing services. Housing services, as
program year; or, provided in section 105(a) (21) of the Act
(D) The amount of funds it (42 U.S.C. 5305(a) (21)) .
obligated for public services in the 1983 (1) Privately owned utilities. CDBG funds
program year. may be used to acquire, construct,
(f) Interim assistance. reconstruct, rehabilitate, or install the
(1) The following activities may be distribution lines and facilities of
undertaken on an interim basis in areas privately owned utilities, including the
exhibiting objectively determinable signs of placing underground of new or existing
physical deterioration where the recipient distribution facilities and lines.
has determined that immediate action is (m) Construction of housing. CDBG funds may
necessary to arrest the deterioration and be used for the construction of housing
that permanent improvements will be carried assisted under section 17 of the United
out as soon as practicable: States Housing Act of 1937.
(i) The repairing of streets, (n) Homeownership assistance. CDBG funds
sidewalks, parks, playgrounds, publicly may be used to provide direct homeownership
owned utilities, and public buildings; and assistance to low- or moderate-income
(ii) The execution of special garbage, households in accordance with section 105(a)
trash, and debris removal, including of the Act.
neighborhood cleanup campaigns, but not the (o)
regular curbside collection of garbage or (1) The provision of assistance either
trash in an area. through the recipient directly or through
(2) In order to alleviate emergency public and private organizations, agencies,
conditions threatening the public health and and other subrecipients (including nonprofit
safety in areas where the chief executive and for-profit subrecipients) to facilitate
officer of the recipient determines that economic development by:
such an emergency [[Page 43]] condition (i) Providing credit, including, but
exists and requires immediate resolution, not limited to, grants, loans, loan
CDBG funds may be used for: guarantees, and other forms of financial
(i) The activities specified in support, for the establishment,
paragraph (f) (1) of this section, except for stabilization, and expansion of
the repair of parks and playgrounds; microenterprises;
(ii) The clearance of streets, (ii) Providing technical assistance,
including snow removal and similar advice, and business support services to
activities, and owners of microenterprises and persons
(iii) The improvement of private developing microenterprises; and
properties. (iii) Providing general support,
(3) All activities authorized under including, but not limited to, peer support
paragraph (f) (2) of this section are limited programs, counseling, child care,
to the extent necessary to alleviate transportation, and other similar services,
emergency conditions.
48
to owners of microenterprises and persons assistance, that the activity for which it
developing microenterprises. is attempting to build capacity would be
(2) Services provided this paragraph (o) eligible for assistance under this subpart
shall not be subject to the restrictions on C, and that the national objective claimed
public services contained in paragraph (e) by the grantee for this assistance can
of this section. reasonably be expected to be met once the
(3) For purposes of this paragraph (o), entity has received the technical assistance
persons developing microenterprises' ' and undertakes the activity.) Capacity
means such persons who have expressed building for private or public entities
interest and who are, or after an initial (including grantees) for other purposes may
screening process are expected to be, be eligible under Sec. 570.205.
actively working toward developing (q) Assistance to institutions of higher
businesses, each of which is expected to be education. Provision of assistance by the
a microenterprise at the time it is formed. recipient to institutions of higher
(4) Assistance under this paragraph (o) education when the grantee determines that
may also include training, technical such an institution has demonstrated a
assistance, or other support services to capacity to carry out eligible activities
increase the capacity of the recipient or under this subpart C.
subrecipient to carry out the activities
under this paragraph (o) . [53 FR 34439, Sept. 6, 1988, as amended at
(p) Technical assistance. Provision of 53 FR 31239, Aug. 17, 1988; 55 FR 29308,
technical assistance to public or nonprofit July 18, 1990; 57 FR 27119, June 17, 1992;
entities to increase the capacity of such 60 FR 1943, Jan. 5, 1995; 60 FR 56911, Nov.
entities to carry out eligible neighborhood 9, 1995; 61 FR 18674, Apr. 29, 1996; 65 FR
revitalization or economic development 70215, Nov. 21, 2000; 67 FR 47213, July 17,
activities. (The recipient must determine, 20021
prior to the [[Page 44]] provision of the
49
Appendix C
24 CFR 570 CDBG Regulations Subpart J, Grant Administration
50
WAIS Document Retrieval[Code of Federal and standards of OMB Circular No. A-87,
Regulations] "Cost Principles for State, Local, and
[Title 24, Volume 3] Indian Tribal Governments' '; OMB Circular A-
[Revised as of April 1, 2004] 128, "Audits of State and Local
From the U.S. Government Printing Office via Governments'' (implemented at 24 CFR part
GPO Access 44); and with the following sections of 24
[CITE: 24CFR570.501] CFR part 85 ''Uniform Administrative
Requirements for Grants and Cooperative
[Page 131-132] Agreements to State and Local Governments' '
or the related CDBG provision, as specified
TITLE 24--HOUSING AND URBAN DEVELOPMENT in this paragraph:
(1) Section 85.3, ''Definitions' ';
CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR (2) Section 85.6, ''Exceptions' ';
COMMUNITY PLANNING ANDDEVELOPMENT, (3) Section 85.12, ''Special grant or
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT subgrant conditions for 'high-risk'
grantees' ';
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS- (4) Section 85.20, ''Standards for
-Table of Contents financial management systems, ' ' except
paragraph (a);
Subpart J_Grant Administration (5) Section 85.21, "Payment, ' ' except as
modified by Sec. 570.513;
Sec. 570.501 Responsibility for grant (6) Section 85.22, "Allowable costs' ';
administration. (7) Section 85.26, "Non-federal
audits' '
(a) One or more public agencies, including (8) Section 85.32, ''Equipment, ' ' except
existing local public agencies, may be in all cases in which the equipment is sold,
designated by the chief executive officer of the proceeds shall be program income;
the recipient to undertake activities (9) Section 85.33, "Supplies' ';
assisted by this part. A public agency so (10) Section 85.34, "Copyrights'';
designated shall be subject to the same (11) Section 85.35, "Subawards to
requirements as are applicable to debarred and suspended parties' ';
subrecipients. (12) Section 85.36, ''Procurement, ' '
(b) The recipient is responsible for except paragraph (a);
ensuring that CDBG funds are used in (13) Section 85.37, "Subgrants' ';
accordance with all program requirements. (14) Section 85.40, ''Monitoring and
The use of designated public agencies, reporting program performance, '' except
subrecipients, or contractors [[Page 132]] paragraphs (b) through (d) and paragraph
does not relieve the recipient of this (f);
responsibility. The recipient is also (15) Section 85.41, "Financial
responsible for determining the adequacy of reporting, ' ' except paragraphs (a),
performance under subrecipient agreements (b), and (e);
and procurement contracts, and for taking (16) Section 85.42, ''Retention and
appropriate action when performance problems access requirements for records, ' ' except
arise, such as the actions described in Sec. that the period shall be four years;
570.910. Where a unit of general local (17) Section 85.43, ''Enforcement'';
government is participating with, or as part (18) Section 85.44, "Termination for
of, an urban county, or as part of a convenience' ';
metropolitan city, the recipient is (19) Section 85.51 ''Later disallowances
responsible for applying to the unit of and adjustments'' and
general local government the same (20) Section 85.52, ''Collection of
requirements as are applicable to amounts due.''
subrecipients, except that the five-year (b) Subrecipients, except subrecipients
period identified under Sec. that are governmental entities, shall comply
570.503(b) (8) (i) shall begin with the date with the requirements and standards of OMB
that the unit of general local government is Circular No. A-122, ''Cost Principles for
no longer considered by HUD to be a part of Non-profit Organizations, ' ' or OMB Circular
the metropolitan city or urban county, as No. A-21, ''Cost Principles for Educational
applicable, instead of the date that the Institutions, ' ' as applicable, and OMB
subrecipient agreement expires. Circular A-133, "Audits of Institutions of
Higher Education and Other Nonprofit
[53 FR 8058, Mar. 11, 1988, as amended at 57 Institutions' ' (as set forth in 24 CFR part
FR 27120, June 17, 19921 45) . Audits shall be conducted annually.
Such subrecipients shall also comply with
Sec. 570.502 Applicability of uniform the following provisions of the Uniform
administrative requirements. Administrative requirements of OMB Circular
A-110 (implemented at 24 CFR part 84,
(a) Recipients and subrecipients that are ''Uniform Administrative Requirements for
governmental entities (including public Grants and Agreements With Institutions of
agencies) shall comply with the requirements Higher Education, Hospitals and Other Non-
51
Profit Organizations'') or the related CDBG Sec. 570.503 Agreements with subrecipients.
provision, as specified in this paragraph:
(1) Subpart A--''General''; (a) Before disbursing any CDBG funds to a
(2) Subpart B--"Pre-Award subrecipient, the recipient shall sign a
Requirements, ' ' except for Sec. 84.12, written agreement with the subrecipient. The
"Forms for Applying for Federal agreement shall remain in effect during any
Assistance' '; period that the subrecipient has control
(3) Subpart C--"Post-Award over CDBG funds, including program income.
Requirements, ' ' except for: (b) At a minimum, the written agreement
(i) Section 84.22, "Payment with the subrecipient shall include
Requirements. '' Grantees shall follow the provisions concerning the following items:
standards of Sec. Sec. 85.20(b) (7) and 85.21 (1) Statement of work. The agreement
in making payments to subrecipients; [[Page shall include a description of the work to
133]] be performed, a schedule for completing the
(ii) Section 84.23, ''Cost Sharing work, and a budget. These items shall be in
and Matching' '; sufficient detail to provide a sound basis
(iii) Section 84.24, ''Program for the recipient effectively to monitor
Income.' ' In lieu of Sec. 84.24, CDBG performance under the agreement.
subrecipients shall follow Sec. 570.504; (2) Records and reports. The recipient
(iv) Section 84.25, "Revision of shall specify in the agreement the
Budget and Program Plans' '; particular records the subrecipient must
(v) Section 84.32, "Real Property.'' maintain and the particular reports the
In lieu of Sec. 84.32, CDBG subrecipients subrecipient must submit in order to assist
shall follow Sec. 570.505; the recipient in meeting its recordkeeping
(vi) Section 84.34(g), ''Equipment.' ' and reporting requirements.
In lieu of the disposition provisions of (3) Program income. The agreement shall
Sec. 84.34(g), the following applies: include the program income requirements set
(A) In all cases in which forth in Sec. 570.504(c) . The agreement
equipment is sold, the proceeds shall be shall also specify that, at the end of the
program income (prorated to reflect the program year, the grantee may require
extent to which CDBG funds were used to remittance of all or part of any program
acquire the equipment); and income balances (including investments
(B) Equipment not needed by the thereof) held by the subrecipient (except
subrecipient for CDBG activities shall be those needed for immediate cash needs, cash
transferred to the recipient for the CDBG balances of a revolving loan fund, cash
program or shall be retained after balances from a lump sum drawdown, or cash
compensating the recipient; or investments held for section 108 security
(vii) Section 84.51 (b), (c), (d), needs) .
(e), (f), (g), and (h), "Monitoring and (4) Uniform administrative requirements.
Reporting Program Performance' '; The agreement shall require the subrecipient
(viii) Section 84.52, 'Financial to comply with applicable uniform
Reporting' '; administrative requirements, as described
(ix) Section 84.53(b), ''Retention in Sec. 570.502.
and access requirements for records.' ' (5) Other program requirements. The
Section 84.53(b) applies with the following agreement shall require the subrecipient to
exceptions: carry out each activity in compliance with
(A) The retention period all Federal laws and regulations described
referenced in Sec. 84.53(b) pertaining to in subpart K of these regulations, except
individual CDBG activities shall be four that:
years; and (i) The subrecipient does not assume
(B) The retention period starts the recipient's environmental
from the date of submission of the annual responsibilities described at Sec. 570.604;
performance and evaluation report, as and
prescribed in 24 CFR 91.520, in which the (ii) The subrecipient does not assume
specific activity is reported on for the the recipient's responsibility for
final time rather than from the date of initiating the review process under the
submission of the final expenditure report provisions of 24 CFR part 52.
for the award; (6) Suspension and termination. The
(x) Section 84.61, ''Termination. ' ' agreement shall specify that, in accordance
In lieu of the provisions of Sec. 84.61, with 24 CFR 85.43, suspension [[Page
CDBG subrecipients shall comply with Sec. 134]] or termination may occur if the
570.503(b) (7); and subrecipient materially fails to comply with
(4) Subpart D--''After-the-Award any term of the award, and that the award
Requirements, ' ' except for Sec. 84.71, may be terminated for convenience in
Closeout Procedures. ' ' accordance with 24 CFR 85.44.
(7) Reversion of assets. The agreement
[53 FR 8058, Mar. 11, 1988, as amended at shall specify that upon its expiration the
60 FR 1916, Jan. 5, 1995; 60 FR 56915, Nov. subrecipient shall transfer to the recipient
9, 19951 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 year, exceeds one-twelfth of the most recent
ensure that any real property under the grant made pursuant to Sec. 570.304 shall be
subrecipient's control that was acquired or remitted to HUD as soon as practicable
improved in whole or in part with CDBG thereafter, to be placed in the recipient's
funds (including CDBG funds provided to the line of credit. This provision applies to
subrecipient in the form of a loan) in program income cash balances and investments
excess of $25,000 is either: thereof held by the grantee and its
(i) Used to meet one of the national subrecipients. (This provision shall be
objectives in Sec. 570.208 (formerly Sec. applied for the first time at the end of the
570.901) until five years after expiration program year for which Federal Fiscal Year
of the agreement, or for such longer period 1996 funds are provided.)
of time as determined to be appropriate by (3) Program income on hand at the time of
the recipient; or closeout shall continue to be subject to the
(ii) Not used in accordance with eligibility requirements in subpart C and
paragraph (b) (7) (i) of this section, in all other applicable provisions of this part
which event the subrecipient shall pay to until it is expended.
the recipient an amount equal to the current (4) Unless otherwise provided in any
market value of the property less any grant closeout agreement, and subject to the
portion of the value attributable to requirements of paragraph (b) (5) of this
expenditures of non-CDBG funds for the section, income received after closeout
acquisition of, or improvement to, the shall not be governed by the provisions of
property. The payment is program income to this part, except that, if at the time of
the recipient. (No payment is required after closeout the recipient has another ongoing
the period of time specified in paragraph CDBG grant received directly from HUD, funds
(b) (7) (i) of this section.) received after closeout shall be treated as
program income of the ongoing grant
[53 FR 8058, Mar. 11, 1988, as amended at 53 program. [[Page 135]]
FR 41331, Oct. 21, 1988; 57 FR 27120, June (5) If the recipient does not have
17, 1992; 60 FR 56915, Nov. 9, 1995; 68 FR another ongoing grant received directly from
56405, Sept. 30, 2003] HUD at the time of closeout, income received
after closeout from the disposition of real
Sec. 570.504 Program income. property or from loans outstanding at the
time of closeout shall not be governed by
(a) Recording program income. The receipt the provisions of this part, except that
and expenditure of program income as defined such income shall be used for activities
in Sec. 570.500(a) shall be recorded as part that meet one of the national objectives in
of the financial transactions of the grant Sec. 570.901 and the eligibility
program. requirements described in section 105 of the
(b) Disposition of program income received Act.
by recipients. (c) Disposition of program income received
(1) Program income received before grant by subrecipients. The written agreement
closeout may be retained by the recipient if between the recipient and the subrecipient,
the income is treated as additional CDBG as required by Sec. 570.503, shall specify
funds subject to all applicable requirements whether program income received is to be
governing the use of CDBG funds. returned to the recipient or retained by the
(2) If the recipient chooses to retain subrecipient. Where program income is to be
program income, that program income shall be retained by the subrecipient, the agreement
disposed of as follows: shall specify the activities that will be
(i) Program income in the form of undertaken with the program income and that
repayments to, or interest earned in, a all provisions of the written agreement
revolving fund as defined in Sec. 570.500(b) shall apply to the specified activities.
shall be substantially disbursed from the When the subrecipient retains program
fund before additional cash withdrawals are income, transfers of grant funds by the
made from the U.S. Treasury for the same recipient to the subrecipient shall be
activity. (This rule does not prevent a lump adjusted according to the principles
sum disbursement to finance the described in paragraphs (b) (2) (i) and (ii)
rehabilitation of privately owned properties of this section. Any program income on hand
as provided for in Sec. 570.513.) when the agreement expires, or received
(ii) Substantially all other program after the agreement's expiration, shall be
income shall be disbursed for eligible paid to the recipient as required by Sec.
activities before additional cash 570.503(b) (8) .
withdrawals are made from the U.S. Treasury. (d) Disposition of certain program income
(iii) At the end of each program received by urban counties. Program income
year, the aggregate amount of program income derived from urban county program activities
cash balances and any investment thereof undertaken by or within the jurisdiction of
(except those needed for immediate cash a unit of general local government which
needs, cash balances of a revolving loan thereafter terminates its participation in
fund, cash balances from a lump-sum the urban county shall continue to be
drawdown, or cash or investments held for program income of the urban county. The
section 108 loan guarantee security needs) urban county may transfer the program income
that, as of the last day of the program to the unit of general local government,
53
upon its termination of urban county the requirements of this part. At a minimum,
participation, provided that the unit of the following records are needed:
general local government has become an (a) Records providing a full description of
entitlement grantee and agrees to use the each activity assisted (or being assisted)
program income in its own CDBG entitlement with CDBG funds, including its location (if
program. the activity has a geographical locus), the
amount of CDBG funds budgeted, obligated and
[53 FR 8058, Mar. 11, 1988, as amended at 60 expended for the activity, and the provision
FR 56915, Nov. 9, 19951 in subpart C under which it is eligible.
(b) Records demonstrating that each
Sec. 570.505 Use of real property. activity undertaken meets one of the
criteria set forth in Sec. 570.208. (Where
The standards described in this section information on income by family size is
apply to real property within the required, the recipient may substitute
recipient's control which was acquired or evidence establishing that the person
improved in whole or in part using CDBG assisted qualifies under another program
funds in excess of $25,000. These standards having income qualification criteria at
shall apply from the date CDBG funds are least as restrictive as that used in the
first spent for the property until five definitions of ''low and moderate income
years after closeout of an entitlement person'' and "low and moderate income
recipient's participation in the entitlement household' ' (as applicable) at Sec. 570.3,
CDBG program or, with respect to other such as Job Training Partnership Act (JTPA)
recipients, until five years after the and welfare programs; or the recipient may
closeout of the grant from which the substitute evidence that the assisted person
assistance to the property was provided. is homeless; or the recipient may substitute
(a) A recipient may not change the use or a copy of a verifiable certification from
planned use of any such property (including the assisted person that his or her family
the beneficiaries of such use) from that for income does not exceed the applicable income
which the acquisition or improvement was limit established in accordance with Sec.
made unless the recipient provides affected 570.3; or the recipient may substitute a
citizens with reasonable notice of, and notice that the assisted person is a
opportunity to comment on, any proposed referral from a state, county or local
change, and either: employment agency or other entity that
(1) The new use of such property agrees to refer individuals it determines to
qualifies as meeting one of the national be low and moderate income persons based on
objectives in Sec. 570.208 (formerly Sec. HUD's criteria and agrees to maintain
570.901) and is not a building for the documentation supporting these
general conduct of government; or determinations.) Such records shall include
(2) The requirements in paragraph (b) of the following information:
this section are met. (1) For each activity determined to
(b) If the recipient determines, after benefit low and moderate income persons, the
consultation with affected citizens, that it income limits applied and the point in time
is appropriate to change the use of the when the benefit was determined.
property to a use which does not qualify (2) For each activity determined to
under paragraph (a) (1) of this section, it benefit low and moderate income persons
may retain or dispose of the property for based on the area served by the activity:
the changed use if the recipient's CDBG (i) The boundaries of the service
program is reimbursed in the amount of the area;
current fair market value of the property, (ii) The income characteristics of
less any portion of the value attributable families and unrelated individuals in the
to expenditures of non-CDBG funds for service area; and
acquisition of, and improvements to, the (iii) If the percent of low and
property. moderate income persons in the service area
(c) If the change of use occurs after is less than 51 percent, data showing that
closeout, the provisions governing income the area qualifies under the exception
from the disposition of the real property in criteria set forth at Sec.
Sec. 570.504(b) (4) or (5), as applicable, 570.208(a) (1) (ii) .
shall apply to the use of funds reimbursed. (3) For each activity determined to
(d) Following the reimbursement of the CDBG benefit low and moderate income persons
program in accordance with paragraph (b) of because the activity involves a facility or
this section, the property no longer will be service designed for use by a limited
subject to any CDBG requirements. clientele consisting exclusively or
predominantly of low and moderate income
[53 FR 8058, Mar. 11, 1988, as amended at persons:
53 FR 41331, Oct. 21, 19881 [[Page 136]] (i) Documentation establishing that
the facility or service is designed for the
Sec. 570.506 Records to be maintained. particular needs of or used exclusively by
senior citizens, adults meeting the Bureau
Each recipient shall establish and maintain of the Census' Current Population Reports
sufficient records to enable the Secretary definition of ''severely disabled, ' ' persons
to determine whether the recipient has met living with AIDS, battered spouses, abused
54
children, the homeless, illiterate adults, (i) Where the recipient chooses to
or migrant farm workers, for which the document that at least 51 percent of the
regulations provide a presumption concerning jobs will be available to low and moderate
the extent to which low- and moderate-income income persons, documentation for each
persons benefit; or assisted business shall include:
(ii) Documentation describing how the (A) A copy of a written agreement
nature and, if applicable, the location of containing:
the facility or service establishes that it (1) A commitment by the
is used predominantly by low and moderate business that it will make at least 51
income persons; or percent of the jobs available to low and
(iii) Data showing the size and moderate income persons and will provide
annual income of the family of each person training for any of those jobs requiring
receiving the benefit. special skills or education;
(4) For each activity carried out for (2) A listing by job title of
the purpose of providing or improving the permanent jobs to be created indicating
housing which is determined to benefit low which jobs will be available to low and
and moderate income persons: moderate income persons, which jobs require
(i) A copy of a written agreement special skills or education, and which jobs
with each landlord or developer receiving are part-time, if any; and
CDBG assistance indicating the total number (3) A description of actions
of dwelling units in each multifamily to be taken by the recipient and business to
structure assisted and the number of those ensure that low and moderate income persons
units which will be occupied by low and receive first consideration for those jobs;
moderate income households after assistance; and
(ii) The total cost of the activity, (B) A listing by job title of
including both CDBG and non-CDBG funds. the permanent jobs filled, and which jobs of
(iii) For each unit occupied by a low those were available to low and moderate
and moderate income household, the size and income persons, and a description of how
income of the household; first consideration was given to such
(iv) For rental housing only: persons for those jobs. The description
(A) The rent charged (or to be shall include what hiring process was used;
charged) after assistance for each [[Page which low and moderate income persons were
137]] dwelling unit in each structure interviewed for a particular job; and which
assisted; and low and moderate income persons were hired.
(B) Such information as necessary (ii) Where the recipient chooses to
to show the affordability of units occupied document that at least 51 percent of the
(or to be occupied) by low and moderate jobs will be held by low and moderate income
income households pursuant to criteria persons, documentation for each assisted
established and made public by the business shall include:
recipient; (A) A copy of a written agreement
(v) For each property acquired on containing:
which there are no structures, evidence of (1) A commitment by the
commitments ensuring that the criteria in business that at least 51 percent of the
Sec. 570.208(a) (3) will be met when the jobs, on a full-time equivalent basis, will
structures are built; be held by low and moderate income persons;
(vi) Where applicable, records and
demonstrating that the activity qualifies (2) A listing by job title of
under the special conditions at Sec. the permanent jobs to be created,
570.208(a) (3) (i); identifying which are part-time, if any;
(vii) For any homebuyer assistance (B) A listing by job title of the
activity qualifying under Sec. 570.201(e), permanent jobs filled and which jobs were
570.201(n), or 570.204, identification of initially held by low and moderate income
the applicable eligibility paragraph and persons; and
evidence that the activity meets the (C) For each such low and
eligibility criteria for that provision; for moderate income person hired, the size and
any such activity qualifying under Sec. annual income of the person's family prior
570.208(a), the size and income of each to the person being hired for the job.
homebuyer's household; and (6) For each activity determined to
(viii) For a Sec. 570.201(k) housing benefit low and moderate income persons
services activity, identification of the based on the retention of jobs:
HOME project(s) or assistance that the (i) Evidence that in the absence of
housing services activity supports, and CDBG assistance jobs would be lost;
evidence that project(s) or assistance meet (ii) For each business assisted, a
the HOME program income targeting listing by job title of permanent jobs
requirements at 24 CFR 92.252 or 92.254. retained, indicating which of those jobs are
(5) For each activity determined to part-time and (where it is known) which are
benefit low and moderate income persons held by low and moderate income persons at
based on the creation of jobs, the recipient the time the CDBG assistance is provided.
shall provide the documentation described Where applicable, identification of any of
in either paragraph (b) (5) (i) or (ii) of the retained jobs (other than those known to
this section. be held by low and moderate income persons)
55
which are projected to become available to (iii) Details and scope of CDBG
low and moderate income [[Page 138]] assisted rehabilitation, by structure.
persons through job turnover within two (10) For each activity determined to aid
years of the time CDBG assistance is in the prevention or elimination of slums or
provided. Information upon which the job blight based on the elimination of specific
turnover projections were based shall also conditions of blight or physical decay not
be included in the record; located in a slum or blighted area:
(iii) For each retained job claimed (i) A description of the specific
to be held by a low and moderate income condition of blight or physical decay
person, information on the size and annual treated; and
income of the person's family; (ii) For rehabilitation carried out
(iv) For jobs claimed to be available under this category, a description of the
to low and moderate income persons based on specific conditions detrimental to public
job turnover, a description covering the health and safety which were identified and
items required for ''available to'' jobs in the details and scope of the CDBG assisted
paragraph (b) (5) of this section; and rehabilitation by structure.
(v) Where jobs were claimed to be (11) For each activity determined to aid
available to low and moderate income in the prevention or elimination of slums or
persons through turnover, a listing of each blight based on addressing slums or blight
job which has turned over to date, in an urban renewal area, a copy of the
indicating which of those jobs were either Urban Renewal Plan, as in effect at the time
taken by, or available to, low and moderate the activity is carried out, including maps
income persons. For jobs made available, a and supporting documentation.
description of how first consideration was (12) For each activity determined to meet
given to such persons for those jobs shall a community development need having a
also be included in the record. particular urgency:
(7) For purposes of documenting, pursuant (i) Documentation concerning the
to paragraph (b) (5) (i) (B), (b) (5) (ii) (C), nature and degree of seriousness of the
(b) (6) (iii) or (b) (6) (v) of this section, condition requiring assistance;
that the person for whom a job was either (ii) Evidence that the recipient
filled by or made available to a low- or certified that the CDBG activity was
moderate-income person based upon the census designed to address the urgent need;
tract where the person resides or in which (iii) Information on the timing of
the business is located, the recipient, in the development of the serious condition;
lieu of maintaining records showing the and
person's family size and income, may (iv) Evidence confirming that other
substitute records showing either the financial resources to alleviate the need
person's address at the time the were not available. [[Page 139]]
determination of income status was made or (c) Records that demonstrate that the
the address of the business providing the recipient has made the determinations
job, as applicable, the census tract in required as a condition of eligibility of
which that address was located, the percent certain activities, as prescribed in Sec.
of persons residing in that tract who either Sec. 570.201(f), 570.201(i) (2), 570.201(p),
are in poverty or who are low- and moderate- 570.201(q), 570.202(b) (3), 570.206(f),
income, as applicable, the data source used 570.209, and 570.309.
for determining the percentage, and a (d) Records which demonstrate compliance
description of the pervasive poverty and with Sec. 570.505 regarding any change of
general distress in the census tract in use of real property acquired or improved
sufficient detail to demonstrate how the with CDBG assistance.
census tract met the criteria in Sec. (e) Records that demonstrate compliance
570.208(a) (4) (v), as applicable. with the citizen participation requirements
(8) For each activity determined to aid prescribed in 24 CFR part 91, subpart B, for
in the prevention or elimination of slums or entitlement recipients, or in 24 CFR part
blight based on addressing one or more of 91, subpart C, for HUD-administered small
the conditions which qualified an area as a cities recipients.
slum or blighted area: (f) Records which demonstrate compliance
(i) The boundaries of the area; and with the requirements in Sec. 570.606
(ii) A description of the conditions regarding acquisition, displacement,
which qualified the area at the time of its relocation, and replacement housing.
designation in sufficient detail to (g) Fair housing and equal opportunity
demonstrate how the area met the criteria in records containing:
Sec. 570.208(b) (1) . (1) Documentation of the analysis of
(9) For each residential rehabilitation impediments and the actions the recipient
activity determined to aid in the prevention has carried out with its housing and
or elimination of slums or blight in a slum community development and other resources to
or blighted area: remedy or ameliorate any impediments to fair
(i) The local definition of housing choice in the recipient's community.
substandard' '; (2) Data on the extent to which each
(ii) A pre-rehabilitation inspection racial and ethnic group and single-headed
report describing the deficiencies in each households (by gender of household head)
structure to be rehabilitated; and have applied for, participated in, or
56
benefited from, any program or activity activity funded in whole or in part with
funded in whole or in part with CDBG funds. CDBG funds. [[Page 140]]
Such information shall be used only as a (h) Financial records, in accordance with
basis for further investigation as to the applicable requirements listed in Sec.
compliance with nondiscrimination 570.502, including source documentation for
requirements. No recipient is required to entities not subject to parts 84 and 85 of
attain or maintain any particular this title. Grantees shall maintain evidence
statistical measure by race, ethnicity, or to support how the CDBG funds provided to
gender in covered programs. such entities are expended. Such
(3) Data on employment in each of the documentation must include, to the extent
recipient's operating units funded in whole applicable, invoices, schedules containing
or in part with CDBG funds, with such data comparisons of budgeted amounts and actual
maintained in the categories prescribed on expenditures, construction progress
the Equal Employment Opportunity schedules signed by appropriate parties
Commission's EEO-4 form; and documentation (e.g., general contractor and/or a project
of any actions undertaken to assure equal architect), and/or other documentation
employment opportunities to all persons appropriate to the nature of the activity.
regardless of race, color, national origin, (i) Agreements and other records related to
sex or handicap in operating units funded in lump sum disbursements to private financial
whole or in part under this part. institutions for financing rehabilitation as
(4) Data indicating the race and prescribed in Sec. 570.513; and
ethnicity of households (and gender of (j) Records required to be maintained in
single heads of households) displaced as a accordance with other applicable laws and
result of CDBG funded activities, together regulations set forth in subpart K of this
with the address and census tract of the part. (Approved by the Office of management
housing units to which each displaced and Budget under control number 2506-0077)
household relocated. Such information shall
be used only as a basis for further [53 FR 34454, Sept. 6, 1988; 53 FR 41330,
investigation as to compliance with Oct. 21, 1988, as amended at 60 FR 1916,
nondiscrimination requirements. No recipient 1953, Jan. 5, 1995; 60 FR 56915, Nov. 9,
is required to attain or maintain any 1995; 61 FR 18674, Apr. 29, 1996; 64 FR
particular statistical measure by race, 38813, July 19, 19991
ethnicity, or gender in covered programs.
(5) Documentation of actions undertaken Sec. 570.508 Public access to program
to meet the requirements of Sec. 570.607(b) records.
which implements section 3 of the Housing
Development Act of 1968, as amended (12 Notwithstanding 24 CFR 85.42(f), recipients
U.S.C. 17010) relative to the hiring and shall provide citizens with reasonable
training of low and moderate income persons access to records regarding the past use of
and the use of local businesses. CDBG funds, consistent with applicable State
(6) Data indicating the racial/ethnic and local laws regarding privacy and
character of each business entity receiving obligations of confidentiality.
a contract or subcontract of $25,000 or more
paid, or to be paid, with CDBG funds, data Sec. 570.509 Grant closeout procedures.
indicating which of those entities are
women's business enterprises as defined in (a) Criteria for closeout. A grant will be
Executive Order 12138, the amount of the closed out when HUD determines, in
contract or subcontract, and documentation consultation with the recipient, that the
of recipient's affirmative steps to assure following criteria have been met:
that minority business and women's business (1) All costs to be paid with CDBG funds
enterprises have an equal opportunity to have been incurred, with the exception of
obtain or compete for contracts and closeout costs (e.g., audit costs) and costs
subcontracts as sources of supplies, resulting from contingent liabilities
equipment, construction and services. Such described in the closeout agreement pursuant
affirmative steps may include, but are not to paragraph (c) of this section. Contingent
limited to, technical assistance open to all liabilities include, but are not limited to,
businesses but designed to enhance third-party claims against the recipient, as
opportunities for these enterprises and well as related administrative costs.
special outreach efforts to inform them of (2) With respect to activities (such as
contract opportunities. Such steps shall not rehabilitation of privately owned
include preferring any business in the award properties) which are financed by means of
of any contract or subcontract solely or in escrow accounts, loan guarantees, or similar
part on the basis of race or gender. mechanisms, the work to be assisted with
(7) Documentation of the affirmative CDBG funds (but excluding program income)
action measures the recipient has taken to has actually been completed.
overcome prior discrimination, where the (3) Other responsibilities of the
courts or HUD have found that the recipient recipient under the grant agreement and
has previously discriminated against persons applicable laws and regulations appear to
on the ground of race, color, national have been carried out satisfactorily or
origin or sex in administering a program or there is no further Federal interest in
57
keeping the grant agreement open for the obligations in paragraphs (c) (1) through (4)
purpose of securing performance. of this section. The agreement shall
(b) Closeout actions. authorize monitoring by HUD, and shall
(1) Within 90 days of the date it is provide that findings of noncompliance may
determined that the criteria for closeout be taken into account by HUD, as
have been met, the recipient shall submit to unsatisfactory performance of the recipient,
HUD a copy of the final performance and in the consideration of any future grant
evaluation report described in 24 CFR part award under this part.
91. If an acceptable report is not (d) Status of consolidated plan after
submitted, an audit of the recipient's grant closeout. Unless otherwise provided in a
activities may be conducted by HUD. closeout agreement, the Consolidated Plan
(2) Based on the information provided in will remain in effect after closeout until
the performance report and other relevant the expiration of the program year covered
information, HUD, in consultation with the by the last approved consolidated plan.
recipient, will prepare a closeout agreement (e) Termination of grant for convenience.
in accordance with paragraph (c) of this Grant assistance provided under this part
section. may be terminated for convenience in whole
(3) HUD will cancel any unused portion of or in part before the completion of the
the awarded grant, as shown in the signed assisted activities, in accordance with the
grant closeout agreement. Any unused grant provisions of 24 CFR 85.44. The recipient
funds disbursed from the U.S. Treasury which shall not incur new obligations for the
are in the possession of the recipient shall terminated portions after the effective
be refunded to HUD. date, and shall cancel as many outstanding
(4) Any costs paid with CDBG funds which obligations as possible. HUD shall allow
were not audited previously shall be subject full credit to the recipient for those
to coverage in the recipient's next single portions of obligations which could not be
audit performed in accordance with 24 CER canceled and which had been properly
part 44. The recipient may be required to incurred by the recipient in carrying out
repay HUD any disallowed costs based on the the activities before the termination. The
results of the audit, or on additional HUD closeout policies contained in this section
reviews provided for in the closeout shall apply in such cases, except where the
agreement. approved grant is terminated in its
(c) Closeout agreement. Any obligations entirety. Responsibility for the
remaining as of the date of the closeout environmental review to be performed under
shall be covered by the terms of a closeout 24 CFR part 50 or 24 CFR part 58, as
agreement. The agreement shall be prepared applicable, shall be determined as part of
by the HUD field office in consultation with the closeout process.
the recipient. The agreement shall identify (f) Termination for cause. In cases in
the grant being closed out, and include which the Secretary terminates the
provisions with respect to the following: recipient's grant under the authority of
(1) Identification of any closeout costs subpart O of this part, or under the terms
or contingent liabilities subject to payment of the grant agreement, the closeout
with CDBG funds after the closeout agreement policies contained in this section shall
is signed; apply, except where the approved grant is
(2) Identification of any unused grant cancelled in its entirety. The provisions in
funds to be canceled by HUD; 24 CFR 85.43(c) on the effects of
(3) Identification of any program income termination shall also apply. HUD shall
on deposit in financial institutions at the determine whether an environmental
time the closeout agreement is signed: assessment or finding of inapplicability is
(4) Description of the recipient's required, and if such review is required,
responsibility after closeout for: HUD shall perform it in accordance with 24
(i) Compliance with all program CFR part 50.
requirements, certifications and assurances
in using program income on deposit at the [53 FR 8058, Mar. 11, 1988, as amended at 56
time the closeout agreement is signed and in FR 56128, Oct. 31, 1991; 60 FR 1916, Jan.
using any other remaining CDBG funds 5, 1995; 60 FR 16379, Mar. 30, 1995]
available for closeout costs and contingent
liabilities; [[Page 142)] Sec. 570.510 Transferring projects from
(ii) Use of real property assisted with urban counties to metropolitan cities.
CDBG funds in accordance with the principles
described in Sec. 570.505; Section 106(c) (3) of the Act authorizes the
(iii) Compliance with requirements Secretary to transfer unobligated grant
governing program income received subsequent funds from an urban county to a new
to grant closeout, as described in Sec. metropolitan city, provided: the city was an
570.504(b) (4) and (5); and included unit of general local government in
(iv) Ensuring that flood insurance the urban county immediately before its
coverage for affected property owners is qualification as a metropolitan city; the
maintained for the mandatory period; funds to be transferred were received by the
(5) Other provisions appropriate to any county before the qualification of the city
special circumstances of the grant closeout, as a metropolitan city; the funds to be
in modification of or in addition to the transferred had been programmed by the urban
58
county for use in the city before such dwelling units (and accessory neighborhood-
qualification; and the city and county agree scale non-residential space within the same
to transfer responsibility for the structure, if any, e.g., a store front below
administration of the funds being a dwelling unit) .
transferred from the county's letter of (2) An escrow account shall not be used
credit to the city's letter of credit. The unless the contract between the property
following rules apply to the transfer of owner and the contractor selected to do the
responsibility for an activity from an urban rehabilitation work specifically provides
county to the new metropolitan city. that payment to the contractor shall be made
(a) The urban county and the metropolitan through an escrow account maintained by the
city must execute a legally binding recipient, by a subrecipient as defined in
agreement which shall specify: Sec. 570.500(c), by a public agency
(1) The amount of funds to be transferred designated under Sec. 570.501(a), or by an
from the urban county's letter of credit to agent under a procurement contact governed
the metropolitan city's letter of credit; by the requirements of 24 CFR 65.36. No
(2) The activities to be carried out by deposit to the escrow account shall be made
the city with the funds being transferred; until after the contract has been executed
(3) The county's responsibility for all between the property owner and the
expenditures and unliquidated obligations rehabilitation contractor.
associated with the activities before the (3) All funds withdrawn under this
time of transfer, including a statement that section shall be deposited into one interest
responsibility for all audit and monitoring earning account with a financial
findings associated with those expenditures institution. Separate bank accounts shall
and obligations shall remain with the not be established for individual loans and
county; [[Page 143]] grants.
(4) The responsibility of the (4) The amount of funds deposited into an
metropolitan city for all other audit and escrow account shall be limited to the
monitoring findings; amount expected to be disbursed within 10
(5) How program income (if any) from the working days from the date of deposit. If
activities specified shall be divided the escrow account, for whatever reason, at
between the metropolitan city and the urban any time contains funds exceeding 10 days
county; and cash needs, the grantee immediately shall
(6) Such other provisions as may be transfer the excess funds to its program
required by HUD. account. In the program account, the excess
(b) Upon receipt of a request for the funds shall be treated as funds erroneously
transfer of funds from an urban county to a drawn in accordance with the requirements of
metropolitan city and a copy of the executed U.S. Treasury Financial Manual, paragraph 6-
agreement, HUD, in consultation with the 2075.30.
Department of the Treasury, shall establish (5) Funds deposited into an escrow
a date upon which the funds shall be account shall be used only to pay the actual
transferred from the letter of credit of costs of rehabilitation incurred by the
the urban county to the letter of credit of owner under the contract with a private
the metropolitan city, and shall take all contractor. Other eligible costs related to
necessary actions to effect the requested the rehabilitation loan or grant, e.g., the
transfer of funds. recipient's administrative costs under Sec.
(c) HUD shall notify the metropolitan city 570.206 or rehabilitation services costs
and urban county of any special audit and under Sec. 570.202(b) (9), are not
monitoring rules which apply to the permissible uses of escrowed funds. Such
transferred funds when the date of the other eligible rehabilitation costs shall be
transfer is communicated to the city and the paid under normal CDBG payment procedures
county. (e.g., from withdrawals of grant funds under
the recipient's letter of credit with the
Sec. 570.511 Use of escrow accounts for Treasury) .
rehabilitation of privately owned (b) Interest. Interest earned on escrow
residential property. accounts established in accordance with this
section, less any service charges for the
(a) Limitations. A recipient may withdraw account, shall be remitted to HUD at least
funds from its letter of credit for quarterly but not more frequently than
immediate deposit into an escrow account for monthly. Interest earned on escrow accounts
use in funding loans and grants for the is not required to be remitted to HUD to the
rehabilitation of privately owned extent the interest is attributable to the
residential property under Sec. investment of program income.
570.202(a) (1) . The following additional (c) Remedies for noncompliance. If HUD
limitations apply to the use of escrow determines that a recipient has failed to
accounts for residential rehabilitation use an escrow account in accordance [[Page
loans and grants closed after September 7, 144]]with this section, HUD may, in addition
1990: to imposing any other sanctions provided for
(1) The use of escrow accounts under this under this part, require the recipient to
section is limited to loans and grants for discontinue the use of escrow accounts, in
the rehabilitation of primarily residential whole or in part.
properties containing no more than four
59
[55 FR 32369, Aug. 8, 1990] Sec. 570.512 which CDBG funds are to be deposited and
[Reserved) used or returned, the anticipated level of
rehabilitation activities by the financial
Sec. 570.513 Lump sum drawdown for institution, the rate of interest and other
financing of property rehabilitation benefits to be provided by the financial
activities. institution in return for the lump sum
deposit, and such other terms as are
Subject to the conditions prescribed in this necessary for compliance with the provisions
section, recipients may draw funds from the of this section. Upon execution of the
letter of credit in a lump sum to establish agreement, a copy must be provided to the
a rehabilitation fund in one or more private HUD field office for its record and use in
financial institutions for the purpose of monitoring. Any modifications made during
financing the rehabilitation of privately the term of the agreement must also be
owned properties. The fund may be used in provided to HUD.
conjunction with various rehabilitation (3) Period to undertake activities. The
financing techniques, including loans, agreement must provide that the
interest subsidies, loan guarantees, loan rehabilitation fund may only be used for
reserves, or such other uses as may be authorized activities during a period of no
approved by HUD consistent with the more than two years. The lump sum deposit
objectives of this section. The fund may shall be made only after the agreement is
also be used for making grants, but only for fully executed.
the purpose of leveraging non-CDBG funds for (4) Time limit on use of deposited funds.
the rehabilitation of the same property. Use of the deposited funds for
(a) Limitation on drawdown of grant funds. rehabilitation financing assistance must
(1) The funds that a recipient deposits start (e.g., first loan must be made,
to a rehabilitation fund shall not exceed subsidized or guaranteed) within 45 days of
the grant amount that the recipient the deposit. In addition, substantial
reasonably expects will be required, disbursements from the fund must occur
together with anticipated program income within 180 days of the receipt of the
from interest and loan repayments, for the deposit. (Where CDBG funds are used as a
rehabilitation activities during the period guarantee, the funds that must be
specified in the agreement to undertake substantially disbursed are the guaranteed
activities, based on either: funds.) For a recipient with an agreement
(i) Prior level of rehabilitation specifying two years to [[Page 145]]
activity; or undertake activities, the disbursement of 25
(ii) Rehabilitation staffing and percent of the fund (deposit plus any
management capacity during the period interest earned) within 180 days will be
specified in the agreement to undertake regarded as meeting this requirement. If a
activities. recipient with an agreement specifying two
(2) No grant funds may be deposited under years to undertake activities determines
this section solely for the purpose of that it has had substantial disbursement
investment, notwithstanding that the from the fund within the 180 days although
interest or other income is to be used for it had not met this 25 percent threshold,
the rehabilitation activities. the justification for the recipient's
(3) The recipient's rehabilitation determination shall be included in the
program administrative costs and the program file. Should use of deposited funds
administrative costs of the financial not start within 45 days, or substantial
institution may not be funded through lump disbursement from such fund not occur within
sum drawdown. Such costs must be paid from 180 days, the recipient may be required by
periodic letter of credit withdrawals in HUD to return all or part of the deposited
accordance with standard procedures or from funds to the recipient's letter of credit.
program income, other than program income (5) Program activity. Recipients shall
generated by the lump sum distribution. review the level of program activity on a
(b) Standards to be met. The following yearly basis. Where activity is
standards shall apply to all lump sum substantially below that anticipated,
drawdowns of CDBG funds for rehabilitation: program funds shall be returned to the
(1) Eligible rehabilitation activities. recipient's letter of credit.
The rehabilitation fund shall be used to (6) Termination of agreement. In the case
finance the rehabilitation of privately of substantial failure by a private
owned properties eligible under the general financial institution to comply with the
policies in Sec. 570.200 and the specific terms of a lump sum drawdown agreement, the
provisions of either Sec. 570.202, including recipient shall terminate its agreement,
the acquisition of properties for provide written justification for the
rehabilitation, or Sec. 570.203. action, withdraw all unobligated deposited
(2) Requirements for agreement. The funds from the private financial
recipient shall execute a written agreement institution, and return the funds to the
with one or more private financial recipient's letter of credit.
institutions for the operation of the (7) Return of unused deposits. At the end
rehabilitation fund. The agreement shall of the period specified in the agreement for
specify the obligations and responsibilities undertaking activities, all unobligated
of the parties, the terms and conditions on deposited funds shall be returned to the
60
recipient's letter of credit unless the (ii) In addition to the payment of
recipient enters into a new agreement interest, at least one of the following
conforming to the requirements of this benefits must be provided by the financial
section. In addition, the recipient shall institution:
reserve the right to withdraw any (A) Leverage of the deposited
unobligated deposited funds required by HUD funds so that the financial institution
in the exercise of corrective or remedial commits private funds for loans in the
actions authorized under Sec. 570.910(b), rehabilitation program in an amount
Sec. 570.911, Sec. 570.912 or Sec. 570.913. substantially in excess of the amount of the
(8) Rehabilitation loans made with non- lump sum deposit;
CDBG funds. If the deposited funds or (B) Commitment of private funds
program income derived from deposited funds by the financial institution for
are used to subsidize or guarantee repayment rehabilitation loans at below market
of rehabilitation loans made with non-CDBG interest rates, at higher than normal risk,
funds, or to provide a supplemental loan or or with longer than normal repayment
grant to the borrower of the non-CDBG funds, periods; or
the rehabilitation activities are considered (C) Provision of administrative
to be CDBG-assisted activities subject to services in support of the rehabilitation
the requirements applicable to such program by the participating financial
activities, except that repayment of non- institution at no cost or at lower than
CDBG funds shall not be treated as program actual cost.
income. (c) Program income. Interest earned on lump
(9) Provision of consideration. In sum deposits and payments on loans made from
consideration for the lump sum deposit by such deposits are program income and, during
the recipient in a private financial the period of [[Page 146]] the agreement,
institution, the deposit must result in shall be used for rehabilitation activities
appropriate benefits in support of the under the provisions of this section.
recipient's local rehabilitation program. (d) Outstanding findings. Notwithstanding
Minimum requirements for such benefits are: any other provision of this section, no
(i) Grantees shall require the recipient shall enter into a new agreement
financial institution to pay interest on the during any period of time in which an audit
lump sum deposit. or monitoring finding on a previous lump sum
(A) The interest rate paid by the drawdown agreement remains unresolved.
financial institution shall be no more than (e) Prior notification. The recipient shall
three points below the rate on one year provide the HUD field office with written
Treasury obligations at constant maturity. notification of the amount of funds to be
(B) When an agreement sets a distributed to a private financial
fixed interest rate for the entire term of institution before distribution under the
the agreement, the rate should be based on provisions of this section.
the rate at the time the agreement is (f) Recordkeeping requirements. The
executed. recipient shall maintain in its files a copy
(C) The agreement may provide for of the written agreement and related
an interest rate that would fluctuate documents establishing conformance with this
periodically during the term of the section and concerning performance by a
agreement, but at no time shall the rate be financial institution in accordance with the
established at more than three points below agreement.
the rate on one year Treasury obligations at
constant maturity.
61
Appendix D
24 CFR 570 CDBG Regulations Subpart K, Other Program Requirements
62
Section Sec. 570.601 Public Law 88-352 and Public
Law 90-284; affirmatively furthering fair
(Code of Federal Regulations] housing; Executive Order 11063.
[Title 24, Volume 31 (a) The following requirements apply
[Revised as of April 1, 2004] according to sections 104(b) and 107 of the
From the U.S. Government Printing Office via Act:
GPO Access (1) Public Law 88-352, which is title
[CITE: 24CFR570.6001 VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d et seq.), and implementing
[Page 146] regulations in 24 CFR part 1.
(2) Public Law 90-284, which is the
TITLE 24--HOUSING AND URBAN DEVELOPMENT Fair Housing Act (42 U.S.C. 3601-3620) . In
accordance with the Fair Housing Act, the
CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR Secretary requires that grantees administer
COMMUNITY PLANNING AND DEVELOPMENT, all programs and activities related to
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT housing and community development in a
manner to affirmatively further the policies
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS- of the Fair Housing Act. Furthermore, in
-Table of Contents accordance with section 104(b) (2) of the
Act, for each community receiving a grant
Subpart K_Other Program Requirements under subpart D of this part, the
certification that the grantee will
Sec. 570.600 General. affirmatively further fair housing shall
specifically require the grantee to assume
Source: 53 FR 34456, Sept. 6, 1988, unless the responsibility of fair housing planning
otherwise noted. by conducting an analysis to identify
impediments to fair housing choice within
(a) This subpart K enumerates laws that its jurisdiction, taking appropriate actions
the Secretary will treat as applicable to to overcome the effects of any impediments
grants made under section 106 of the Act, identified through that analysis, and
other than grants to States made pursuant to maintaining records reflecting the analysis
section 106(d) of the Act, for purposes of and actions in this regard.
the Secretary's determinations under section (b) Executive Order 11063, as amended by
104(e) (1) of the Act, including statutes Executive Order 12259 (3 CFR, 1959-1963
expressly made applicable by the Act and Comp., p. 652; 3 CFR, 1980 Comp., p. 307)
certain other statutes and Executive Orders (Equal Opportunity in Housing), [[Page 147]]
for which the Secretary has enforcement and implementing regulations in 24 CFR part
responsibility. This subpart K applies to 107, also apply.
grants made under the Insular areas program
in Sec. 570.405, with the exception of Sec. [61 FR 11477, Mar. 20, 1996]
570.612. The absence of mention herein of
any other statute for which the Secretary Sec. 570.602 Section 109 of the Act.
does not have direct enforcement
responsibility is not intended to be taken Section 109 of the Act requires that no
as an indication that, in the Secretary's person in the United States shall on the
opinion, such statute or Executive Order is grounds of race, color, national origin,
not applicable to activities assisted under religion, or sex be excluded from
the Act. For laws that the Secretary will participation in, be denied the benefits of,
treat as applicable to grants made to States or be subjected to discrimination under any
under section 106(d) of the Act for purposes program or activity receiving Federal
of the determination required to be made by financial assistance made available pursuant
the Secretary pursuant to section 104(e) (2) to the Act. Section 109 also directs that
of the Act, see Sec. 570.487. the prohibitions against discrimination on
(b) This subpart also sets forth certain the basis of age under the Age
additional program requirements which the Discrimination Act and the prohibitions
Secretary has determined to be applicable to against discrimination on the basis of
grants provided under the Act as a matter of disability under Section 504 shall apply to
administrative discretion. programs or activities receiving Federal
(c) In addition to grants made pursuant to financial assistance under Title I programs.
section 106(b) and 106(d) (2) (B) of the Act The policies and procedures necessary to
(subparts D and F, respectively), the ensure enforcement of section 109 are
requirements of this subpart K are codified in 24 CFR part 6.
applicable to grants made pursuant to
sections 107 and 119 of the Act (subparts E [64 FR 3802, Jan. 25, 1999]
and G, respectively), and to loans
guaranteed pursuant to subpart M. Sec. 570.603 Labor standards.
[53 FR 34456, Sept. 6, 1988, as amended at
61 FR 11477, Mar. 20, 19961 (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 (i) For purposes of paragraph (b)
accordance with section 110(a) of the Act, of this section, the term "displaced
the Contract Work Hours and Safety Standards person' ' means any person (family,
Act (40 U.S.C. 327 et seq.) also applies. individual, business, nonprofit
However, these requirements apply to the organization, or farm) that moves from real
rehabilitation of residential property only property, or moves his or her personal
if such property contains not less than 8 property from real property, permanently and
units. involuntarily, as a direct result of
(b) The regulations in 24 CFR part 70 rehabilitation, demolition, or acquisition
apply to the use of volunteers. for an activity assisted under this part. A
[61 FR 11477, Mar. 20, 19961 permanent, involuntary move for an assisted
activity includes a permanent move from real
Sec. 570.604 Environmental standards. property that is made:
(A) After notice by the grantee
For purposes of section 104(g) of the Act, (or the state recipient, if applicable) to
the regulations in 24 CFR part 58 specify move permanently from the property, if the
the other provisions of law which further move occurs after the initial official
the purposes of the National Environmental submission to HUD (or the State, [[Page
Policy Act of 1969, and the procedures by 148]] as applicable) for grant, loan, or
which grantees must fulfill their loan guarantee funds under this part that
environmental responsibilities. In certain are later provided or granted.
cases, grantees assume these environmental (B) After notice by the
review, decision making, and action property owner to move permanently from the
responsibilities by execution of grant property, if the move occurs after the date
agreements with the Secretary. of the submission of a request for financial
assistance by the property owner (or person
[61 FR 11477, Mar. 20, 1996] in control of the site) that is later
approved for the requested activity.
Sec. 570.605 National Flood Insurance (C) Before the date described
Program. in paragraph (b) (2) (i) (A) or (B) of this
section, if either HUD or the grantee (or
Notwithstanding the date of HUD approval of State, as applicable) determines that the
the recipient's application (or, in the case displacement directly resulted from
of grants made under subpart D of this part acquisition, rehabilitation, or demolition
or HUD-administered small cities recipients for the requested activity.
in Hawaii, the date of submission of the (D) After the ''initiation of
grantee's consolidated plan, in accordance negotiations' ' if the person is the tenant-
with 24 CFR part 91), section 202(a) of the occupant of a dwelling unit and any one of
Flood Disaster Protection Act of 1973 (42 the following three situations occurs:
U.S.C. 4106) and the regulations in 44 CFR (1) The tenant has not been
parts 59 through 79 apply to funds provided provided with a reasonable opportunity to
under this part 570. lease and occupy a suitable decent, safe,
and sanitary dwelling in the same
[61 FR 11477, Mar. 20, 1996] building/complex upon the completion of the
project, including a monthly rent that does
Sec. 570.606 Displacement, relocation, not exceed the greater of the tenant's
acquisition, and replacement of housing. monthly rent and estimated average utility
costs before the initiation of negotiations
(a) General policy for minimizing or 30 percent of the household's average
displacement. Consistent with the other monthly gross income; or
goals and objectives of this part, grantees (2) The tenant is required
(or States or state recipients, as to relocate temporarily for the activity but
applicable) shall assure that they have the tenant is not offered payment for all
taken all reasonable steps to minimize the reasonable out-of-pocket expenses incurred
displacement of persons (families, in connection with the temporary relocation,
individuals, businesses, nonprofit including the cost of moving to and from the
organizations, and farms) as a result of temporary location and any increased housing
activities assisted under this part. costs, or other conditions of the temporary
(b) Relocation assistance for displaced relocation are not reasonable; and the
persons at URA levels. tenant does not return to the
(1) A displaced person shall be building/complex; or
provided with relocation assistance at the (3) The tenant is required
levels described in, and in accordance with to move to another unit in the
the requirements of 49 CFR part 24, which building/complex, but is not offered
contains the government-wide regulations reimbursement for all reasonable out-of-
implementing the Uniform Relocation pocket expenses incurred in connection with
Assistance and Real Property Acquisition the move.
Policies Act of 1970 (URA) (42 U.S.C. 4601- (ii) Notwithstandingthe
provisions of
4655) . paragraph (b) (2) (i) of this section, the
(2) Displaced person. term "displaced person-' ' does not include:
64
(A) A person who is evicted for equal relocation assistance within each
cause based upon serious or repeated class of displaced persons.
violations of material terms of the lease or (e) Acquisition of real property. The
occupancy agreement. To exclude a person on acquisition of real property for an assisted
this basis, the grantee (or State or state activity is subject to 49 CFR part 24,
recipient, as applicable) must determine subpart B.
that the eviction was not undertaken for the (f) Appeals. If a person disagrees with
purpose of evading the obligation to provide the determination of the grantee (or the
relocation assistance under this section; state recipient, as applicable) concerning
(B) A person who moves into the the person's eligibility for, or the amount
property after the date of the notice of, a relocation payment under this section,
described in paragraph (b) (2) (i) (A) or (B) the person may file a written appeal of that
of this section, but who received a written determination with the grantee (or state
notice of the expected displacement before recipient, as applicable) . The appeal
occupancy. procedures to be followed are described in
(C) A person who is not displaced 49 CFR 24.10. In addition, a low- or
as described in 49 CFR 24.2(g) (2) . moderate-income household that has been
(D) A person who the grantee (or displaced from a dwelling may file a written
State, as applicable) determines is not request for review of the grantee's decision
displaced as a direct result of the to the HUD Field Office. For purposes of the
acquisition, rehabilitation, or demolition State CDBG program, a low- or moderate-
for an assisted activity. To exclude a income household may file a written request
person on this basis, HUD must concur in for review of the state recipient's decision
that determination. with the State.
(iii) A grantee (or State or state (g) Responsibility of grantee or State.
recipient, as applicable) may, at any time, (1) The grantee (or State, if applicable) is
request HUD to determine whether a person is responsible for ensuring compliance with the
a displaced person under this section. (3) requirements of this section,
Initiation of negotiations. For purposes of notwithstanding any third party's
determining the type of replacement housing contractual obligation to the grantee to
assistance to be provided under paragraph comply with the provisions of this section.
(b) of this section, if the displacement is For purposes of the State CDBG program, the
the direct result of privately undertaken State shall require state recipients to
rehabilitation, demolition, or acquisition certify that they will comply with the
of real property, the term "initiation of requirements of this section.
negotiations' ' means the execution of the (2) The cost of assistance required
grant or loan agreement between the grantee under this section may be paid from local
(or State or state recipient, as public funds, funds provided under this
(applicable) and the person owning or part, or funds available from other sources.
controlling the real property. (3) The grantee (or State and state
(c) Residential antidisplacement and recipient, as applicable) must maintain
relocation assistance plan. The grantee records in sufficient detail to demonstrate
shall comply with the requirements of 24 CFR compliance with the provisions of this
part 42, subpart B. section.
(d) Optional relocation assistance. Under
section 105(a) (11) of the Act, the grantee (Approved by the Office of Management and
may provide (or the State may permit the Budget under OMB control number 2506-0102)
state recipient to provide, as applicable) [61 FR 11477, Mar. 20, 1996, as amended at
relocation payments and other relocation 61 FR 51760, Oct. 3, 1996]
assistance to persons displaced by
activities that are not subject to paragraph Sec. 570.607 Employment and contracting
(b) or (c) of this section. The grantee may opportunities.
also provide (or the State may also permit
the state recipient to provide, as To the extent that they are otherwise
applicable) relocation assistance to persons applicable, grantees shall comply with:
receiving assistance under paragraphs (b) or (a) Executive Order 11246, as amended by
(c) of this section at levels in excess of Executive Orders 11375, 11478, 12086, and
those required by these paragraphs. Unless 12107 (3 CFR 1964-1965 Comp. p. 339; 3 CFR,
such assistance is provided [[Page 149]] 1966-1970 Comp., p. 684; 3 CFR, 1966-1970.,
under State or local law, the grantee (or p. 803; 3 CFR, 1978 Comp., p. 230; 3 CFR,
state recipient, as applicable) shall 1978 Comp., p. 264 (Equal Employment
provide such assistance only upon the basis Opportunity), and Executive Order 13279
of a written determination that the (Equal Protection of the Laws for Faith-
assistance is appropriate (see, e.g., 24 CFR Based and Community Organizations), 67 FR
570.201(i), as applicable) . The grantee (or 77141, 3 CFR, 2002 Comp., p. 258; and the
state recipient, as applicable) must adopt a implementing regulations at 41 CFR chapter
written policy available to the public that 60; and (b) Section 3 of the Housing and
describes the relocation assistance that the Urban Development Act of 1968 (12 U.S.C.
grantee (or state recipient, as applicable) 1701u) and implementing regulations at 24
has elected to provide and that provides for CFR part 135.
65
[68 FR 56405, Sept. 30, 2003] participate in a decision making process or
gain inside information with regard to such
Sec. 570.608 Lead-based paint. activities, may obtain a financial interest
or benefit from a CDBG-assisted activity, or
The Lead-Based Paint Poisoning Prevention have a financial interest in any contract,
Act (42 U.S.C. 4821-4846), the Residential subcontract, or agreement with respect to a
Lead-Based Paint Hazard Reduction Act of CDBG-assisted activity, or with respect to
1992 (42 U.S.C. 4851-4856), and implementing the proceeds of the CDBG-assisted activity,
regulations at part 35, subparts A, B, J, K, either for themselves or those with whom
and R of this part apply to activities under they have business or immediate family ties,
this program. during their tenure or for one year
thereafter. For the UDAG program, the above
[64 FR 50226, Sept. 15, 1999] restrictions shall apply to all activities
that are a part of the UDAG project, and
Sec. 570.609 Use of debarred, suspended or shall cover any such financial interest or
ineligible contractors or subrecipients. benefit during, or at any time after, such
person's tenure.
The requirements set forth in 24 CFR part 5 (c) Persons covered. The conflict of
apply to this program. interest provisions of paragraph (b) of this
[61 FR 5209, Feb. 9, 1996] section apply to any person who is an
employee, agent, consultant, officer, or
Sec. 570.610 Uniform administrative elected official or appointed official of
requirements and cost principles. the recipient, or of any designated public
agencies, or of subrecipients that are
The recipient, its agencies or receiving funds under this part. (d)
instrumentalities, and subrecipients shall Exceptions. Upon the written request of the
comply with the policies, guidelines, and recipient, HUD may grant an exception to the
requirements of 24 CFR part 85 and OMB provisions of paragraph (b) of this section
Circulars A-87, A-110 (implemented at 24 CFR on a case-by-case basis when it has
part 84), A-122, A-133 (implemented at 24 satisfactorily met the threshold
CFR part 45), and [[Page 150]] A-128 2 requirements of (d) (1) of this section,
(implemented at 24 CFR part 44), as taking into account the cumulative effects
applicable, as they relate to the acceptance of paragraph (d) (2) of this section.
and use of Federal funds under this part. (1) Threshold requirements. HUD will
The applicable sections of 24 CFR parts 84 consider an exception only after the
and 85 are set forth at Sec. 570.502. \2\ recipient has provided the following
See footnote 1 at Sec. 570.200(a) (5) . documentation:
(i) A disclosure of the nature of the
[60 FR 56916, Nov. 9, 19951 conflict, accompanied by an assurance that
there has been public disclosure of the
Sec. 570.611 Conflict of interest. conflict and a description of how the public
disclosure was made; and
(a) Applicability. (ii) An opinion of the recipient's
(1) In the procurement of supplies, attorney that the interest for which the
equipment, construction, and services by exception is sought would not violate State
recipients and by subrecipients, the or local law.
conflict of interest provisions in 24 CFR (2) Factors to be considered for
85.36 and 24 CFR 84.42, respectively, shall exceptions. In determining whether to grant
apply. a requested exception after the recipient
(2) In all cases not governed by 24 CFR has satisfactorily met the requirements of
85.36 and 84.42, the provisions of this paragraph (d) (1) of this section, HUD shall
section shall apply. Such cases include the conclude that such an exception will serve
acquisition and disposition of real property to further the purposes of the Act and the
and the provision of assistance by the effective and efficient administration of
recipient or by its subrecipients to the recipient's program or project, taking
individuals, businesses, and other private into account the cumulative effect of the
entities under eligible activities that following factors, as applicable:
authorize such assistance (e.g., (i) Whether the exception would
rehabilitation, preservation, and other provide a significant cost benefit or an
improvements of private properties or essential degree of expertise to the program
facilities pursuant to Sec. 570.202; or or project that would otherwise not be
grants, loans, and other assistance to available;
businesses, individuals, and other private (ii) Whether an opportunity was
entities pursuant to Sec. 570.203, 570.204, provided for open competitive bidding or
570.455, or 570.703(i)) . negotiation;
(b) Conflicts prohibited. The general rule (iii) Whether the person affected is a
is that no persons described in paragraph member of a group or class of low- or
(c) of this section who exercise or have moderate-income persons intended to be the
exercised any functions or responsibilities beneficiaries of the assisted activity, and
with respect to CDBG activities assisted the exception will permit such person to
under this part, or who are in a position to
66
receive generally the same interests or activities meeting the requirements of Sec.
benefits as are being [[Page 151]] 570.208(a) that either:
made available or provided to the group or (1) Have income eligibility requirements
class; limiting the benefits exclusively to low and
(iv) Whether the affected person has moderate income persons; or
withdrawn from his or her functions or (2) Are targeted geographically or
responsibilities, or the decision making otherwise to primarily benefit low and
process with respect to the specific moderate income persons (excluding
assisted activity in question; activities serving the public at large, such
(v) Whether the interest or benefit as sewers, roads, sidewalks, and parks), and
was present before the affected person was that provide benefits to persons on the
in a position as described in paragraph (b) basis of an application.
of this section; (c) Limitation on coverage. The
(vi) Whether undue hardship will restrictions under this section apply only
result either to the recipient or the person to applicants for new benefits not being
affected when weighed against the public received by covered resident aliens as of
interest served by avoiding the prohibited the effective date of this section.
conflict; and (d) Compliance. Compliance can be
(vii) Any other relevant accomplished by obtaining certification as
considerations. provided in 24 CFR 49.20.
(e) Programs affected.
[60 FR 56916, Nov. 9, 19951 (1) The Community Development Block Grant
program for small cities, administered under
Sec. 570.612 Executive Order 12372. subpart F of part 570 of this title until
closeout of the recipient's grant.
(a) General. Executive Order 12372, (2) The Community Development Block Grant
Intergovernmental Review of Federal program for entitlement grants, administered
Programs, and the Department's implementing under subpart D of part 570 of this title.
regulations at 24 CFR part 52, allow each (3) The Community Development Block Grant
State to establish its own process for program for States, administered under
review and comment on proposed Federal subpart I of part 570 of this title until
financial assistance programs. closeout of the unit of general local
(b) Applicability. Executive Order 12372 government's grant by the State.
applies to the CDBG Entitlement program and (4) The Urban Development Action Grants
the UDAG program. The Executive Order program, administered under subpart G of
applies to all activities proposed to be part 570 of this title until closeout of the
assisted under UDAG, but it applies to the recipient's grant.
Entitlement program only where a grantee
proposes to use funds for the planning or [55 FR 18494, May 2, 1990]
construction (reconstruction or
installation) of water or sewer facilities. Sec. 570.614 Architectural Barriers Act and
Such facilities include storm sewers as well the Americans with Disabilities Act.
as all sanitary sewers, but do not include
water and sewer lines connecting a structure (a) The Architectural Barriers Act of 1968
to the lines in the public right-of-way or (42 U.S.C. 4151-4157) requires certain
easement. It is the responsibility of the Federal and Federally funded[[Page 152]]
grantee to initiate the Executive Order buildings and other facilities to be
review process if it proposes to use its designed, constructed, or altered in
CDBG or UDAG funds for activities subject to accordance with standards that insure
review. accessibility to, and use by, physically
handicapped people. A building or facility
Sec. 570.613 Eligibility restrictions for designed, constructed, or altered with funds
certain resident aliens. allocated or reallocated under this part
after December 11, 1995, and that meets the
(a) Restriction. Certain newly legalized definition of ''residential structure' ' as
aliens, as described in 24 CFR part 49, are defined in 24 CFR 40.2 or the definition of
not eligible to apply for benefits under ''building' ' as defined in 41 CFR 101-
covered activities funded by the programs 19.602(a) is subject to the requirements of
listed in paragraph (e) of this section. the Architectural Barriers Act of 1968 (42
''Benefits'' under this section means U.S.C. 4151-4157) and shall comply with the
financial assistance, public services, jobs Uniform Federal Accessibility Standards
and access to new or rehabilitated housing (appendix A to 24 CFR part 40 for
and other facilities made available under residential structures, and appendix A to 41
covered activities funded by programs listed CFR part 101-19, subpart 101-19.6, for
in paragraph (e) of this section. general type buildings) .
''Benefits' ' do not include relocation (b) The Americans with Disabilities Act (42
services and payments to which displacees U.S.C. 12131; 47 U.S.C. 155, 201, 218 and
are entitled by law. 225) (ADA) provides comprehensive civil
(b) Covered activities. ''Covered rights to individuals with disabilities in
activities' ' under this section means 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