[Title 40 CFR B]
[Code of Federal Regulations (annual edition) - July 1, 2002 Edition]
[Title 40 - PROTECTION OF ENVIRONMENT]
[Chapter I - ENVIRONMENTAL PROTECTION AGENCY]
[Subchapter B - GRANTS AND OTHER FEDERAL ASSISTANCE]
[From the U.S. Government Printing Office]
40PROTECTION OF ENVIRONMENT12002-07-012002-07-01falseGRANTS AND OTHER FEDERAL ASSISTANCEBSUBCHAPTER BPROTECTION OF ENVIRONMENTENVIRONMENTAL PROTECTION AGENCY
SUBCHAPTER B--GRANTS AND OTHER FEDERAL ASSISTANCE
PART 30--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS--Table of Contents
Subpart A--General
Sec.
30.1 Purpose.
30.2 Definitions.
30.3 Effect on other issuances.
30.4 Deviations.
30.5 Subawards.
30.6 Availability of OMB circulars.
Subpart B--Pre-Award Requirements
30.10 Purpose.
30.11 Pre-award policies.
30.12 Forms for applying for Federal assistance.
30.13 Debarment and suspension.
30.14 Special award conditions.
30.15 Metric system of measurement.
30.16 Resource Conservation and Recovery Act (RCRA).
30.17 Certifications and representations.
30.18 Hotel and motel fire safety.
Subpart C--Post-Award Requirements
Financial and Program Management
30.20 Purpose of financial and program management.
30.21 Standards for financial management systems.
30.22 Payment.
30.23 Cost sharing or matching.
30.24 Program income.
30.25 Revision of budget and program plans.
30.26 Non-Federal audits.
30.27 Allowable costs.
30.28 Period of availability of funds.
Property Standards
30.30 Purpose of property standards.
30.31 Insurance coverage.
30.32 Real property.
30.33 Federally-owned and exempt property.
30.34 Equipment.
30.35 Supplies and other expendable property.
30.36 Intangible property.
30.37 Property trust relationship.
Procurement Standards
30.40 Purpose of procurement standards.
30.41 Recipient responsibilities.
30.42 Codes of conduct.
30.43 Competition.
30.44 Procurement procedures.
30.45 Cost and price analysis.
30.46 Procurement records.
30.47 Contract administration.
30.48 Contract provisions.
Reports and Records
30.50 Purpose of reports and records.
30.51 Monitoring and reporting program performance.
30.52 Financial reporting.
30.53 Retention and access requirements for records.
30.54 Quality assurance.
Termination and Enforcement
30.60 Purpose of termination and enforcement.
30.61 Termination.
30.62 Enforcement.
30.63 Disputes.
Subpart D--After-the-Award Requirements
30.70 Purpose.
30.71 Closeout procedures.
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30.72 Subsequent adjustments and continuing responsibilities.
30.73 Collection of amounts due.
Appendix to Part 30--Contract Provisions
Authority: 7 U.S.C. 135 et seq.; 15 U.S.C. 2601 et seq.; 33 U.S.C.
1251 et seq.; 42 U.S.C. 241, 242b, 243, 246, 300f, 300j-1, 300j-2, 300j-
3, 1857 et seq., 6901 et seq., 7401 et seq., 9601 et seq.; OMB Circular
A-110 (64 FR 54926, October 8, 1999).
Source: 61 FR 6067, Feb. 15, 1996, unless otherwise noted.
Subpart A--General
Sec. 30.1 Purpose.
This subpart establishes uniform administrative requirements for
Federal grants and agreements awarded to institutions of higher
education, hospitals, and other non-profit organizations. The
Environmental Protection Agency (EPA) may not impose additional or
inconsistent requirements, except as provided in Secs. 30.4, and 30.14
or unless specifically required by Federal statute or Executive Order.
Non-profit organizations that implement Federal programs for the States
are also subject to State requirements.
Sec. 30.2 Definitions.
(a) Accrued expenditures means the charges incurred by the recipient
during a given period requiring the provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subrecipients, and
other payees; and
(3) Other amounts becoming owed under programs for which no current
services or performance is required.
(b) Accrued income means the sum of:
(1) Earnings during a given period from;
(i) Services performed by the recipient; and
(ii) Goods and other tangible property delivered to purchasers; and
(2) Amounts becoming owed to the recipient for which no current
services or performance is required by the recipient.
(c) Acquisition cost of equipment means the net invoice price of the
equipment, including the cost of modifications, attachments,
accessories, or auxiliary apparatus necessary to make the property
usable for the purpose for which it was acquired. Other charges, such as
the cost of installation, transportation, taxes, duty or protective in-
transit insurance, shall be included or excluded from the unit
acquisition cost in accordance with the recipient's regular accounting
practices.
(d) Advance means a payment made by Treasury check or other
appropriate payment mechanism to a recipient upon its request either
before outlays are made by the recipient or through the use of
predetermined payment schedules.
(e) Award means financial assistance that provides support or
stimulation to accomplish a public purpose. Awards include grants and
other agreements in the form of money or property in lieu of money, by
the Federal Government to an eligible recipient. The term does not
include: technical assistance, which provides services instead of money;
other assistance in the form of loans, loan guarantees, interest
subsidies, or insurance; direct payments of any kind to individuals;
and, contracts which are required to be entered into and administered
under procurement laws and regulations.
(f) Cash contributions means the recipient's cash outlay, including
the outlay of money contributed to the recipient by third parties.
(g) Closeout means the process by which a Federal awarding agency
determines that all applicable administrative actions and all required
work of the award have been completed by the recipient and Federal
awarding agency.
(h) Contract means a procurement contract under an award or
subaward, and a procurement subcontract under a recipient's or
subrecipient's contract.
(i) Cost sharing or matching means that portion of project or
program costs not borne by the Federal Government.
(j) Date of completion means the date on which all work under an
award is completed or the date on the award document, or any supplement
or amendment thereto, on which Federal sponsorship ends.
(k) Disallowed costs means those charges to an award that the
Federal
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awarding agency determines to be unallowable, in accordance with the
applicable Federal cost principles or other terms and conditions
contained in the award.
(l) Equipment means tangible nonexpendable personal property
including exempt property charged directly to the award having a useful
life of more than one year and an acquisition cost of $5000 or more per
unit. However, consistent with recipient policy, lower limits may be
established.
(m) Excess property means property under the control of any Federal
awarding agency that, as determined by the head thereof, is no longer
required for its needs or the discharge of its responsibilities.
(n) Exempt property means tangible personal property acquired in
whole or in part with Federal funds, where the Federal awarding agency
has statutory authority to vest title in the recipient without further
obligation to the Federal Government. An example of exempt property
authority is contained in the Federal Grant and Cooperative Agreement
Act (31 U.S.C. 6306), for property acquired under an award to conduct
basic or applied research by a non-profit institution of higher
education or non-profit organization whose principal purpose is
conducting scientific research.
(o) Federal awarding agency means the Federal agency that provides
an award to the recipient.
(p) Federal funds authorized means the total amount of Federal funds
obligated by the Federal Government for use by the recipient. This
amount may include any authorized carryover of unobligated funds from
prior funding periods when permitted by agency regulations or agency
implementing instructions.
(q) Federal share of real property, equipment, or supplies means
that percentage of the property's acquisition costs and any improvement
expenditures paid with Federal funds.
(r) Funding period means the period of time when Federal funding is
available for obligation by the recipient.
(s) Intangible property and debt instruments means, but is not
limited to, trademarks, copyrights, patents and patent applications and
such property as loans, notes and other debt instruments, lease
agreements, stock and other instruments of property ownership, whether
considered tangible or intangible.
(t) Obligations means the amounts of orders placed, contracts and
grants awarded, services received and similar transactions during a
given period that require payment by the recipient during the same or a
future period.
(u) Outlays or expenditures means charges made to the project or
program. They may be reported on a cash or accrual basis. For reports
prepared on a cash basis, outlays are the sum of cash disbursements for
direct charges for goods and services, the amount of indirect expense
charged, the value of third party in-kind contributions applied and the
amount of cash advances and payments made to subrecipients. For reports
prepared on an accrual basis, outlays are the sum of cash disbursements
for direct charges for goods and services, the amount of indirect
expense incurred, the value of in-kind contributions applied, and the
net increase (or decrease) in the amounts owed by the recipient for
goods and other property received, for services performed by employees,
contractors, subrecipients and other payees and other amounts becoming
owed under programs for which no current services or performance are
required.
(v) Personal property means property of any kind except real
property. It may be tangible, having physical existence, or intangible,
having no physical existence, such as copyrights, patents, or
securities.
(w) Prior approval means written approval by an authorized official
evidencing prior consent.
(x) Program income means gross income earned by the recipient that
is directly generated by a supported activity or earned as a result of
the award (see exclusions in Sec. 30.24 (e) and (h)). Program income
includes, but is not limited to, income from fees for services
performed, the use or rental of real or personal property acquired under
federally-funded projects, the sale of commodities or items fabricated
under an award, license fees and royalties on patents and copyrights,
and interest on loans made with award funds. Interest
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earned on advances of Federal funds is not program income. Except as
otherwise provided in Federal awarding agency regulations or the terms
and conditions of the award, program income does not include the receipt
of principal on loans, rebates, credits, discounts, etc., or interest
earned on any of them.
(y) Project costs means all allowable costs, as set forth in the
applicable Federal cost principles, incurred by a recipient and the
value of the contributions made by third parties in accomplishing the
objectives of the award during the project period.
(z) Project period means the period established in the award
document during which Federal sponsorship begins and ends.
(aa) Property means, unless otherwise stated, real property,
equipment, intangible property and debt instruments.
(bb) Real property means land, including land improvements,
structures and appurtenances thereto, but excludes movable machinery and
equipment.
(cc) Recipient means an organization receiving financial assistance
directly from Federal awarding agencies to carry out a project or
program. The term includes public and private institutions of higher
education, public and private hospitals, and other quasi-public and
private non-profit organizations such as, but not limited to, community
action agencies, research institutes, educational associations, and
health centers. The term may include commercial organizations, foreign
or international organizations (such as agencies of the United Nations)
which are recipients, subrecipients, or contractors or subcontractors of
recipients or subrecipients at the discretion of the Federal awarding
agency. The term does not include government-owned contractor-operated
facilities or research centers providing continued support for mission-
oriented, large-scale programs that are government-owned or controlled,
or are designated as federally-funded research and development centers.
(dd) Research and development means all research activities, both
basic and applied, and all development activities that are supported at
universities, colleges, and other non-profit institutions. ``Research''
is defined as a systematic study directed toward fuller scientific
knowledge or understanding of the subject studied. ``Development'' is
the systematic use of knowledge and understanding gained from research
directed toward the production of useful materials, devices, systems, or
methods, including design and development of prototypes and processes.
The term research also includes activities involving the training of
individuals in research techniques where such activities utilize the
same facilities as other research and development activities and where
such activities are not included in the instruction function.
(ee) Small award means a grant or cooperative agreement not
exceeding the small purchase threshold fixed at 41 U.S.C. 403(11)
(currently $100,000).
(ff) Subaward means an award of financial assistance in the form of
money, or property in lieu of money, made under an award by a recipient
to an eligible subrecipient or by a subrecipient to a lower tier
subrecipient. The term includes financial assistance when provided by
any legal agreement, even if the agreement is called a contract, but
does not include procurement of goods and services nor does it include
any form of assistance which is excluded from the definition of
``award'' in paragraph (e) of this section.
(gg) Subrecipient means the legal entity to which a subaward is made
and which is accountable to the recipient for the use of the funds
provided. The term may include foreign or international organizations
(such as agencies of the United Nations) at the discretion of the
Federal awarding agency.
(hh) Supplies means all personal property excluding equipment,
intangible property, and debt instruments as defined in this section,
and inventions of a contractor conceived or first actually reduced to
practice in the performance of work under a funding agreement (``subject
inventions''), as defined in 37 CFR part 401, ``Rights to Inventions
Made by Nonprofit Organizations
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and Small Business Firms Under Government Grants, Contracts, and
Cooperative Agreements.''
(ii) Suspension means an action by a Federal awarding agency that
temporarily withdraws Federal sponsorship under an award, pending
corrective action by the recipient or pending a decision to terminate
the award by the Federal awarding agency. Suspension of an award is a
separate action from suspension under Federal agency regulations
implementing Executive Orders 12549 and 12689, ``Debarment and
Suspension.''
(jj) Termination means the cancellation of Federal sponsorship, in
whole or in part, under an agreement at any time prior to the date of
completion.
(kk) Third party in-kind contributions means the value of non-cash
contributions provided by non-Federal third parties. Third party in-kind
contributions may be in the form of real property, equipment, supplies
and other expendable property, and the value of goods and services
directly benefiting and specifically identifiable to the project or
program.
(ll) Unliquidated obligations, for financial reports prepared on a
cash basis, means the amount of obligations incurred by the recipient
that have not been paid. For reports prepared on an accrued expenditure
basis, they represent the amount of obligations incurred by the
recipient for which an outlay has not been recorded.
(mm) Unobligated balance means the portion of the funds authorized
by the Federal awarding agency that has not been obligated by the
recipient and is determined by deducting the cumulative obligations from
the cumulative funds authorized.
(nn) Unrecovered indirect cost means the difference between the
amount awarded and the amount which could have been awarded under the
recipient's approved negotiated indirect cost rate.
(oo) Working capital advance means a procedure where by funds are
advanced to the recipient to cover its estimated disbursement needs for
a given initial period.
Sec. 30.3 Effect on other issuances.
For awards subject to Circular A-110, all administrative
requirements of codified program regulations, program manuals, handbooks
and other nonregulatory materials which are inconsistent with the
requirements of Circular A-110 shall be superseded, except to the extent
they are required by statute, or authorized in accordance with the
deviations provision in Sec. 30.4.
Sec. 30.4 Deviations.
The Office of Management and Budget (OMB) may grant exceptions for
classes of grants or recipients subject to the requirements of Circular
A-110 when exceptions are not prohibited by statute. However, in the
interest of maximum uniformity, exceptions from the requirements of
Circular A-110 shall be permitted only in unusual circumstances. EPA may
apply more restrictive requirements to a class of recipients when
approved by OMB. EPA may apply less restrictive requirements when
awarding small awards, except for those requirements which are
statutory. Exceptions on a case-by-case basis may also be made by EPA.
Sec. 30.5 Subawards.
Unless sections of Circular A-110 specifically exclude subrecipients
from coverage, the provisions of Circular A-110 shall be applied to
subrecipients performing work under awards if such subrecipients are
institutions of higher education, hospitals or other non-profit
organizations. State and local government subrecipients are subject to
the provisions of regulations in 40 CFR part 31 implementing the grants
management common rule, ``Uniform Administrative Requirements for Grants
and Cooperative Agreements to State and Local Governments,''.
Sec. 30.6 Availability of OMB circulars.
OMB circulars cited in this part are available from the Office of
Management and Budget (OMB) by writing to the Executive Office of the
President, Publications Service, 725 17th Street, NW., Suite 200,
Washington, DC 20503.
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Subpart B--Pre-Award Requirements
Sec. 30.10 Purpose.
Sections 30.11 through 30.18 prescribe forms and instructions and
other pre-award matters to be used in applying for Federal awards.
Sec. 30.11 Pre-award policies.
(a) Use of grants and cooperative agreements, and contracts. In each
instance, EPA shall decide on the appropriate award instrument (i.e.,
grant, cooperative agreement, or contract). The Federal Grant and
Cooperative Agreement Act (31 U.S.C. 6301-08) governs the use of grants,
cooperative agreements and contracts. A grant or cooperative agreement
shall be used only when the principal purpose of a transaction is to
accomplish a public purpose of support or stimulation authorized by
Federal statute. The statutory criterion for choosing between grants and
cooperative agreements is that for the latter, ``substantial involvement
is expected between the executive agency and the State, local
government, or other recipient when carrying out the activity
contemplated in the agreement.'' Contracts shall be used when the
principal purpose is acquisition of property or services for the direct
benefit or use of the Federal Government.
(b) Public notice and priority setting. EPA shall notify the public
of its intended funding priorities for discretionary grant programs,
unless funding priorities are established by Federal statute.
(c) By submitting an application to EPA, the applicant grants EPA
permission to share the application with technical reviewers both within
and outside the Agency.
Sec. 30.12 Forms for applying for Federal assistance.
(a) EPA shall comply with the applicable report clearance
requirements of 5 CFR part 1320, ``Controlling Paperwork Burdens on the
Public,'' with regard to all forms used by EPA in place of or as a
supplement to the Standard Form 424 (SF-424) series.
(b) Applicants shall use the SF-424 series or those forms and
instructions prescribed by EPA.
(c) For Federal programs covered by Executive Order 12372,
``Intergovernmental Review of Federal Programs,'' the applicant shall
complete the appropriate sections of the SF-424 (Application for Federal
Assistance) indicating whether the application was subject to review by
the State Single Point of Contact (SPOC). The name and address of the
SPOC for a particular State can be obtained from EPA or the Catalog of
Federal Domestic Assistance. The SPOC shall advise the applicant whether
the program for which application is made has been selected by that
State for review.
(d) If the SF-424 form is not used EPA should indicate whether the
application is subject to review by the State under Executive Order
12372.
Sec. 30.13 Debarment and suspension.
EPA and recipients shall comply with the nonprocurement debarment
and suspension regulations in 40 CFR part 32 implementing Executive
Orders 12549 and 12689, ``Debarment and Suspension.'' 40 CFR part 32
restricts subawards and contracts with certain parties that are
debarred, suspended or otherwise excluded from or ineligible for
participation in Federal assistance programs or activities.
Sec. 30.14 Special award conditions.
If an applicant or recipient: has a history of poor performance, is
not financially stable; has a management system that does not meet the
standards prescribed in Circular A-110; has not conformed to the terms
and conditions of a previous award; or is not otherwise responsible, EPA
may impose additional requirements as needed, provided that such
applicant or recipient is notified in writing as to: the nature of the
additional requirements, the reason why the additional requirements are
being imposed, the nature of the corrective action needed, the time
allowed for completing the corrective actions, and the method for
requesting reconsideration of the additional requirements imposed. Any
special conditions shall be promptly removed once the conditions that
prompted them have been corrected.
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Sec. 30.15 Metric system of measurement.
The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205), declares that the metric system is
the preferred measurement system for U.S. trade and commerce. The Act
requires each Federal agency to establish a date or dates in
consultation with the Secretary of Commerce, when the metric system of
measurement will be used in the agency's procurements, grants, and other
business-related activities. Metric implementation may take longer where
the use of the system is initially impractical or likely to cause
significant inefficiencies in the accomplishment of federally-funded
activities. EPA shall follow the provisions of Executive Order 12770,
``Metric Usage in Federal Government Programs.''
Sec. 30.16 Resource Conservation and Recovery Act (RCRA).
Resource Conservation and Recovery Act (RCRA) (Public Law 94-580
codified at 42 U.S.C. 6962). Under the Act, any State agency or agency
of a political subdivision of a State which is using appropriated
Federal funds must comply with Section 6002. Section 6002 requires that
preference be given in procurement programs to the purchase of specific
products containing recycled materials identified in guidelines
developed by EPA (40 CFR parts 247 through 254). Accordingly, State and
local institutions of higher education, hospitals, and non-profit
organizations that receive direct Federal awards or other Federal funds
shall give preference in their procurement programs funded with Federal
funds to the purchase of recycled products pursuant to EPA's guidelines.
Further, pursuant to Executive Order 12873 (dated October 20, 1993)
recipients are to print documents/reports prepared under an EPA award of
assistance double sided on recycled paper. This requirement does not
apply to Standard Forms. These forms are printed on recycled paper as
available through the General Services Administration.
Sec. 30.17 Certifications and representations.
Unless prohibited by statute or codified regulation, EPA will allow
recipients to submit certifications and representations required by
statute, Executive Order, or regulation on an annual basis, if the
recipients have ongoing and continuing relationships with the agency.
Annual certifications and representations shall be signed by responsible
officials with the authority to ensure recipients' compliance with the
pertinent requirements.
Sec. 30.18 Hotel and motel fire safety.
The Hotel and Motel Fire Safety Act of 1990 (Public Law 101-391)
establishes a number of fire safety standards which must be met for
hotels and motels. The law provides further that Federal funds may not
be used to sponsor a conference, meeting, or training seminar held in a
hotel or motel which does not meet the law's fire protection and control
guidelines. If necessary, the head of the Federal agency may waive this
prohibition in the public interest.
Subpart C--Post-Award Requirements
Financial and Program Management
Sec. 30.20 Purpose of financial and program management.
Sections 30.21 through 30.28 prescribe standards for financial
management systems, methods for making payments and rules for:
satisfying cost sharing and matching requirements, accounting for
program income, budget revision approvals, making audits, determining
allowability of cost, and establishing fund availability.
Sec. 30.21 Standards for financial management systems.
(a) EPA shall require recipients to relate financial data to
performance data and develop unit cost information whenever practical.
(b) Recipients' financial management systems shall provide for the
following.
(1) Accurate, current and complete disclosure of the financial
results of each federally-sponsored project or program in accordance
with the reporting requirements set forth in Sec. 30.52. If EPA requires
reporting on an accrual basis from a recipient that maintains its
records on other than an accrual
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basis, the recipient shall not be required to establish an accrual
accounting system. These recipients may develop such accrual data for
its reports on the basis of an analysis of the documentation on hand.
(2) Records that identify adequately the source and application of
funds for federally-sponsored activities. These records shall contain
information pertaining to Federal awards, authorizations, obligations,
unobligated balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds,
property and other assets. Recipients shall adequately safeguard all
such assets and assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award.
Whenever appropriate, financial information should be related to
performance and unit cost data.
(5) Written procedures to minimize the time elapsing between the
transfer of funds to the recipient from the U.S. Treasury and the
issuance or redemption of checks, warrants or payments by other means
for program purposes by the recipient. To the extent that the provisions
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern,
payment methods of State agencies, instrumentalities, and fiscal agents
shall be consistent with CMIA Treasury-State Agreements or the CMIA
default procedures codified at 31 CFR part 205, ``Withdrawal of Cash
from the Treasury for Advances under Federal Grant and Other Programs.''
(6) Written procedures for determining the reasonableness,
allocability and allowability of costs in accordance with the provisions
of the applicable Federal cost principles and the terms and conditions
of the award.
(7) Accounting records including cost accounting records that are
supported by source documentation.
(c) Where the EPA guarantees or insures the repayment of money
borrowed by the recipient, the recipient shall provide adequate bonding
and insurance if the bonding and insurance requirements of the recipient
are not deemed adequate to protect the interest of the Federal
Government.
(d) Recipients shall obtain adequate fidelity bond coverage where
coverage to protect the Federal Government's interest is insufficient.
(e) Where bonds are required in the situations described above, the
bonds shall be obtained from companies holding certificates of authority
as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety
Companies Doing Business with the United States.''
Sec. 30.22 Payment.
(a) Payment methods shall minimize the time elapsing between the
transfer of funds from the United States Treasury and the issuance or
redemption of checks, warrants, or payment by other means by the
recipients. Payment methods of State agencies or instrumentalities shall
be consistent with Treasury-State CMIA agreements or default procedures
codified at 31 CFR part 205.
(b) Recipients are to be paid in advance, provided they maintain or
demonstrate the willingness to maintain: written procedures that
minimize the time elapsing between the transfer of funds and
disbursement by the recipient; and financial management systems that
meet the standards for fund control and accountability as established in
Sec. 30.21. Cash advances to a recipient organization shall be limited
to the minimum amounts needed and be timed to be in accordance with the
actual, immediate cash requirements of the recipient organization in
carrying out the purpose of the approved program or project. The timing
and amount of cash advances shall be as close as is administratively
feasible to the actual disbursements by the recipient organization for
direct program or project costs and the proportionate share of any
allowable indirect costs.
(c) Whenever possible, advances shall be consolidated to cover
anticipated cash needs for all awards made by the EPA to the recipient.
(1) Advance payment mechanisms include, but are not limited to,
Treasury check and electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
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(3) Recipients shall be authorized to submit requests for advances
and reimbursements at least monthly when electronic fund transfers are
not used.
(d) Requests for Treasury check advance payment shall be submitted
on SF-270, ``Request for Advance or Reimbursement,'' or other forms as
may be authorized by OMB. This form is not to be used when Treasury
check advance payments are made to the recipient automatically through
the use of a predetermined payment schedule or if precluded by special
instructions for electronic funds transfer.
(e) Reimbursement is the preferred method when the requirements in
paragraph (b) of this section cannot be met. EPA may also use this
method on any construction agreement, or if the major portion of the
construction project is accomplished through private market financing or
Federal loans, and the Federal assistance constitutes a minor portion of
the project.
(1) When the reimbursement method is used, EPA shall make payment
within 30 days after receipt of the billing, unless the billing is
improper.
(2) Recipients shall be authorized to submit request for
reimbursement at least monthly when electronic funds transfers are not
used.
(f) If a recipient cannot meet the criteria for advance payments and
EPA has determined that reimbursement is not feasible because the
recipient lacks sufficient working capital, EPA may provide cash on a
working capital advance basis. Under this procedure, EPA shall advance
cash to the recipient to cover its estimated disbursement needs for an
initial period generally geared to the awardee's disbursing cycle.
Thereafter, EPA shall reimburse the recipient for its actual cash
disbursements. The working capital advance method of payment shall not
be used for recipients unwilling or unable to provide timely advances to
their subrecipient to meet the subrecipient's actual cash disbursements.
(g) To the extent available, recipients shall disburse funds
available from repayments to and interest earned on a revolving fund,
program income, rebates, refunds, contract settlements, audit recoveries
and interest earned on such funds before requesting additional cash
payments.
(h) Unless otherwise required by statute, EPA shall not withhold
payments for proper charges made by recipients at any time during the
project period unless paragraph (h) (1) or (2) of this section applies.
(1) A recipient has failed to comply with the project objectives,
the terms and conditions of the award, or Federal reporting
requirements.
(2) The recipient or subrecipient is delinquent in a debt to the
United States as defined in OMB Circular A-129, ``Managing Federal
Credit Programs.'' Under such conditions, EPA may, upon reasonable
notice, inform the recipient that payments shall not be made for
obligations incurred after a specified date until the conditions are
corrected or the indebtedness to the Federal Government is liquidated.
(i) Standards governing the use of banks and other institutions as
depositories of funds advanced under awards are as follows.
(1) Except for situations described in paragraph (i)(2) of this
section, EPA shall not require separate depository accounts for funds
provided to a recipient or establish any eligibility requirements for
depositories for funds provided to a recipient. However, recipients must
be able to account for the receipt, obligation and expenditure of funds.
(2) Advances of Federal funds shall be deposited and maintained in
insured accounts whenever possible.
(j) Consistent with the national goal of expanding the opportunities
for women-owned and minority-owned business enterprises, recipients
shall be encouraged to use women-owned and minority-owned banks (a bank
which is owned at least 50 percent by women or minority group members).
(k) Recipients shall maintain advances of Federal funds in interest
bearing accounts, unless paragraph (k) (1), (2) or (3) of this section
applies.
(1) The recipient receives less than $120,000 in Federal awards per
year.
(2) The best reasonably available interest bearing account would not
be expected to earn interest in excess of $250 per year on Federal cash
balances.
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(3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non-
Federal cash resources.
(l) For those entities where CMIA and its implementing regulations
do not apply, interest earned on Federal advances deposited in interest
bearing accounts shall be remitted annually to Department of Health and
Human Services, Payment Management System, P.O. Box 6021, Rockville, MD
20852. Interest amounts up to $250 per year may be retained by the
recipient for administrative expense. State universities and hospitals
shall comply with CMIA, as it pertains to interest. If an entity subject
to CMIA uses its own funds to pay pre-award costs for discretionary
awards without prior written approval from EPA, it waives its right to
recover the interest under CMIA. In keeping with Electronic Funds
Transfer rules, (31 CFR part 206), interest should be remitted to the
HHS Payment Management System through an electronic medium such as the
FEDWIRE Deposit system. Recipients which do not have this capability
should use a check.
(m) Except as noted elsewhere in Circular A-110, only the following
forms shall be authorized for the recipients in requesting advances and
reimbursements. EPA shall not require more than an original and two
copies of these forms.
(1) SF-270, Request for Advance or Reimbursement. EPA shall adopt
the SF-270 as a standard form for all nonconstruction programs when
electronic funds transfer or predetermined advance methods are not used.
However, EPA has the option of using this form for construction programs
in lieu of the SF-271, ``Outlay Report and Request for Reimbursement for
Construction Programs.''
(2) SF-271, Outlay Report and Request for Reimbursement for
Construction Programs. EPA shall adopt the SF-271 as the standard form
to be used for requesting reimbursement for construction programs.
However, the SF-270 may be substituted when EPA determines that it
provides adequate information to meet its needs.
Sec. 30.23 Cost sharing or matching.
EPA shall not require cost sharing or matching unless required by
statute, regulation, Executive Order, or official Agency policy.
(a) All contributions, including cash and third party in-kind, shall
be accepted as part of the recipient's cost sharing or matching when
such contributions meet all of the following criteria.
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other federally-
assisted project or program.
(3) Are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award,
except where authorized by Federal statute to be used for cost sharing
or matching.
(6) Are identified in the approved budget.
(7) Conform to other provisions of Circular A-110, as applicable.
(b) Unrecovered indirect costs may be included as part of cost
sharing or matching only with the prior approval of the EPA Award
Official.
(c) Values for recipient contributions of services and property
shall be established in accordance with the applicable cost principles.
If, after consultation with Agency property management personnel, the
EPA Award Official authorizes recipients to donate buildings or land for
construction or facilities acquisition projects or long-term use, the
value of the donated property for cost sharing or matching shall be the
lesser of paragraph (c) (1) or (2) of this section.
(1) The certified value of the remaining life of the property
recorded in the recipient's accounting records at the time of donation.
(2) The current fair market value. However, when there is sufficient
justification, the EPA Award Official may approve the use of the current
fair market value of the donated property, even if it exceeds the
certified value at the time of donation to the project.
(d) Volunteer services furnished by professional and technical
personnel,
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consultants, and other skilled and unskilled labor may be counted as
cost sharing or matching if the service is an integral and necessary
part of an approved project or program. Rates for volunteer services
shall be consistent with those paid for similar work in the recipient's
organization. In those instances in which the required skills are not
found in the recipient organization, rates shall be consistent with
those paid for similar work in the labor market in which the recipient
competes for the kind of services involved. In either case, paid fringe
benefits that are reasonable, allowable, and allocable may be included
in the valuation.
(e) When an employer other than the recipient furnishes the services
of an employee, these services shall be valued at the employee's regular
rate of pay (plus an amount of fringe benefits that are reasonable,
allowable, and allocable, but exclusive of overhead costs), provided
these services are in the same skill for which the employee is normally
paid.
(f) Donated supplies may include such items as expendable equipment,
office supplies, laboratory supplies or workshop and classroom supplies.
Value assessed to donated supplies included in the cost sharing or
matching share shall be reasonable and shall not exceed the fair market
value of the property at the time of the donation.
(g) The method used for determining cost sharing or matching for
donated equipment, buildings and land for which title passes to the
recipient may differ according to the purpose of the award, if paragraph
(g) (1) or (2) of this section applies.
(1) If the purpose of the award is to assist the recipient in the
acquisition of equipment, buildings or land, the total value of the
donated property may be claimed as cost sharing or matching.
(2) If the purpose of the award is to support activities that
require the use of equipment, buildings or land, normally only
depreciation or use charges for equipment and buildings may be made.
However, the full value of equipment or other capital assets and fair
rental charges for land may be allowed, provided that the EPA technical
program office, after consultation with EPA property management
personnel, has approved the charges.
(h) The value of donated property shall be determined in accordance
with the usual accounting policies of the recipient, with the following
qualifications.
(1) The value of donated land and buildings shall not exceed its
fair market value at the time of donation to the recipient as
established by an independent appraiser (e.g., certified real property
appraiser or General Services Administration representative) and
certified by a responsible official of the recipient.
(2) The value of donated equipment shall not exceed the fair market
value of equipment of the same age and condition at the time of
donation.
(3) The value of donated space shall not exceed the fair rental
value of comparable space as established by an independent appraisal of
comparable space and facilities in a privately-owned building in the
same locality.
(4) The value of loaned equipment shall not exceed its fair rental
value.
(5) The following requirements pertain to the recipient's supporting
records for in-kind contributions from third parties.
(i) Volunteer services shall be documented and, to the extent
feasible, supported by the same methods used by the recipient for its
own employees.
(ii) The basis for determining the valuation for personal service,
material, equipment, buildings and land shall be documented.
Sec. 30.24 Program income.
(a) EPA shall apply the standards set forth in this section in
requiring recipient organizations to account for program income related
to projects financed in whole or in part with Federal funds.
(b) Except as provided in paragraph (h) of this section, program
income earned during the project period shall be retained by the
recipient and, in accordance with EPA regulations or the terms and
conditions of the award, shall be used in one or more of the ways listed
in the following.
(1) Added to funds committed to the project by EPA and recipient and
used
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to further eligible project or program objectives.
(2) Used to finance the non-Federal share of the project or program.
(3) Deducted from the total project or program allowable cost in
determining the net allowable costs on which the Federal share of costs
is based.
(c) When EPA authorizes the disposition of program income as
described in paragraphs (b)(1) or (2) of this section, program income in
excess of any limits stipulated shall be used in accordance with
paragraph (b)(3) of this section.
(d) In the event that the EPA does not specify in its regulations or
the terms and conditions of the award how program income is to be used,
paragraph (b)(3) of this section shall apply automatically to all
projects or programs except research. For awards that support research,
paragraph (b)(1) of this section shall apply automatically unless EPA
indicates in the terms and conditions another alternative on the award
or the recipient is subject to special award conditions, as indicated in
Sec. 30.14.
(e) Unless EPA regulations or the terms and conditions of the award
provide otherwise, recipients shall have no obligation to the Federal
Government regarding program income earned after the end of the project
period.
(f) If authorized by EPA regulations or the terms and conditions of
the award, costs incident to the generation of program income may be
deducted from gross income to determine program income, provided these
costs have not been charged to the award.
(g) Proceeds from the sale of property shall be handled in
accordance with the requirements of the Property Standards (See
Secs. 30.30 through 30.37).
(h) Unless EPA regulations or the terms and condition of the award
provide otherwise, recipients shall have no obligation to the Federal
Government with respect to program income earned from license fees and
royalties for copyrighted material, patents, patent applications,
trademarks, and inventions produced under an award. However, Patent and
Trademark Amendments (35 U.S.C. 18) apply to inventions made under an
experimental, developmental, or research award.
Sec. 30.25 Revision of budget and program plans.
(a) The budget plan is the financial expression of the project or
program as approved during the award process. The budget shall include
both the Federal and non-Federal share. It shall be related to
performance for program evaluation purposes whenever appropriate.
(b) Recipients are required to report deviations from budget and
program plans, and request prior approvals for budget and program plan
revisions, in accordance with this section.
(c) For nonconstruction awards, unless EPA regulations provide
otherwise, recipients shall request prior written approvals from:
(1) The EPA Award Official for the following:
(i) Change in the scope or the objective of the project or program
(even if there is no associated budget revision requiring prior written
approval).
(ii) The need for additional Federal funding.
(iii) The inclusion of costs that require prior approval in
accordance with OMB Circular A-21, ``Cost Principles for Institutions of
Higher Education,'' OMB Circular A-122, ``Cost Principles for Non-Profit
Organizations,'' or 45 CFR part 74 appendix E, ``Principles for
Determining Costs Applicable to Research and Development under Grants
and Contracts with Hospitals,'' or 48 CFR part 31, ``Contract Cost
Principles and Procedures,'' as applicable.
(2) The technical program office for the following:
(i) Change in a key person specified in the application or award
document.
(ii) The absence for more than three months, or a 25 percent
reduction in time devoted to the project, by the approved project
director or principal investigator.
(iii) The transfer of amounts budgeted for indirect costs to absorb
increases in direct costs, or vice versa.
(iv) The transfer of funds allotted for training allowances (direct
payment to trainees) to other categories of expense.
(v) Unless described in the application and funded in the approved
award, the subaward, transfer or contracting out of any work under an
award. This
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provision does not apply to the purchase of supplies, material,
equipment or general support services.
(d) No other prior approval requirements for specific items may be
imposed unless a deviation has been approved by OMB.
(e) Except for requirements listed in paragraphs (c)(1)(i) and (ii)
of this section, the EPA Award Official may waive cost-related and
administrative prior written approvals required by this part and OMB
cost principles. For awards that support research, these prior approval
requirements are automatically waived unless:
(1) EPA provides otherwise in the award or agency regulation or
(2) One of the conditions in paragraph (f)(2)(i) of this section
applies.
(f) Recipients are authorized without prior approval or a waiver to:
(1) Incur pre-award costs 90 calendar days prior to award.
(i) Pre-award costs incurred more than 90 calendar days prior to
award require the prior approval of the EPA Award Official.
(ii) The applicant must include all pre-award costs in its
application.
(iii) The applicant incurs such costs at its own risk (i.e., EPA is
under no obligation to reimburse such costs if for any reason the
recipient does not receive an award or if the award is less than
anticipated and inadequate to cover such costs).
(iv) EPA will only allow pre-award costs without approval if there
are sufficient programmatic reasons for incurring the expenditures prior
to the award (e.g., time constraints, weather factors, etc.), they are
in conformance with the appropriate cost principles, and any procurement
complies with the requirements of this rule.
(2) Extend the expiration date of the award one time for up to 12
months.
(i) A one-time extension may not be initiated if:
(A) The terms and conditions of the award prohibit the extension;
(B) The extension requires additional Federal funds; or
(C) The extension involves any change in the approved objectives or
scope of the project.
(ii) For one-time extensions, the recipient must notify the EPA
Award Official in writing with the supporting reasons and revised
expiration date at least 10 days before the expiration date specified in
the award.
(iii) This one-time extension may not be exercised merely for the
purpose of using unobligated balances.
(3) Carry forward unobligated balances to subsequent funding periods
providing the recipient notifies the EPA Award Official by means of the
Financial Status Report.
(g) The EPA technical program office may, at its option, restrict
the transfer of funds among direct cost categories or programs,
functions and activities for awards in which the Federal share of the
project exceeds $100,000 and the cumulative amount of such transfers
exceeds or is expected to exceed 10 percent of the total budget as last
approved by EPA. Except as provided for at paragraph (c) of this
section, for awards in which the Federal share is less than $100,000
there are no restrictions on transfers of funds among direct cost
categories. EPA shall not permit a transfer that would cause any Federal
appropriation or part thereof to be used for purposes other than those
consistent with the original intent of the appropriation.
(h) All other changes to nonconstruction budgets, except for the
changes described in paragraph (j) of this section, do not require prior
approval.
(i) For construction awards, recipients shall request prior written
approval promptly from EPA for budget revisions whenever paragraph
(h)(1), (2) or (3) of this section applies.
(1) The revision results from changes in the scope or the objective
of the project or program.
(2) The need arises for additional Federal funds to complete the
project.
(3) A revision is desired which involves specific costs for which
prior written approval requirements may be imposed consistent with
applicable OMB cost principles listed in Sec. 30.27.
(j) No other prior approval requirements for specific items may be
imposed unless a deviation has been approved by OMB.
(k) When EPA makes an award that provides support for both
construction and nonconstruction work, EPA may require the recipient to
request prior
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approval before making any fund or budget transfers between the two
types of work supported.
(l) For both construction and nonconstruction awards, EPA shall
require recipients to notify the agency in writing promptly whenever the
amount of Federal authorized funds is expected to exceed the needs of
the recipient for the project period by more than $5000 or five percent
of the Federal award, whichever is greater. This notification shall not
be required if an application for additional funding is submitted for a
continuation award.
(m) When requesting approval for budget revisions, recipients shall
use the budget forms that were used in the application unless the EPA
indicates that a letter clearly describing the details of the request
will suffice.
(n) Within 30 calendar days from the date of receipt of the request
for budget revisions, EPA shall review the request and notify the
recipient whether the budget revisions have been approved. If the
revision is still under consideration at the end of 30 calendar days,
EPA shall inform the recipient in writing of the date when the recipient
may expect the decision.
Sec. 30.26 Non-Federal audits.
(a) Recipients and subrecipients that are institutions of higher
education or other non-profit organizations (including hospitals) shall
be subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133,
``Audits of States, Local Governments, and Non-Profit Organizations.''
(b) State and local governments shall be subject to the audit
requirements contained in the Single Audit Act Amendments of 1996 (31
U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of States,
Local Governments, and Non-Profit Organizations.''
(c) For-profit hospitals not covered by the audit provisions of
revised OMB Circular A-133 shall be subject to the audit requirements of
the Federal awarding agencies.
(d) Commercial organizations shall be subject to the audit
requirements of EPA or the prime recipient as incorporated into the
award document.
[61 FR 6067, Feb. 15, 1996, as amended at 62 FR 45939, 45944, Aug. 29,
1997]
Sec. 30.27 Allowable costs.
(a) For each kind of recipient, there is a set of Federal principles
for determining allowable costs. Allowability of costs shall be
determined in accordance with the cost principles applicable to the
entity incurring the costs. Thus, allowability of costs incurred by
State, local or federally-recognized Indian tribal governments is
determined in accordance with the provisions of OMB Circular A-87,
``Cost Principles for State and Local Governments.'' The allowability of
costs incurred by non-profit organizations is determined in accordance
with the provisions of OMB Circular A-122, ``Cost Principles for Non-
Profit Organizations.'' The allowability of costs incurred by
institutions of higher education is determined in accordance with the
provisions of OMB Circular A-21, ``Cost Principles for Educational
Institutions.'' The allowability of costs incurred by hospitals is
determined in accordance with the provisions of appendix E of 45 CFR
part 74, ``Principles for Determining Costs Applicable to Research and
Development Under Grants and Contracts with Hospitals.'' The
allowability of costs incurred by commercial organizations and those
non-profit organizations listed in Attachment C to Circular A-122 is
determined in accordance with the provisions of the Federal Acquisition
Regulation (FAR) at 48 CFR part 31. In addition, EPA's annual
Appropriations Acts may contain restrictions on the use of assistance
funds. For example, the Acts may prohibit the use of funds to support
intervention in Federal regulatory or adjudicatory proceedings.
(b) EPA will limit its participation in the salary rate (excluding
overhead) paid to individual consultants retained by recipients or by a
recipient's contractors or subcontractors to the maximum daily rate for
level 4 of the Executive Schedule unless a greater amount is authorized
by law. (Recipient's may, however, pay consultants more than this
amount.) This limitation applies to consultation services of designated
individuals with specialized skills who
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are paid at a daily or hourly rate. This rate does not include
transportation and subsistence costs for travel performed; recipients
will pay these in accordance with their normal travel reimbursement
practices. Contracts with firms for services which are awarded using the
procurement requirements in this part are not affected by this
limitation.
Sec. 30.28 Period of availability of funds.
Where a funding period is specified, a recipient may charge to the
grant only allowable costs resulting from obligations incurred during
the funding period and any pre-award costs authorized by EPA.
Property Standards
Sec. 30.30 Purpose of property standards.
Sections 30.31 through 30.37 set forth uniform standards governing
management and disposition of property furnished by the Federal
Government whose cost was charged to a project supported by a Federal
award. EPA shall require recipients to observe these standards under
awards and shall not impose additional requirements, unless specifically
required by Federal statute. The recipient may use its own property
management standards and procedures provided it observes the provisions
of Secs. 30.31 through 30.37.
Sec. 30.31 Insurance coverage.
Recipients shall, at a minimum, provide the equivalent insurance
coverage for real property and equipment acquired with Federal funds as
provided to property owned by the recipient. Federally-owned property
need not be insured unless required by the terms and conditions of the
award.
Sec. 30.32 Real property.
EPA shall prescribe requirements for recipients concerning the use
and disposition of real property acquired in whole or in part under
awards. Unless otherwise provided by statute, such requirements, at a
minimum, shall contain the following.
(a) Title to real property shall vest in the recipient subject to
the condition that the recipient shall use the real property for the
authorized purpose of the project as long as it is needed and shall not
encumber the property without approval of EPA.
(b) The recipient shall obtain written approval by EPA for the use
of real property in other federally-sponsored projects when the
recipient determines that the property is no longer needed for the
purpose of the original project. Use in other projects shall be limited
to those under federally-sponsored projects (i.e., awards) or programs
that have purposes consistent with those authorized for support by EPA.
(c) When the real property is no longer needed as provided in
paragraphs (a) and (b) of this section, the recipient shall request
disposition instructions from EPA or its successor Federal awarding
agency. EPA shall observe one or more of the following disposition
instructions.
(1) The recipient may be permitted to retain title without further
obligation to the Federal Government after it compensates the Federal
Government for that percentage of the current fair market value of the
property attributable to the Federal participation in the project.
(2) The recipient may be directed to sell the property under
guidelines provided by EPA and pay the Federal Government for that
percentage of the current fair market value of the property attributable
to the Federal participation in the project (after deducting actual and
reasonable selling and fix-up expenses, if any, from the sales
proceeds). When the recipient is authorized or required to sell the
property, proper sales procedures shall be established that provide for
competition to the extent practicable and result in the highest possible
return.
(3) The recipient may be directed to transfer title to the property
to the Federal Government or to an eligible third party provided that,
in such cases, the recipient shall be entitled to compensation for its
attributable percentage of the current fair market value of the
property.
Sec. 30.33 Federally-owned and exempt property.
(a) Federally-owned property. (1) Title to federally-owned property
remains
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vested in the Federal Government. Recipients shall submit annually an
inventory listing of federally-owned property in their custody to EPA's
property management staff. Upon completion of the award or when the
property is no longer needed, the recipient shall report the property to
EPA's property management staff for further utilization.
(2) If EPA has no further need for the property, it shall be
declared excess and reported to the General Services Administration,
unless EPA has statutory authority to dispose of the property by
alternative methods (e.g., the authority provided by the Federal
Technology Transfer Act (15 U.S.C. 3710 (I)) to donate research
equipment to educational and non-profit organizations in accordance with
Executive Order 12821, ``Improving Mathematics and Science Education in
Support of the National Education Goals.'') Appropriate instructions
shall be issued to the recipient by EPA's property management staff.
(b) Exempt property. When statutory authority exists, EPA has the
option to vest title to property acquired with Federal funds in the
recipient without further obligation to the Federal Government and under
conditions EPA considers appropriate. Such property is ``exempt
property.'' Should EPA not establish conditions, title to exempt
property upon acquisition shall vest in the recipient without further
obligation to the Federal Government.
Sec. 30.34 Equipment.
(a) Title to equipment acquired by a recipient with Federal funds
shall vest in the recipient, subject to conditions of this section.
(b) The recipient shall not use equipment acquired with Federal
funds to provide services to non-Federal outside organizations for a fee
that is less than private companies charge for equivalent services,
unless specifically authorized by Federal statute, for as long as the
Federal Government retains an interest in the equipment.
(c) The recipient shall use the equipment in the project or program
for which it was acquired as long as needed, whether or not the project
or program continues to be supported by Federal funds and shall not
encumber the property without approval of EPA. When no longer needed for
the original project or program, the recipient shall use the equipment
in connection with its other federally-sponsored activities, in the
following order of priority: Activities sponsored by EPA, then
activities sponsored by other Federal awarding agencies.
(d) During the time that equipment is used on the project or program
for which it was acquired, the recipient shall make it available for use
on other projects or programs if such other use will not interfere with
the work on the project or program for which the equipment was
originally acquired. First preference for such other use shall be given
to other projects or programs sponsored by EPA; second preference shall
be given to projects or programs sponsored by other Federal awarding
agencies. If the equipment is owned by the Federal Government, use on
other activities not sponsored by the Federal Government shall be
permissible if authorized by EPA. User charges shall be treated as
program income.
(e) When acquiring replacement equipment, the recipient may use the
equipment to be replaced as trade-in or sell the equipment and use the
proceeds to offset the costs of the replacement equipment subject to the
approval of EPA.
(f) The recipient's property management standards for equipment
acquired with Federal funds and federally-owned equipment shall include
all of the following.
(1) Equipment records shall be maintained accurately and shall
include the following information.
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal stock
number, national stock number, or other identification number.
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal Government.
(v) Acquisition date (or date received, if the equipment was
furnished by the Federal Government) and cost.
(vi) Information from which one can calculate the percentage of
Federal
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participation in the cost of the equipment (not applicable to equipment
furnished by the Federal Government).
(vii) Location and condition of the equipment and the date the
information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data, including date of disposal and sales
price or the method used to determine current fair market value where a
recipient compensates EPA for its share.
(2) Equipment owned by the Federal Government shall be identified to
indicate Federal ownership.
(3) A physical inventory of equipment shall be taken and the results
reconciled with the equipment records at least once every two years. Any
differences between quantities determined by the physical inspection and
those shown in the accounting records shall be investigated to determine
the causes of the difference. The recipient shall, in connection with
the inventory, verify the existence, current utilization, and continued
need for the equipment.
(4) A control system shall be in effect to insure adequate
safeguards to prevent loss, damage, or theft of the equipment. Any loss,
damage, or theft of equipment shall be investigated and fully
documented; if the equipment was owned by the Federal Government, the
recipient shall promptly notify EPA.
(5) Adequate maintenance procedures shall be implemented to keep the
equipment in good condition.
(6) Where the recipient is authorized or required to sell the
equipment, proper sales procedures shall be established which provide
for competition to the extent practicable and result in the highest
possible return.
(g) When the recipient no longer needs the equipment, the equipment
may be used for other activities in accordance with the following
standards. For equipment with a current per unit fair market value of
$5000 or more, the recipient may retain the equipment for other uses
provided that compensation is made to the original Federal awarding
agency or its successor. The amount of compensation shall be computed by
applying the percentage of Federal participation in the cost of the
original project or program to the current fair market value of the
equipment. If the recipient has no need for the equipment, the recipient
shall request disposition instructions from EPA. EPA shall determine
whether the equipment can be used to meet the agency's requirements. If
no requirement exists within that agency, the availability of the
equipment shall be reported to the General Services Administration by
EPA to determine whether a requirement for the equipment exists in other
Federal agencies. EPA shall issue instructions to the recipient no later
than 120 calendar days after the recipient's request and the following
procedures shall govern.
(1) If so instructed or if disposition instructions are not issued
within 120 calendar days after the recipient's request, the recipient
shall sell the equipment and reimburse EPA an amount computed by
applying to the sales proceeds the percentage of Federal participation
in the cost of the original project or program. However, the recipient
shall be permitted to deduct and retain from the Federal share $500 or
ten percent of the proceeds, whichever is less, for the recipient's
selling and handling expenses.
(2) If the recipient is instructed to ship the equipment elsewhere,
the recipient shall be reimbursed by the Federal Government by an amount
which is computed by applying the percentage of the recipient's
participation in the cost of the original project or program to the
current fair market value of the equipment, plus any reasonable shipping
or interim storage costs incurred.
(3) If the recipient is instructed to otherwise dispose of the
equipment, the recipient shall be reimbursed by EPA for such costs
incurred in its disposition.
(4) EPA may reserve the right to transfer the title to the Federal
Government or to a third party named by the Federal Government when such
third party is otherwise eligible under existing statutes. Such transfer
shall be subject to the following standards.
(i) The equipment shall be appropriately identified in the award or
otherwise made known to the recipient in writing.
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(ii) EPA shall issue disposition instructions within 120 calendar
days after receipt of a final inventory. The final inventory shall list
all equipment acquired with grant funds and federally-owned equipment.
If EPA fails to issue disposition instructions within the 120 calendar
day period, the recipient shall apply the standards of this section, as
appropriate.
(iii) When EPA exercises its right to take title, the equipment
shall be subject to the provisions for federally-owned equipment.
Sec. 30.35 Supplies and other expendable property.
(a) Title to supplies and other expendable property shall vest in
the recipient upon acquisition. If there is a residual inventory of
unused supplies exceeding $5000 in total aggregate value upon
termination or completion of the project or program and the supplies are
not needed for any other federally-sponsored project or program, the
recipient shall retain the supplies for use on non-Federal sponsored
activities or sell them, but shall, in either case, compensate the
Federal Government for its share. The amount of compensation shall be
computed in the same manner as for equipment.
(b) The recipient shall not use supplies acquired with Federal funds
to provide services to non-Federal outside organizations for a fee that
is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute as long as the Federal
Government retains an interest in the supplies.
Sec. 30.36 Intangible property.
(a) The recipient may copyright any work that is subject to
copyright and was developed, or for which ownership was purchased, under
an award. EPA reserves a royalty-free, nonexclusive and irrevocable
right to reproduce, publish, or otherwise use the work for Federal
purposes, and to authorize others to do so.
(b) Recipients are subject to applicable regulations governing
patents and inventions, including government-wide regulations issued by
the Department of Commerce at 37 CFR part 401, ``Rights to Inventions
Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts and Cooperative Agreements.''
(c) The Federal Government has the right to:
(1) Obtain, reproduce, publish or otherwise use the data first
produced under an award; and
(2) Authorize others to receive, reproduce, publish, or otherwise
use such data for Federal purposes.
(d)(1) In addition, in response to a Freedom of Information Act
(FOIA) request for research data relating to published research findings
produced under an award that were used by the Federal Government in
developing an agency action that has the force and effect of law, the
EPA shall request, and the recipient shall provide, within a reasonable
time, the research data so that they can be made available to the public
through the procedures established under the FOIA. If the EPA obtains
the research data solely in response to a FOIA request, the agency may
charge the requester a reasonable fee equaling the full incremental cost
of obtaining the research data. This fee should reflect costs incurred
by the agency, the recipient, and applicable subrecipients. This fee is
in addition to any fees the agency may assess under the FOIA (5 U.S.C.
552(a)(4)(A)).
(2) The following definitions apply for purposes of this paragraph
(d):
(i) Research data is defined as the recorded factual material
commonly accepted in the scientific community as necessary to validate
research findings, but not any of the following: preliminary analyses,
drafts of scientific papers, plans for future research, peer reviews, or
communications with colleagues. This ``recorded'' material excludes
physical objects (e.g., laboratory samples). Research data also do not
include:
(A) Trade secrets, commercial information, materials necessary to be
held confidential by a researcher until they are published, or similar
information which is protected under law; and
(B) Personnel and medical information and similar information the
disclosure of which would constitute a clearly unwarranted invasion of
personal privacy, such as information that
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could be used to identify a particular person in a research study.
(ii) Published is defined as either when:
(A) Research findings are published in a peer-reviewed scientific or
technical journal; or
(B) A Federal agency publicly and officially cites the research
findings in support of an agency action that has the force and effect of
law.
(iii) Used by the Federal Government in developing an agency action
that has the force and effect of law is defined as when an agency
publicly and officially cites the research findings in support of an
agency action that has the force and effect of law.
(e) Title to intangible property and debt instruments acquired under
an award or subaward vests upon acquisition in the recipient. The
recipient shall use that property for the originally-authorized purpose,
and the recipient shall not encumber the property without approval of
EPA. When no longer needed for the originally authorized purpose,
disposition of the intangible property shall occur in accordance with
the provisions of Sec. 30.34(g).
[61 FR 6067, Feb. 15, 1996, as amended at 65 FR 14407, 14417, Mar. 16,
2000]
Sec. 30.37 Property trust relationship.
Real property, equipment, intangible property and debt instruments
that are acquired or improved with Federal funds shall be held in trust
by the recipient as trustee for the beneficiaries of the project or
program under which the property was acquired or improved. Agencies may
require recipients to record liens or other appropriate notices of
record to indicate that personal or real property has been acquired or
improved with Federal funds and that use and disposition conditions
apply to the property.
Procurement Standards
Sec. 30.40 Purpose of procurement standards.
Sections 30.41 through 30.48 set forth standards for use by
recipients in establishing procedures for the procurement of supplies
and other expendable property, equipment, real property and other
services with Federal funds. These standards are furnished to ensure
that such materials and services are obtained in an effective manner and
in compliance with the provisions of applicable Federal statutes and
Executive Orders. No additional procurement standards or requirements
shall be imposed by EPA upon recipients, unless specifically required by
Federal statute or Executive Order or approved by OMB.
Sec. 30.41 Recipient responsibilities.
The standards contained in this part do not relieve the recipient of
the contractual responsibilities arising under its contract(s). The
recipient is the responsible authority, without recourse to EPA,
regarding the settlement and satisfaction of all contractual and
administrative issues arising out of procurements entered into in
support of an award or other agreement. This includes disputes, claims,
protests of award, source evaluation or other matters of a contractual
nature. Matters concerning violation of statute are to be referred to
such Federal, State or local authority as may have proper jurisdiction.
Sec. 30.42 Codes of conduct.
The recipient shall maintain written standards of conduct governing
the performance of its employees engaged in the award and administration
of contracts. No employee, officer, or agent shall participate in the
selection, award, or administration of a contract supported by Federal
funds if a real or apparent conflict of interest would be involved. Such
a conflict would arise when the employee, officer, or agent, any member
of his or her immediate family, his or her partner, or an organization
which employs or is about to employ any of the parties indicated herein,
has a financial or other interest in the firm selected for an award. The
officers, employees, and agents of the recipient shall neither solicit
nor accept gratuities, favors, or anything of monetary value from
contractors, or parties to subagreements. However, recipients may set
standards for situations in which the financial interest is not
substantial or the gift is an unsolicited item of nominal value. The
standards of conduct shall provide for
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disciplinary actions to be applied for violations of such standards by
officers, employees, or agents of the recipient.
Sec. 30.43 Competition.
All procurement transactions shall be conducted in a manner to
provide, to the maximum extent practical, open and free competition. The
recipient shall be alert to organizational conflicts of interest as well
as noncompetitive practices among contractors that may restrict or
eliminate competition or otherwise restrain trade. In order to ensure
objective contractor performance and eliminate unfair competitive
advantage, contractors that develop or draft specifications,
requirements, statements of work, invitations for bids and/or requests
for proposals shall be excluded from competing for such procurements.
Awards shall be made to the bidder or offeror whose bid or offer is
responsive to the solicitation and is most advantageous to the
recipient, price, quality and other factors considered. Solicitations
shall clearly set forth all requirements that the bidder or offeror
shall fulfill in order for the bid or offer to be evaluated by the
recipient. Any and all bids or offers may be rejected when it is in the
recipient's interest to do so.
Sec. 30.44 Procurement procedures.
(a) All recipients shall establish written procurement procedures.
These procedures shall provide for, at a minimum, that paragraphs (a)
(1), (2) and (3) of this section apply.
(1) Recipients avoid purchasing unnecessary items.
(2) Where appropriate, an analysis is made of lease and purchase
alternatives to determine which would be the most economical and
practical procurement for the Federal Government.
(3) Solicitations for goods and services provide for all of the
following.
(i) A clear and accurate description of the technical requirements
for the material, product or service to be procured. In competitive
procurements, such a description shall not contain features which unduly
restrict competition.
(ii) Requirements which the bidder/offeror must fulfill and all
other factors to be used in evaluating bids or proposals.
(iii) A description, whenever practicable, of technical requirements
in terms of functions to be performed or performance required, including
the range of acceptable characteristics or minimum acceptable standards.
(iv) The specific features of ``brand name or equal'' descriptions
that bidders are required to meet when such items are included in the
solicitation.
(v) The acceptance, to the extent practicable and economically
feasible, of products and services dimensioned in the metric system of
measurement.
(vi) Preference, to the extent practicable and economically
feasible, for products and services that conserve natural resources and
protect the environment and are energy efficient.
(b) Positive efforts shall be made by recipients to utilize small
businesses, minority-owned firms, and women's business enterprises,
whenever possible. Recipients of Federal awards shall take all of the
following steps to further this goal.
(1) Ensure that small businesses, minority-owned firms, and women's
business enterprises are used to the fullest extent practicable.
(2) Make information on forthcoming opportunities available and
arrange time frames for purchases and contracts to encourage and
facilitate participation by small businesses, minority-owned firms, and
women's business enterprises.
(3) Consider in the contract process whether firms competing for
larger contracts intend to subcontract with small businesses, minority-
owned firms, and women's business enterprises.
(4) Encourage contracting with consortiums of small businesses,
minority-owned firms and women's business enterprises when a contract is
too large for one of these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such
organizations as the Small Business Administration and the Department of
Commerce's Minority Business Development Agency in the solicitation and
utilization of small businesses, minority-owned firms and women's
business enterprises.
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(6) If the prime contractor awards subcontracts, requiring the
contractor to take steps in paragraphs (b)(1) through (5) of this
section.
(c) The type of procuring instruments used (e.g., fixed price
contracts, cost reimbursable contracts, purchase orders, and incentive
contracts) shall be determined by the recipient but shall be appropriate
for the particular procurement and for promoting the best interest of
the program or project involved. The ``cost-plus-a-percentage-of-cost''
or ``percentage of construction cost'' methods of contracting shall not
be used.
(d) Contracts shall be made only with responsible contractors who
possess the potential ability to perform successfully under the terms
and conditions of the proposed procurement. Consideration shall be given
to such matters as contractor integrity, record of past performance,
financial and technical resources or accessibility to other necessary
resources. In certain circumstances, contracts with certain parties are
restricted by agencies' implementation of Executive Orders 12549 and
12689, ``Debarment and Suspension.''
(e) Recipients shall, on request, make available for EPA, pre-award
review and procurement documents, such as request for proposals or
invitations for bids, independent cost estimates, etc., when any of the
following conditions apply.
(1) A recipient's procurement procedures or operation fails to
comply with the procurement standards in EPA's implementation of
Circular A-110.
(2) The procurement is expected to exceed the small purchase
threshold fixed at 41 U.S.C. 403 (11) (currently $100,000) and is to be
awarded without competition or only one bid or offer is received in
response to a solicitation.
(3) The procurement, which is expected to exceed the small purchase
threshold, specifies a ``brand name'' product.
(4) The proposed award over the small purchase threshold is to be
awarded to other than the apparent low bidder under a sealed bid
procurement.
(5) A proposed contract modification changes the scope of a contract
or increases the contract amount by more than the amount of the small
purchase threshold.
Sec. 30.45 Cost and price analysis.
Some form of cost or price analysis shall be made and documented in
the procurement files in connection with every procurement action. Price
analysis may be accomplished in various ways, including the comparison
of price quotations submitted, market prices and similar indicia,
together with discounts. Cost analysis is the review and evaluation of
each element of cost to determine reasonableness, allocability and
allowability.
Sec. 30.46 Procurement records.
Procurement records and files for purchases in excess of the small
purchase threshold shall include the following at a minimum: Basis for
contractor selection; justification for lack of competition when
competitive bids or offers are not obtained; and basis for award cost or
price.
Sec. 30.47 Contract administration.
A system for contract administration shall be maintained to ensure
contractor conformance with the terms, conditions and specifications of
the contract and to ensure adequate and timely follow up of all
purchases. Recipients shall evaluate contractor performance and
document, as appropriate, whether contractors have met the terms,
conditions and specifications of the contract.
Sec. 30.48 Contract provisions.
The recipient shall include, in addition to provisions to define a
sound and complete agreement, the following provisions in all contracts.
The following provisions shall also be applied to subcontracts.
(a) Contracts in excess of the small purchase threshold shall
contain contractual provisions or conditions that allow for
administrative, contractual, or legal remedies in instances in which a
contractor violates or breaches the contract terms, and provide for such
remedial actions as may be appropriate.
(b) All contracts in excess of the small purchase threshold shall
contain
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suitable provisions for termination by the recipient, including the
manner by which termination shall be effected and the basis for
settlement. In addition, such contracts shall describe conditions under
which the contract may be terminated for default as well as conditions
where the contract may be terminated because of circumstances beyond the
control of the contractor.
(c) Except as otherwise required by statute, an award that requires
the contracting (or subcontracting) for construction or facility
improvements shall provide for the recipient to follow its own
requirements relating to bid guarantees, performance bonds, and payment
bonds unless the construction contract or subcontract exceeds $100,000.
For those contracts or subcontracts exceeding $100,000, EPA may accept
the bonding policy and requirements of the recipient, provided EPA has
made a determination that the Federal Government's interest is
adequately protected. If such a determination has not been made, the
minimum requirements shall be as follows.
(1) A bid guarantee from each bidder equivalent to five percent of
the bid price. The ``bid guarantee'' shall consist of a firm commitment
such as a bid bond, certified check, or other negotiable instrument
accompanying a bid as assurance that the bidder shall, upon acceptance
of his bid, execute such contractual documents as may be required within
the time specified.
(2) A performance bond on the part of the contractor for 100 percent
of the contract price. A ``performance bond'' is one executed in
connection with a contract to secure fulfillment of all the contractor's
obligations under such contract.
(3) A payment bond on the part of the contractor for 100 percent of
the contract price. A ``payment bond'' is one executed in connection
with a contract to assure payment as required by statute of all persons
supplying labor and material in the execution of the work provided for
in the contract.
(4) Where bonds are required in the situations described herein, the
bonds shall be obtained from companies holding certificates of authority
as acceptable sureties pursuant to 31 CFR part 223, ``Surety Companies
Doing Business with the United States.''
(d) All negotiated contracts (except those for less than the small
purchase threshold) awarded by recipients shall include a provision to
the effect that the recipient, EPA, the Comptroller General of the
United States, or any of their duly authorized representatives, shall
have access to any books, documents, papers and records of the
contractor which are directly pertinent to a specific program for the
purpose of making audits, examinations, excerpts and transcriptions.
(e) All contracts, including small purchases, awarded by recipients
and their contractors shall contain the procurement provisions of the
appendix to Circular A-110, as applicable.
Reports and Records
Sec. 30.50 Purpose of reports and records.
Sections 30.51 through 30.53 set forth the procedures for monitoring
and reporting on the recipient's financial and program performance and
the necessary standard reporting forms. They also set forth record
retention requirements.
Sec. 30.51 Monitoring and reporting program performance.
(a) Recipients are responsible for managing and monitoring each
project, program, subaward, function or activity supported by the award.
Recipients shall monitor subawards to ensure subrecipients have met the
audit requirements as delineated in Sec. 30.26.
(b) EPA shall prescribe the frequency with which the performance
reports shall be submitted. Except as provided in paragraph (f) of this
section, performance reports shall not be required more frequently than
quarterly or, less frequently than annually. Annual reports shall be due
90 calendar days after the grant year; quarterly or semi-annual reports
shall be due 30 days after the reporting period. EPA may require annual
reports before the anniversary dates of multiple year awards in lieu of
these requirements. The final performance reports are due 90 calendar
days after the expiration or termination of the award.
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(c) If inappropriate, a final technical or performance report shall
not be required after completion of the project.
(d) When required, performance reports shall generally contain, for
each award, brief information on each of the following.
(1) A comparison of actual accomplishments with the goals and
objectives established for the period, the findings of the investigator,
or both. Whenever appropriate and the output of programs or projects can
be readily quantified, such quantitative data should be related to cost
data for computation of unit costs.
(2) Reasons why established goals were not met, if appropriate.
(3) Other pertinent information including, when appropriate,
analysis and explanation of cost overruns or high unit costs.
(e) Recipients shall not be required to submit more than the
original and two copies of performance reports.
(f) Recipients shall immediately notify EPA of developments that
have a significant impact on the award-supported activities. Also,
notification shall be given in the case of problems, delays, or adverse
conditions which materially impair the ability to meet the objectives of
the award. This notification shall include a statement of the action
taken or contemplated, and any assistance needed to resolve the
situation.
(g) EPA may make site visits, as needed.
(h) EPA shall comply with clearance requirements of 5 CFR part 1320
when requesting performance data from recipients.
Sec. 30.52 Financial reporting.
(a) The following forms or such other forms as may be approved by
OMB are authorized for obtaining financial information from recipients.
(1) SF-269 or SF-269A, Financial Status Report. (i) EPA shall
require recipients to use the SF-269 or SF-269A to report the status of
funds for all nonconstruction projects or programs. However, EPA has the
option of not requiring the SF-269 or SF-269A when the SF-270, Request
for Advance or Reimbursement, or SF-272, Report of Federal Cash
Transactions, is determined to provide adequate information to meet its
needs, except that a final SF-269 or SF-269A shall be required at the
completion of the project when the SF-270 is used only for advances.
(ii) EPA shall prescribe whether the report shall be on a cash or
accrual basis. If EPA requires accrual information and the recipient's
accounting records are not normally kept on the accrual basis, the
recipient shall not be required to convert its accounting system, but
shall develop such accrual information through best estimates based on
an analysis of the documentation on hand.
(iii) EPA shall determine the frequency of the Financial Status
Report for each project or program, considering the size and complexity
of the particular project or program. However, the report shall not be
required more frequently than quarterly or less frequently than
annually. A final report shall be required at the completion of the
agreement.
(iv) EPA shall require recipients to submit the SF-269 or SF-269A
(an original and no more than two copies) no later than 30 days after
the end of each specified reporting period for quarterly and semi-annual
reports, and 90 calendar days for annual and final reports. Extensions
of reporting due dates may be approved by EPA upon request of the
recipient.
(2) SF-272, Report of Federal Cash Transactions. (i) When funds are
advanced to recipients EPA shall require each recipient to submit the
SF-272 and, when necessary, its continuation sheet, SF-272A. EPA shall
use this report to monitor cash advanced to recipients and to obtain
disbursement information for each agreement with the recipients.
(ii) EPA may require forecasts of Federal cash requirements in the
``Remarks'' section of the report.
(iii) When practical and deemed necessary, EPA may require
recipients to report in the ``Remarks'' section the amount of cash
advances received in excess of three days. Recipients shall provide
short narrative explanations of actions taken to reduce the excess
balances.
(iv) Recipients shall be required to submit not more than the
original and
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two copies of the SF-272 15 calendar days following the end of each
quarter. EPA may require a monthly report from those recipients
receiving advances totaling $1 million or more per year.
(v) EPA may waive the requirement for submission of the SF-272 for
any one of the following reasons:
(A) When monthly advances do not exceed $25,000 per recipient,
provided that such advances are monitored through other forms contained
in this section;
(B) If, in EPA's opinion, the recipient's accounting controls are
adequate to minimize excessive Federal advances; or
(C) When the electronic payment mechanisms provide adequate data.
(b) When EPA needs additional information or more frequent reports,
the following shall be observed.
(1) When additional information is needed to comply with legislative
requirements, EPA shall issue instructions to require recipients to
submit such information under the ``Remarks'' section of the reports.
(2) When EPA determines that a recipient's accounting system does
not meet the standards in Sec. 30.21, additional pertinent information
to further monitor awards may be obtained upon written notice to the
recipient until such time as the system is brought up to standard. EPA,
in obtaining this information, shall comply with report clearance
requirements of 5 CFR part 1320.
(3) EPA may shade out any line item on any report if not necessary.
(4) EPA may accept the identical information from the recipients in
machine readable format or computer printouts or electronic outputs in
lieu of prescribed formats.
(5) EPA may provide computer or electronic outputs to recipients
when such expedites or contributes to the accuracy of reporting.
Sec. 30.53 Retention and access requirements for records.
(a) This section sets forth requirements for record retention and
access to records for awards to recipients. EPA shall not impose any
other record retention or access requirements upon recipients.
(b) Financial records, supporting documents, statistical records,
and all other records pertinent to an award shall be retained for a
period of three years from the date of submission of the final
expenditure report or, for awards that are renewed quarterly or
annually, from the date of the submission of the quarterly or annual
financial report, as authorized by EPA. The only exceptions are the
following.
(1) If any litigation, claim, or audit is started before the
expiration of the 3-year period, the records shall be retained until all
litigation, claims or audit findings involving the records have been
resolved and final action taken.
(2) Records for real property and equipment acquired with Federal
funds shall be retained for 3 years after final disposition.
(3) When records are transferred to or maintained by EPA, the 3-year
retention requirement is not applicable to the recipient.
(4) Indirect cost rate proposals, cost allocations plans, etc. as
specified in paragraph (g) of this section.
(c) Copies of original records may be substituted for the original
records if authorized by EPA.
(d) EPA shall request transfer of certain records to its custody
from recipients when it determines that the records possess long term
retention value. However, in order to avoid duplicate recordkeeping, EPA
may make arrangements for recipients to retain any records that are
continuously needed for joint use.
(e) EPA, the Inspector General, Comptroller General of the United
States, or any of their duly authorized representatives, have the right
of timely and unrestricted access to any books, documents, papers, or
other records of recipients that are pertinent to the awards, in order
to make audits, examinations, excerpts, transcripts and copies of such
documents. This right also includes timely and reasonable access to a
recipient's personnel for the purpose of interview and discussion
related to such documents. The rights of access in this paragraph are
not limited to the required retention period, but shall last as long as
records are retained.
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(f) Unless required by statute, EPA shall not place restrictions on
recipients that limit public access to the records of recipients that
are pertinent to an award, except when it can be demonstrated that such
records shall be kept confidential and would have been exempted from
disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) if
the records had belonged to EPA.
(g) Indirect cost rate proposals, cost allocations plans, etc.
Paragraphs (g)(1) and (g)(2) of this section apply to the following
types of documents, and their supporting records: indirect cost rate
computations or proposals, cost allocation plans, and any similar
accounting computations of the rate at which a particular group of costs
is chargeable (such as computer usage chargeback rates or composite
fringe benefit rates).
(1) If submitted for negotiation. If the recipient submits to EPA or
the subrecipient submits to the recipient the proposal, plan, or other
computation to form the basis for negotiation of the rate, then the 3-
year retention period for its supporting records starts on the date of
such submission.
(2) If not submitted for negotiation. If the recipient is not
required to submit to EPA or the subrecipient is not required to submit
to the recipient the proposal, plan, or other computation for
negotiation purposes, then the 3-year retention period for the proposal,
plan, or other computation and its supporting records starts at the end
of the fiscal year (or other accounting period) covered by the proposal,
plan, or other computation.
Sec. 30.54 Quality assurance.
If the project officer determines that the grantee's project
involves environmentally related measurements or data generation, the
grantee shall develop and implement quality assurance practices
consisting of policies, procedures, specifications, standards, and
documentation sufficient to produce data of quality adequate to meet
project objectives and to minimize loss of data due to out-of-control
conditions or malfunctions. The quality system must comply with the
requirements of ANSI/ASQC E4, ``Specifications and Guidelines for
Quality Systems for Environmental Data Collection and Environmental
Technology Programs'', which may be obtained from the National Technical
Information Service (NTIS), 5885 Port Royal Road, Springfield, VA 22161.
Termination and Enforcement
Sec. 30.60 Purpose of termination and enforcement.
Sections 30.61 and 30.62 set forth uniform suspension, termination
and enforcement procedures.
Sec. 30.61 Termination.
(a) Awards may be terminated in whole or in part only if paragraph
(a) (1), (2) or (3) of this section applies.
(1) By EPA, if a recipient materially fails to comply with the terms
and conditions of an award.
(2) By EPA with the consent of the recipient, in which case the two
parties shall agree upon the termination conditions, including the
effective date and, in the case of partial termination, the portion to
be terminated.
(3) By the recipient upon sending to EPA written notification
setting forth the reasons for such termination, the effective date, and,
in the case of partial termination, the portion to be terminated.
However, if EPA determines in the case of partial termination that the
reduced or modified portion of the grant will not accomplish the
purposes for which the grant was made, it may terminate the grant in its
entirety under either paragraph (a) (1) or (2) of this section.
(b) If costs are allowed under an award, the responsibilities of the
recipient referred to in Sec. 30.71(a), including those for property
management as applicable, shall be considered in the termination of the
award, and provision shall be made for continuing responsibilities of
the recipient after termination, as appropriate.
Sec. 30.62 Enforcement.
(a) Remedies for noncompliance. If a recipient materially fails to
comply with the terms and conditions of an award, whether stated in a
Federal statute, regulation, assurance, application, or notice of award,
EPA may, in addition
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to imposing any of the special conditions outlined in Sec. 30.14, take
one or more of the following actions, as appropriate in the
circumstances.
(1) Temporarily withhold cash payments pending correction of the
deficiency by the recipient or more severe enforcement action by EPA.
(2) Disallow (that is, deny both use of funds and any applicable
matching credit for) all or part of the cost of the activity or action
not in compliance.
(3) Wholly or partly suspend or terminate the current award.
(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
(b) Hearings and appeals. In taking an enforcement action, EPA shall
provide the recipient an opportunity for hearing, appeal, or other
administrative proceeding to which the recipient is entitled under any
statute or regulation applicable to the action involved. EPA's Dispute
Provisions found at 40 CFR part 31, subpart F, Disputes, are applicable
to assistance awarded under the provisions of this part.
(c) Effects of suspension and termination. Costs of a recipient
resulting from obligations incurred by the recipient during a suspension
or after termination of an award are not allowable unless EPA expressly
authorizes them in the notice of suspension or termination or
subsequently. Other recipient costs during suspension or after
termination which are necessary and not reasonably avoidable are
allowable if paragraphs (c)(1) and (2) of this section apply.
(1) The costs result from obligations which were properly incurred
by the recipient before the effective date of suspension or termination,
are not in anticipation of it, and in the case of a termination, are
noncancellable.
(2) The costs would be allowable if the award were not suspended or
expired normally at the end of the funding period in which the
termination takes effect.
(d) Relationship to debarment and suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude a recipient from being subject to debarment
and suspension under Executive Orders 12549 and 12689 and EPA's
implementing regulations (see Sec. 30.13).
Sec. 30.63 Disputes.
(a) Disagreements should be resolved at the lowest possible level.
(b) If an agreement cannot be reached, the EPA disputes decision
official will provide a written final decision. The EPA disputes
decision official is the individual designated by the award official to
resolve disputes concerning assistance agreements. If the dispute cannot
be resolved the procedures outlined at 40 CFR part 31, subpart F, should
be followed.
Subpart D--After-the-Award Requirements
Sec. 30.70 Purpose.
Sections 30.71 through 30.73 contain closeout procedures and other
procedures for subsequent disallowances and adjustments.
Sec. 30.71 Closeout procedures.
(a) Recipients shall submit, within 90 calendar days after the date
of completion of the award, all financial, performance, and other
reports as required by the terms and conditions of the award. EPA may
approve extensions when requested by the recipient.
(b) Unless EPA authorizes an extension, a recipient shall liquidate
all obligations incurred under the award not later than 90 calendar days
after the funding period or the date of completion as specified in the
terms and conditions of the award or in agency implementing
instructions.
(c) EPA shall make prompt payments to a recipient for allowable
reimbursable costs under the award being closed out.
(d) The recipient shall promptly refund any balances of unobligated
cash that EPA has advanced or paid and that is not authorized to be
retained by the recipient for use in other projects. OMB Circular A-129
governs unreturned amounts that become delinquent debts.
(e) When authorized by the terms and conditions of the award, EPA
shall make a settlement for any upward or downward adjustments to the
Federal
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share of costs after closeout reports are received.
(f) The recipient shall account for any real and personal property
acquired with Federal funds or received from the Federal Government in
accordance with Secs. 30.31 through 30.37.
(g) In the event a final audit has not been performed prior to the
closeout of an award, EPA shall retain the right to recover an
appropriate amount after fully considering the recommendations on
disallowed costs resulting from the final audit.
Sec. 30.72 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the following.
(1) The right of EPA 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 Sec. 30.26.
(4) Property management requirements in Secs. 30.31 through 30.37.
(5) Records retention as required in Sec. 30.53.
(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
EPA and the recipient, provided the responsibilities of the recipient
referred to in Sec. 30.73(a), including those for property management as
applicable, are considered and provisions made for continuing
responsibilities of the recipient, as appropriate.
Sec. 30.73 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, EPA
may reduce the debt by paragraph (a) (1), (2) or (3) of this section.
(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, EPA shall charge interest
on an overdue debt in accordance with 4 CFR chapter II, ``Federal Claims
Collection Standards.''
Appendix to Part 30--Contract Provisions
All contracts awarded by a recipient, including small purchases,
shall contain the following provisions as applicable:
1. Equal Employment Opportunity--All contracts shall contain a
provision requiring compliance with Executive Order 11246, ``Equal
Employment Opportunity,'' as amended by Executive Order 11375,
``Amending Executive Order 11246 Relating to Equal Employment
Opportunity,'' and as supplemented by regulations at 41 CFR part 60,
``Office of Federal Contract Compliance Programs, Equal Employment
Opportunity, Department of Labor.''
2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C.
276c)--All contracts and subgrants in excess of $100,000 for
construction or repair awarded by recipients and subrecipients shall
include a provision for compliance with the Copeland ``Anti-Kickback''
Act (18 U.S.C. 874), as supplemented by Department of Labor regulations
(29 CFR part 3, ``Contractors and Subcontractors on Public Building or
Public Work Financed in Whole or in Part by Loans or Grants from the
United States''). The Act provides that each contractor or subrecipient
shall be prohibited from inducing, by any means, any person employed in
the construction, completion, or repair of public work, to give up any
part of the compensation to which he is otherwise entitled. The
recipient shall report all suspected or reported violations to EPA.
3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--When
required by Federal program legislation, all construction contracts
awarded by the recipients and subrecipients of more than $2000 shall
include a provision for compliance with the Davis-Bacon Act (40 U.S.C.
276a to a-7) and as supplemented by Department of Labor regulations (29
CFR part 5, ``Labor Standards Provisions Applicable to Contracts
Governing Federally Financed and Assisted Construction''). Under this
Act, contractors shall be required to pay wages to laborers and
mechanics at a rate not less than the minimum wages specified in a wage
determination made by the Secretary of Labor. In addition, contractors
shall be required to pay wages not less than once a week. The recipient
shall place a copy of the current prevailing wage determination issued
by the Department of Labor in each solicitation and the award of a
contract shall be conditioned upon the acceptance of the
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wage determination. The recipient shall report all suspected or reported
violations to EPA.
4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333)-
-Where applicable, all contracts awarded by recipients in excess of
$100,000 for construction contracts and in excess of $2500 for other
contracts that involve the employment of mechanics or laborers shall
include a provision for compliance with sections 102 and 107 of the
Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), as
supplemented by Department of Labor regulations (29 CFR part 5). Under
section 102 of the Act, each contractor shall be required to compute the
wages of every mechanic and laborer on the basis of a standard work week
of 40 hours. Work in excess of the standard work week is permissible
provided that the worker is compensated at a rate of not less than 1/2
times the basic rate of pay for all hours worked in excess of 40 hours
in the work week. Section 107 of the Act is applicable to construction
work and provides that no laborer or mechanic shall be required to work
in surroundings or under working conditions which are unsanitary,
hazardous or dangerous. These requirements do not apply to the purchases
of supplies or materials or articles ordinarily available on the open
market, or contracts for transportation or transmission of intelligence.
5. Rights to Inventions Made Under a Contract or Agreement--
Contracts or agreements for the performance of experimental,
developmental, or research work shall provide for the rights of the
Federal Government and the recipient in any resulting invention in
accordance with 37 CFR part 401, ``Rights to Inventions Made by
Nonprofit Organizations and Small Business Firms Under Government
Grants, Contracts and Cooperative Agreements,'' and any implementing
regulations issued by EPA.
6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended--Contracts
and subgrants of amounts in excess of $100,000 shall contain a provision
that requires the recipient to agree to comply with all applicable
standards, orders or regulations issued pursuant to the Clean Air Act
(42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as
amended (33 U.S.C. 1251 et seq.). Violations shall be reported to the
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 more than $100,000 shall file the required
certification. Each tier certifies to the tier above that it will not
and has not used Federal appropriated funds to pay any person or
organization for influencing or attempting to influence an officer or
employee of any agency, a member of Congress, officer or employee of
Congress, or an employee of a member of Congress in connection with
obtaining any Federal contract, grant or any other award covered by 31
U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal
funds that takes place in connection with obtaining any Federal award.
Such disclosures are forwarded from tier to tier up to the recipient.
8. Debarment and Suspension (Executive Orders 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 Executive Orders 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 Executive Order 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.
PART 31--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS--Table of Contents
Subpart A--General
Sec.
31.1 Purpose and scope of this part.
31.2 Scope of subpart.
31.3 Definitions.
31.4 Applicability.
31.5 Effect on other issuances.
31.6 Additions and exceptions.
Subpart B--Pre-Award Requirements
31.10 Forms for applying for grants.
31.11 State plans.
31.12 Special grant or subgrant conditions for ``high-risk'' grantees.
31.13 Principal environmental statutory provisions applicable to EPA
assistance awards.
Subpart C--Post-Award Requirements
Financial Administration
31.20 Standards for financial management systems.
31.21 Payment.
31.22 Allowable costs.
31.23 Period of availability of funds.
31.24 Matching or cost sharing.
31.25 Program income.
31.26 Non-Federal audit.
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Changes, Property, and Subawards
31.30 Changes.
31.31 Real property.
31.32 Equipment.
31.33 Supplies.
31.34 Copyrights.
31.35 Subawards to debarred and suspended parties.
31.36 Procurement.
31.37 Subgrants.
31.38 Indian Self Determination Act.
Reports, Records, Retention, and Enforcement
31.40 Monitoring and reporting program performance.
31.41 Financial reporting.
31.42 Retention and access requirements for records.
31.43 Enforcement.
31.44 Termination for convenience.
31.45 Quality assurance.
Subpart D--After-the-Grant Requirements
31.50 Closeout.
31.51 Later disallowances and adjustments.
31.52 Collection of amounts due.
Subpart E--Entitlement [Reserved]
Subpart F--Disputes
31.70 Disputes.
Appendix A to Part 31--Audit Requirements for State and Local Government
Recipients
Authority: 33 U.S.C. 1251 et seq.; 42 U.S.C. 7401 et seq.; 42 U.S.C.
6901 et seq.; 42 U.S.C. 300f et seq.; 7 U.S.C. 136 et seq.; 15 U.S.C.
2601 et seq.; 42 U.S.C. 9601 et seq.; 20 U.S.C. 4011 et seq.; 33 U.S.C.
1401 et seq.
Source: 53 FR 8075 and 8087, Mar. 11, 1988, unless otherwise noted.
Subpart A--General
Sec. 31.1 Purpose and scope of this part.
This part establishes uniform administrative rules for Federal
grants and cooperative agreements and subawards to State, local and
Indian tribal governments.
Sec. 31.2 Scope of subpart.
This subpart contains general rules pertaining to this part and
procedures for control of exceptions from this part.
Sec. 31.3 Definitions.
As used in this part:
Accrued expenditures mean the charges incurred by the grantee during
a given period requiring the provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subgrantees,
subcontractors, and other payees; and
(3) Other amounts becoming owed under programs for which no current
services or performance is required, such as annuities, insurance
claims, and other benefit payments.
Accrued income means the sum of:
(1) Earnings during a given period from services performed by the
grantee and goods and other tangible property delivered to purchasers,
and
(2) Amounts becoming owed to the grantee for which no current
services or performance is required by the grantee.
Acquisition cost of an item of purchased equipment means the net
invoice unit price of the property including the cost of modifications,
attachments, accessories, or auxiliary apparatus necessary to make the
property usable for the purpose for which it was acquired. Other charges
such as the cost of installation, transportation, taxes, duty or
protective in-transit insurance, shall be included or excluded from the
unit acquisition cost in accordance with the grantee's regular
accounting practices.
Administrative requirements mean those matters common to grants in
general, such as financial management, kinds and frequency of reports,
and retention of records. These are distinguished from programmatic
requirements, which concern matters that can be treated only on a
program-by-program or grant-by-grant basis, such as kinds of activities
that can be supported by grants under a particular program.
Awarding agency means (1) with respect to a grant, the Federal
agency, and (2) with respect to a subgrant, the party that awarded the
subgrant.
Cash contributions means the grantee's cash outlay, including the
outlay of money contributed to the grantee or subgrantee by other public
agencies and institutions, and private organizations and individuals.
When authorized
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by Federal legislation, Federal funds received from other assistance
agreements may be considered as grantee or subgrantee cash
contributions.
Contract means (except as used in the definitions for grant and
subgrant in this section and except where qualified by Federal) a
procurement contract under a grant or subgrant, and means a procurement
subcontract under a contract.
Cost sharing or matching means the value of the third party in-kind
contributions and the portion of the costs of a federally assisted
project or program not borne by the Federal Government.
Cost-type contract means a contract or subcontract under a grant in
which the contractor or subcontractor is paid on the basis of the costs
it incurs, with or without a fee.
Equipment means tangible, nonexpendable, personal property having a
useful life of more than one year and an acquisition cost of $5,000 or
more per unit. A grantee may use its own definition of equipment
provided that such definition would at least include all equipment
defined above.
Expenditure report means: (1) For nonconstruction grants, the SF-269
``Financial Status Report'' (or other equivalent report); (2) for
construction grants, the SF-271 ``Outlay Report and Request for
Reimbursement'' (or other equivalent report).
Federally recognized Indian tribal government means the governing
body or a governmental agency of any Indian tribe, band, nation, or
other organized group or community (including any Native village as
defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat
688) certified by the Secretary of the Interior as eligible for the
special programs and services provided by him through the Bureau of
Indian Affairs.
Government means a State or local government or a federally
recognized Indian tribal government.
Grant means an award of financial assistance, including cooperative
agreements, in the form of money, or property in lieu of money, by the
Federal Government to an eligible grantee. The term does not include
technical assistance which provides services instead of money, or other
assistance in the form of revenue sharing, loans, loan guarantees,
interest subsidies, insurance, or direct appropriations. Also, the term
does not include assistance, such as a fellowship or other lump sum
award, which the grantee is not required to account for.
Grantee means the government to which a grant is awarded and which
is accountable for the use of the funds provided. The grantee is the
entire legal entity even if only a particular component of the entity is
designated in the grant award document.
Local government means a county, municipality, city, town, township,
local public authority (including any public and Indian housing agency
under the United States Housing Act of 1937) school district, special
district, intrastate district, council of governments (whether or not
incorporated as a nonprofit corporation under State law), any other
regional or interstate government entity, or any agency or
instrumentality of a local government.
Obligations means the amounts of orders placed, contracts and
subgrants awarded, goods and services received, and similar transactions
during a given period that will require payment by the grantee during
the same or a future period.
OMB means the U.S. Office of Management and Budget.
Outlays (expenditures) mean charges made to the project or program.
They may be reported on a cash or accrual basis. For reports prepared on
a cash basis, outlays are the sum of actual cash disbursement for direct
charges for goods and services, the amount of indirect expense incurred,
the value of in-kind contributions applied, and the amount of cash
advances and payments made to contractors and subgrantees. For reports
prepared on an accrued expenditure basis, outlays are the sum of actual
cash disbursements, the amount of indirect expense incurred, the value
of inkind contributions applied, and the new increase (or decrease) in
the amounts owed by the grantee for goods and other property received,
for services performed by employees, contractors, subgrantees,
subcontractors, and other payees, and other amounts becoming owed under
programs for which
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no current services or performance are required, such as annuities,
insurance claims, and other benefit payments.
Percentage of completion method refers to a system under which
payments are made for construction work according to the percentage of
completion of the work, rather than to the grantee's cost incurred.
Prior approval means documentation evidencing consent prior to
incurring specific cost.
Real property means land, including land improvements, structures
and appurtenances thereto, excluding movable machinery and equipment.
Share, when referring to the awarding agency's portion of real
property, equipment or supplies, means the same percentage as the
awarding agency's portion of the acquiring party's total costs under the
grant to which the acquisition costs under the grant to which the
acquisition cost of the property was charged. Only costs are to be
counted--not the value of third-party in-kind contributions.
State means any of the several States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or any agency or instrumentality of a
State exclusive of local governments. The term does not include any
public and Indian housing agency under United States Housing Act of
1937.
Subgrant means an award of financial assistance in the form of
money, or property in lieu of money, made under a grant by a grantee to
an eligible subgrantee. The term includes financial assistance when
provided by contractual legal agreement, but does not include
procurement purchases, nor does it include any form of assistance which
is excluded from the definition of grant in this part.
Subgrantee means the government or other legal entity to which a
subgrant is awarded and which is accountable to the grantee for the use
of the funds provided.
Supplies means all tangible personal property other than equipment
as defined in this part.
Suspension means depending on the context, either (1) temporary
withdrawal of the authority to obligate grant funds pending corrective
action by the grantee or subgrantee or a decision to terminate the
grant, or (2) an action taken by a suspending official in accordance
with agency regulations implementing E.O. 12549 to immediately exclude a
person from participating in grant transactions for a period, pending
completion of an investigation and such legal or debarment proceedings
as may ensue.
Termination means permanent withdrawal of the authority to obligate
previously-awarded grant funds before that authority would otherwise
expire. It also means the voluntary relinquishment of that authority by
the grantee or subgrantee. Termination does not include:
(1) Withdrawal of funds awarded on the basis of the grantee's
underestimate of the unobligated balance in a prior period;
(2) Withdrawal of the unobligated balance as of the expiration of a
grant;
(3) Refusal to extend a grant or award additional funds, to make a
competing or noncompeting continuation, renewal, extension, or
supplemental award; or
(4) Voiding of a grant upon determination that the award was
obtained fraudulently, or was otherwise illegal or invalid from
inception.
Terms of a grant or subgrant mean all requirements of the grant or
subgrant, whether in statute, regulations, or the award document.
Third party in-kind contributions mean property or services which
benefit a federally assisted project or program and which are
contributed by non-Federal third parties without charge to the grantee,
or a cost-type contractor under the grant agreement.
Unliquidated obligations for reports prepared on a cash basis mean
the amount of obligations incurred by the grantee that has not been
paid. For reports prepared on an accrued expenditure basis, they
represent the amount of obligations incurred by the grantee for which an
outlay has not been recorded.
Unobligated balance means the portion of the funds authorized by the
Federal agency that has not been obligated by the grantee and is
determined
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by deducting the cumulative obligations from the cumulative funds
authorized.
Sec. 31.4 Applicability.
(a) General. Subparts A-D of this part apply to all grants and
subgrants to governments, except where inconsistent with Federal
statutes or with regulations authorized in accordance with the exception
provision of Sec. 31.6, or:
(1) Grants and subgrants to State and local institutions of higher
education or State and local hospitals.
(2) The block grants authorized by the Omnibus Budget Reconciliation
Act of 1981 (Community Services; Preventive Health and Health Services;
Alcohol, Drug Abuse, and Mental Health Services; Maternal and Child
Health Services; Social Services; Low-Income Home Energy Assistance;
States' Program of Community Development Block Grants for Small Cities;
and Elementary and Secondary Education other than programs administered
by the Secretary of Education under Title V, Subtitle D, Chapter 2,
Section 583--the Secretary's discretionary grant program) and Titles I-
III of the Job Training Partnership Act of 1982 and under the Public
Health Services Act (Section 1921), Alcohol and Drug Abuse Treatment and
Rehabilitation Block Grant and Part C of Title V, Mental Health Service
for the Homeless Block Grant).
(3) Entitlement grants to carry out the following programs of the
Social Security Act:
(i) Aid to Needy Families with Dependent Children (Title IV-A of the
Act, not including the Work Incentive Program (WIN) authorized by
section 402(a)19(G); HHS grants for WIN are subject to this part);
(ii) Child Support Enforcement and Establishment of Paternity (Title
IV-D of the Act);
(iii) Foster Care and Adoption Assistance (Title IV-E of the Act);
(iv) Aid to the Aged, Blind, and Disabled (Titles I, X, XIV, and
XVI-AABD of the Act); and
(v) Medical Assistance (Medicaid) (Title XIX of the Act) not
including the State Medicaid Fraud Control program authorized by section
1903(a)(6)(B).
(4) Entitlement grants under the following programs of The National
School Lunch Act:
(i) School Lunch (section 4 of the Act),
(ii) Commodity Assistance (section 6 of the Act),
(iii) Special Meal Assistance (section 11 of the Act),
(iv) Summer Food Service for Children (section 13 of the Act), and
(v) Child Care Food Program (section 17 of the Act).
(5) Entitlement grants under the following programs of The Child
Nutrition Act of 1966:
(i) Special Milk (section 3 of the Act), and
(ii) School Breakfast (section 4 of the Act).
(6) Entitlement grants for State Administrative expenses under The
Food Stamp Act of 1977 (section 16 of the Act).
(7) A grant for an experimental, pilot, or demonstration project
that is also supported by a grant listed in paragraph (a)(3) of this
section;
(8) Grant funds awarded under subsection 412(e) of the Immigration
and Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the
Refugee Education Assistance Act of 1980 (Pub. L. 96-422, 94 Stat.
1809), for cash assistance, medical assistance, and supplemental
security income benefits to refugees and entrants and the administrative
costs of providing the assistance and benefits;
(9) Grants to local education agencies under 20 U.S.C. 236 through
241-1(a), and 242 through 244 (portions of the Impact Aid program),
except for 20 U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for
Handicapped Children); and
(10) Payments under the Veterans Administration's State Home Per
Diem Program (38 U.S.C. 641(a)).
(b) Entitlement programs. Entitlement programs enumerated above in
Sec. 31.4(a) (3) through (8) are subject to subpart E.
Sec. 31.5 Effect on other issuances.
All other grants administration provisions of codified program
regulations, program manuals, handbooks and other nonregulatory
materials which are inconsistent with this part are superseded, except
to the extent
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they are required by statute, or authorized in accordance with the
exception provision in Sec. 31.6.
Sec. 31.6 Additions and exceptions.
(a) For classes of grants and grantees subject to this part, Federal
agencies may not impose additional administrative requirements except in
codified regulations published in the Federal Register.
(b) Exceptions for classes of grants or grantees may be authorized
only by OMB.
(c) Exceptions on a case-by-case basis and for subgrantees may be
authorized by the affected Federal agencies.
(1) In the Environmental Protection Agency, the Director, Grants
Administration Division, is authorized to grant the exceptions.
(2) [Reserved]
(d) The EPA Director is also authorized to approve exceptions, on a
class or an individual case basis, to EPA program--specific assistance
regulations other than those which implement statutory and executive
order requirements.
[53 FR 8068 and 8087, Mar. 11, 1988, and amended at 53 FR 8075, Mar. 11,
1988]
Subpart B--Pre-Award Requirements
Sec. 31.10 Forms for applying for grants.
(a) Scope. (1) This section prescribes forms and instructions to be
used by governmental organizations (except hospitals and institutions of
higher education operated by a government) in applying for grants. This
section is not applicable, however, to formula grant programs which do
not require applicants to apply for funds on a project basis.
(2) This section applies only to applications to Federal agencies
for grants, and is not required to be applied by grantees in dealing
with applicants for subgrants. However, grantees are encouraged to avoid
more detailed or burdensome application requirements for subgrants.
(b) Authorized forms and instructions for governmental
organizations. (1) In applying for grants, applicants shall only use
standard application forms or those prescribed by the granting agency
with the approval of OMB under the Paperwork Reduction Act of 1980.
(2) Applicants are not required to submit more than the original and
two copies of preapplications or applications.
(3) Applicants must follow all applicable instructions that bear OMB
clearance numbers. Federal agencies may specify and describe the
programs, functions, or activities that will be used to plan, budget,
and evaluate the work under a grant. Other supplementary instructions
may be issued only with the approval of OMB to the extent required under
the Paperwork Reduction Act of 1980. For any standard form, except the
SF-424 facesheet, Federal agencies may shade out or instruct the
applicant to disregard any line item that is not needed.
(4) When a grantee applies for additional funding (such as a
continuation or supplemental award) or amends a previously submitted
application, only the affected pages need be submitted. Previously
submitted pages with information that is still current need not be
resubmitted.
Sec. 31.11 State plans.
(a) Scope. The statutes for some programs require States to submit
plans before receiving grants. Under regulations implementing Executive
Order 12372, ``Intergovernmental Review of Federal Programs,'' States
are allowed to simplify, consolidate and substitute plans. This section
contains additional provisions for plans that are subject to regulations
implementing the Executive Order.
(b) Requirements. A State need meet only Federal administrative or
programmatic requirements for a plan that are in statutes or codified
regulations.
(c) Assurances. In each plan the State will include an assurance
that the State shall comply with all applicable Federal statutes and
regulations in effect with respect to the periods for which it receives
grant funding. For this assurance and other assurances required in the
plan, the State may:
(1) Cite by number the statutory or regulatory provisions requiring
the assurances and affirm that it gives the
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assurances required by those provisions,
(2) Repeat the assurance language in the statutes or regulations, or
(3) Develop its own language to the extent permitted by law.
(d) Amendments. A State will amend a plan whenever necessary to
reflect: (1) New or revised Federal statutes or regulations or (2) a
material change in any State law, organization, policy, or State agency
operation. The State will obtain approval for the amendment and its
effective date but need submit for approval only the amended portions of
the plan.
Sec. 31.12 Special grant or subgrant conditions for ``high-risk'' grantees.
(a) A grantee or subgrantee may be considered ``high risk'' if an
awarding agency determines that a grantee or subgrantee:
(1) Has a history of unsatisfactory performance, or
(2) Is not financially stable, or
(3) Has a management system which does not meet the management
standards set forth in this part, or
(4) Has not conformed to terms and conditions of previous awards, or
(5) Is otherwise not responsible; and if the awarding agency
determines that an award will be made, special conditions and/or
restrictions shall correspond to the high risk condition and shall be
included in the award.
(b) Special conditions or restrictions may include:
(1) Payment on a reimbursement basis;
(2) Withholding authority to proceed to the next phase until receipt
of evidence of acceptable performance within a given funding period;
(3) Requiring additional, more detailed financial reports;
(4) Additional project monitoring;
(5) Requiring the grantee or subgrantee to obtain technical or
management assistance; or
(6) Establishing additional prior approvals.
(c) If an awarding agency decides to impose such conditions, the
awarding official will notify the grantee or subgrantee as early as
possible, in writing, of:
(1) The nature of the special conditions/restrictions;
(2) The reason(s) for imposing them;
(3) The corrective actions which must be taken before they will be
removed and the time allowed for completing the corrective actions and
(4) The method of requesting reconsideration of the conditions/
restrictions imposed.
Sec. 31.13 Principal environmental statutory provisions applicable to EPA assistance awards.
Grantees shall comply with all applicable Federal laws including:
(a) Section 306 of the Clean Air Act, (42 U.S.C. 7606).
(b) Section 508 of the Federal Water Pollution Control Act, as
amended, (33 U.S.C. 1368).
(c) Section 1424(e) of the Safe Drinking Water Act, (42 U.S.C. 300h-
3(e)).
[53 FR 8075, Mar. 11, 1988]
Subpart C--Post-Award Requirements
Financial Administration
Sec. 31.20 Standards for financial management systems.
(a) A State must expand and account for grant funds in accordance
with State laws and procedures for expending and accounting for its own
funds. Fiscal control and accounting procedures of the State, as well as
its subgrantees and cost-type contractors, must be sufficient to--
(1) Permit preparation of reports required by this part and the
statutes authorizing the grant, and
(2) Permit the tracing of funds to a level of expenditures adequate
to establish that such funds have not been used in violation of the
restrictions and prohibitions of applicable statutes.
(b) The financial management systems of other grantees and
subgrantees must meet the following standards:
(1) Financial reporting. Accurate, current, and complete disclosure
of the financial results of financially assisted activities must be made
in accordance with the financial reporting requirements of the grant or
subgrant.
(2) Accounting records. Grantees and subgrantees must maintain
records
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which adequately identify the source and application of funds provided
for financially-assisted activities. These records must contain
information pertaining to grant or subgrant awards and authorizations,
obligations, unobligated balances, assets, liabilities, outlays or
expenditures, and income.
(3) Internal control. Effective control and accountability must be
maintained for all grant and subgrant cash, real and personal property,
and other assets. Grantees and subgrantees must adequately safeguard all
such property and must assure that it is used solely for authorized
purposes.
(4) Budget control. Actual expenditures or outlays must be compared
with budgeted amounts for each grant or subgrant. Financial information
must be related to performance or productivity data, including the
development of unit cost information whenever appropriate or
specifically required in the grant or subgrant agreement. If unit cost
data are required, estimates based on available documentation will be
accepted whenever possible.
(5) Allowable cost. Applicable OMB cost principles, agency program
regulations, and the terms of grant and subgrant agreements will be
followed in determining the reasonableness, allowability, and
allocability of costs.
(6) Source documentation. Accounting records must be supported by
such source documentation as cancelled checks, paid bills, payrolls,
time and attendance records, contract and subgrant award documents, etc.
(7) Cash management. Procedures for minimizing the time elapsing
between the transfer of funds from the U.S. Treasury and disbursement by
grantees and subgrantees must be followed whenever advance payment
procedures are used. Grantees must establish reasonable procedures to
ensure the receipt of reports on subgrantees' cash balances and cash
disbursements in sufficient time to enable them to prepare complete and
accurate cash transactions reports to the awarding agency. When advances
are made by letter-of-credit or electronic transfer of funds methods,
the grantee must make drawdowns as close as possible to the time of
making disbursements. Grantees must monitor cash drawdowns by their
subgrantees to assure that they conform substantially to the same
standards of timing and amount as apply to advances to the grantees.
(c) An awarding agency may review the adequacy of the financial
management system of any applicant for financial assistance as part of a
preaward review or at any time subsequent to award.
Sec. 31.21 Payment.
(a) Scope. This section prescribes the basic standard and the
methods under which a Federal agency will make payments to grantees, and
grantees will make payments to subgrantees and contractors.
(b) Basic standard. Methods and procedures for payment shall
minimize the time elapsing between the transfer of funds and
disbursement by the grantee or subgrantee, in accordance with Treasury
regulations at 31 CFR part 205.
(c) Advances. Grantees and subgrantees shall be paid in advance,
provided they maintain or demonstrate the willingness and ability to
maintain procedures to minimize the time elapsing between the transfer
of the funds and their disbursement by the grantee or subgrantee.
(d) Reimbursement. Reimbursement shall be the preferred method when
the requirements in paragraph (c) of this section are not met. Grantees
and subgrantees may also be paid by reimbursement for any construction
grant. Except as otherwise specified in regulation, Federal agencies
shall not use the percentage of completion method to pay construction
grants. The grantee or subgrantee may use that method to pay its
construction contractor, and if it does, the awarding agency's payments
to the grantee or subgrantee will be based on the grantee's or
subgrantee's actual rate of disbursement.
(e) Working capital advances. If a grantee cannot meet the criteria
for advance payments described in paragraph (c) of this section, and the
Federal agency has determined that reimbursement is not feasible because
the grantee lacks sufficient working capital, the awarding agency may
provide cash or a working capital advance
[[Page 353]]
basis. Under this procedure the awarding agency shall advance cash to
the grantee to cover its estimated disbursement needs for an initial
period generally geared to the grantee's disbursing cycle. Thereafter,
the awarding agency shall reimburse the grantee for its actual cash
disbursements. The working capital advance method of payment shall not
be used by grantees or subgrantees if the reason for using such method
is the unwillingness or inability of the grantee to provide timely
advances to the subgrantee to meet the subgrantee's actual cash
disbursements.
(f) Effect of program income, refunds, and audit recoveries on
payment. (1) Grantees and subgrantees shall disburse repayments to and
interest earned on a revolving fund before requesting additional cash
payments for the same activity.
(2) Except as provided in paragraph (f)(1) of this section, grantees
and subgrantees shall disburse program income, rebates, refunds,
contract settlements, audit recoveries and interest earned on such funds
before requesting additional cash payments.
(g) Withholding payments. (1) Unless otherwise required by Federal
statute, awarding agencies shall not withhold payments for proper
charges incurred by grantees or subgrantees unless--
(i) The grantee or subgrantee has failed to comply with grant award
conditions or
(ii) The grantee or subgrantee is indebted to the United States.
(2) Cash withheld for failure to comply with grant award condition,
but without suspension of the grant, shall be released to the grantee
upon subsequent compliance. When a grant is suspended, payment
adjustments will be made in accordance with Sec. 31.43(c).
(3) A Federal agency shall not make payment to grantees for amounts
that are withheld by grantees or subgrantees from payment to contractors
to assure satisfactory completion of work. Payments shall be made by the
Federal agency when the grantees or subgrantees actually disburse the
withheld funds to the contractors or to escrow accounts established to
assure satisfactory completion of work.
(h) Cash depositories. (1) Consistent with the national goal of
expanding the opportunities for minority business enterprises, grantees
and subgrantees are encouraged to use minority banks (a bank which is
owned at least 50 percent by minority group members). A list of minority
owned banks can be obtained from the Minority Business Development
Agency, Department of Commerce, Washington, DC 20230.
(2) A grantee or subgrantee shall maintain a separate bank account
only when required by Federal-State agreement.
(i) Interest earned on advances. Except for interest earned on
advances of funds exempt under the Intergovernmental Cooperation Act (31
U.S.C. 6501 et seq.) and the Indian Self-Determination Act (23 U.S.C.
450), grantees and subgrantees shall promptly, but at least quarterly,
remit interest earned on advances to the Federal agency. The grantee or
subgrantee may keep interest amounts up to $100 per year for
administrative expenses.
Sec. 31.22 Allowable costs.
(a) Limitation on use of funds. Grant funds may be used only for:
(1) The allowable costs of the grantees, subgrantees and cost-type
contractors, including allowable costs in the form of payments to fixed-
price contractors; and
(2) Reasonable fees or profit to cost-type contractors but not any
fee or profit (or other increment above allowable costs) to the grantee
or subgrantee.
(b) Applicable cost principles. For each kind of organization, there
is a set of Federal principles for determining allowable costs.
Allowable costs will be determined in accordance with the cost
principles applicable to the organization incurring the costs. The
following chart lists the kinds of organizations and the applicable cost
principles.
------------------------------------------------------------------------
For the costs of a-- Use the principles in--
------------------------------------------------------------------------
State, local or Indian tribal government.. OMB Circular A-87.
Private nonprofit organization other than OBM Circular A-122.
an (1) institution of higher education,
(2) hospital, or (3) organization named
in OMB Circular A-122 as not subject to
that circular.
[[Page 354]]
Educational institutions.................. OMB Circular A-21.
For-profit organization other than a 48 CFR part 31, Contract
hospital and an organization named in OBM Cost Principles and
Circular A-122 as not subject to that Procedures, or uniform cost
circular. accounting standards that
comply with cost principles
acceptable to the Federal
agency.
------------------------------------------------------------------------
Sec. 31.23 Period of availability of funds.
(a) General. Where a funding period is specified, a grantee may
charge to the award only costs resulting from obligations of the funding
period unless carryover of unobligated balances is permitted, in which
case the carryover balances may be charged for costs resulting from
obligations of the subsequent funding period.
(b) Liquidation of obligations. A grantee must liquidate all
obligations incurred under the award not later than 90 days after the
end of the funding period (or as specified in a program regulation) to
coincide with the submission of the annual Financial Status Report (SF-
269). The Federal agency may extend this deadline at the request of the
grantee.
Sec. 31.24 Matching or cost sharing.
(a) Basic rule: Costs and contributions acceptable. With the
qualifications and exceptions listed in paragraph (b) of this section, a
matching or cost sharing requirement may be satisfied by either or both
of the following:
(1) Allowable costs incurred by the grantee, subgrantee or a cost-
type contractor under the assistance agreement. This includes allowable
costs borne by non-Federal grants or by other cash donations from non-
Federal third parties.
(2) The value of third party in-kind contributions applicable to the
period to which the cost sharing or matching requirements applies.
(b) Qualifications and exceptions--(1) Costs borne by other Federal
grant agreements. Except as provided by Federal statute, a cost sharing
or matching requirement may not be met by costs borne by another Federal
grant. This prohibition does not apply to income earned by a grantee or
subgrantee from a contract awarded under another Federal grant.
(2) General revenue sharing. For the purpose of this section,
general revenue sharing funds distributed under 31 U.S.C. 6702 are not
considered Federal grant funds.
(3) Cost or contributions counted towards other Federal costs-
sharing requirements. Neither costs nor the values of third party in-
kind contributions may count towards satisfying a cost sharing or
matching requirement of a grant agreement if they have been or will be
counted towards satisfying a cost sharing or matching requirement of
another Federal grant agreement, a Federal procurement contract, or any
other award of Federal funds.
(4) Costs financed by program income. Costs financed by program
income, as defined in Sec. 31.25, shall not count towards satisfying a
cost sharing or matching requirement unless they are expressly permitted
in the terms of the assistance agreement. (This use of general program
income is described in Sec. 31.25(g).)
(5) Services or property financed by income earned by contractors.
Contractors under a grant may earn income from the activities carried
out under the contract in addition to the amounts earned from the party
awarding the contract. No costs of services or property supported by
this income may count toward satisfying a cost sharing or matching
requirement unless other provisions of the grant agreement expressly
permit this kind of income to be used to meet the requirement.
(6) Records. Costs and third party in-kind contributions counting
towards satisfying a cost sharing or matching requirement must be
verifiable from the records of grantees and subgrantee or cost-type
contractors. These records must show how the value placed on third party
in-kind contributions was derived. To the extent feasible, volunteer
services will be supported by the same methods that the organization
uses to support the allocability of regular personnel costs.
(7) Special standards for third party in-kind contributions. (i)
Third party in-kind contributions count towards satisfying a cost
sharing or matching requirement only where, if the party receiving the
contributions were to pay
[[Page 355]]
for them, the payments would be allowable costs.
(ii) Some third party in-kind contributions are goods and services
that, if the grantee, subgrantee, or contractor receiving the
contribution had to pay for them, the payments would have been an
indirect costs. Costs sharing or matching credit for such contributions
shall be given only if the grantee, subgrantee, or contractor has
established, along with its regular indirect cost rate, a special rate
for allocating to individual projects or programs the value of the
contributions.
(iii) A third party in-kind contribution to a fixed-price contract
may count towards satisfying a cost sharing or matching requirement only
if it results in:
(A) An increase in the services or property provided under the
contract (without additional cost to the grantee or subgrantee) or
(B) A cost savings to the grantee or subgrantee.
(iv) The values placed on third party in-kind contributions for cost
sharing or matching purposes will conform to the rules in the succeeding
sections of this part. If a third party in-kind contribution is a type
not treated in those sections, the value placed upon it shall be fair
and reasonable.
(c) Valuation of donated services--(1) Volunteer services. Unpaid
services provided to a grantee or subgrantee by individuals will be
valued at rates consistent with those ordinarily paid for similar work
in the grantee's or subgrantee's organization. If the grantee or
subgrantee does not have employees performing similar work, the rates
will be consistent with those ordinarily paid by other employers for
similar work in the same labor market. In either case, a reasonable
amount for fringe benefits may be included in the valuation.
(2) Employees of other organizations. When an employer other than a
grantee, subgrantee, or cost-type contractor furnishes free of charge
the services of an employee in the employee's normal line of work, the
services will be valued at the employee's regular rate of pay exclusive
of the employee's fringe benefits and overhead costs. If the services
are in a different line of work, paragraph (c)(1) of this section
applies.
(d) Valuation of third party donated supplies and loaned equipment
or space. (1) If a third party donates supplies, the contribution will
be valued at the market value of the supplies at the time of donation.
(2) If a third party donates the use of equipment or space in a
building but retains title, the contribution will be valued at the fair
rental rate of the equipment or space.
(e) Valuation of third party donated equipment, buildings, and land.
If a third party donates equipment, buildings, or land, and title passes
to a grantee or subgrantee, the treatment of the donated property will
depend upon the purpose of the grant or subgrant, as follows:
(1) Awards for capital expenditures. If the purpose of the grant or
subgrant is to assist the grantee or subgrantee in the acquisition of
property, the market value of that property at the time of donation may
be counted as cost sharing or matching,
(2) Other awards. If assisting in the acquisition of property is not
the purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of
this section apply:
(i) If approval is obtained from the awarding agency, the market
value at the time of donation of the donated equipment or buildings and
the fair rental rate of the donated land may be counted as cost sharing
or matching. In the case of a subgrant, the terms of the grant agreement
may require that the approval be obtained from the Federal agency as
well as the grantee. In all cases, the approval may be given only if a
purchase of the equipment or rental of the land would be approved as an
allowable direct cost. If any part of the donated property was acquired
with Federal funds, only the non-federal share of the property may be
counted as cost-sharing or matching.
(ii) If approval is not obtained under paragraph (e)(2)(i) of this
section, no amount may be counted for donated land, and only
depreciation or use allowances may be counted for donated equipment and
buildings. The depreciation or use allowances for this property are not
treated as third party in-kind
[[Page 356]]
contributions. Instead, they are treated as costs incurred by the
grantee or subgrantee. They are computed and allocated (usually as
indirect costs) in accordance with the cost principles specified in
Sec. 31.22, in the same way as depreciation or use allowances for
purchased equipment and buildings. The amount of depreciation or use
allowances for donated equipment and buildings is based on the
property's market value at the time it was donated.
(f) Valuation of grantee or subgrantee donated real property for
construction/acquisition. If a grantee or subgrantee donates real
property for a construction or facilities acquisition project, the
current market value of that property may be counted as cost sharing or
matching. If any part of the donated property was acquired with Federal
funds, only the non-federal share of the property may be counted as cost
sharing or matching.
(g) Appraisal of real property. In some cases under paragraphs (d),
(e) and (f) of this section, it will be necessary to establish the
market value of land or a building or the fair rental rate of land or of
space in a building. In these cases, the Federal agency may require the
market value or fair rental value be set by an independent appraiser,
and that the value or rate be certified by the grantee. This requirement
will also be imposed by the grantee on subgrantees.
Sec. 31.25 Program income.
(a) General. Grantees are encouraged to earn income to defray
program costs. Program income includes income from fees for services
performed, from the use or rental of real or personal property acquired
with grant funds, from the sale of commodities or items fabricated under
a grant agreement, and from payments of principal and interest on loans
made with grant funds. Except as otherwise provided in regulations of
the Federal agency, program income does not include interest on grant
funds, rebates, credits, discounts, refunds, etc. and interest earned on
any of them.
(b) Definition of program income. Program income means gross income
received by the grantee or subgrantee directly generated by a grant
supported activity, or earned only as a result of the grant agreement
during the grant period. ``During the grant period'' is the time between
the effective date of the award and the ending date of the award
reflected in the final financial report.
(c) Cost of generating program income. If authorized by Federal
regulations or the grant agreement, costs incident to the generation of
program income may be deducted from gross income to determine program
income.
(d) Governmental revenues. Taxes, special assessments, levies,
fines, and other such revenues raised by a grantee or subgrantee are not
program income unless the revenues are specifically identified in the
grant agreement or Federal agency regulations as program income.
(e) Royalties. Income from royalties and license fees for
copyrighted material, patents, and inventions developed by a grantee or
subgrantee is program income only if the revenues are specifically
identified in the grant agreement or Federal agency regulations as
program income. (See Sec. 31.34.)
(f) Property. Proceeds from the sale of real property or equipment
will be handled in accordance with the requirements of Secs. 31.31 and
31.32.
(g) Use of program income. Program income shall be deducted from
outlays which may be both Federal and non-Federal as described below,
unless the Federal agency regulations or the grant agreement specify
another alternative (or a combination of the alternatives). In
specifying alternatives, the Federal agency may distinguish between
income earned by the grantee and income earned by subgrantees and
between the sources, kinds, or amounts of income. When Federal agencies
authorize the alternatives in paragraphs (g) (2) and (3) of this
section, program income in excess of any limits stipulated shall also be
deducted from outlays.
(1) Deduction. Ordinarily program income shall be deducted from
total allowable costs to determine the net allowable costs. Program
income shall be used for current costs unless the Federal agency
authorizes otherwise. Program income which the grantee did not
anticipate at the time of the award shall be used to reduce the Federal
[[Page 357]]
agency and grantee contributions rather than to increase the funds
committed to the project.
(2) Addition. When authorized, program income may be added to the
funds committed to the grant agreement by the Federal agency and the
grantee. The program income shall be used for the purposes and under the
conditions of the grant agreement.
(3) Cost sharing or matching. When authorized, program income may be
used to meet the cost sharing or matching requirement of the grant
agreement. The amount of the Federal grant award remains the same.
(h) Income after the award period. There are no Federal requirements
governing the disposition of program income earned after the end of the
award period (i.e., until the ending date of the final financial report,
see paragraph (a) of this section), unless the terms of the agreement or
the Federal agency regulations provide otherwise.
Sec. 31.26 Non-Federal audit.
(a) Basic rule. Grantees and subgrantees are responsible for
obtaining audits in accordance with the Single Audit Act Amendments of
1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of
States, Local Governments, and Non-Profit Organizations.'' The audits
shall be made by an independent auditor in accordance with generally
accepted government auditing standards covering financial audits.
(b) Subgrantees. State or local governments, as those terms are
defined for purposes of the Single Audit Act Amendments of 1996, that
provide Federal awards to a subgrantee, which expends $300,000 or more
(or other amount as specified by OMB) in Federal awards in a fiscal
year, shall:
(1) Determine whether State or local subgrantees have met the audit
requirements of the Act and whether subgrantees covered by OMB Circular
A-110, ``Uniform Administrative Requirements for Grants and Agreements
with Institutions of Higher Education, Hospitals, and Other Non-Profit
Organizations,'' have met the audit requirements of the Act. Commercial
contractors (private for-profit and private and governmental
organizations) providing goods and services to State and local
governments are not required to have a single audit performed. State and
local governments should use their own procedures to ensure that the
contractor has complied with laws and regulations affecting the
expenditure of Federal funds;
(2) Determine whether the subgrantee spent Federal assistance funds
provided in accordance with applicable laws and regulations. This may be
accomplished by reviewing an audit of the subgrantee made in accordance
with the Act, Circular A-110, or through other means (e.g., program
reviews) if the subgrantee has not had such an audit;
(3) Ensure that appropriate corrective action is taken within six
months after receipt of the audit report in instance of noncompliance
with Federal laws and regulations;
(4) Consider whether subgrantee audits necessitate adjustment of the
grantee's own records; and
(5) Require each subgrantee to permit independent auditors to have
access to the records and financial statements.
(c) Auditor selection. In arranging for audit services, Sec. 31.36
shall be followed.
[53 FR 8075, 8087, Mar. 11, 1988, as amended at 62 FR 45939, 45944, Aug.
29, 1997]
Changes, Property, and Subawards
Sec. 31.30 Changes.
(a) General. Grantees and subgrantees are permitted to rebudget
within the approved direct cost budget to meet unanticipated
requirements and may make limited program changes to the approved
project. However, unless waived by the awarding agency, certain types of
post-award changes in budgets and projects shall require the prior
written approval of the awarding agency.
(b) Relation to cost principles. The applicable cost principles (see
Sec. 31.22) contain requirements for prior approval of certain types of
costs. Except where waived, those requirements apply to all grants and
subgrants even if paragraphs (c) through (f) of this section do not.
(c) Budget changes. (1) Nonconstruction projects. Except as stated
in other regulations or an award document, grantees
[[Page 358]]
or subgrantees shall obtain the prior approval of the awarding agency
whenever any of the following changes is anticipated under a
nonconstruction award:
(i) Any revision which would result in the need for additional
funding.
(ii) Unless waived by the awarding agency, cumulative transfers
among direct cost categories, or, if applicable, among separately
budgeted programs, projects, functions, or activities which exceed or
are expected to exceed ten percent of the current total approved budget,
whenever the awarding agency's share exceeds $100,000.
(iii) Transfer of funds allotted for training allowances (i.e., from
direct payments to trainees to other expense categories).
(2) Construction projects. Grantees and subgrantees shall obtain
prior written approval for any budget revision which would result in the
need for additional funds.
(3) Combined construction and nonconstruction projects. When a grant
or subgrant provides funding for both construction and nonconstruction
activities, the grantee or subgrantee must obtain prior written approval
from the awarding agency before making any fund or budget transfer from
nonconstruction to construction or vice versa.
(d) Programmatic changes. Grantees or subgrantees must obtain the
prior approval of the awarding agency whenever any of the following
actions is anticipated:
(1) Any revision of the scope or objectives of the project
(regardless of whether there is an associated budget revision requiring
prior approval).
(2) Need to extend the period of availability of funds.
(3) Changes in key persons in cases where specified in an
application or a grant award. In research projects, a change in the
project director or principal investigator shall always require approval
unless waived by the awarding agency.
(4) Under nonconstruction projects, contracting out, subgranting (if
authorized by law) or otherwise obtaining the services of a third party
to perform activities which are central to the purposes of the award.
This approval requirement is in addition to the approval requirements of
Sec. 31.36 but does not apply to the procurement of equipment, supplies,
and general support services.
(e) Additional prior approval requirements. The awarding agency may
not require prior approval for any budget revision which is not
described in paragraph (c) of this section.
(f) Requesting prior approval. (1) A request for prior approval of
any budget revision will be in the same budget formal the grantee used
in its application and shall be accompanied by a narrative justification
for the proposed revision.
(2) A request for a prior approval under the applicable Federal cost
principles (see Sec. 31.22) may be made by letter.
(3) A request by a subgrantee for prior approval will be addressed
in writing to the grantee. The grantee will promptly review such request
and shall approve or disapprove the request in writing. A grantee will
not approve any budget or project revision which is inconsistent with
the purpose or terms and conditions of the Federal grant to the grantee.
If the revision, requested by the subgrantee would result in a change to
the grantee's approved project which requires Federal prior approval,
the grantee will obtain the Federal agency's approval before approving
the subgrantee's request.
Sec. 31.31 Real property.
(a) Title. Subject to the obligations and conditions set forth in
this section, title to real property acquired under a grant or subgrant
will vest upon acquisition in the grantee or subgrantee respectively.
(b) Use. Except as otherwise provided by Federal statutes, real
property will be used for the originally authorized purposes as long as
needed for that purposes, and the grantee or subgrantee shall not
dispose of or encumber its title or other interests.
(c) Disposition. When real property is no longer needed for the
originally authorized purpose, the grantee or subgrantee will request
disposition instructions from the awarding agency. The instructions will
provide for one of the following alternatives:
[[Page 359]]
(1) Retention of title. Retain title after compensating the awarding
agency. The amount paid to the awarding agency will be computed by
applying the awarding agency's percentage of participation in the cost
of the original purchase to the fair market value of the property.
However, in those situations where a grantee or subgrantee is disposing
of real property acquired with grant funds and acquiring replacement
real property under the same program, the net proceeds from the
disposition may be used as an offset to the cost of the replacement
property.
(2) Sale of property. Sell the property and compensate the awarding
agency. The amount due to the awarding agency will be calculated by
applying the awarding agency's percentage of participation in the cost
of the original purchase to the proceeds of the sale after deduction of
any actual and reasonable selling and fixing-up expenses. If the grant
is still active, the net proceeds from sale may be offset against the
original cost of the property. When a grantee or subgrantee is directed
to sell property, sales procedures shall be followed that provide for
competition to the extent practicable and result in the highest possible
return.
(3) Transfer of title. Transfer title to the awarding agency or to a
third-party designated/approved by the awarding agency. The grantee or
subgrantee shall be paid an amount calculated by applying the grantee or
subgrantee's percentage of participation in the purchase of the real
property to the current fair market value of the property.
Sec. 31.32 Equipment.
(a) Title. Subject to the obligations and conditions set forth in
this section, title to equipment acquired under a grant or subgrant will
vest upon acquisition in the grantee or subgrantee respectively.
(b) States. A State will use, manage, and dispose of equipment
acquired under a grant by the State in accordance with State laws and
procedures. Other grantees and subgrantees will follow paragraphs (c)
through (e) of this section.
(c) Use. (1) Equipment shall be used by the grantee or subgrantee in
the program or project for which it was acquired as long as needed,
whether or not the project or program continues to be supported by
Federal funds. When no longer needed for the original program or
project, the equipment may be used in other activities currently or
previously supported by a Federal agency.
(2) The grantee or subgrantee shall also make equipment available
for use on other projects or programs currently or previously supported
by the Federal Government, providing such use will not interfere with
the work on the projects or program for which it was originally
acquired. First preference for other use shall be given to other
programs or projects supported by the awarding agency. User fees should
be considered if appropriate.
(3) Notwithstanding the encouragement in Sec. 31.25(a) to earn
program income, the grantee or subgrantee must not use equipment
acquired with grant funds to provide services for a fee to compete
unfairly with private companies that provide equivalent services, unless
specifically permitted or contemplated by Federal statute.
(4) When acquiring replacement equipment, the grantee or subgrantee
may use the equipment to be replaced as a trade-in or sell the property
and use the proceeds to offset the cost of the replacement property,
subject to the approval of the awarding agency.
(d) Management requirements. Procedures for managing equipment
(including replacement equipment), whether acquired in whole or in part
with grant funds, until disposition takes place will, as a minimum, meet
the following requirements:
(1) Property records must be maintained that include a description
of the property, a serial number or other identification number, the
source of property, who holds title, the acquisition date, and cost of
the property, percentage of Federal participation in the cost of the
property, the location, use and condition of the property, and any
ultimate disposition data including the date of disposal and sale price
of the property.
[[Page 360]]
(2) A physical inventory of the property must be taken and the
results reconciled with the property records at least once every two
years.
(3) A control system must be developed to ensure adequate safeguards
to prevent loss, damage, or theft of the property. Any loss, damage, or
theft shall be investigated.
(4) Adequate maintenance procedures must be developed to keep the
property in good condition.
(5) If the grantee or subgrantee is authorized or required to sell
the property, proper sales procedures must be established to ensure the
highest possible return.
(e) Disposition. When original or replacement equipment acquired
under a grant or subgrant is no longer needed for the original project
or program or for other activities currently or previously supported by
a Federal agency, disposition of the equipment will be made as follows:
(1) Items of equipment with a current per-unit fair market value of
less than $5,000 may be retained, sold or otherwise disposed of with no
further obligation to the awarding agency.
(2) Items of equipment with a current per unit fair market value in
excess of $5,000 may be retained or sold and the awarding agency shall
have a right to an amount calculated by multiplying the current market
value or proceeds from sale by the awarding agency's share of the
equipment.
(3) In cases where a grantee or subgrantee fails to take appropriate
disposition actions, the awarding agency may direct the grantee or
subgrantee to take excess and disposition actions.
(f) Federal equipment. In the event a grantee or subgrantee is
provided federally-owned equipment:
(1) Title will remain vested in the Federal Government.
(2) Grantees or subgrantees will manage the equipment in accordance
with Federal agency rules and procedures, and submit an annual inventory
listing.
(3) When the equipment is no longer needed, the grantee or
subgrantee will request disposition instructions from the Federal
agency.
(g) Right to transfer title. The Federal awarding agency may reserve
the right to transfer title to the Federal Government or a third party
named by the awarding agency when such a third party is otherwise
eligible under existing statutes. Such transfers shall be subject to the
following standards:
(1) The property shall be identified in the grant or otherwise made
known to the grantee in writing.
(2) The Federal awarding agency shall issue disposition instruction
within 120 calendar days after the end of the Federal support of the
project for which it was acquired. If the Federal awarding agency fails
to issue disposition instructions within the 120 calendar-day period the
grantee shall follow 31.32(e).
(3) When title to equipment is transferred, the grantee shall be
paid an amount calculated by applying the percentage of participation in
the purchase to the current fair market value of the property.
Sec. 31.33 Supplies.
(a) Title. Title to supplies acquired under a grant or subgrant will
vest, upon acquisition, in the grantee or subgrantee respectively.
(b) Disposition. If there is a residual inventory of unused supplies
exceeding $5,000 in total aggregate fair market value upon termination
or completion of the award, and if the supplies are not needed for any
other federally sponsored programs or projects, the grantee or
subgrantee shall compensate the awarding agency for its share.
Sec. 31.34 Copyrights.
The Federal awarding agency reserves a royalty-free, nonexclusive,
and irrevocable license to reproduce, publish or otherwise use, and to
authorize others to use, for Federal Government purposes:
(a) The copyright in any work developed under a grant, subgrant, or
contract under a grant or subgrant; and
(b) Any rights of copyright to which a grantee, subgrantee or a
contractor purchases ownership with grant support.
[[Page 361]]
Sec. 31.35 Subawards to debarred and suspended parties.
Grantees and subgrantees must not make any award or permit any award
(subgrant or contract) at any tier to any party which is debarred or
suspended or is otherwise excluded from or ineligible for participation
in Federal assistance programs under Executive Order 12549, ``Debarment
and Suspension.''
Sec. 31.36 Procurement.
(a) States. When procuring property and services under a grant, a
State will follow the same policies and procedures it uses for
procurements from its non-Federal funds. The State will ensure that
every purchase order or other contract includes any clauses required by
Federal statutes and executive orders and their implementing
regulations. Other grantees and subgrantees will follow paragraphs (b)
through (i) in this section.
(b) Procurement standards. (1) Grantees and subgrantees will use
their own procurement procedures which reflect applicable State and
local laws and regulations, provided that the procurements conform to
applicable federal law, the standards identified in this section, and if
applicable, Sec. 31.38.
(2) Grantees and subgrantees will maintain a contract administration
system which ensures that contractors perform in accordance with the
terms, conditions, and specifications of their contracts or purchase
orders.
(3) Grantees and subgrantees will maintain a written code of
standards of conduct governing the performance of their employees
engaged in the award and administration of contracts. No employee,
officer or agent of the grantee or subgrantee shall participate in
selection, or in the award or administration of a contract supported by
Federal funds if a conflict of interest, real or apparent, would be
involved. Such a conflict would arise when:
(i) The employee, officer or agent,
(ii) Any member of his immediate family,
(iii) His or her partner, or
(iv) An organization which employs, or is about to employ, any of
the above, has a financial or other interest in the firm selected for
award. The grantee's or subgrantee's officers, employees or agents will
neither solicit nor accept gratuities, favors or anything of monetary
value from contractors, potential contractors, or parties to
subagreements. Grantee and subgrantees may set minimum rules where the
financial interest is not substantial or the gift is an unsolicited item
of nominal intrinsic value. To the extent permitted by State or local
law or regulations, such standards or conduct will provide for
penalties, sanctions, or other disciplinary actions for violations of
such standards by the grantee's and subgrantee's officers, employees, or
agents, or by contractors or their agents. The awarding agency may in
regulation provide additional prohibitions relative to real, apparent,
or potential conflicts of interest.
(4) Grantee and subgrantee procedures will provide for a review of
proposed procurements to avoid purchase of unnecessary or duplicative
items. Consideration should be given to consolidating or breaking out
procurements to obtain a more economical purchase. Where appropriate, an
analysis will be made of lease versus purchase alternatives, and any
other appropriate analysis to determine the most economical approach.
(5) To foster greater economy and efficiency, grantees and
subgrantees are encouraged to enter into State and local
intergovernmental agreements for procurement or use of common goods and
services.
(6) Grantees and subgrantees are encouraged to use Federal excess
and surplus property in lieu of purchasing new equipment and property
whenever such use is feasible and reduces project costs.
(7) Grantees and subgrantees are encouraged to use value engineering
clauses in contracts for construction projects of sufficient size to
offer reasonable opportunities for cost reductions. Value engineering is
a systematic and creative anaylsis of each contract item or task to
ensure that its essential function is provided at the overall lower
cost.
(8) Grantees and subgrantees will make awards only to responsible
contractors possessing the ability to perform successfully under the
terms and
[[Page 362]]
conditions of a proposed procurement. Consideration will be given to
such matters as contractor integrity, compliance with public policy,
record of past performance, and financial and technical resources.
(9) Grantees and subgrantees will maintain records sufficient to
detail the significant history of a procurement. These records will
include, but are not necessarily limited to the following: rationale for
the method of procurement, selection of contract type, contractor
selection or rejection, and the basis for the contract price.
(10) Grantees and subgrantees will use time and material type
contracts only--
(i) After a determination that no other contract is suitable, and
(ii) If the contract includes a ceiling price that the contractor
exceeds at its own risk.
(11) Grantees and subgrantees alone will be responsible, in
accordance with good administrative practice and sound business
judgment, for the settlement of all contractual and administrative
issues arising out of procurements. These issues include, but are not
limited to source evaluation, protests, disputes, and claims. These
standards do not relieve the grantee or subgrantee of any contractual
responsibilities under its contracts. Federal agencies will not
substitute their judgment for that of the grantee or subgrantee unless
the matter is primarily a Federal concern. Violations of law will be
referred to the local, State, or Federal authority having proper
jurisdiction.
(12) Grantees and subgrantees will have protest procedures to handle
and resolve disputes relating to their procurements and shall in all
instances disclose information regarding the protest to the awarding
agency. A protestor must exhaust all administrative remedies with the
grantee and subgrantee before pursuing a protest with the Federal
agency. Reviews of protests by the Federal agency will be limited to:
(i) Violations of Federal law or regulations and the standards of
this section (violations of State or local law will be under the
jurisdiction of State or local authorities) and
(ii) Violations of the grantee's or subgrantee's protest procedures
for failure to review a complaint or protest. Protests received by the
Federal agency other than those specified above will be referred to the
grantee or subgrantee.
(c) Competition. (1) All procurement transactions will be conducted
in a manner providing full and open competition consistent with the
standards of Sec. 31.36. Some of the situations considered to be
restrictive of competition include but are not limited to:
(i) Placing unreasonable requirements on firms in order for them to
qualify to do business,
(ii) Requiring unnecessary experience and excessive bonding,
(iii) Noncompetitive pricing practices between firms or between
affiliated companies,
(iv) Noncompetitive awards to consultants that are on retainer
contracts,
(v) Organizational conflicts of interest,
(vi) Specifying only a ``brand name'' product instead of allowing
``an equal'' product to be offered and describing the performance of
other relevant requirements of the procurement, and
(vii) Any arbitrary action in the procurement process.
(2) Grantees and subgrantees will conduct procurements in a manner
that prohibits the use of statutorily or administratively imposed in-
State or local geographical preferences in the evaluation of bids or
proposals, except in those cases where applicable Federal statutes
expressly mandate or encourage geographic preference. Nothing in this
section preempts State licensing laws. When contracting for
architectural and engineering (A/E) services, geographic location may be
a selection criteria provided its application leaves an appropriate
number of qualified firms, given the nature and size of the project, to
compete for the contract.
(3) Grantees will have written selection procedures for procurement
transactions. These procedures will ensure that all solicitations:
(i) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such
description shall not, in competitive procurements, contain features
which unduly
[[Page 363]]
restrict competition. The description may include a statement of the
qualitative nature of the material, product or service to be procured,
and when necessary, shall set forth those minimum essential
characteristics and standards to which it must conform if it is to
satisfy its intended use. Detailed product specifications should be
avoided if at all possible. When it is impractical or uneconomical to
make a clear and accurate description of the technical requirements, a
``brand name or equal'' description may be used as a means to define the
performance or other salient requirements of a procurement. The specific
features of the named brand which must be met by offerors shall be
clearly stated; and
(ii) Identify all requirements which the offerors must fulfill and
all other factors to be used in evaluating bids or proposals.
(4) Grantees and subgrantees will ensure that all prequalified lists
of persons, firms, or products which are used in acquiring goods and
services are current and include enough qualified sources to ensure
maximum open and free competition. Also, grantees and subgrantees will
not preclude potential bidders from qualifying during the solicitation
period.
(5) Construction grants awarded under Title II of the Clean Water
Act are subject to the following ``Buy American'' requirements in
paragraphs (c)(5) (i)-(iii) of this section. Section 215 of the Clean
Water Act requires that contractors give preference to the use of
domestic material in the construction of EPA-funded treatment works.
(i) Contractors must use domestic construction materials in
preference to nondomestic material if it is priced no more than 6
percent higher than the bid or offered price of the nondomestic
material, including all costs of delivery to the construction site and
any applicable duty, whether or not assessed. The grantee will normally
base the computations on prices and costs in effect on the date of
opening bids or proposals.
(ii) The award official may waive the Buy American provision based
on factors the award official considers relevant, including:
(A) Such use is not in the public interest;
(B) The cost is unreasonable;
(C) The Agency's available resources are not sufficient to implement
the provision, subject to the Deputy Administrator's concurrence;
(D) The articles, materials or supplies of the class or kind to be
used or the articles, materials or supplies from which they are
manufactured are not mined, produced or manufactured in the United
States in sufficient and reasonably available commerical quantities or
satisfactory quality for the particular project; or
(E) Application of this provision is contrary to multilateral
government procurement agreements, subject to the Deputy Administrator's
concurrence.
(iii) All bidding documents, subagreements, and, if appropriate,
requests for proposals must contain the following ``Buy American''
provision: In accordance with section 215 of the Clean Water Act (33
U.S.C. 1251 et seq.) and implementing EPA regulations, the contractor
agrees that preference will be given to domestic construction materials
by the contractor, subcontractors, materialmen and suppliers in the
performance of this subagreement.
(d) Methods of procurement to be followed--(1) Procurement by small
purchase procedures. Small purchase procedures are those relatively
simple and informal procurement methods for securing services, supplies,
or other property that do not cost more than the simplified acquisition
threshold fixed at 41 U.S.C. 403(11) (currently set at $100,000). If
small purchase procedures are used, price or rate quotations shall be
obtained from an adequate number of qualified sources.
(2) Procurement by sealed bids (formal advertising). Bids are
publicly solicited and a firm-fixed-price contract (lump sum or unit
price) is awarded to the responsible bidder whose bid, conforming with
all the material terms and conditions of the invitation for bids, is the
lowest in price. The sealed bid method is the preferred method for
procuring construction, if the conditions in 31.36(d)(2)(i) apply.
[[Page 364]]
(i) In order for sealed bidding to be feasible, the following
conditions should be present:
(A) A complete, adequate, and realistic specification or purchase
description is available;
(B) Two or more responsible bidders are willing and able to compete
effectively and for the business; and
(C) The procurement lends itself to a firm fixed price contract and
the selection of the successful bidder can be made principally on the
basis of price.
(ii) If sealed bids are used, the following requirements apply:
(A) The invitation for bids will be publicly advertised and bids
shall be solicited from an adequate number of known suppliers, providing
them sufficient time prior to the date set for opening the bids;
(B) The invitation for bids, which will include any specifications
and pertinent attachments, shall define the items or services in order
for the bidder to properly respond;
(C) All bids will be publicly opened at the time and place
prescribed in the invitation for bids;
(D) A firm fixed-price contract award will be made in writing to the
lowest responsive and responsible bidder. Where specified in bidding
documents, factors such as discounts, transportation cost, and life
cycle costs shall be considered in determining which bid is lowest.
Payment discounts will only be used to determine the low bid when prior
experience indicates that such discounts are usually taken advantage of;
and
(E) Any or all bids may be rejected if there is a sound documented
reason.
(3) Procurement by competitive proposals. The technique of
competitive proposals is normally conducted with more than one source
submitting an offer, and either a fixed-price or cost-reimbursement type
contract is awarded. It is generally used when conditions are not
appropriate for the use of sealed bids. If this method is used, the
following requirements apply:
(i) Requests for proposals will be publicized and identify all
evaluation factors and their relative importance. Any response to
publicized requests for proposals shall be honored to the maximum extent
practical;
(ii) Proposals will be solicited from an adequate number of
qualified sources;
(iii) Grantees and subgrantees will have a method for conducting
technical evaluations of the proposals received and for selecting
awardees;
(iv) Awards will be made to the responsible firm whose proposal is
most advantageous to the program, with price and other factors
considered; and
(v) Grantees and subgrantees may use competitive proposal procedures
for qualifications-based procurement of architectural/engineering (A/E)
professional services whereby competitors' qualifications are evaluated
and the most qualified competitor is selected, subject to negotiation of
fair and reasonable compensation. The method, where price is not used as
a selection factor, can only be used in procurement of A/E professional
services. It cannot be used to purchase other types of services though
A/E firms are a potential source to perform the proposed effort.
(4) Procurement by noncompetitive proposals is procurement through
solicitation of a proposal from only one source, or after solicitation
of a number of sources, competition is determined inadequate.
(i) Procurement by noncompetitive proposals may be used only when
the award of a contract is infeasible under small purchase procedures,
sealed bids or competitive proposals and one of the following
circumstances applies:
(A) The item is available only from a single source;
(B) The public exigency or emergency for the requirement will not
permit a delay resulting from competitive solicitation;
(C) The awarding agency authorizes noncompetitive proposals; or
(D) After solicitation of a number of sources, competition is
determined inadequate.
(ii) Cost analysis, i.e., verifying the proposed cost data, the
projections of the data, and the evaluation of the specific elements of
costs and profits, is required.
(iii) Grantees and subgrantees may be required to submit the
proposed procurement to the awarding agency for
[[Page 365]]
pre-award review in accordance with paragraph (g) of this section.
(e) Contracting with small and minority firms, women's business
enterprise and labor surplus area firms. (1) The grantee and subgrantee
will take all necessary affirmative steps to assure that minority firms,
women's business enterprises, and labor surplus area firms are used when
possible.
(2) Affirmative steps shall include:
(i) Placing qualified small and minority businesses and women's
business enterprises on solicitation lists;
(ii) Assuring that small and minority businesses, and women's
business enterprises are solicited whenever they are potential sources;
(iii) Dividing total requirements, when economically feasible, into
smaller tasks or quantities to permit maximum participation by small and
minority business, and women's business enterprises;
(iv) Establishing delivery schedules, where the requirement permits,
which encourage participation by small and minority business, and
women's business enterprises;
(v) Using the services and assistance of the Small Business
Administration, and the Minority Business Development Agency of the
Department of Commerce; and
(vi) Requiring the prime contractor, if subcontracts are to be let,
to take the affirmative steps listed in paragraphs (e)(2) (i) through
(v) of this section.
(f) Contract cost and price. (1) Grantees and subgrantees must
perform a cost or price analysis in connection with every procurement
action including contract modifications. The method and degree of
analysis is dependent on the facts surrounding the particular
procurement situation, but as a starting point, grantees must make
independent estimates before receiving bids or proposals. A cost
analysis must be performed when the offeror is required to submit the
elements of his estimated cost, e.g., under professional, consulting,
and architectural engineering services contracts. A cost analysis will
be necessary when adequate price competition is lacking, and for sole
source procurements, including contract modifications or change orders,
unless price resonableness can be established on the basis of a catalog
or market price of a commercial product sold in substantial quantities
to the general public or based on prices set by law or regulation. A
price analysis will be used in all other instances to determine the
reasonableness of the proposed contract price.
(2) Grantees and subgrantees will negotiate profit as a separate
element of the price for each contract in which there is no price
competition and in all cases where cost analysis is performed. To
establish a fair and reasonable profit, consideration will be given to
the complexity of the work to be performed, the risk borne by the
contractor, the contractor's investment, the amount of subcontracting,
the quality of its record of past performance, and industry profit rates
in the surrounding geographical area for similar work.
(3) Costs or prices based on estimated costs for contracts under
grants will be allowable only to the extent that costs incurred or cost
estimates included in negotiated prices are consistent with Federal cost
principles (see Sec. 31.22). Grantees may reference their own cost
principles that comply with the applicable Federal cost principles.
(4) The cost plus a percentage of cost and percentage of
construction cost methods of contracting shall not be used.
(g) Awarding agency review. (1) Grantees and subgrantees must make
available, upon request of the awarding agency, technical specifications
on proposed procurements where the awarding agency believes such review
is needed to ensure that the item and/or service specified is the one
being proposed for purchase. This review generally will take place prior
to the time the specification is incorporated into a solicitation
document. However, if the grantee or subgrantee desires to have the
review accomplished after a solicitation has been developed, the
awarding agency may still review the specifications, with such review
usually limited to the technical aspects of the proposed purchase.
(2) Grantees and subgrantees must on request make available for
awarding agency pre-award review procurement
[[Page 366]]
documents, such as requests for proposals or invitations for bids,
independent cost estimates, etc. when:
(i) A grantee's or subgrantee's procurement procedures or operation
fails to comply with the procurement standards in this section; or
(ii) The procurement is expected to exceed the simplified
acquisition threshold and is to be awarded without competition or only
one bid or offer is received in response to a solicitation; or
(iii) The procurement, which is expected to exceed the simplified
acquisition threshold, specifies a ``brand name'' product; or
(iv) The proposed award is more than the simplified acquisition
threshold and is to be awarded to other than the apparent low bidder
under a sealed bid procurement; or
(v) A proposed contract modification changes the scope of a contract
or increases the contract amount by more than the simplified acquisition
threshold.
(3) A grantee or subgrantee will be exempt from the pre-award review
in paragraph (g)(2) of this section if the awarding agency determines
that its procurement systems comply with the standards of this section.
(i) A grantee or subgrantee may request that its procurement system
be reviewed by the awarding agency to determine whether its system meets
these standards in order for its system to be certified. Generally,
these reviews shall occur where there is a continuous high-dollar
funding, and third-party contracts are awarded on a regular basis.
(ii) A grantee or subgrantee may self-certify its procurement
system. Such self-certification shall not limit the awarding agency's
right to survey the system. Under a self-certification procedure,
awarding agencies may wish to rely on written assurances from the
grantee or subgrantee that it is complying with these standards. A
grantee or subgrantee will cite specific procedures, regulations,
standards, etc., as being in compliance with these requirements and have
its system available for review.
(h) Bonding requirements. For construction or facility improvement
contracts or subcontracts exceeding the simplified acquisition
threshold, the awarding agency may accept the bonding policy and
requirements of the grantee or subgrantee provided the awarding agency
has made a determination that the awarding agency's interest is
adequately protected. If such a determination has not been made, the
minimum requirements shall be as follows:
(1) A bid guarantee from each bidder equivalent to five percent of
the bid price. The ``bid guarantee'' shall consist of a firm commitment
such as a bid bond, certified check, or other negotiable instrument
accompanying a bid as assurance that the bidder will, upon acceptance of
his bid, execute such contractual documents as may be required within
the time specified.
(2) A performance bond on the part of the contractor for 100 percent
of the contract price. A ``performance bond'' is one executed in
connection with a contract to secure fulfillment of all the contractor's
obligations under such contract.
(3) A payment bond on the part of the contractor for 100 percent of
the contract price. A ``payment bond'' is one executed in connection
with a contract to assure payment as required by law of all persons
supplying labor and material in the execution of the work provided for
in the contract.
(i) Contract provisions. A grantee's and subgrantee's contracts must
contain provisions in paragraph (i) of this section. Federal agencies
are permitted to require changes, remedies, changed conditions, access
and records retention, suspension of work, and other clauses approved by
the Office of Federal Procurement Policy.
(1) Administrative, contractual, or legal remedies in instances
where contractors violate or breach contract terms, and provide for such
sanctions and penalties as may be appropriate. (Contracts more than the
simplified acquisition threshold)
(2) Termination for cause and for convenience by the grantee or
subgrantee including the manner by which it will be effected and the
basis for settlement. (All contracts in excess of $10,000)
[[Page 367]]
(3) Compliance with Executive Order 11246 of September 24, 1965,
entitled ``Equal Employment Opportunity,'' as amended by Executive Order
11375 of October 13, 1967, and as supplemented in Department of Labor
regulations (41 CFR chapter 60). (All construction contracts awarded in
excess of $10,000 by grantees and their contractors or subgrantees)
(4) Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C.
874) as supplemented in Department of Labor regulations (29 CFR part 3).
(All contracts and subgrants for construction or repair)
(5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276a-7)
as supplemented by Department of Labor regulations (29 CFR part 5).
(Construction contracts in excess of $2000 awarded by grantees and
subgrantees when required by Federal grant program legislation)
(6) Compliance with Sections 103 and 107 of the Contract Work Hours
and Safety Standards Act (40 U.S.C. 327-330) as supplemented by
Department of Labor regulations (29 CFR part 5). (Construction contracts
awarded by grantees and subgrantees in excess of $2000, and in excess of
$2500 for other contracts which involve the employment of mechanics or
laborers)
(7) Notice of awarding agency requirements and regulations
pertaining to reporting.
(8) Notice of awarding agency requirements and regulations
pertaining to patent rights with respect to any discovery or invention
which arises or is developed in the course of or under such contract.
(9) Awarding agency requirements and regulations pertaining to
copyrights and rights in data.
(10) Access by the grantee, the subgrantee, the Federal grantor
agency, the Comptroller General of the United States, or any of their
duly authorized representatives to any books, documents, papers, and
records of the contractor which are directly pertinent to that specific
contract for the purpose of making audit, examination, excerpts, and
transcriptions.
(11) Retention of all required records for three years after
grantees or subgrantees make final payments and all other pending
matters are closed.
(12) Compliance with all applicable standards, orders, or
requirements issued under section 306 of the Clean Air Act (42 U.S.C.
1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive
Order 11738, and Environmental Protection Agency regulations (40 CFR
part 15). (Contracts, subcontracts, and subgrants of amounts in excess
of $100,000)
(13) Mandatory standards and policies relating to energy efficiency
which are contained in the State energy conservation plan issued in
compliance with the Energy Policy and Conservation Act (Pub. L. 94-163,
89 Stat. 871).
(j) Payment to consultants. (1) EPA will limit its participation in
the salary rate (excluding overhead) paid to individual consultants
retained by grantees or by a grantee's contractors or subcontractors to
the maximum daily rate for a GS-18. (Grantees may, however, pay
consultants more than this amount). This limitation applies to
consultation services of designated individuals with specialized skills
who are paid at a daily or hourly rate. This rate does not include
transportation and subsistence costs for travel performed; grantees will
pay these in accordance with their normal travel reimbursement
practices. (Pub. L. 99-591).
(2) Subagreements with firms for services which are awarded using
the procurement requirements in this part are not affected by this
limitation.
(k) Use of the same architect or engineer during construction. (1)
If the grantee is satisfied with the qualifications and performance of
the architect or engineer who provided any or all of the facilities
planning or design services for a waste-water treatment works project
and wishes to retain that firm or individual during construction of the
project, it may do so without further public notice and evaluation of
qualifications, provided:
(i) The grantee received a facilities planning (Step 1) or design
grant (Step 2), and selected the architect or engineer in accordance
with EPA's procurement regulations in effect when EPA awarded the grant;
or
[[Page 368]]
(ii) The award official approves noncompetitive procurement under
Sec. 31.36(d)(4) for reasons other than simply using the same individual
or firm that provided facilities planning or design services for the
project; or
(iii) The grantee attests that:
(A) The initial request for proposals clearly stated the possibility
that the firm or individual selected could be awarded a subagreement for
services during construction; and
(B) The firm or individual was selected for facilities planning or
design services in accordance with procedures specified in this section.
(C) No employee, officer or agent of the grantee, any member of
their immediate families, or their partners have financial or other
interest in the firm selected for award; and
(D) None of the grantee's officers, employees or agents solicited or
accepted gratuities, favors or anything of monetary value from
contractors or other parties to subagreements.
(2) However, if the grantee uses the procedures in paragraph (k)(1)
of this section to retain an architect or engineer, any Step 3
subagreements between the architect or engineer and the grantee must
meet all of the other procurement provisions in Sec. 31.36.
[53 FR 8068 and 8087, Mar. 11, 1988, and amended at 53 FR 8075, Mar. 11,
1988; 60 FR 19639, 19644, Apr. 19, 1995; 66 FR 3794, Jan. 16, 2001]
Sec. 31.37 Subgrants.
(a) States. States shall follow State law and procedures when
awarding and administering subgrants (whether on a cost reimbursement or
fixed amount basis) of financial assistance to local and Indian tribal
governments. States shall:
(1) Ensure that every subgrant includes any clauses required by
Federal statute and executive orders and their implementing regulations;
(2) Ensure that subgrantees are aware of requirements imposed upon
them by Federal statute and regulation;
(3) Ensure that a provision for compliance with Sec. 31.42 is placed
in every cost reimbursement subgrant; and
(4) Conform any advances of grant funds to subgrantees substantially
to the same standards of timing and amount that apply to cash advances
by Federal agencies.
(b) All other grantees. All other grantees shall follow the
provisions of this part which are applicable to awarding agencies when
awarding and administering subgrants (whether on a cost reimbursement or
fixed amount basis) of financial assistance to local and Indian tribal
governments. Grantees shall:
(1) Ensure that every subgrant includes a provision for compliance
with this part;
(2) Ensure that every subgrant includes any clauses required by
Federal statute and executive orders and their implementing regulations;
and
(3) Ensure that subgrantees are aware of requirements imposed upon
them by Federal statutes and regulations.
(c) Exceptions. By their own terms, certain provisions of this part
do not apply to the award and administration of subgrants:
(1) Section 31.10;
(2) Section 31.11;
(3) The letter-of-credit procedures specified in Treasury
Regulations at 31 CFR part 205, cited in Sec. 31.21; and
(4) Section 31.50.
Sec. 31.38 Indian Self Determination Act.
Any contract, subcontract, or subgrant awarded under an EPA grant by
an Indian Tribe or Indian Intertribal Consortium shall require to the
extent feasible:
(a) Preferences and opportunities for training and employment in
connection with the administration of such contracts or grants shall be
given to Indians as defined in the Indian Self Determination Act (25
U.S.C. 450b); and
(b) Preference in the award of subcontracts and subgrants in
connection with the administration of such contracts or grants shall be
given to Indian organizations and to Indian-owned economic enterprises
as defined in section 3 of the Indian Financing Act of 1974 (88 Stat.
77) [25 U.S.C. 1452].
[66 FR 3794, Jan. 19, 2001]
[[Page 369]]
Reports, Records, Retention, and Enforcement
Sec. 31.40 Monitoring and reporting program performance.
(a) Monitoring by grantees. Grantees are responsible for managing
the day-to-day operations of grant and subgrant supported activities.
Grantees must monitor grant and subgrant supported activities to assure
compliance with applicable Federal requirements and that performance
goals are being achieved. Grantee monitoring must cover each program,
function or activity.
(b) Nonconstruction performance reports. The Federal agency may, if
it decides that performance information available from subsequent
applications contains sufficient information to meet its programmatic
needs, require the grantee to submit a performance report only upon
expiration or termination of grant support. Unless waived by the Federal
agency this report will be due on the same date as the final Financial
Status Report.
(1) Grantees shall submit annual performance reports unless the
awarding agency requires quarterly or semi-annual reports. However,
performance reports will not be required more frequently than quarterly.
Annual reports shall be due 90 days after the grant year, quarterly or
semi-annual reports shall be due 30 days after the reporting period. The
final performance report will be due 90 days after the expiration or
termination of grant support. If a justified request is submitted by a
grantee, the Federal agency may extend the due date for any performance
report. Additionally, requirements for unnecessary performance reports
may be waived by the Federal agency.
(2) Performance reports will contain, for each grant, brief
information on the following:
(i) A comparison of actual accomplishments to the objectives
established for the period. Where the output of the project can be
quantified, a computation of the cost per unit of output may be required
if that information will be useful.
(ii) The reasons for slippage if established objectives were not
met.
(iii) Additional pertinent information including, when appropriate,
analysis and explanation of cost overruns or high unit costs.
(3) Grantees will not be required to submit more than the original
and two copies of performance reports.
(4) Grantees will adhere to the standards in this section in
prescribing performance reporting requirements for subgrantees.
(c) Construction performance reports. For the most part, on-site
technical inspections and certified percentage-of-completion data are
relied on heavily by Federal agencies to monitor progress under
construction grants and subgrants. The Federal agency will require
additional formal performance reports only when considered necessary,
and never more frequently than quarterly.
(d) Significant developments. Events may occur between the scheduled
performance reporting dates which have significant impact upon the grant
or subgrant supported activity. In such cases, the grantee must inform
the Federal agency as soon as the following types of conditions become
known:
(1) Problems, delays, or adverse conditions which will materially
impair the ability to meet the objective of the award. This disclosure
must include a statement of the action taken, or contemplated, and any
assistance needed to resolve the situation.
(2) Favorable developments which enable meeting time schedules and
objectives sooner or at less cost than anticipated or producing more
beneficial results than originally planned.
(e) Federal agencies may make site visits as warranted by program
needs.
(f) Waivers, extensions. (1) Federal agencies may waive any
performance report required by this part if not needed.
(2) The grantee may waive any performance report from a subgrantee
when not needed. The grantee may extend the due date for any performance
report from a subgrantee if the grantee will still be able to meet its
performance reporting obligations to the Federal agency.
[[Page 370]]
Sec. 31.41 Financial reporting.
(a) General. (1) Except as provided in paragraphs (a) (2) and (5) of
this section, grantees will use only the forms specified in paragraphs
(a) through (e) of this section, and such supplementary or other forms
as may from time to time be authorized by OMB, for:
(i) Submitting financial reports to Federal agencies, or
(ii) Requesting advances or reimbursements when letters of credit
are not used.
(2) Grantees need not apply the forms prescribed in this section in
dealing with their subgrantees. However, grantees shall not impose more
burdensome requirements on subgrantees.
(3) Grantees shall follow all applicable standard and supplemental
Federal agency instructions approved by OMB to the extent required under
the Paperwork Reduction Act of 1980 for use in connection with forms
specified in paragraphs (b) through (e) of this section. Federal
agencies may issue substantive supplementary instructions only with the
approval of OMB. Federal agencies may shade out or instruct the grantee
to disregard any line item that the Federal agency finds unnecessary for
its decisionmaking purposes.
(4) Grantees will not be required to submit more than the original
and two copies of forms required under this part.
(5) Federal agencies may provide computer outputs to grantees to
expedite or contribute to the accuracy of reporting. Federal agencies
may accept the required information from grantees in machine usable
format or computer printouts instead of prescribed forms.
(6) Federal agencies may waive any report required by this section
if not needed.
(7) Federal agencies may extend the due date of any financial report
upon receiving a justified request from a grantee.
(b) Financial Status Report--(1) Form. Grantees will use Standard
Form 269 or 269A, Financial Status Report, to report the status of funds
for all nonconstruction grants and for construction grants when required
in accordance with Sec. 31.41(e)(2)(iii).
(2) Accounting basis. Each grantee will report program outlays and
program income on a cash or accrual basis as prescribed by the awarding
agency. If the Federal agency requires accrual information and the
grantee's accounting records are not normally kept on the accrual basis,
the grantee shall not be required to convert its accounting system but
shall develop such accrual information through and analysis of the
documentation on hand.
(3) Frequency. The Federal agency may prescribe the frequency of the
report for each project or program. However, the report will not be
required more frequently than quarterly. If the Federal agency does not
specify the frequency of the report, it will be submitted annually. A
final report will be required upon expiration or termination of grant
support.
(4) Due date. When reports are required on a quarterly or semiannual
basis, they will be due 30 days after the reporting period. When
required on an annual basis, they will be due 90 days after the grant
year. Final reports will be due 90 days after the expiration or
termination of grant support.
(c) Federal Cash Transactions Report--(1) Form. (i) For grants paid
by letter or credit, Treasury check advances or electronic transfer of
funds, the grantee will submit the Standard Form 272, Federal Cash
Transactions Report, and when necessary, its continuation sheet,
Standard Form 272a, unless the terms of the award exempt the grantee
from this requirement.
(ii) These reports will be used by the Federal agency to monitor
cash advanced to grantees and to obtain disbursement or outlay
information for each grant from grantees. The format of the report may
be adapted as appropriate when reporting is to be accomplished with the
assistance of automatic data processing equipment provided that the
information to be submitted is not changed in substance.
(2) Forecasts of Federal cash requirements. Forecasts of Federal
cash requirements may be required in the ``Remarks'' section of the
report.
(3) Cash in hands of subgrantees. When considered necessary and
feasible by the Federal agency, grantees may be required to report the
amount of cash
[[Page 371]]
advances in excess of three days' needs in the hands of their
subgrantees or contractors and to provide short narrative explanations
of actions taken by the grantee to reduce the excess balances.
(4) Frequency and due date. Grantees must submit the report no later
than 15 working days following the end of each quarter. However, where
an advance either by letter of credit or electronic transfer of funds is
authorized at an annualized rate of one million dollars or more, the
Federal agency may require the report to be submitted within 15 working
days following the end of each month.
(d) Request for advance or reimbursement--(1) Advance payments.
Requests for Treasury check advance payments will be submitted on
Standard Form 270, Request for Advance or Reimbursement. (This form will
not be used for drawdowns under a letter of credit, electronic funds
transfer or when Treasury check advance payments are made to the grantee
automatically on a predetermined basis.)
(2) Reimbursements. Requests for reimbursement under nonconstruction
grants will also be submitted on Standard Form 270. (For reimbursement
requests under construction grants, see paragraph (e)(1) of this
section.)
(3) The frequency for submitting payment requests is treated in
Sec. 31.41(b)(3).
(e) Outlay report and request for reimbursement for construction
programs. (1) Grants that support construction activities paid by
reimbursement method.
(i) Requests for reimbursement under construction grants will be
submitted on Standard Form 271, Outlay Report and Request for
Reimbursement for Construction Programs. Federal agencies may, however,
prescribe the Request for Advance or Reimbursement form, specified in
Sec. 31.41(d), instead of this form.
(ii) The frequency for submitting reimbursement requests is treated
in Sec. 31.41(b)(3).
(2) Grants that support construction activities paid by letter of
credit, electronic funds transfer or Treasury check advance. (i) When a
construction grant is paid by letter of credit, electronic funds
transfer or Treasury check advances, the grantee will report its outlays
to the Federal agency using Standard Form 271, Outlay Report and Request
for Reimbursement for Construction Programs. The Federal agency will
provide any necessary special instruction. However, frequency and due
date shall be governed by Sec. 31.41(b) (3) and (4).
(ii) When a construction grant is paid by Treasury check advances
based on periodic requests from the grantee, the advances will be
requested on the form specified in Sec. 31.41(d).
(iii) The Federal agency may substitute the Financial Status Report
specified in Sec. 31.41(b) for the Outlay Report and Request for
Reimbursement for Construction Programs.
(3) Accounting basis. The accounting basis for the Outlay Report and
Request for Reimbursement for Construction Programs shall be governed by
Sec. 31.41(b)(2).
Sec. 31.42 Retention and access requirements for records.
(a) Applicability. (1) This section applies to all financial and
programmatic records, supporting documents, statistical records, and
other records of grantees or subgrantees which are:
(i) Required to be maintained by the terms of this part, program
regulations or the grant agreement, or
(ii) Otherwise reasonably considered as pertinent to program
regulations or the grant agreement.
(2) This section does not apply to records maintained by contractors
or subcontractors. For a requirement to place a provision concerning
records in certain kinds of contracts, see Sec. 31.36(i)(10).
(b) Length of retention period. (1) Except as otherwise provided,
records must be retained for three years from the starting date
specified in paragraph (c) of this section.
(2) If any litigation, claim, negotiation, audit or other action
involving the records has been started before the expiration of the 3-
year period, the records must be retained until completion of the action
and resolution of all issues which arise from it, or until the end of
the regular 3-year period, whichever is later.
[[Page 372]]
(3) To avoid duplicate recordkeeping, awarding agencies may make
special arrangements with grantees and subgrantees to retain any records
which are continuously needed for joint use. The awarding agency will
request transfer of records to its custody when it determines that the
records possess long-term retention value. When the records are
transferred to or maintained by the Federal agency, the 3-year retention
requirement is not applicable to the grantee or subgrantee.
(c) Starting date of retention period--(1) General. When grant
support is continued or renewed at annual or other intervals, the
retention period for the records of each funding period starts on the
day the grantee or subgrantee submits to the awarding agency its single
or last expenditure report for that period. However, if grant support is
continued or renewed quarterly, the retention period for each year's
records starts on the day the grantee submits its expenditure report for
the last quarter of the Federal fiscal year. In all other cases, the
retention period starts on the day the grantee submits its final
expenditure report. If an expenditure report has been waived, the
retention period starts on the day the report would have been due.
(2) Real property and equipment records. The retention period for
real property and equipment records starts from the date of the
disposition or replacement or transfer at the direction of the awarding
agency.
(3) Records for income transactions after grant or subgrant support.
In some cases grantees must report income after the period of grant
support. Where there is such a requirement, the retention period for the
records pertaining to the earning of the income starts from the end of
the grantee's fiscal year in which the income is earned.
(4) Indirect cost rate proposals, cost allocations plans, etc. This
paragraph applies to the following types of documents, and their
supporting records: indirect cost rate computations or proposals, cost
allocation plans, and any similar accounting computations of the rate at
which a particular group of costs is chargeable (such as computer usage
chargeback rates or composite fringe benefit rates).
(i) If submitted for negotiation. If the proposal, plan, or other
computation is required to be submitted to the Federal Government (or to
the grantee) to form the basis for negotiation of the rate, then the 3-
year retention period for its supporting records starts from the date of
such submission.
(ii) If not submitted for negotiation. If the proposal, plan, or
other computation is not required to be submitted to the Federal
Government (or to the grantee) for negotiation purposes, then the 3-year
retention period for the proposal plan, or computation and its
supporting records starts from end of the fiscal year (or other
accounting period) covered by the proposal, plan, or other computation.
(d) Substitution of microfilm. Copies made by microfilming,
photocopying, or similar methods may be substituted for the original
records.
(e) Access to records--(1) Records of grantees and subgrantees. The
awarding agency and the Comptroller General of the United States, or any
of their authorized representatives, shall have the right of access to
any pertinent books, documents, papers, or other records of grantees and
subgrantees which are pertinent to the grant, in order to make audits,
examinations, excerpts, and transcripts.
(2) Expiration of right of access. The rights of access in this
section must not be limited to the required retention period but shall
last as long as the records are retained.
(f) Restrictions on public access. The Federal Freedom of
Information Act (5 U.S.C. 552) does not apply to records Unless required
by Federal, State, or local law, grantees and subgrantees are not
required to permit public access to their records.
Sec. 31.43 Enforcement.
(a) Remedies for noncompliance. If a grantee or subgrantee
materially fails to comply with any term of an award, whether stated in
a Federal statute or regulation, an assurance, in a State plan or
application, a notice of award, or elsewhere, the awarding agency may
take one or more of the following actions, as appropriate in the
circumstances:
[[Page 373]]
(1) Temporarily withhold cash payments pending correction of the
deficiency by the grantee or subgrantee or more severe enforcement
action by the awarding agency,
(2) Disallow (that is, deny both use of funds and matching credit
for) all or part of the cost of the activity or action not in
compliance,
(3) Wholly or partly suspend or terminate the current award for the
grantee's or subgrantee's program,
(i) EPA can also wholly or partly annul the current award for the
grantee's or subgrantee's program,
(ii) [Reserved]
(4) Withhold further awards for the program, or
(5) Take other remedies that may be legally available.
(b) Hearings, appeals. In taking an enforcement action, the awarding
agency will provide the grantee or subgrantee an opportunity for such
hearing, appeal, or other administrative proceeding to which the grantee
or subgrantee is entitled under any statute or regulation applicable to
the action involved.
(c) Effects of suspension and termination. Costs of grantee or
subgrantee resulting from obligations incurred by the grantee or
subgrantee during a suspension or after termination of an award are not
allowable unless the awarding agency expressly authorizes them in the
notice of suspension or termination or subsequently. Other grantee or
subgrantee costs during suspension or after termination which are
necessary and not reasonably avoidable are allowable if:
(1) The costs result from obligations which were properly incurred
by the grantee or subgrantee before the effective date of suspension or
termination, are not in anticipation of it, and, in the case of a
termination, are noncancellable, and,
(2) The costs would be allowable if the award were not suspended or
expired normally at the end of the funding period in which the
termination takes effect.
(d) Relationship to Debarment and Suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude grantee or subgrantee from being subject to
``Debarment and Suspension'' under E.O. 12549 (see Sec. 31.35).
[53 FR 8068 and 8087, Mar. 11, 1988, as amended at 53 FR 8076, Mar. 11,
1988]
Sec. 31.44 Termination for convenience.
Except as provided in Sec. 31.43 awards may be terminated in whole
or in part only as follows:
(a) By the awarding agency with the consent of the grantee or
subgrantee in which case the two parties shall agree upon the
termination conditions, including the effective date and in the case of
partial termination, the portion to be terminated, or
(b) By the grantee or subgrantee upon written notification to the
awarding agency, setting forth the reasons for such termination, the
effective date, and in the case of partial termination, the portion to
be terminated. However, if, in the case of a partial termination, the
awarding agency determines that the remaining portion of the award will
not accomplish the purposes for which the award was made, the awarding
agency may terminate the award in its entirety under either Sec. 31.43
or paragraph (a) of this section.
Sec. 31.45 Quality assurance.
If the grantee's project involves environmentally related
measurements or data generation, the grantee shall develop and implement
quality assurance practices consisting of policies, procedures,
specifications, standards, and documentation sufficient to produce data
of quality adequate to meet project objectives and to minimize loss of
data due to out-of-control conditions or malfunctions.
[53 FR 8076, Mar. 11, 1988]
Subpart D--After-the-Grant Requirements
Sec. 31.50 Closeout.
(a) General. The Federal agency will close out the award when it
determines that all applicable administrative actions and all required
work of the grant has been completed.
(b) Reports. Within 90 days after the expiration or termination of
the grant, the grantee must submit all financial,
[[Page 374]]
performance, and other reports required as a condition of the grant.
Upon request by the grantee, Federal agencies may extend this timeframe.
These may include but are not limited to:
(1) Final performance or progress report.
(2) Financial Status Report (SF 269) or Outlay Report and Request
for Reimbursement for Construction Programs (SF-271) (as applicable.)
(3) Final request for payment (SF-270) (if applicable).
(4) Invention disclosure (if applicable).
(5) Federally-owned property report: In accordance with
Sec. 31.32(f), a grantee must submit an inventory of all federally owned
property (as distinct from property acquired with grant funds) for which
it is accountable and request disposition instructions from the Federal
agency of property no longer needed.
(c) Cost adjustment. The Federal agency will, within 90 days after
receipt of reports in paragraph (b) of this section, make upward or
downward adjustments to the allowable costs.
(d) Cash adjustments. (1) The Federal agency will make prompt
payment to the grantee for allowable reimbursable costs.
(2) The grantee must immediately refund to the Federal agency any
balance of unobligated (unencumbered) cash advanced that is not
authorized to be retained for use on other grants.
Sec. 31.51 Later disallowances and adjustments.
The closeout of a grant does not affect:
(a) The Federal agency's right to disallow costs and recover funds
on the basis of a later audit or other review;
(b) The grantee's obligation to return any funds due as a result of
later refunds, corrections, or other transactions;
(c) Records retention as required in Sec. 31.42;
(d) Property management requirements in Secs. 31.31 and 31.32; and
(e) Audit requirements in Sec. 31.26.
Sec. 31.52 Collection of amounts due.
(a) Any funds paid to a grantee in excess of the amount to which the
grantee is finally determined to be entitled under the terms of the
award constitute a debt to the Federal Government. If not paid within a
reasonable period after demand, the Federal agency may reduce the debt
by:
(1) Making an adminstrative offset against other requests for
reimbursements,
(2) Withholding advance payments otherwise due to the grantee, or
(3) Other action permitted by law.
(b) Except where otherwise provided by statutes or regulations, the
Federal agency will charge interest on an overdue debt in accordance
with the Federal Claims Collection Standards (4 CFR Ch. II). The date
from which interest is computed is not extended by litigation or the
filing of any form of appeal.
Subpart E--Entitlement [Reserved]
Subpart F--Disputes
Sec. 31.70 Disputes.
(a) Disagreements should be resolved at the lowest level possible.
(b) If an agreement cannot be reached, the EPA disputes decision
official will provide a written final decision. The EPA disputes
decision official is the individual designated by the award official to
resolve disputes concerning assistance agreements.
(c) The disputes decision official's decision will constitute final
agency action unless a request for review is filed by registered mail,
return receipt requested, within 30 calendar days of the date of the
decision.
(1) For final decisions issued by an EPA disputes decision official
at Headquarters, the request for review shall be filed with the
Assistant Administrator responsible for the assistance program.
(2) For final decisions issued by a Regional disputes decision
official, the request for review shall be filed with the Regional
Administrator. If the Regional Administrator issued the final decision,
the request for reconsideration shall be filed with the Regional
Administrator.
(d) The request shall include:
(1) A copy of the EPA disputes decision official's final decision;
[[Page 375]]
(2) A statement of the amount in dispute;
(3) A description of the issues involved; and
(4) A concise statement of the objections to the final decision.
(e) The disputant(s) may be represented by counsel and may submit
documentary evidence and briefs for inclusion in a written record.
(f) Disputants are entitled to an informal conference with EPA
officials.
(g) Disputants are entitled to a written decision from the
appropriate Regional or Assistant Administrator.
(h) A decision by the Assistant Administrator to confirm the final
decision of a Headquarters disputes decision official will constitute
the final Agency action.
(i) A decision by the Regional Administrator to confirm the Regional
disputes decision official's decision will constitute the final Agency
action. However, a petition for discretionary review by the Assistant
Administrator responsible for the assistance program may be filed within
30 calendar days of the Regional Administrator's decision. The petition
shall be sent to the Assistant Administrator by registered mail, return
receipt requested, and shall include:
(1) A copy of the Regional Administrator's decision; and
(2) A concise statement of the objections to the decision.
(j) If the Assistant Administrator decides not to review the
Regional Administrator's decision, the Assistant Administrator will
advise the disputant(s) in writing that the Regional Administrator's
decision remains the final Agency action.
(k) If the Assistant Administrator decides to review the Regional
Administrator's decision, the review will generally be limited to the
written record on which the Regional Administrator's decision was based.
The Assistant Administrator may allow the disputant(s) to submit briefs
in support of the petition for review and may provide an opportunity for
an informal conference in order to clarify technical or legal issues.
After reviewing the Regional Administrator's decision, the Assistant
Administrator will issue a written decision which will then become the
final Agency action.
(l) Reviews may not be requested of:
(1) Decisions on requests for exceptions under Sec. 31.6;
(2) Bid protest decisions under Sec. 31.36(b)(12);
(3) National Environmental Policy Act decisions under part 6;
(4) Advanced wastewater treatment decisions of the Administrator;
and
(5) Policy decisions of the EPA Audit Resolution Board.
[53 FR 8076, Mar. 11, 1988]
Appendix A to Part 31--Audit Requirements for State and Local Government
Recipients
EXECUTIVE OFFICE OF THE PRESIDENT
Office of Management and Budget
Circular No. A-128
April 12, 1985
To the Heads of Executive Departments and Establishments.
Subject: Audits of State and Local Governments.
1. Purpose. This Circular is issued pursuant to the Single Audit Act
of 1984, Public Law 98-502. It establishes audit requirements for State
and local governments that receive Federal aid, and defines Federal
responsibilities for implementing and monitoring those requirements.
2. Supersession. The Circular supersedes Attachment P, ``Audit
Requirements,'' of Circular A-102, ``Uniform requirements for grants to
State and local governments.''
3. Background. The Single Audit Act builds upon earlier efforts to
improve audits of Federal aid programs. The Act requires State or local
governments that receive $100,000 or more a year in Federal funds to
have an audit made for that year. Section 7505 of the Act requires the
Director of the Office of Management and Budget to prescribe policies,
procedures and guidelines to implement the Act. It specifies that the
Director shall designate ``cognizant'' Federal agencies, determine
criteria for making appropriate charges to Federal programs for the cost
of audits, and provide procedures to assure that small firms or firms
owned and controlled by disadvantaged individuals have the opportunity
to participate in contracts for single audits.
4. Policy. The Single Audit Act requires the following:
a. State or local governments that receive $100,000 or more a year
in Federal financial assistance shall have an audit made in accordance
with this Circular.
[[Page 376]]
b. State or local governments that receive between $25,000 and
$100,000 a year shall have an audit made in accordance with this
Circular, or in accordance with Federal laws and regulations governing
the programs they participate in.
c. State or local governments that receive less than $25,000 a year
shall be exempt from compliance with the Act and other Federal audit
requirements. These State and local governments shall be governed by
audit requirements prescribed by State or local law or regulation.
d. Nothing in this paragraph exempts State or local governments from
maintaining records of Federal financial assistance or from providing
access to such records to Federal agencies, as provided for in Federal
law or in Circular A-102, ``Uniform requirements for grants to State or
local governments.''
5. Definitions. For the purposes of this Circular the following
definitions from the Single Audit Act apply:
a. Cognizant agency means the Federal agency assigned by the Office
of Management and Budget to carry out the responsibilities described in
paragraph 11 of this Circular.
b. Federal financial assistance means assistance provided by a
Federal agency in the form of grants, contracts, cooperative agreements,
loans, loan guarantees, property, interest subsidies, insurance, or
direct appropriations, but does not include direct Federal cash
assistance to individuals. It includes awards received directly from
Federal agencies, or indirectly through other units of State and local
governments.
c. Federal agency has the same meaning as the term agency in section
551(1) of Title 5, United States Code.
d. Generally accepted accounting principles has the meaning
specified in the generally accepted government auditing standards.
e. Generally accepted government auditing standards means the
Standards for Audit of Government Organizations, Programs, Activities,
and Functions, developed by the Comptroller General, dated February 27,
1981.
f. Independent auditor means:
(1) A State or local government auditor who meets the independence
standards specified in generally accepted government auditing standards;
or
(2) A public accountant who meets such independence standards.
g. Internal controls means the plan of organization and methods and
procedures adopted by management to ensure that:
(1) Resource use is consistent with laws, regulations, and policies;
(2) Resources are safeguarded against waste, loss, and misuse; and
(3) Reliable data are obtained, maintained, and fairly disclosed in
reports.
h. Indian tribe means any Indian tribe, band, nations, or other
organized group or community, including any Alaskan Native village or
regional or village corporations (as defined in, or established under,
the Alaskan Native Claims Settlement Act) that is recognized by the
United States as eligible for the special programs and services provided
by the United States to Indians because of their status as Indians.
i. Local government means any unit of local government within a
State, including a county, a borough, municipality, city, town,
township, parish, local public authority, special district, school
district, intrastate district, council of governments, and any other
instrumentality of local government.
j. Major Federal Assistance Program, as defined by Pub. L. 98-502,
is described in the Attachment to this Circular.
k. Public accountants means those individuals who meet the
qualification standards included in generally accepted government
auditing standards for personnel performing government audits.
l. State means any State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Commonwealth of the Northern Mariana Islands, and
the Trust Territory of the Pacific Islands, any instrumentality thereof,
and any multi-State, regional, or interstate entity that has
governmental functions and any Indian tribe.
m. Subrecipient means any person or government department, agency,
or establishment that receives Federal financial assistance to carry out
a program through a State or local government, but does not include an
individual that is a beneficiary of such a program. A subrecipient may
also be a direct recipient of Federal financial assistance.
6. Scope of audit. The Single Audit Act provides that:
a. The audit shall be made by an independent auditor in accordance
with generally accepted government auditing standards covering financial
and compliance audits.
b. The audit shall cover the entire operations of a State or local
government or, at the option of that government, it may cover
departments, agencies or establishments that received, expended, or
otherwise administered Federal financial assistance during the year.
However, if a State or local government receives $25,000 or more in
General Revenue Sharing Funds in a fiscal year, it shall have an audit
of its entire operations. A series of audits of individual departments,
agencies, and establishments for the same fiscal year may be considered
a single audit.
c. Public hospitals and public colleges and universities may be
excluded from State and local audits and the requirements of this
Circular. However, if such entities are excluded, audits of these
entities shall be made in accordance with statutory requirements and
[[Page 377]]
the provisions of Circular A-110. ``Uniform requirements for grants to
universities, hospitals, and other nonprofit organizations.''
d. The auditor shall determine whether:
(1) The financial statements of the government, department, agency
or establishment present fairly its financial position and the results
of its financial operations in accordance with generally accepted
accounting principles:
(2) The organization has internal accounting and other control
systems to provide reasonable assurance that it is managing Federal
financial assistance programs in compliance with applicable laws and
regulations; and
(3) The organization has complied with laws and regulations that may
have material effect on its financial statements and on each major
Federal assistance program.
7. Frequency of audit. Audits shall be made annually unless the
State or local government has, by January 1, 1987, a constitutional or
statutory requirement for less frequent audits. For those governments,
the cognizant agency shall permit biennial audits, covering both years,
if the government so requests. It shall also honor requests for biennial
audits by governments that have an administrative policy calling for
audits less frequent than annual, but only for fiscal years beginning
before January 1, 1987.
8. Internal control and compliance reviews. The Single Audit Act
requires that the independent auditor determine and report on whether
the organization has internal control systems to provide reasonable
assurance that it is managing Federal assistance programs in compliance
with applicable laws and regulations.
a. Internal control review. In order to provide this assurance the
auditor must make a study and evaluation of internal control systems
used in administering Federal assistance programs. The study and
evaluation must be made whether or not the auditor intends to place
reliance on such systems. As part of this review, the auditor shall:
(1) Test whether these internal control systems are functioning in
accordance with prescribed procedures.
(2) Examine the recipient's system for monitoring subrecipients and
obtaining and acting on subrecipient audit reports.
b. Compliance review. The law also requires the auditor to determine
whether the organization has complied with laws and regulations that may
have a material effect on each major Federal assistance program.
(1) In order to determine which major programs are to be tested for
compliance, State and local governments shall identify in their accounts
all Federal funds received and expended and the programs under which
they were received. This shall include funds received directly from
Federal agencies and through other State and local governments.
(2) The review must include the selection and testing of a
representative number of charges from each major Federal assistance
program. The selection and testing of transactions shall be based on the
auditor's professional judgment considering such factors as the amount
of expenditures for the program and the individual awards; the newness
of the program or changes in its conditions; prior experience with the
program, particularly as revealed in audits and other evaluations (e.g.,
inspections program reviews); the extent to which the program is carried
out through subrecipients; the extent to which the program contracts for
goods or services; the level to which the program is already subject to
program reviews or other forms of independent oversight; the adequacy of
the controls for ensuring compliance; the expectation of adherence or
lack of adherence to the applicable laws and regulations; and the
potential impact of adverse findings.
(a) In making the test of transactions, the auditor shall determine
whether.
--The amounts reported as expenditures were for allowable services, and
--The records show that those who received services or benefits were
eligible to receive them.
(b) In addition to transaction testing, the auditor shall determine
whether:
--Matching requirements, levels of effort and earmarking limitations
were met,
--Federal financial reports and claims for advances and reimbursements
contain information that is supported by the books and records from
which the basic financial statements have been prepared, and
--Amounts claimed or used for matching were determined in accordance
with OMB Circular A-87, ``Cost principles for State and local
governments,'' and Attachment F of Circular A-102, ``Uniform
requirements for grants to State and local governments.''
(c) The principal compliance requirements of the largest Federal aid
programs may be ascertained by referring to the Compliance Supplement
for Single Audits of State and Local Governments, issued by OMB and
available from the Government Printing Office. For those programs not
covered in the Compliance Supplement, the auditor may ascertain
compliance requirements by researching the statutes, regulations, and
agreements governing individual programs.
(3) Transactions related to other Federal assistance programs that
are selected in connection with examinations of financial statements and
evaluations of internal controls shall be tested for compliance with
Federal laws and regulations that apply to such transactions.
9. Subrecipients. State or local governments that receive Federal
financial assistance and
[[Page 378]]
provide $25,000 or more of it in a fiscal year to a subrecipient shall:
a. Determine whether State or local subrecipients have met the audit
requirements of this Circular and whether subrecipients covered by
Circular A-110. ``Uniform requirements for grants to universities,
hospitals, and other nonprofit organizations,'' have met that
requirement;
b. Determine whether the subrecipient spent Federal assistance funds
provided in accordance with applicable laws and regulations. This may be
accomplished by reviewing an audit of the subrecipient made in
accordance with this Circular, Circular A-110, or through other means
(e.g., program reviews) if the subrecipient has not yet had such an
audit;
c. Ensure that appropriate corrective action is taken within six
months after receipt of the audit report in instances of noncompliance
with Federal laws and regulations;
d. Consider whether subrecipient audits necessitate adjustment of
the recipient's own records; and
e. Require each subrecipient to permit independent auditors to have
access to the records and financial statements as necessary to comply
with this Circular.
10. Relation to other audit requirements. The Single Audit Act
provides that an audit made in accordance with this Circular shall be in
lieu of any financial or financial compliance audit required under
individual Federal assistance programs. To the extent that a single
audit provides Federal agencies with information and assurance they need
to carry out their overall responsibilities, they shall rely upon and
use such information. However, a Federal agency shall make any
additional audits which are necessary to carry out its responsibilities
under Federal law and regulation. Any additional Federal audit effort
shall be planned and carried out in such a way as to avoid duplication.
a. The provisions of this Circular do not limit the authority of
Federal agencies to make, or contract for audits and evaluations of
Federal financial assistance programs, nor do they limit the authority
of any Federal agency Inspector General or other Federal audit official.
b. The provisions of this Circular do not authorize any State or
local government or subrecipient thereof to constrain Federal agencies,
in any manner, from carrying out additional audits.
c. A Federal agency that makes or contracts for audits in additon to
the audits made by recipients pursuant to this Circular shall,
consistent with other applicable laws and regulations, arrange for
funding the cost of such additional audits. Such additional audits
include economy and efficiency audits, program results audits, and
program evaluations.
11. Cognizant agency responsibilities. The Single Audit Act provides
for congnizant Federal agencies to oversee the implementation of this
Circular.
a. The Office of Management and Budget will assign cognizant
agencies for States and their subdivisions and larger local governments
and their subdivisions. Other Federal agencies may participate with an
assigned cognizant agency, in order to fulfill the cognizant
responsibilities. Smaller governments not assigned a cognizant agency
will be under the general oversight of the Federal agency that provides
them the most funds whether directly or indirectly.
b. A cognizant agency shall have the following responsibilities:
(1) Ensure that audits are made and reports are received in a timely
manner and in accordance with the requirements of this Circular.
(2) Provide technical advice and liaison to State and local
governments and independent auditors.
(3) Obtain or make quality control reviews of selected audits made
by non-Federal audit organizations, and provide the results, when
appropriate, to other interested organizations.
(4) Promptly inform other affected Federal agencies and appropriate
Federal law enforcement officials of any reported illegal acts or
irregularities. They should also inform State or local law enforcement
and prosecuting authorities, if not advised by the recipient, of any
violation of law within their jurisdiction.
(5) Advise the recipient of audits that have been found not to have
met the requirements set forth in this Circular. In such instances, the
recipient will be expected to work with the auditor to take corrective
action. If corrective action is not taken, the cognizant agency shall
notify the recipient and Federal awarding agencies of the facts and make
recommendations for followup action. Major inadequacies or repetitive
substandard performance of independent auditors shall be referred to
appropriate professional bodies for disciplinary action.
(6) Coordinate, to the extent practicable, audits made by or for
Federal agencies that are in addition to the audits made pursuant to
this Circular, so that the additional audits build up such audits.
(7) Oversee the resolution of audit findings that affect the
programs of more than one agency.
12. Illegal acts or irregularities. If the auditor becomes aware of
illegal acts or other irregularities, prompt notice shall be given to
recipient management officials above the level of involvement. (See also
program 13(a)(3) below for the auditor's reporting responsibilities.)
The recipient, in turn, shall promptly notify the cognizant agency of
the illegal
[[Page 379]]
acts or irregularities and of proposed and actual actions, if any.
Illegal acts and irregularities include such matters as conflicts of
interest, falsification of records or reports, and misappropriations of
funds or other assets.
13. Audit Reports. Audit reports must be prepared at the completion
of the audit. Reports serve many needs of State and local governments as
well as meeting the requirements of the Single Audit Act.
a. The audit report shall state that the audit was made in
accordance with the provisions of this Circular. The report shall be
made up of at least:
(1) The auditor's report on financial statements and on a schedule
of Federal assistance; the financial statements; and a schedule of
Federal assistance, showing the total expenditures for each Federal
assitance program as identified in the Catalog of Federal Domestic
Assistance. Federal programs or grants that have not been assigned a
catalog number shall be identified under the caption ``other Federal
assistance.''
(2) The author's report on the study and evaluation of internal
control systems must identify the organization's significant internal
accounting controls, and those controls designed to provide reasonable
assurance that Federal programs are being managed in compliance with
laws and regulations. It must also identify the controls that were
evaluated, the controls that were not evaluated, and the material
weaknesses identified as a result of the evaluation.
(3) The auditor's report on compliance containing:
--A statement of positive assurance with respect to those items tested
for compliance, including compliance with law and regulations pertaining
to financial reports and claims for advances and reimbursements;
--Negative assurance on those items not tested;
--A summary of all instances of noncompliance; and
--An identification of total amounts questioned, if any, for each
Federal assistance award, as a result of noncompliance.
b. The three parts of the audit report may be bound into a single
report, or presented at the same time as separate documents.
c. All fraud abuse, or illegal acts or indications of such acts,
including all questioned costs found as the result of these acts that
auditors become aware of, should normally be covered in a separate
written report submitted in accordance with paragraph 13f.
d. In addition to the audit report, the recipient shall provide
comments on the findings and recommendations in the report, including a
plan for corrective action taken or planned and comments on the status
of corrective action taken on prior findings. If corrective action is
not necessary, a statement describing the reason it is not should
accompany the audit report.
e. The reports shall be made available by the State or local
government for public inspection within 30 days after the completion of
the audit.
f. In accordance with generally accepted government audit standards,
reports shall be submitted by the auditor to the organization audited
and to those requiring or arranging for the audit. In addition, the
recipient shall submit copies of the reports to each Federal department
or agency that provided Federal assistance funds to the recipient.
Subrecipients shall submit copies to recipients that provided them
Federal assistance funds. The reports shall be sent within 30 days after
the completion of the audit, but no later than one year after the end of
the audit period unless a longer period is agreed to with the cognizant
agency.
g. Recipients of more than $100,000 in Federal funds shall submit
one copy of the audit report within 30 days after issuance to a central
clearinghouse to be designated by the Office of Management and Budget.
The clearinghouse will keep completed audits on file and follow up with
State and local governments that have not submitted required audit
reports.
h. Recipients shall keep audit reports on file for three years from
their issuance.
14. Audit Resolution. As provided in paragraph 11, the cognizant
agency shall be responsible for monitoring the resolution of audit
findings that affect the programs of more than one Federal agency.
Resolution of findings that relate to the programs of a single Federal
agency will be the responsibility of the recipient and that agency.
Alternate arrangements may be made on a case-by-case basis by agreement
among the agencies concerned.
Resolution shall be made within six months after receipt of the
report by the Federal departments and agencies. Corrective action should
proceed as rapidly as possible.
15. Audit workpapers and reports. Workpapers and reports shall be
retained for a minimum of three years from the date of the audit report,
unless the auditor is notified in writing by the cognizant agency to
extend the retention period. Audit workpapers shall be made available
upon request to the cognizant agency or its designee or the General
Accounting Office, at the completion of the audit.
16. Audit Costs. The cost of audits made in accordance with the
provisions of this Circular are allowable charges to Federal assistance
programs.
a. The charges may be considered a direct cost or an allocated
indirect cost, determined in accordance with the provision of Circular
A-87, ``Cost principles for State and local governments.''
[[Page 380]]
b. Generally, the percentage of costs charged to Federal assistance
programs for a single audit shall not exceed the percentage that Federal
funds expended represent of total funds expended by the recipient during
the fiscal year. The percentage may be exceeded, however, if appropriate
documentation demonstrates higher actual cost.
17. Sanctions. The Single Audit Act provides that no cost may be
charged to Federal assistance programs for audits required by the Act
that are not made in accordance with this Circular. In cases of
continued inability or unwillingness to have a proper audit, Federal
agencies must consider other appropriate sanctions including:
--Withholding a percentage of assistance payments until the audit its
completed satisfactorily,
--Withholding or disallowing overhead costs, and
--Suspending the Federal assistance agreement until the audit is made.
18. Auditor Selection. In arranging for audit services State and
local governments shall follow the procurement standards prescribed by
Attachment O of Circular A-102, ``Uniform requirements for grants to
State and local governments.'' The standards provide that while
recipients are encouraged to enter into intergovernmental agreements for
audit and other services, analysis should be made to determine whether
it would be more economical to purchase the services from private firms.
In instances where use of such intergovernmental agreements are required
by State statutes (e.g., audit services) these statutes will take
precedence.
19. Small and Minority Audit Firms. Small audit firms and audit
firms owned and controlled by socially and economically disadvantaged
individuals shall have the maximum practicable opportunity to
participate in contracts awarded to fulfill the requirements of this
Circular. Recipients of Federal assistance shall take the following
steps to further this goal:
a. Assure that small audit firms and audit firms owned and
controlled by socially and economically disadvantaged individuals are
used to the fullest extent practicable.
b. Make information on forthcoming opportunities available and
arrange timeframes for the audit so as to encourage and facilitate
participation by small audit firms and audit firms owned and controlled
by socially and economically disadvantaged individuals.
c. Consider in the contract process whether firms competing for
larger audits intend to subcontract with small audit firms and audit
firms owned and controlled by socially and economically disadvantaged
individuals.
d. Encourage contracting with small audit firms or audit firms owned
and controlled by socially and economically disadvantaged individuals
which have traditionally audited government programs and, in such cases
where this is not possible, assure that these firms are given
consideration for audit subcontracting opportunities.
e. Encourage contracting with consortiums of small audit firms as
described in paragraph (a) above when a contract is too large for an
individual small audit firm or audit firm owned and controlled by
socially and economically disadvantaged individuals.
f. Use the services and assistance, as appropriate, of such
organizations as the Small Business Administration in the solicitation
and utilization of small audit firms or audit firms owned and controlled
by socially and economically disadvantaged individuals.
20. Reporting. Each Federal agency will report to the Director of
OMB on or before March 1, 1987, and annually thereafter on the
effectiveness of State and local governments in carrying out the
provisions of this Circular. The report must identify each State or
local government or Indian tribe that, in the opinion of the agency, is
failing to comply with the Circular.
21. Regulations. Each Federal agency shall include the provisions of
this Circular in its regulations implementing the Single Audit Act.
22. Effective date. This Circular is effective upon publication and
shall apply to fiscal years of State and local governments that begin
after December 31, 1984. Earlier implementation is encouraged. However,
until it is implemented, the audit provisions of Attachment P to
Circular A-102 shall continue to be observed.
23. Inquiries, All questions or inquiries should be addressed to
Financial Management Division, Office of Management and Budget,
telephone number 202/395-3993.
24. Sunset review date. This Circular shall have an independent
policy review to ascertain its effectiveness three years from the date
of issuance.
David A. Stockman,
Director.
Attachment--Circular A-128
Definition of Major Program as Provided in Pub. L. 96-502
Major Federal Assistance Program, for State and local governments
having Federal assistance expenditures between $100,000 and
$100,000,000, means any program for which Federal expenditures during
the applicable year exceed the larger of $308,000, or 3 percent of such
total expenditures.
Where total expenditures of Federal assistance exceed $100,000,000,
the following criteria apply:
[[Page 381]]
------------------------------------------------------------------------
Total expenditures of Federal financial assistance Major Federal
for all programs assistance program
----------------------------------------------------- means any program
More than But less than that exceeds
------------------------------------------------------------------------
$100 million.................... $1 billion........ $3 million.
$1 billion...................... $2 billion........ $4 million.
$2 billion...................... $3 billion........ $7 million.
$3 billion...................... $4 billion........ $10 million.
$4 billion...................... $5 billion........ $13 million.
$5 billion...................... $6 billion........ $16 million.
$6 billion...................... $7 billion........ $19 million.
Over $7 billion................. .................. $20 million.
------------------------------------------------------------------------
[51 FR 6353, Feb. 21, 1986. Redesignated at 53 FR 8076, Mar. 11, 1988]
PART 32--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS); CLEAN AIR ACT
AND CLEAN
WATER ACT INELIGIBILITY OF FACILITIES IN PERFORMANCE OF FEDERAL CONTRACTS, GRANTS AND LOANS--Table of Contents
Subpart A--General
Sec.
32.100 Purpose.
32.105 Definitions.
32.110 Coverage.
32.115 Policy.
Subpart B--Effect of Action
32.200 Debarment or suspension.
32.205 Ineligible persons.
32.210 Voluntary exclusion.
32.215 Exception provision.
32.220 Continuation of covered transactions.
32.225 Failure to adhere to restrictions.
Subpart C--Debarment
32.300 General.
32.305 Causes for debarment.
32.310 Procedures.
32.311 Investigation and referral.
32.312 Notice of proposed debarment.
32.313 Opportunity to contest proposed debarment.
32.314 Debarring official's decision.
32.315 Settlement and voluntary exclusion.
32.320 Period of debarment.
32.321 Reinstatement of facility eligibility.
32.325 Scope of debarment.
32.335 Appeal.
Subpart D--Suspension
32.400 General.
32.405 Causes for suspension.
32.410 Procedures.
32.411 Notice of suspension.
32.412 Opportunity to contest suspension.
32.413 Suspending official's decision.
32.415 Period of suspension.
32.420 Scope of suspension.
32.430 Appeal.
Subpart E--Responsibilities of GSA, Agency and Participants
32.500 GSA responsibilities.
32.505 EPA responsibilities.
32.510 Participants' responsibilities.
Subpart F--Drug-Free Workplace Requirements (Grants)
32.600 Purpose.
32.605 Definitions.
32.610 Coverage.
32.615 Grounds for suspension of payments, suspension or termination of
grants, or suspension or debarment.
32.620 Effect of violation.
32.625 Exception provision.
32.630 Certification requirements and procedures.
32.635 Reporting of and employee sanctions for convictions of criminal
drug offenses.
Appendix A to Part 32--Certification Regarding Debarment, Suspension,
and Other Responsibility Matters--Primary Covered Transactions
Appendix B to Part 32--Certification Regarding Debarment, Suspension,
Ineligibility and Voluntary Exclusion--Lower Tier Covered
Transactions
Appendix C to Part 32--Certification Regarding Drug-Free Workplace
Requirements
Authority: E.O. 12549; 41 U.S.C. 701 et seq.; 7 U.S.C. 136 et seq.;
15 U.S.C. 2601 et seq.; 20 U.S.C. 4011 et seq.; 33 U.S.C. 1251 et seq.;
42 U.S.C. 300f, 4901, 6901, 7401, 9801 et seq.; E.O. 12689; E.O. 11738;
Pub. L. 103-355 Sec. 2455.
Source: 53 FR 19196, 19204, May 26, 1988, unless otherwise noted.
Cross Reference: See also Office of Management and Budget notice
published at 55 FR 21679, May 25, 1990, and at 60 FR 33036, June 26,
1995.
Subpart A--General
Sec. 32.100 Purpose.
(a) Executive Order (E.O.) 12549 provides that, to the extent
permitted by law, Executive departments and agencies shall participate
in a governmentwide system for nonprocurement debarment and suspension.
A person who is debarred or suspended shall be excluded
[[Page 382]]
from Federal financial and nonfinancial assistance and benefits under
Federal programs and activities. Debarment or suspension of a
participant in a program by one agency shall have governmentwide effect.
(b) These regulations implement section 3 of E.O. 12549 and the
guidelines promulgated by the Office of Management and Budget under
section 6 of the E.O. by:
(1) Prescribing the programs and activities that are covered by the
governmentwide system;
(2) Prescribing the governmentwide criteria and governmentwide
minimum due process procedures that each agency shall use;
(3) Providing for the listing of debarred and suspended
participants, participants declared ineligible (see definition of
``ineligible'' in Sec. 32.105), and participants who have voluntarily
excluded themselves from participation in covered transactions;
(4) Setting forth the consequences of a debarment, suspension,
determination of ineligibility, or voluntary exclusion; and
(5) Offering such other guidance as necessary for the effective
implementation and administration of the governmentwide system.
(c) These regulations also implement Executive Order 12689 (3 CFR,
1989 Comp., p. 235) and 31 U.S.C. 6101 note (Public Law 103-355, sec.
2455, 108 Stat. 3327) by--
(1) Providing for the inclusion in the List of Parties Excluded from
Federal Procurement and Nonprocurement Programs all persons proposed for
debarment, debarred or suspended under the Federal Acquisition
Regulation, 48 CFR part 9, subpart 9.4; persons against which
governmentwide exclusions have been entered under this part; and persons
determined to be ineligible; and
(2) Setting forth the consequences of a debarment, suspension,
determination of ineligibility, or voluntary exclusion.
(d) Although these regulations cover the listing of ineligible
participants and the effect of such listing, they do not prescribe
policies and procedures governing declarations of ineligibility.
(e) Facilities ineligible to provide goods, materials, or services
under Federal contracts, loans or assistance, pursuant to Section 306 of
the Clean Air Act (CAA) or Section 508 of the Clean Water Act (CWA) are
excluded in accordance with the terms of those statutes. Reinstatement
of a CAA or CWA ineligible facility may be requested in accordance with
the procedures at Sec. 32.321.
[60 FR 33040, 33059, June 26, 1995, as amended at 61 FR 28756, June 6,
1996]
Sec. 32.105 Definitions.
The following definitions apply to this part:
Adequate evidence. Information sufficient to support the reasonable
belief that a particular act or omission has occurred.
Affiliate. Persons are affiliates of each other if, directly or
indirectly, either one controls or has the power to control the other,
or, a third person controls or has the power to control both. Indicia of
control include, but are not limited to: interlocking management or
ownership, identity of interests among family members, shared facilities
and equipment, common use of employees, or a business entity organized
following the suspension or debarment of a person which has the same or
similar management, ownership, or principal employees as the suspended,
debarred, ineligible, or voluntarily excluded person.
Agency. Any executive department, military department or defense
agency or other agency of the executive branch, excluding the
independent regulatory agencies.
Agency head. Administrator of the Environmental Protection Agency.
CAA or CWA ineligibility. The status of a facility which, as
provided in section 306 of the Clean Air Act (CAA) and section 508 of
the Clean Water Act (CWA), is ineligible to be used in the performance
of a Federal contract, subcontract, loan, assistance award or covered
transaction. Such ineligibility commences upon conviction of a facility
owner, lessee, or supervisor for a violation of section 113 of the CAA
or section 309(c) of the CWA, which violation occurred at the facility.
The ineligibility of the facility continues until such time as the EPA
Debarring Official certifies that the condition giving
[[Page 383]]
rise to the CAA or CWA criminal conviction has been corrected.
Civil judgment. The disposition of a civil action by any court of
competent jurisdiction, whether entered by verdict, decision,
settlement, stipulation, or otherwise creating a civil liability for the
wrongful acts complained of; or a final determination of liability under
the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-12).
Conviction. A judgment of conviction of a criminal offense by any
court of competent jurisdiction, whether entered upon a verdict or a
plea, including a plea of nolo contendere.
Debarment. An action taken by a debarring official in accordance
with these regulations to exclude a person from participating in covered
transactions. A person so excluded is ``debarred.''
Debarring official. An official authorized to impose debarment. The
debarring official is either:
(1) The agency head, or
(2) An official designated by the agency head.
EPA. Environmental Protection Agency.
Facility. Any building, plant, installation, structure, mine,
vessel, floating craft, location or site of operations at which, or from
which, a Federal contract, subcontract, loan, assistance award or
covered transaction is to be performed. Where a location or site of
operations contains or includes more than one building, plant,
installation or structure, the entire location or site shall be deemed
the facility unless otherwise limited by EPA.
Indictment. Indictment for a criminal offense. An information or
other filing by competent authority charging a criminal offense shall be
given the same effect as an indictment.
Ineligible. Excluded from participation in Federal nonprocurement
programs pursuant to a determination of ineligibility under statutory,
executive order, or regulatory authority, other than Executive Order
12549 and its agency implementing regulations; for exemple, excluded
pursuant to the Davis-Bacon Act and its implementing regulations, the
equal employment opportunity acts and executive orders, or the
environmental protection acts and executive orders. A person is
ineligible where the determination of ineligibility affects such
person's eligibility to participate in more than one covered
transaction.
Legal proceedings. Any criminal proceeding or any civil judicial
proceeding to which the Federal Government or a State or local
government or quasi-governmental authority is a party. The term includes
appeals from such proceedings.
List of Parties Excluded from Federal Procurement and Nonprocurement
Programs. A list compiled, maintained and distributed by the General
Services Administration (GSA) containing the names and other information
about persons who have been debarred, suspended, or voluntarily excluded
under Executive Orders 12549 and 12689 and these regulations or 48 CFR
part 9, subpart 9.4, persons who have been proposed for debarment under
48 CFR part 9, subpart 9.4, and those persons who have been determined
to be ineligible.
Notice. A written communication served in person or sent by
certified mail, return receipt requested, or its equivalent, to the last
known address of a party, its identified counsel, its agent for service
of process, or any partner, officer, director, owner, or joint venturer
of the party. Notice, if undeliverable, shall be considered to have been
received by the addressee five days after being properly sent to the
last address known by the agency.
Participant. Any person who submits a proposal for, enters into, or
reasonably may be expected to enter into a covered transaction. This
term also includes any person who acts on behalf of or is authorized to
commit a participant in a covered transaction as an agent or
representative of another participant.
Person. Any individual, corporation, partnership, association, unit
of government or legal entity, however organized, except: foreign
governments or foreign governmental entities, public international
organizations, foreign government owned (in whole or in part) or
controlled entities, and entities consisting wholly or partially of
foreign governments or foreign governmental entities.
[[Page 384]]
Preponderance of the evidence. Proof by information that, compared
with that opposing it, leads to the conclusion that the fact at issue is
more probably true than not.
Principal. Officer, director, owner, partner, key employee, or other
person within a participant with primary management or supervisory
responsibilities; or a person who has a critical influence on or
substantive control over a covered transaction, whether or not employed
by the participant. Persons who have a critical influence on or
substantive control over a covered transaction are:
(1) Principal investigators.
(2) Bid and proposal estimators and preparers.
Proposal. A solicited or unsolicited bid, application, request,
invitation to consider or similar communication by or on behalf of a
person seeking to participate or to receive a benefit, directly or
indirectly, in or under a covered transaction.
Respondent. A person against whom a debarment or suspension action
has been initiated.
State. Any of the States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, any territory or possession
of the United States, or any agency of a State, exclusive of
institutions of higher education, hospitals, and units of local
government. A State instrumentality will be considered part of the State
government if it has a written determination from a State government
that such State considers that instrumentality to be an agency of the
State government.
Suspending official. An official authorized to impose suspension.
The suspending official is either:
(1) The agency head, or
(2) An official designated by the agency head.
Suspension. An action taken by a suspending official in accordance
with these regulations that immediately excludes a person from
participating in covered transactions for a temporary period, pending
completion of an investigation and such legal, debarment, or Program
Fraud Civil Remedies Act proceedings as may ensue. A person so excluded
is ``suspended.''
Voluntary exclusion or voluntarily excluded. A status of
nonparticipation or limited participation in covered transactions
assumed by a person pursuant to the terms of a settlement.
[53 FR 19196, 19204, May 26, 1988, as amended at 53 FR 19196, May 26,
1988; 59 FR 50692, Oct. 5, 1994; 60 FR 33040, 33059, June 26, 1995; 61
FR 28756, June 6, 1996; 62 FR 47149, Sept. 8, 1997]
Sec. 32.110 Coverage.
(a) These regulations apply to all persons who have participated,
are currently participating or may reasonably be expected to participate
in transactions under Federal nonprocurement programs. For purposes of
these regulations such transactions will be referred to as ``covered
transactions.''
(1) Covered transaction. For purposes of these regulations, a
covered transaction is a primary covered transaction or a lower tier
covered transaction. Covered transactions at any tier need not involve
the transfer of Federal funds.
(i) Primary covered transaction. Except as noted in paragraph (a)(2)
of this section, a primary covered transaction is any nonprocurement
transaction between an agency and a person, regardless of type,
including: grants, cooperative agreements, scholarships, fellowships,
contracts of assistance, loans, loan guarantees, subsidies, insurance,
payments for specified use, donation agreements and any other
nonprocurement transactions between a Federal agency and a person.
Primary covered transactions also include those transactions specially
designated by the U.S. Department of Housing and Urban Development in
such agency's regulations governing debarment and suspension.
(ii) Lower tier covered transaction. A lower tier covered
transaction is:
(A) Any transaction between a participant and a person other than a
procurement contract for goods or services, regardless of type, under a
primary covered transaction.
(B) Any procurement contract for goods or services between a
participant and a person, regardless of type, expected to equal or
exceed the Federal procurement small purchase threshold fixed at 10
U.S.C. 2304(g) and 41 U.S.C.
[[Page 385]]
253(g) (currently $25,000) under a primary covered transaction.
(C) Any procurement contract for goods or services between a
participant and a person under a covered transaction, regardless of
amount, under which that person will have a critical influence on or
substantive control over that covered transaction. Such persons are:
(1) Principal investigators.
(2) Providers of federally-required audit services.
(2) Exceptions. The following transactions are not covered:
(i) Statutory entitlements or mandatory awards (but not subtier
awards thereunder which are not themselves mandatory), including
deposited funds insured by the Federal Government;
(ii) Direct awards to foreign governments or public international
organizations, or transactions with foreign governments or foreign
governmental entities, public international organizations, foreign
government owned (in whole or in part) or controlled entities, entities
consisting wholly or partially of foreign governments or foreign
governmental entities;
(iii) Benefits to an individual as a personal entitlement without
regard to the individual's present responsibility (but benefits received
in an individual's business capacity are not excepted);
(iv) Federal employment;
(A) For the purpose of this paragraph, no transactions under EPA
assistance programs are deemed to be pursuant to agency-recognized
emergencies or disasters.
(B) [Reserved]
(v) Transactions pursuant to national or agency-recognized
emergencies or disasters;
(vi) Incidental benefits derived from ordinary governmental
operations; and
(vii) Other transactions where the application of these regulations
would be prohibited by law.
(b) Relationship to other sections. This section describes the types
of transactions to which a debarment or suspension under the regulations
will apply. Subpart B, ``Effect of Action,'' Sec. 32.200, ``Debarment or
suspension,'' sets forth the consequences of a debarment or suspension.
Those consequences would obtain only with respect to participants and
principals in the covered transactions and activities described in
Sec. 32.110(a). Sections 32.325, ``Scope of debarment,'' and 32.420,
``Scope of suspension,'' govern the extent to which a specific
participant or organizational elements of a participant would be
automatically included within a debarment or suspension action, and the
conditions under which affiliates or persons associated with a
participant may also be brought within the scope of the action.
(c) Relationship to Federal procurement activities. In accordance
with E.O. 12689 and section 2455 of Public Law 103-355, any debarment,
suspension, proposed debarment or other governmentwide exclusion
initiated under the Federal Acquisition Regulation (FAR) on or after
August 25, 1995 shall be recognized by and effective for Executive
Branch agencies and participants as an exclusion under this regulation.
Similarly, any debarment, suspension or other governmentwide exclusion
initiated under this regulation on or after August 25, 1995 shall be
recognized by and effective for those agencies as a debarment or
suspension under the FAR.
(d) Except as provided in Sec. 32.215 of this part, Federal agencies
shall not use a CAA or CWA ineligible facility in the performance of any
Federal contract, subcontract, loan, assistance award or covered
transaction.
[53 FR 19196, 19204, May 26, 1988, as amended at 53 FR 19197, May 26,
1988; 60 FR 33041, 33059, June 26, 1995; 61 FR 28757, June 6, 1996]
Sec. 32.115 Policy.
(a) In order to protect the public interest, it is the policy of the
Federal Government to conduct business only with responsible persons.
Debarment and suspension are discretionary actions that, taken in
accordance with Executive Order 12549 and these regulations, are
appropriate means to implement this policy.
(b) Debarment and suspension are serious actions which shall be used
only in the public interest and for the Federal Government's protection
and not for purposes of punishment. Agencies may impose debarment or
suspension for the causes and in accordance with the procedures set
forth in these regulations.
[[Page 386]]
(c) When more than one agency has an interest in the proposed
debarment or suspension of a person, consideration shall be given to
designating one agency as the lead agency for making the decision.
Agencies are encouraged to establish methods and procedures for
coordinating their debarment or suspension actions.
(d) It is EPA policy to exercise its authority to reinstate CAA or
CWA ineligible facilities in a manner which is consistent with the
policies in paragraphs (a) and (b) of this section.
[53 FR 19196, 19204, May 26, 1988, as amended at 53 FR 19197, May 26,
1988; 61 FR 28757, June 6, 1996]
Subpart B--Effect of Action
Sec. 32.200 Debarment or suspension.
(a) Primary covered transactions. Except to the extent prohibited by
law, persons who are debarred or suspended shall be excluded from
primary covered transactions as either participants or principals
throughout the Executive Branch of the Federal Government for the period
of their debarment, suspension, or the period they are proposed for
debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency shall
enter into primary covered transactions with such excluded persons
during such period, except as permitted pursuant to Sec. 32.215.
(b) Lower tier covered transactions. Except to the extent prohibited
by law, persons who have been proposed for debarment under 48 CFR part
9, subpart 9.4, debarred or suspended shall be excluded from
participating as either participants or principals in all lower tier
covered transactions (see Sec. 32.110(a)(1)(ii)) for the period of their
exclusion.
(c) Exceptions. Debarment or suspension does not affect a person's
eligibility for--
(1) Statutory entitlements or mandatory awards (but not subtier
awards thereunder which are not themselves mandatory), including
deposited funds insured by the Federal Government;
(2) Direct awards to foreign governments or public international
organizations, or transactions with foreign governments or foreign
governmental entities, public international organizations, foreign
government owned (in whole or in part) or controlled entities, and
entities consisting wholly or partially of foreign governments or
foreign governmental entities;
(3) Benefits to an individual as a personal entitlement without
regard to the individual's present responsibility (but benefits received
in an individual's business capacity are not excepted);
(4) Federal employment;
(5) Transactions pursuant to national or agency-recognized
emergencies or disasters;
(6) Incidental benefits derived from ordinary governmental
operations; and
(7) Other transactions where the application of these regulations
would be prohibited by law.
[60 FR 33041, 33059, June 26, 1995]
Sec. 32.205 Ineligible persons.
Persons who are ineligible, as defined in Sec. 32.105(i), are
excluded in accordance with the applicable statutory, executive order,
or regulatory authority.
Sec. 32.210 Voluntary exclusion.
Persons who accept voluntary exclusions under Sec. 32.315 are
excluded in accordance with the terms of their settlements. EPA shall,
and participants may, contact the original action agency to ascertain
the extent of the exclusion.
Sec. 32.215 Exception provision.
(a) EPA may grant an exception permitting a debarred, suspended, or
voluntarily excluded person, or a person proposed for debarment under 48
CFR part 9, subpart 9.4, to participate in a particular covered
transaction upon a written determination by the agency head or an
authorized designee stating the reason(s) for deviating from the
Presidential policy established by Executive Order 12549 and
Sec. 32.200. However, in accordance with the President's stated
intention in the Executive Order, exceptions shall be granted only
infrequently. Exceptions shall be reported in accordance with
Sec. 32.505(a).
(b) Any agency head, or authorized designee, may except any Federal
contract, subcontract, loan, assistance award or covered transaction,
individually or as a class, in whole or in part,
[[Page 387]]
from the prohibitions otherwise applicable by reason of a CAA or CWA
ineligibility. The agency head granting the exception shall notify the
EPA Debarring Official of the exception as soon, before or after
granting the exception, as may be practicable. The justification for
such an exception, or any renewal thereof, shall fully describe the
purpose of the contract or covered transaction, and show why the
paramount interest of the United States requires the exception.
(c) The EPA Debarring Official is the official authorized to grant
exceptions under this section for EPA.
[61 FR 28757, June 6, 1996]
Sec. 32.220 Continuation of covered transactions.
(a) Notwithstanding the debarment, suspension, proposed debarment
under 48 CFR part 9, subpart 9.4, determination of ineligibility, or
voluntary exclusion of any person by an agency, agencies and
participants may continue covered transactions in existence at the time
the person was debarred, suspended, proposed for debarment under 48 CFR
part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A
decision as to the type of termination action, if any, to be taken
should be made only after thorough review to ensure the propriety of the
proposed action.
(b) Agencies and participants shall not renew or extend covered
transactions (other than no-cost time extensions) with any person who is
debarred, suspended, proposed for debarment under 48 CFR part 9, subpart
9.4, ineligible or voluntary excluded, except as provided in
Sec. 32.215.
[60 FR 33041, 33059, June 26, 1995]
Sec. 32.225 Failure to adhere to restrictions.
(a) Except as permitted under Sec. 32.215 or Sec. 32.220, a
participant shall not knowingly do business under a covered transaction
with a person who is--
(1) Debarred or suspended;
(2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or
(3) Ineligible for or voluntarily excluded from the covered
transaction.
(b) Violation of the restriction under paragraph (a) of this section
may result in disallowance of costs, annulment or termination of award,
issuance of a stop work order, debarment or suspension, or other
remedies as appropriate.
(c) A participant may rely upon the certification of a prospective
participant in a lower tier covered transaction that it and its
principals are not debarred, suspended, proposed for debarment under 48
CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the
covered transaction (See appendix B of these regulations), unless it
knows that the certification is erroneous. An agency has the burden of
proof that a participant did knowingly do business with a person that
filed an erroneous certification.
[60 FR 33041, 33059, June 26, 1995]
Subpart C--Debarment
Sec. 32.300 General.
The debarring official may debar a person for any of the causes in
Sec. 32.305, using procedures established in Secs. 32.310 through
32.314. The existence of a cause for debarment, however, does not
necessarily require that the person be debarred; the seriousness of the
person's acts or omissions and any mitigating factors shall be
considered in making any debarment decision.
Sec. 32.305 Causes for debarment.
Debarment may be imposed in accordance with the provisions of
Secs. 32.300 through 32.314 for:
(a) Conviction of or civil judgment for:
(1) Commission of fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing a public or private
agreement or transaction;
(2) Violation of Federal or State antitrust statutes, including
those proscribing price fixing between competitors, allocation of
customers between competitors, and bid rigging;
(3) Commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements,
receiving stolen property,
[[Page 388]]
making false claims, or obstruction of justice; or
(4) Commission of any other offense indicating a lack of business
integrity or business honesty that seriously and directly affects the
present responsibility of a person.
(b) Violation of the terms of a public agreement or transaction so
serious as to affect the integrity of an agency program, such as:
(1) A willful failure to perform in accordance with the terms of one
or more public agreements or transactions;
(2) A history of failure to perform or of unsatisfactory performance
of one or more public agreements or transactions; or
(3) A willful violation of a statutory or regulatory provision or
requirement applicable to a public agreement or transaction.
(c) Any of the following causes:
(1) A nonprocurement debarment by any Federal agency taken before
October 1, 1988, the effective date of these regulations, or a
procurement debarment by any Federal agency taken pursuant to 48 CFR
subpart 9.4;
(2) Knowingly doing business with a debarred, suspended, ineligible,
or voluntarily excluded person, in connection with a covered
transaction, except as permitted in Secs. 32.215 or 32.220;
(3) Failure to pay a single substantial debt, or a number of
outstanding debts (including disallowed costs and overpayments, but not
including sums owed the Federal Government under the Internal Revenue
Code) owed to any Federal agency or instrumentality, provided the debt
is uncontested by the debtor or, if contested, provided that the
debtor's legal and administrative remedies have been exhausted;
(4) Violation of a material provision of a voluntary exclusion
agreement entered into under Sec. 32.315 or of any settlement of a
debarment or suspension action; or
(5) Violation of any requirement of subpart F of this part, relating
to providing a drug-free workplace, as set forth in Sec. 32.615 of this
part.
(d) Any other cause of so serious or compelling a nature that it
affects the present responsibility of a person.
[53 FR 19196, 19204, May 26, 1988, as amended at 54 FR 4962, Jan. 31,
1989]
Sec. 32.310 Procedures.
EPA shall process debarment actions as informally as practicable,
consistent with the principles of fundamental fairness, using the
procedures in Secs. 32.311 through 32.314.
Sec. 32.311 Investigation and referral.
Information concerning the existence of a cause for debarment from
any source shall be promptly reported, investigated, and referred, when
appropriate, to the debarring official for consideration. After
consideration, the debarring official may issue a notice of proposed
debarment.
Sec. 32.312 Notice of proposed debarment.
A debarment proceeding shall be initiated by notice to the
respondent advising:
(a) That debarment is being considered;
(b) Of the reasons for the proposed debarment in terms sufficient to
put the respondent on notice of the conduct or transaction(s) upon which
it is based;
(c) Of the cause(s) relied upon under Sec. 32.305 for proposing
debarment;
(d) Of the provisions of Sec. 32.311 through Sec. 32.314, and any
other EPA procedures, if applicable, governing debarment decisionmaking;
and
(e) Of the potential effect of a debarment.
Sec. 32.313 Opportunity to contest proposed debarment.
(a) Submission in opposition. Within 30 days after receipt of the
notice of proposed debarment, the respondent may submit, in person, in
writing, or through a representative, information and argument in
opposition to the proposed debarment.
(1) If the respondent desires a hearing, it shall submit a written
request to the debarring official within the 30-day period following
receipt of the notice of proposed debarment.
(2) [Reserved]
(b) Additional proceedings as to disputed material facts. (1) In
actions not based upon a conviction or civil judgment, if the debarring
official finds that the respondent's submission in opposition raises a
genuine dispute over
[[Page 389]]
facts material to the proposed debarment, respondent(s) shall be
afforded an opportunity to appear with a representative, submit
documentary evidence, present witnesses, and confront any witness the
agency presents.
(2) A transcribed record of any additional proceedings shall be made
available at cost to the respondent, upon request, unless the respondent
and the agency, by mutual agreement, waive the requirement for a
transcript.
[53 FR 19196, 19204, May 26, 1988, as amended at 53 FR 19197, May 26,
1988]
Sec. 32.314 Debarring official's decision.
(a) No additional proceedings necessary. In actions based upon a
conviction or civil judgment, or in which there is no genuine dispute
over material facts, the debarring official shall make a decision on the
basis of all the information in the administrative record, including any
submission made by the respondent. The decision shall be made within 45
days after receipt of any information and argument submitted by the
respondent, unless the debarring official extends this period for good
cause.
(b) Additional proceedings necessary. (1) In actions in which
additional proceedings are necessary to determine disputed material
facts, written findings of fact shall be prepared. The debarring
official shall base the decision on the facts as found, together with
any information and argument submitted by the respondent and any other
information in the administrative record.
(2) The debarring official may refer disputed material facts to
another official for findings of fact. The debarring official may reject
any such findings, in whole or in part, only after specifically
determining them to be arbitrary and capricious or clearly erroneous.
(3) The debarring official's decision shall be made after the
conclusion of the proceedings with respect to disputed facts.
(c)(1) Standard of proof. In any debarment action, the cause for
debarment must be established by a preponderance of the evidence. Where
the proposed debarment is based upon a conviction or civil judgment, the
standard shall be deemed to have been met.
(2) Burden of proof. The burden of proof is on the agency proposing
debarment.
(d) Notice of debarring official's decision. (1) If the debarring
official decides to impose debarment, the respondent shall be given
prompt notice:
(i) Referring to the notice of proposed debarment;
(ii) Specifying the reasons for debarment;
(iii) Stating the period of debarment, including effective dates;
and
(iv) Advising that the debarment is effective for covered
transactions throughout the executive branch of the Federal Government
unless an agency head or an authorized designee makes the determination
referred to in Sec. 32.215.
(2) If the debarring official decides not to impose debarment, the
respondent shall be given prompt notice of that decision. A decision not
to impose debarment shall be without prejudice to a subsequent
imposition of debarment by any other agency.
Sec. 32.315 Settlement and voluntary exclusion.
(a) When in the best interest of the Government, EPA may, at any
time, settle a debarment or suspension action.
(1) The debarring and suspending official is the official authorized
to settle debarment or suspension actions.
(2) [Reserved]
(b) If a participant and the agency agree to a voluntary exclusion
of the participant, such voluntary exclusion shall be entered on the
Nonpro-curement List (see subpart E).
(c) The EPA Debarring Official may consider matters regarding
present responsibility, as well as any other matter regarding the
conditions giving rise to alleged CAA or CWA violations in anticipation
of entry of a plea, judgment or conviction. If, at any time, it is in
the interest of the United States to conclude such matters pursuant to a
comprehensive settlement agreement, the EPA Debarring Official may
conclude the debarment and ineligibility matters as part of any such
settlement, so long as he or she certifies that the
[[Page 390]]
condition giving rise to the CAA or CWA violation has been corrected.
[53 FR 19196, 19204, May 26, 1988, as amended at 53 FR 19197, May 26,
1988; 61 FR 28757, June 6, 1996]
Sec. 32.320 Period of debarment.
(a) Debarment shall be for a period commensurate with the
seriousness of the cause(s). If a suspension precedes a debarment, the
suspension period shall be considered in determining the debarment
period.
(1) Debarment for causes other than those related to a violation of
the requirements of subpart F of this part generally should not exceed
three years. Where circumstances warrant, a longer period of debarment
may be imposed.
(2) In the case of a debarment for a violation of the requirements
of subpart F of this part (see Sec. 32.305(c)(5)), the period of
debarment shall not exceed five years.
(b) The debarring official may extend an existing debarment for an
additional period, if that official determines that an extension is
necessary to protect the public interest. However, a debarment may not
be extended solely on the basis of the facts and circumstances upon
which the initial debarment action was based. If debarment for an
additional period is determined to be necessary, the procedures of
Secs. 32.311 through 32.314 shall be followed to extend the debarment.
(c) The respondent may request the debarring official to reverse the
debarment decision or to reduce the period or scope of debarment. Such a
request shall be in writing and supported by documentation. The
debarring official may grant such a request for reasons including, but
not limited to:
(1) Newly discovered material evidence;
(2) Reversal of the conviction or civil judgment upon which the
debarment was based;
(3) Bona fide change in ownership or management;
(4) Elimination of other causes for which the debarment was imposed;
or
(5) Other reasons the debarring official deems appropriate.
[53 FR 19196, 19204, May 26, 1988, as amended at 54 FR 4962, Jan. 31,
1989]
Sec. 32.321 Reinstatement of facility eligibility.
(a) A written petition to reinstate the eligibility of a CAA or CWA
ineligible facility may be submitted to the EPA Debarring Official. The
petitioner bears the burden of providing sufficient information and
documentation to establish, by a preponderance of the evidence, that the
condition giving rise to the CAA or CWA conviction has been corrected.
If the material facts set forth in the petition are disputed, and the
Debarring Official denies the petition, the petitioner shall be afforded
the opportunity to have additional proceedings as provided in
Sec. 32.314(b).
(b) A decision by the EPA Debarring Official denying a petition for
reinstatement may be appealed under Sec. 32.335.
[61 FR 28757, June 6, 1996]
Sec. 32.325 Scope of debarment.
(a) Scope in general. (1) Debarment of a person under these
regulations constitutes debarment of all its divisions and other
organizational elements from all covered transactions, unless the
debarment decision is limited by its terms to one or more specifically
identified individuals, divisions or other organizational elements or to
specific types of transactions.
(2) The debarment action may include any affiliate of the
participant that is specifically named and given notice of the proposed
debarment and an opportunity to respond (see Secs. 32.311 through
32.314).
(b) Imputing conduct. For purposes of determining the scope of
debarment, conduct may be imputed as follows:
(1) Conduct imputed to participant. The fraudulent, criminal or
other seriously improper conduct of any officer, director, shareholder,
partner, employee, or other individual associated with a participant may
be imputed to the participant when the conduct occurred in connection
with the individual's performance of duties for or on behalf of the
participant, or with the participant's knowledge, approval, or
acquiescence. The participant's acceptance of the benefits derived from
the conduct shall be evidence of such knowledge, approval, or
acquiescence.
[[Page 391]]
(2) Conduct imputed to individuals associated with participant. The
fraudulent, criminal, or other seriously improper conduct of a
participant may be imputed to any officer, director, shareholder,
partner, employee, or other individual associated with the participant
who participated in, knew of, or had reason to know of the participant's
conduct.
(3) Conduct of one participant imputed to other participants in a
joint venture. The fraudulent, criminal, or other seriously improper
conduct of one participant in a joint venture, grant pursuant to a joint
application, or similar arrangement may be imputed to other participants
if the conduct occurred for or on behalf of the joint venture, grant
pursuant to a joint application, or similar arrangement may be imputed
to other participants if the conduct occurred for or on behalf of the
joint venture, grant pursuant to a joint application, or similar
arrangement or with the knowledge, approval, or acquiescence of these
participants. Acceptance of the benefits derived from the conduct shall
be evidence of such knowledge, approval, or acquiescence.
Sec. 32.335 Appeal.
(a) The debarment determination under Sec. 32.314 shall be final.
However, any party to the action may request the Director, Office of
Grants and Debarment (OGD Director), to review the findings of the
Debarring Official by filing a request with the OGD Director within 30
calendar days of the party's receipt of the debarment determination, or
its reconsideration. The request must be in writing and set forth the
specific reasons why relief should be granted.
(b) A review under this section shall be at the discretion of the
OGD Director. If a review is granted, the debarring official may stay
the effective date of a debarment order pending resolution of the
appeal. If a debarment is stayed, the stay shall be automatically lifted
if the OGD Director affirms the debarment.
(c) The review shall be based solely upon the record. The OGD
Director may set aside a determination only if it is found to be
arbitrary, capricious, and abuse of discretion, or based upon a clear
error of law.
(d) The OGD Director's subsequent determination shall be in writing
and mailed to all parties.
(e) A determination under Sec. 32.314 or a review under this section
shall not be subject to a dispute or a bid protest under parts 30, 31 or
33 of this subchapter.
[53 FR 19197, May 26, 1988, as amended at 59 FR 50693, Oct. 5, 1994; 62
FR 47149, Sept. 8, 1997]
Subpart D--Suspension
Sec. 32.400 General.
(a) The suspending official may suspend a person for any of the
causes in Sec. 32.405 using procedures established in Secs. 32.410
through 32.413.
(b) Suspension is a serious action to be imposed only when:
(1) There exists adequate evidence of one or more of the causes set
out in Sec. 32.405, and
(2) Immediate action is necessary to protect the public interest.
(c) In assessing the adequacy of the evidence, the agency should
consider how much information is available, how credible it is given the
circumstances, whether or not important allegations are corroborated,
and what inferences can reasonably be drawn as a result. This assessment
should include an examination of basic documents such as grants,
cooperative agreements, loan authorizations, and contracts.
Sec. 32.405 Causes for suspension.
(a) Suspension may be imposed in accordance with the provisions of
Secs. 32.400 through 32.413 upon adequate evidence:
(1) To suspect the commission of an offense listed in
Sec. 32.305(a); or
(2) That a cause for debarment under Sec. 32.305 may exist.
(b) Indictment shall constitute adequate evidence for purposes of
suspension actions.
Sec. 32.410 Procedures.
(a) Investigation and referral. Information concerning the existence
of a cause for suspension from any source
[[Page 392]]
shall be promptly reported, investigated, and referred, when
appropriate, to the suspending official for consideration. After
consideration, the suspending official may issue a notice of suspension.
(b) Decisionmaking process. EPA shall process suspension actions as
informally as practicable, consistent with principles of fundamental
fairness, using the procedures in Sec. 32.411 through Sec. 32.413.
Sec. 32.411 Notice of suspension.
When a respondent is suspended, notice shall immediately be given:
(a) That suspension has been imposed;
(b) That the suspension is based on an indictment, conviction, or
other adequate evidence that the respondent has committed irregularities
seriously reflecting on the propriety of further Federal Government
dealings with the respondent;
(c) Describing any such irregularities in terms sufficient to put
the respondent on notice without disclosing the Federal Government's
evidence;
(d) Of the cause(s) relied upon under Sec. 32.405 for imposing
suspension;
(e) That the suspension is for a temporary period pending the
completion of an investigation or ensuing legal, debarment, or Program
Fraud Civil Remedies Act proceedings;
(f) Of the provisions of Sec. 32.411 through Sec. 32.413 and any
other EPA procedures, if applicable, governing suspension
decisionmaking; and
(g) Of the effect of the suspension.
Sec. 32.412 Opportunity to contest suspension.
(a) Submission in opposition. Within 30 days after receipt of the
notice of suspension, the respondent may submit, in person, in writing,
or through a representative, information and argument in opposition to
the suspension.
(1) If the respondent desires a hearing, it shall submit a written
request to the suspending official within the 30-day period following
receipt of the notice of suspension.
(2) [Reserved]
(b) Additional proceedings as to disputed material facts. (1) If the
suspending official finds that the respondent's submission in opposition
raises a genuine dispute over facts material to the suspension,
respondent(s) shall be afforded an opportunity to appear with a
representative, submit documentary evidence, present witnesses, and
confront any witness the agency presents, unless:
(i) The action is based on an indictment, conviction or civil
judgment, or
(ii) A determination is made, on the basis of Department of Justice
advice, that the substantial interests of the Federal Government in
pending or contemplated legal proceedings based on the same facts as the
suspension would be prejudiced.
(2) A transcribed record of any additional proceedings shall be
prepared and made available at cost to the respondent, upon request,
unless the respondent and the agency, by mutual agreement, waive the
requirement for a transcript.
[53 FR 19196, 19204, May 26, 1988, as amended at 53 FR 19197, May 26,
1988]
Sec. 32.413 Suspending official's decision.
The suspending official may modify or terminate the suspension (for
example, see Sec. 32.320(c) for reasons for reducing the period or scope
of debarment) or may leave it in force. However, a decision to modify or
terminate the suspension shall be without prejudice to the subsequent
imposition of suspension by any other agency or debarment by any agency.
The decision shall be rendered in accordance with the following
provisions:
(a) No additional proceedings necessary. In actions: based on an
indictment, conviction, or civil judgment; in which there is no genuine
dispute over material facts; or in which additional proceedings to
determine disputed material facts have been denied on the basis of
Department of Justice advice, the suspending official shall make a
decision on the basis of all the information in the administrative
record, including any submission made by the respondent. The decision
shall be made within 45 days after receipt of any information and
argument submitted by the respondent, unless the suspending official
extends this period for good cause.
[[Page 393]]
(b) Additional proceedings necessary. (1) In actions in which
additional proceedings are necessary to determine disputed material
facts, written findings of fact shall be prepared. The suspending
official shall base the decision on the facts as found, together with
any information and argument submitted by the respondent and any other
information in the administrative record.
(2) The suspending official may refer matters involving disputed
material facts to another official for findings of fact. The suspending
official may reject any such findings, in whole or in part, only after
specifically determining them to be arbitrary or capricious or clearly
erroneous.
(c) Notice of suspending official's decision. Prompt written notice
of the suspending official's decision shall be sent to the respondent.
Sec. 32.415 Period of suspension.
(a) Suspension shall be for a temporary period pending the
completion of an investigation or ensuing legal, debarment, or Program
Fraud Civil Remedies Act proceedings, unless terminated sooner by the
suspending official or as provided in paragraph (b) of this section.
(b) If legal or administrative proceedings are not initiated within
12 months after the date of the suspension notice, the suspension shall
be terminated unless an Assistant Attorney General or United States
Attorney requests its extension in writing, in which case it may be
extended for an additional six months. In no event may a suspension
extend beyond 18 months, unless such proceedings have been initiated
within that period.
(c) The suspending official shall notify the Department of Justice
of an impending termination of a suspension, at least 30 days before the
12-month period expires, to give that Department an opportunity to
request an extension.
Sec. 32.420 Scope of suspension.
The scope of a suspension is the same as the scope of a debarment
(see Sec. 32.325), except that the procedures of Secs. 32.410 through
32.413 shall be used in imposing a suspension.
Sec. 32.430 Appeal.
(a) The suspension determination under Sec. 32.413 shall be final.
However, any party to the action may request the Director, Office of
Grants and Debarment (OGD Director), to review the findings of the
suspending official by filing a request with the OGD Director within 30
calendar days of the party's receipt of the suspension determination, or
its reconsideration. The request must be in writing and set forth the
specific reasons why relief should be granted.
(b) A review under this section shall be at the discretion of the
OGD Director. If a review is granted, the suspending official may stay
the effective date of a suspension order pending resolution of appeal.
If a suspension is stayed, the stay shall be automatically lifted if the
OGD Director affirms the suspension.
(c) The review shall be based solely upon the record. The OGD
Director may set aside a determination only if it is found to be
arbitrary, capricious, an abuse of discretion, or based upon a clear
error of law.
(d) The OGD Director's subsequent determination shall be in writing
and mailed to all parties.
(e) A determination under Sec. 32.413 or a review under this section
shall not be subject to a dispute or a bid protest under parts 30, 31,
or 33 of this subchapter.
[53 FR 19197, May 26, 1988, as amended at 59 FR 50693, Oct. 5, 1994; 62
FR 47149, Sept. 8, 1997]
Subpart E--Responsibilities of GSA, Agency and Participants
Sec. 32.500 GSA responsibilities.
(a) In accordance with the OMB guidelines, GSA shall compile,
maintain, and distribute a list of all persons who have been debarred,
suspended, or voluntarily excluded by agencies under Executive Order
12549 and these regulations, and those who have been determined to be
ineligible.
(b) At a minimum, this list shall indicate:
(1) The names and addresses of all debarred, suspended, ineligible,
and
[[Page 394]]
voluntarily excluded persons, in alphabetical order, with cross-
references when more than one name is involved in a single action;
(2) The type of action;
(3) The cause for the action;
(4) The scope of the action;
(5) Any termination date for each listing; and
(6) The agency and name and telephone number of the agency point of
contact for the action.
Sec. 32.505 EPA responsibilities.
(a) The agency shall provide GSA with current information concerning
debarments, suspension, determinations of ineligibility, and voluntary
exclusions it has taken. Until February 18, 1989, the agency shall also
provide GSA and OMB with information concerning all transactions in
which EPA has granted exceptions under Sec. 32.215 permitting
participation by debarred, suspended, or voluntarily excluded persons.
(b) Unless an alternative schedule is agreed to by GSA, the agency
shall advise GSA of the information set forth in Sec. 32.500(b) and of
the exceptions granted under Sec. 32.215 within five working days after
taking such actions.
(c) The agency shall direct inquiries concerning listed persons to
the agency that took the action.
(d) Agency officials shall check the Nonprocurement List before
entering covered transactions to determine whether a participant in a
primary transaction is debarred, suspended, ineligible, or voluntarily
excluded (Tel. ).
(e) Agency officials shall check the Nonprocurement List before
approving principals or lower tier participants where agency approval of
the principal or lower tier participant is required under the terms of
the transaction, to determine whether such principals or participants
are debarred, suspended, ineligible, or voluntarily excluded.
Sec. 32.510 Participants' responsibilities.
(a) Certification by participants in primary covered transactions.
Each participant shall submit the certification in appendix A to this
part for it and its principals at the time the participant submits its
proposal in connection with a primary covered transaction, except that
States need only complete such certification as to their principals.
Participants may decide the method and frequency by which they determine
the eligibility of their principals. In addition, each participant may,
but is not required to, check the Nonprocurement List for its principals
(Tel. ). Adverse information on the certification will not
necessarily result in denial of participation. However, the
certification, and any additional information pertaining to the
certification submitted by the participant, shall be considered in the
administration of covered transactions.
(b) Certification by participants in lower tier covered
transactions. (1) Each participant shall require participants in lower
tier covered transactions to include the certification in appendix B to
this part for it and its principals in any proposal submitted in
connection with such lower tier covered transactions.
(2) A participant may rely upon the certification of a prospective
participant in a lower tier covered transaction that it and its
principals are not debarred, suspended, ineligible, or voluntarily
excluded from the covered transaction by any Federal agency, unless it
knows that the certification is erroneous. Participants may decide the
method and frequency by which they determine the eligiblity of their
principals. In addition, a participant may, but is not required to,
check the Nonprocurement List for its principals and for participants
(Tel. ).
(c) Changed circumstances regarding certification. A participant
shall provide immediate written notice to EPA if at any time the
participant learns that its certification was erroneous when submitted
or has become erroneous by reason of changed circumstances. Participants
in lower tier covered transactions shall provide the same updated notice
to the participant to which it submitted its proposals.
Subpart F--Drug-Free Workplace Requirements (Grants)
Source: 55 FR 21688, 21701, May 25, 1990, unless otherwise noted.
[[Page 395]]
Sec. 32.600 Purpose.
(a) The purpose of this subpart is to carry out the Drug-Free
Workplace Act of 1988 by requiring that--
(1) A grantee, other than an individual, shall certify to the agency
that it will provide a drug-free workplace;
(2) A grantee who is an individual shall certify to the agency that,
as a condition of the grant, he or she will not engage in the unlawful
manufacture, distribution, dispensing, possession or use of a controlled
substance in conducting any activity with the grant.
(b) Requirements implementing the Drug-Free Workplace Act of 1988
for contractors with the agency are found at 48 CFR subparts 9.4, 23.5,
and 52.2.
Sec. 32.605 Definitions.
(a) Except as amended in this section, the definitions of
Sec. 32.105 apply to this subpart.
(b) For purposes of this subpart--
(1) Controlled substance means a controlled substance in schedules I
through V of the Controlled Substances Act (21 U.S.C. 812), and as
further defined by regulation at 21 CFR 1308.11 through 1308.15;
(2) Conviction means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes;
(3) Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, use, or
possession of any controlled substance;
(4) Drug-free workplace means a site for the performance of work
done in connection with a specific grant at which employees of the
grantee are prohibited from engaging in the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance;
(5) Employee means the employee of a grantee directly engaged in the
performance of work under the grant, including:
(i) All direct charge employees;
(ii) All indirect charge employees, unless their impact or
involvement is insignificant to the performance of the grant; and,
(iii) Temporary personnel and consultants who are directly engaged
in the performance of work under the grant and who are on the grantee's
payroll.
This definition does not include workers not on the payroll of the
grantee (e.g., volunteers, even if used to meet a matching requirement;
consultants or independent contractors not on the payroll; or employees
of subrecipients or subcontractors in covered workplaces);
(6) Federal agency or agency means any United States executive
department, military department, government corporation, government
controlled corporation, any other establishment in the executive branch
(including the Executive Office of the President), or any independent
regulatory agency;
(7) Grant means an award of financial assistance, including a
cooperative agreement, in the form of money, or property in lieu of
money, by a Federal agency directly to a grantee. The term grant
includes block grant and entitlement grant programs, whether or not
exempted from coverage under the grants management government-wide
common rule on uniform administrative requirements for grants and
cooperative agreements. The term does not include technical assistance
that provides services instead of money, or other assistance in the form
of loans, loan guarantees, interest subsidies, insurance, or direct
appropriations; or any veterans' benefits to individuals, i.e., any
benefit to veterans, their families, or survivors by virtue of the
service of a veteran in the Armed Forces of the United States;
(8) Grantee means a person who applies for or receives a grant
directly from a Federal agency (except another Federal agency);
(9) Individual means a natural person;
(10) State means any of the States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or any agency of a State, exclusive of
institutions of higher education, hospitals, and units of
[[Page 396]]
local government. A State instrumentality will be considered part of the
State government if it has a written determination from a State
government that such State considers the instrumentality to be an agency
of the State government.
Sec. 32.610 Coverage.
(a) This subpart applies to any grantee of the agency.
(b) This subpart applies to any grant, except where application of
this subpart would be inconsistent with the international obligations of
the United States or the laws or regulations of a foreign government. A
determination of such inconsistency may be made only by the agency head
or his/her designee.
(c) The provisions of subparts A, B, C, D and E of this part apply
to matters covered by this subpart, except where specifically modified
by this subpart. In the event of any conflict between provisions of this
subpart and other provisions of this part, the provisions of this
subpart are deemed to control with respect to the implementation of
drug-free workplace requirements concerning grants.
Sec. 32.615 Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.
A grantee shall be deemed in violation of the requirements of this
subpart if the agency head or his or her official designee determines,
in writing, that--
(a) The grantee has made a false certification under Sec. 32.630;
(b) With respect to a grantee other than an individual--
(1) The grantee has violated the certification by failing to carry
out the requirements of paragraphs (A) (a)-(g) and/or (B) of the
certification (Alternate I to appendix C) or
(2) Such a number of employees of the grantee have been convicted of
violations of criminal drug statutes for violations occurring in the
workplace as to indicate that the grantee has failed to make a good
faith effort to provide a drug-free workplace.
(c) With respect to a grantee who is an individual--
(1) The grantee has violated the certification by failing to carry
out its requirements (Alternate II to appendix C); or
(2) The grantee is convicted of a criminal drug offense resulting
from a violation occurring during the conduct of any grant activity.
Sec. 32.620 Effect of violation.
(a) In the event of a violation of this subpart as provided in
Sec. 32.615, and in accordance with applicable law, the grantee shall be
subject to one or more of the following actions:
(1) Suspension of payments under the grant;
(2) Suspension or termination of the grant; and
(3) Suspension or debarment of the grantee under the provisions of
this part.
(b) Upon issuance of any final decision under this part requiring
debarment of a grantee, the debarred grantee shall be ineligible for
award of any grant from any Federal agency for a period specified in the
decision, not to exceed five years (see Sec. 32.320(a)(2) of this part).
Sec. 32.625 Exception provision.
The agency head may waive with respect to a particular grant, in
writing, a suspension of payments under a grant, suspension or
termination of a grant, or suspension or debarment of a grantee if the
agency head determines that such a waiver would be in the public
interest. This exception authority cannot be delegated to any other
official.
Sec. 32.630 Certification requirements and procedures.
(a)(1) As a prior condition of being awarded a grant, each grantee
shall make the appropriate certification to the Federal agency providing
the grant, as provided in appendix C to this part.
(2) Grantees are not required to make a certification in order to
continue receiving funds under a grant awarded before March 18, 1989, or
under a no-cost time extension of such a grant. However, the grantee
shall make a one-time drug-free workplace certification for a non-
automatic continuation of
[[Page 397]]
such a grant made on or after March 18, 1989.
(b) Except as provided in this section, all grantees shall make the
required certification for each grant. For mandatory formula grants and
entitlements that have no application process, grantees shall submit a
one-time certification in order to continue receiving awards.
(c) A grantee that is a State may elect to make one certification in
each Federal fiscal year. States that previously submitted an annual
certification are not required to make a certification for Fiscal Year
1990 until June 30, 1990. Except as provided in paragraph (d) of this
section, this certification shall cover all grants to all State agencies
from any Federal agency. The State shall retain the original of this
statewide certification in its Governor's office and, prior to grant
award, shall ensure that a copy is submitted individually with respect
to each grant, unless the Federal agency has designated a central
location for submission.
(d)(1) The Governor of a State may exclude certain State agencies
from the statewide certification and authorize these agencies to submit
their own certifications to Federal agencies. The statewide
certification shall name any State agencies so excluded.
(2) A State agency to which the statewide certification does not
apply, or a State agency in a State that does not have a statewide
certification, may elect to make one certification in each Federal
fiscal year. State agencies that previously submitted a State agency
certification are not required to make a certification for Fiscal Year
1990 until June 30, 1990. The State agency shall retain the original of
this State agency-wide certification in its central office and, prior to
grant award, shall ensure that a copy is submitted individually with
respect to each grant, unless the Federal agency designates a central
location for submission.
(3) When the work of a grant is done by more than one State agency,
the certification of the State agency directly receiving the grant shall
be deemed to certify compliance for all workplaces, including those
located in other State agencies.
(e)(1) For a grant of less than 30 days performance duration,
grantees shall have this policy statement and program in place as soon
as possible, but in any case by a date prior to the date on which
performance is expected to be completed.
(2) For a grant of 30 days or more performance duration, grantees
shall have this policy statement and program in place within 30 days
after award.
(3) Where extraordinary circum-stances warrant for a specific grant,
the grant officer may determine a different date on which the policy
statement and program shall be in place.
Sec. 32.635 Reporting of and employee sanctions for convictions of criminal drug offenses.
(a) When a grantee other than an individual is notified that an
employee has been convicted for a violation of a criminal drug statute
occurring in the workplace, it shall take the following actions:
(1) Within 10 calendar days of receiving notice of the conviction,
the grantee shall provide written notice, including the convicted
employee's position title, to every grant officer, or other designee on
whose grant activity the convicted employee was working, unless a
Federal agency has designated a central point for the receipt of such
notifications. Notification shall include the identification number(s)
for each of the Federal agency's affected grants.
(2) Within 30 calendar days of receiving notice of the conviction,
the grantee shall do the following with respect to the employee who was
convicted.
(i) Take appropriate personnel action against the employee, up to
and including termination, consistent with requirements of the
Rehabilitation Act of 1973, as amended; or
(ii) Require the employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for such purposes by
a Federal, State, or local health, law enforcement, or other appropriate
agency.
(b) A grantee who is an individual who is convicted for a violation
of a criminal drug statute occurring during the conduct of any grant
activity shall
[[Page 398]]
report the conviction, in writing, within 10 calendar days, to his or
her Federal agency grant officer, or other designee, unless the Federal
agency has designated a central point for the receipt of such notices.
Notification shall include the identification number(s) for each of the
Federal agency's affected grants.
(Approved by the Office of Management and Budget under control number
0991-0002)
Appendix A to Part 32--Certification Regarding Debarment, Suspension,
and Other Responsibility Matters--Primary Covered Transactions
Instructions for Certification
1. By signing and submitting this proposal, the prospective primary
participant is providing the certification set out below.
2. The inability of a person to provide the certification required
below will not necessarily result in denial of participation in this
covered transaction. The prospective participant shall submit an
explanation of why it cannot provide the certification set out below.
The certification or explanation will be considered in connection with
the department or agency's determination whether to enter into this
transaction. However, failure of the prospective primary participant to
furnish a certification or an explanation shall disqualify such person
from participation in this transaction.
3. The certification in this clause is a material representation of
fact upon which reliance was placed when the department or agency
determined to enter into this transaction. If it is later determined
that the prospective primary participant knowingly rendered an erroneous
certification, in addition to other remedies available to the Federal
Government, the department or agency may terminate this transaction for
cause or default.
4. The prospective primary participant shall provide immediate
written notice to the department or agency to which this proposal is
submitted if at any time the prospective primary participant learns that
its certification was erroneous when submitted or has become erroneous
by reason of changed circumstances.
5. The terms covered transaction, debarred, suspended, ineligible,
lower tier covered transaction, participant, person, primary covered
transaction, principal, proposal, and voluntarily excluded, as used in
this clause, have the meanings set out in the Definitions and Coverage
sections of the rules implementing Executive Order 12549. You may
contact the department or agency to which this proposal is being
submitted for assistance in obtaining a copy of those regulations.
6. The prospective primary participant agrees by submitting this
proposal that, should the proposed covered transaction be entered into,
it shall not knowingly enter into any lower tier covered transaction
with a person who is proposed for debarment under 48 CFR part 9, subpart
9.4, debarred, suspended, declared ineligible, or voluntarily excluded
from participation in this covered transaction, unless authorized by the
department or agency entering into this transaction.
7. The prospective primary participant further agrees by submitting
this proposal that it will include the clause titled ``Certification
Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-
Lower Tier Covered Transaction,'' provided by the department or agency
entering into this covered transaction, without modification, in all
lower tier covered transactions and in all solicitations for lower tier
covered transactions.
8. A participant in a covered transaction may rely upon a
certification of a prospective participant in a lower tier covered
transaction that it is not proposed for debarment under 48 CFR part 9,
subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded
from the covered transaction, unless it knows that the certification is
erroneous. A participant may decide the method and frequency by which it
determines the eligibility of its principals. Each participant may, but
is not required to, check the List of Parties Excluded from Federal
Procurement and Nonprocurement Programs.
9. Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render in good faith
the certification required by this clause. The knowledge and information
of a participant is not required to exceed that which is normally
possessed by a prudent person in the ordinary course of business
dealings.
10. Except for transactions authorized under paragraph 6 of these
instructions, if a participant in a covered transaction knowingly enters
into a lower tier covered transaction with a person who is proposed for
debarment under 48 CFR part 9, subpart 9.4, suspended, debarred,
ineligible, or voluntarily excluded from participation in this
transaction, in addition to other remedies available to the Federal
Government, the department or agency may terminate this transaction for
cause or default.
[[Page 399]]
Certification Regarding Debarment, Suspension, and Other Responsibility
Matters--Primary Covered Transactions
(1) The prospective primary participant certifies to the best of its
knowledge and belief, that it and its principals:
(a) Are not presently debarred, suspended, proposed for debarment,
declared ineligible, or voluntarily excluded by any Federal department
or agency;
(b) Have not within a three-year period preceding this proposal been
convicted of or had a civil judgment rendered against them for
commission of fraud or a criminal offense in connection with obtaining,
attempting to obtain, or performing a public (Federal, State or local)
transaction or contract under a public transaction; violation of Federal
or State antitrust statutes or commission of embezzlement, theft,
forgery, bribery, falsification or destruction of records, making false
statements, or receiving stolen property;
(c) Are not presently indicted for or otherwise criminally or
civilly charged by a governmental entity (Federal, State or local) with
commission of any of the offenses enumerated in paragraph (1)(b) of this
certification; and
(d) Have not within a three-year period preceding this application/
proposal had one or more public transactions (Federal, State or local)
terminated for cause or default.
(2) Where the prospective primary participant is unable to certify
to any of the statements in this certification, such prospective
participant shall attach an explanation to this proposal.
[60 FR 33042, 33059, June 26, 1995]
Appendix B to Part 32--Certification Regarding Debarment, Suspension,
Ineligibility and Voluntary Exclusion--Lower Tier Covered Transactions
Instructions for Certification
1. By signing and submitting this proposal, the prospective lower
tier participant is providing the certification set out below.
2. The certification in this clause is a material representation of
fact upon which reliance was placed when this transaction was entered
into. If it is later determined that the prospective lower tier
participant knowingly rendered an erroneous certification, in addition
to other remedies available to the Federal Government the department or
agency with which this transaction originated may pursue available
remedies, including suspension and/or debarment.
3. The prospective lower tier participant shall provide immediate
written notice to the person to which this proposal is submitted if at
any time the prospective lower tier participant learns that its
certification was erroneous when submitted or had become erroneous by
reason of changed circumstances.
4. The terms covered transaction, debarred, suspended, ineligible,
lower tier covered transaction, participant, person, primary covered
transaction, principal, proposal, and voluntarily excluded, as used in
this clause, have the meaning set out in the Definitions and Coverage
sections of rules implementing Executive Order 12549. You may contact
the person to which this proposal is submitted for assistance in
obtaining a copy of those regulations.
5. The prospective lower tier participant agrees by submitting this
proposal that, should the proposed covered transaction be entered into,
it shall not knowingly enter into any lower tier covered transaction
with a person who is proposed for debarment under 48 CFR part 9, subpart
9.4, debarred, suspended, declared ineligible, or voluntarily excluded
from participation in this covered transaction, unless authorized by the
department or agency with which this transaction originated.
6. The prospective lower tier participant further agrees by
submitting this proposal that it will include this clause titled
``Certification Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion-Lower Tier Covered Transaction,'' without
modification, in all lower tier covered transactions and in all
solicitations for lower tier covered transactions.
7. A participant in a covered transaction may rely upon a
certification of a prospective participant in a lower tier covered
transaction that it is not proposed for debarment under 48 CFR part 9,
subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded
from covered transactions, unless it knows that the certification is
erroneous. A participant may decide the method and frequency by which it
determines the eligibility of its principals. Each participant may, but
is not required to, check the List of Parties Excluded from Federal
Procurement and Nonprocurement Programs.
8. Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render in good faith
the certification required by this clause. The knowledge and information
of a participant is not required to exceed that which is normally
possessed by a prudent person in the ordinary course of business
dealings.
9. Except for transactions authorized under paragraph 5 of these
instructions, if a participant in a covered transaction knowingly enters
into a lower tier covered transaction with a person who is proposed for
debarment under 48 CFR part 9, subpart 9.4, suspended, debarred,
ineligible, or voluntarily excluded
[[Page 400]]
from participation in this transaction, in addition to other remedies
available to the Federal Government, the department or agency with which
this transaction originated may pursue available remedies, including
suspension and/or debarment.
Certification Regarding Debarment, Suspension, Ineligibility an
Voluntary Exclusion--Lower Tier Covered Transactions
(1) The prospective lower tier participant certifies, by submission
of this proposal, that neither it nor its principals is presently
debarred, suspended, proposed for debarment, declared ineligible, or
voluntarily excluded from participation in this transaction by any
Federal department or agency.
(2) Where the prospective lower tier participant is unable to
certify to any of the statements in this certification, such prospective
participant shall attach an explanation to this proposal.
[60 FR 33042, 33059, June 26, 1995]
Appendix C to Part 32--Certification Regarding Drug-Free Workplace
Requirements
Instructions for Certification
1. By signing and/or submitting this application or grant agreement,
the grantee is providing the certification set out below.
2. The certification set out below is a material representation of
fact upon which reliance is placed when the agency awards the grant. If
it is later determined that the grantee knowingly rendered a false
certification, or otherwise violates the requirements of the Drug-Free
Workplace Act, the agency, in addition to any other remedies available
to the Federal Government, may take action authorized under the Drug-
Free Workplace Act.
3. For grantees other than individuals, Alternate I applies.
4. For grantees who are individuals, Alternate II applies.
5. Workplaces under grants, for grantees other than individuals,
need not be identified on the certification. If known, they may be
identified in the grant application. If the grantee does not identify
the workplaces at the time of application, or upon award, if there is no
application, the grantee must keep the identity of the workplace(s) on
file in its office and make the information available for Federal
inspection. Failure to identify all known workplaces constitutes a
violation of the grantee's drug-free workplace requirements.
6. Workplace identifications must include the actual address of
buildings (or parts of buildings) or other sites where work under the
grant takes place. Categorical descriptions may be used (e.g., all
vehicles of a mass transit authority or State highway department while
in operation, State employees in each local unemployment office,
performers in concert halls or radio studios).
7. If the workplace identified to the agency changes during the
performance of the grant, the grantee shall inform the agency of the
change(s), if it previously identified the workplaces in question (see
paragraph five).
8. Definitions of terms in the Nonprocurement Suspension and
Debarment common rule and Drug-Free Workplace common rule apply to this
certification. Grantees' attention is called, in particular, to the
following definitions from these rules:
Controlled substance means a controlled substance in Schedules I
through V of the Controlled Substances Act (21 U.S.C. 812) and as
further defined by regulation (21 CFR 1308.11 through 1308.15);
Conviction means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes;
Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, use, or
possession of any controlled substance;
Employee means the employee of a grantee directly engaged in the
performance of work under a grant, including: (i) All direct charge
employees; (ii) All indirect charge employees unless their impact or
involvement is insignificant to the performance of the grant; and, (iii)
Temporary personnel and consultants who are directly engaged in the
performance of work under the grant and who are on the grantee's
payroll. This definition does not include workers not on the payroll of
the grantee (e.g., volunteers, even if used to meet a matching
requirement; consultants or independent contractors not on the grantee's
payroll; or employees of subrecipients or subcontractors in covered
workplaces).
Certification Regarding Drug-Free Workplace Requirements
Alternate I. (Grantees Other Than Individuals)
A. The grantee certifies that it will or will continue to provide a
drug-free workplace by:
(a) Publishing a statement notifying employees that the unlawful
manufacture, distribution, dispensing, possession, or use of a
controlled substance is prohibited in the grantee's workplace and
specifying the actions that will be taken against employees for
violation of such prohibition;
(b) Establishing an ongoing drug-free awareness program to inform
employees about--
(1) The dangers of drug abuse in the workplace;
[[Page 401]]
(2) The grantee's policy of maintaining a drug-free workplace;
(3) Any available drug counseling, rehabilitation, and employee
assistance programs; and
(4) The penalties that may be imposed upon employees for drug abuse
violations occurring in the workplace;
(c) Making it a requirement that each employee to be engaged in the
performance of the grant be given a copy of the statement required by
paragraph (a);
(d) Notifying the employee in the statement required by paragraph
(a) that, as a condition of employment under the grant, the employee
will--
(1) Abide by the terms of the statement; and
(2) Notify the employer in writing of his or her conviction for a
violation of a criminal drug statute occurring in the workplace no later
than five calendar days after such conviction;
(e) Notifying the agency in writing, within ten calendar days after
receiving notice under paragraph (d)(2) from an employee or otherwise
receiving actual notice of such conviction. Employers of convicted
employees must provide notice, including position title, to every grant
officer or other designee on whose grant activity the convicted employee
was working, unless the Federal agency has designated a central point
for the receipt of such notices. Notice shall include the identification
number(s) of each affected grant;
(f) Taking one of the following actions, within 30 calendar days of
receiving notice under paragraph (d)(2), with respect to any employee
who is so convicted--
(1) Taking appropriate personnel action against such an employee, up
to and including termination, consistent with the requirements of the
Rehabilitation Act of 1973, as amended; or
(2) Requiring such employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for such purposes by
a Federal, State, or local health, law enforcement, or other appropriate
agency;
(g) Making a good faith effort to continue to maintain a drug-free
workplace through implementation of paragraphs (a), (b), (c), (d), (e)
and (f).
B. The grantee may insert in the space provided below the site(s)
for the performance of work done in connection with the specific grant:
Place of Performance (Street address, city, county, State, zip code)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Check {time} if there are workplaces on file that are not identified
here.
Alternate II. (Grantees Who Are Individuals)
(a) The grantee certifies that, as a condition of the grant, he or
she will not engage in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance in conducting
any activity with the grant;
(b) If convicted of a criminal drug offense resulting from a
violation occurring during the conduct of any grant activity, he or she
will report the conviction, in writing, within 10 calendar days of the
conviction, to every grant officer or other designee, unless the Federal
agency designates a central point for the receipt of such notices. When
notice is made to such a central point, it shall include the
identification number(s) of each affected grant.
[55 FR 21690, 21701, May 25, 1990]
PART 34--NEW RESTRICTIONS ON LOBBYING--Table of Contents
Subpart A--General
Sec.
34.100 Conditions on use of funds.
34.105 Definitions.
34.110 Certification and disclosure.
Subpart B--Activities by Own Employees
34.200 Agency and legislative liaison.
34.205 Professional and technical services.
34.210 Reporting.
Subpart C--Activities by Other Than Own Employees
34.300 Professional and technical services.
Subpart D--Penalties and Enforcement
34.400 Penalties.
34.405 Penalty procedures.
34.410 Enforcement.
Subpart E--Exemptions
34.500 Secretary of Defense.
Subpart F--Agency Reports
34.600 Semi-annual compilation.
34.605 Inspector General report.
Appendix A to Part 34--Certification Regarding Lobbying
Appendix B to Part 34--Disclosure Form to Report Lobbying
Authority: Section 319; Pub. L. 101-121 (31 U.S.C. 1352); 33 U.S.C.
1251 et seq.; 42 U.S.C. 7401 et seq.; 42 U.S.C. 6901 et seq.; 42 U.S.C.
300f et seq.; 7 U.S.C. 136 et seq.; 15 U.S.C. 2601 et
[[Page 402]]
seq.; 42 U.S.C. 9601 et seq.; 20 U.S.C. 4011 et seq.; 33 U.S.C. 1401 et
seq.
Source: 55 FR 6737 and 6753, Feb. 26, 1990 (interim), unless
otherwise noted.
Cross-Reference: See also Office of Management and Budget notice
published at 54 FR 52306, December 20, 1989.
Subpart A--General
Sec. 34.100 Conditions on use of funds.
(a) No appropriated funds may be expended by the recipient of a
Federal contract, grant, loan, or cooperative agreement to pay any
person for influencing or attempting to influence an officer or employee
of any agency, a Member of Congress, an officer or employee of Congress,
or an employee of a Member of Congress in connection with any of the
following covered Federal actions: the awarding of any Federal contract,
the making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
(b) Each person who requests or receives from an agency a Federal
contract, grant, loan, or cooperative agreement shall file with that
agency a certification, set forth in appendix A, that the person has not
made, and will not make, any payment prohibited by paragraph (a) of this
section.
(c) Each person who requests or receives from an agency a Federal
contract, grant, loan, or a cooperative agreement shall file with that
agency a disclosure form, set forth in appendix B, if such person has
made or has agreed to make any payment using nonappropriated funds (to
include profits from any covered Federal action), which would be
prohibited under paragraph (a) of this section if paid for with
appropriated funds.
(d) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a statement, set forth in appendix A, whether that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
(e) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a disclosure form, set forth in appendix B, if that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
Sec. 34.105 Definitions.
For purposes of this part:
(a) Agency, as defined in 5 U.S.C. 552(f), includes Federal
executive departments and agencies as well as independent regulatory
commissions and Government corporations, as defined in 31 U.S.C.
9101(1).
(b) Covered Federal action means any of the following Federal
actions:
(1) The awarding of any Federal contract;
(2) The making of any Federal grant;
(3) The making of any Federal loan;
(4) The entering into of any cooperative agreement; and,
(5) The extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.
Covered Federal action does not include receiving from an agency a
commitment providing for the United States to insure or guarantee a
loan. Loan guarantees and loan insurance are addressed independently
within this part.
(c) Federal contract means an acquisition contract awarded by an
agency, including those subject to the Federal Acquisition Regulation
(FAR), and any other acquisition contract for real or personal property
or services not subject to the FAR.
(d) Federal cooperative agreement means a cooperative agreement
entered into by an agency.
(e) Federal grant means an award of financial assistance in the form
of money, or property in lieu of money, by the Federal Government or a
direct
[[Page 403]]
appropriation made by law to any person. The term does not include
technical assistance which provides services instead of money, or other
assistance in the form of revenue sharing, loans, loan guarantees, loan
insurance, interest subsidies, insurance, or direct United States cash
assistance to an individual.
(f) Federal loan means a loan made by an agency. The term does not
include loan guarantee or loan insurance.
(g) Indian tribe and tribal organization have the meaning provided
in section 4 of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions
of Indian tribes in that Act.
(h) Influencing or attempting to influence means making, with the
intent to influence, any communication to or appearance before an
officer or employee or any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in
connection with any covered Federal action.
(i) Loan guarantee and loan insurance means an agency's guarantee or
insurance of a loan made by a person.
(j) Local government means a unit of government in a State and, if
chartered, established, or otherwise recognized by a State for the
performance of a governmental duty, including a local public authority,
a special district, an intrastate district, a council of governments, a
sponsor group representative organization, and any other instrumentality
of a local government.
(k) Officer or employee of an agency includes the following
individuals who are employed by an agency:
(1) An individual who is appointed to a position in the Government
under title 5, U.S. Code, including a position under a temporary
appointment;
(2) A member of the uniformed services as defined in section 101(3),
title 37, U.S. Code;
(3) A special Government employee as defined in section 202, title
18, U.S. Code; and,
(4) An individual who is a member of a Federal advisory committee,
as defined by the Federal Advisory Committee Act, title 5, U.S. Code
appendix 2.
(l) Person means an individual, corporation, company, association,
authority, firm, partnership, society, State, and local government,
regardless of whether such entity is operated for profit or not for
profit. This term excludes an Indian tribe, tribal organization, or any
other Indian organization with respect to expenditures specifically
permitted by other Federal law.
(m) Reasonable compensation means, with respect to a regularly
employed officer or employee of any person, compensation that is
consistent with the normal compensation for such officer or employee for
work that is not furnished to, not funded by, or not furnished in
cooperation with the Federal Government.
(n) Reasonable payment means, with respect to professional and other
technical services, a payment in an amount that is consistent with the
amount normally paid for such services in the private sector.
(o) Recipient includes all contractors, subcontractors at any tier,
and subgrantees at any tier of the recipient of funds received in
connection with a Federal contract, grant, loan, or cooperative
agreement. The term excludes an Indian tribe, tribal organization, or
any other Indian organization with respect to expenditures specifically
permitted by other Federal law.
(p) Regularly employed means, with respect to an officer or employee
of a person requesting or receiving a Federal contract, grant, loan, or
cooperative agreement or a commitment providing for the United States to
insure or guarantee a loan, an officer or employee who is employed by
such person for at least 130 working days within one year immediately
preceding the date of the submission that initiates agency consideration
of such person for receipt of such contract, grant, loan, cooperative
agreement, loan insurance commitment, or loan guarantee commitment. An
officer or employee who is employed by such person for less than 130
working days within one year immediately preceding the date of the
submission that initiates agency consideration of such person shall be
considered to be regularly employed as
[[Page 404]]
soon as he or she is employed by such person for 130 working days.
(q) State means a State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, a territory or possession of
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and
powers.
Sec. 34.110 Certification and disclosure.
(a) Each person shall file a certification, and a disclosure form,
if required, with each submission that initiates agency consideration of
such person for:
(1) Award of a Federal contract, grant, or cooperative agreement
exceeding $100,000; or
(2) An award of a Federal loan or a commitment providing for the
United States to insure or guarantee a loan exceeding $150,000.
(b) Each person shall file a certification, and a disclosure form,
if required, upon receipt by such person of:
(1) A Federal contract, grant, or cooperative agreement exceeding
$100,000; or
(2) A Federal loan or a commitment providing for the United States
to insure or guarantee a loan exceeding $150,000,
Unless such person previously filed a certification, and a disclosure
form, if required, under paragraph (a) of this section.
(c) Each person shall file a disclosure form at the end of each
calendar quarter in which there occurs any event that requires
disclosure or that materially affects the accuracy of the information
contained in any disclosure form previously filed by such person under
paragraphs (a) or (b) of this section. An event that materially affects
the accuracy of the information reported includes:
(1) A cumulative increase of $25,000 or more in the amount paid or
expected to be paid for influencing or attempting to influence a covered
Federal action; or
(2) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or,
(3) A change in the officer(s), employee(s), or Member(s) contacted
to influence or attempt to influence a covered Federal action.
(d) Any person who requests or receives from a person referred to in
paragraphs (a) or (b) of this section:
(1) A subcontract exceeding $100,000 at any tier under a Federal
contract;
(2) A subgrant, contract, or subcontract exceeding $100,000 at any
tier under a Federal grant;
(3) A contract or subcontract exceeding $100,000 at any tier under a
Federal loan exceeding $150,000; or,
(4) A contract or subcontract exceeding $100,000 at any tier under a
Federal cooperative agreement,
Shall file a certification, and a disclosure form, if required, to the
next tier above.
(e) All disclosure forms, but not certifications, shall be forwarded
from tier to tier until received by the person referred to in paragraphs
(a) or (b) of this section. That person shall forward all disclosure
forms to the agency.
(f) Any certification or disclosure form filed under paragraph (e)
of this section shall be treated as a material representation of fact
upon which all receiving tiers shall rely. All liability arising from an
erroneous representation shall be borne solely by the tier filing that
representation and shall not be shared by any tier to which the
erroneous representation is forwarded. Submitting an erroneous
certification or disclosure constitutes a failure to file the required
certification or disclosure, respectively. If a person fails to file a
required certification or disclosure, the United States may pursue all
available remedies, including those authorized by section 1352, title
31, U.S. Code.
(g) For awards and commitments in process prior to December 23,
1989, but not made before that date, certifications shall be required at
award or commitment, covering activities occurring between December 23,
1989, and the date of award or commitment. However, for awards and
commitments in process prior to the December 23, 1989 effective date of
these provisions, but not made before December 23, 1989, disclosure
forms shall not be required at time of award or commitment but shall be
filed within 30 days.
[[Page 405]]
(h) No reporting is required for an activity paid for with
appropriated funds if that activity is allowable under either subpart B
or C.
Subpart B--Activities by Own Employees
Sec. 34.200 Agency and legislative liaison.
(a) The prohibition on the use of appropriated funds, in Sec. 34.100
(a), does not apply in the case of a payment of reasonable compensation
made to an officer or employee of a person requesting or receiving a
Federal contract, grant, loan, or cooperative agreement if the payment
is for agency and legislative liaison activities not directly related to
a covered Federal action.
(b) For purposes of paragraph (a) of this section, providing any
information specifically requested by an agency or Congress is allowable
at any time.
(c) For purposes of paragraph (a) of this section, the following
agency and legislative liaison activities are allowable at any time only
where they are not related to a specific solicitation for any covered
Federal action:
(1) Discussing with an agency (including individual demonstrations)
the qualities and characteristics of the person's products or services,
conditions or terms of sale, and service capabilities; and,
(2) Technical discussions and other activities regarding the
application or adaptation of the person's products or services for an
agency's use.
(d) For purposes of paragraph (a) of this section, the following
agencies and legislative liaison activities are allowable only where
they are prior to formal solicitation of any covered Federal action:
(1) Providing any information not specifically requested but
necessary for an agency to make an informed decision about initiation of
a covered Federal action;
(2) Technical discussions regarding the preparation of an
unsolicited proposal prior to its official submission; and,
(3) Capability presentations by persons seeking awards from an
agency pursuant to the provisions of the Small Business Act, as amended
by Public Law 95-507 and other subsequent amendments.
(e) Only those activities expressly authorized by this section are
allowable under this section.
Sec. 34.205 Professional and technical services.
(a) The prohibition on the use of appropriated funds, in Sec. 34.100
(a), does not apply in the case of a payment of reasonable compensation
made to an officer or employee of a person requesting or receiving a
Federal contract, grant, loan, or cooperative agreement or an extension,
continuation, renewal, amendment, or modification of a Federal contract,
grant, loan, or cooperative agreement if payment is for professional or
technical services rendered directly in the preparation, submission, or
negotiation of any bid, proposal, or application for that Federal
contract, grant, loan, or cooperative agreement or for meeting
requirements imposed by or pursuant to law as a condition for receiving
that Federal contract, grant, loan, or cooperative agreement.
(b) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of
[[Page 406]]
his or her client's proposal, but generally advocate one proposal over
another are not allowable under this section because the lawyer is not
providing professional legal services. Similarly, communications with
the intent to influence made by an engineer providing an engineering
analysis prior to the preparation or submission of a bid or proposal are
not allowable under this section since the engineer is providing
technical services but not directly in the preparation, submission or
negotiation of a covered Federal action.
(c) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
(d) Only those services expressly authorized by this section are
allowable under this section.
Sec. 34.210 Reporting.
No reporting is required with respect to payments of reasonable
compensation made to regularly employed officers or employees of a
person.
Subpart C--Activities by Other Than Own Employees
Sec. 34.300 Professional and technical services.
(a) The prohibition on the use of appropriated funds, in Sec. 34.100
(a), does not apply in the case of any reasonable payment to a person,
other than an officer or employee of a person requesting or receiving a
covered Federal action, if the payment is for professional or technical
services rendered directly in the preparation, submission, or
negotiation of any bid, proposal, or application for that Federal
contract, grant, loan, or cooperative agreement or for meeting
requirements imposed by or pursuant to law as a condition for receiving
that Federal contract, grant, loan, or cooperative agreement.
(b) The reporting requirements in Sec. 34.110 (a) and (b) regarding
filing a disclosure form by each person, if required, shall not apply
with respect to professional or technical services rendered directly in
the preparation, submission, or negotiation of any commitment providing
for the United States to insure or guarantee a loan.
(c) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting or a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
(d) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
[[Page 407]]
(e) Persons other than officers or employees of a person requesting
or receiving a covered Federal action include consultants and trade
associations.
(f) Only those services expressly authorized by this section are
allowable under this section.
Subpart D--Penalties and Enforcement
Sec. 34.400 Penalties.
(a) Any person who makes an expenditure prohibited herein shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such expenditure.
(b) Any person who fails to file or amend the disclosure form (see
appendix B) to be filed or amended if required herein, shall be subject
to a civil penalty of not less than $10,000 and not more than $100,000
for each such failure.
(c) A filing or amended filing on or after the date on which an
administrative action for the imposition of a civil penalty is commenced
does not prevent the imposition of such civil penalty for a failure
occurring before that date. An administrative action is commenced with
respect to a failure when an investigating official determines in
writing to commence an investigation of an allegation of such failure.
(d) In determining whether to impose a civil penalty, and the amount
of any such penalty, by reason of a violation by any person, the agency
shall consider the nature, circumstances, extent, and gravity of the
violation, the effect on the ability of such person to continue in
business, any prior violations by such person, the degree of culpability
of such person, the ability of the person to pay the penalty, and such
other matters as may be appropriate.
(e) First offenders under paragraphs (a) or (b) of this section
shall be subject to a civil penalty of $10,000, absent aggravating
circumstances. Second and subsequent offenses by persons shall be
subject to an appropriate civil penalty between $10,000 and $100,000, as
determined by the agency head or his or her designee.
(f) An imposition of a civil penalty under this section does not
prevent the United States from seeking any other remedy that may apply
to the same conduct that is the basis for the imposition of such civil
penalty.
Sec. 34.405 Penalty procedures.
Agencies shall impose and collect civil penalties pursuant to the
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 3803
(except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 3812, insofar
as these provisions are not inconsistent with the requirements herein.
Sec. 34.410 Enforcement.
The head of each agency shall take such actions as are necessary to
ensure that the provisions herein are vigorously implemented and
enforced in that agency.
Subpart E--Exemptions
Sec. 34.500 Secretary of Defense.
(a) The Secretary of Defense may exempt, on a case-by-case basis, a
covered Federal action from the prohibition whenever the Secretary
determines, in writing, that such an exemption is in the national
interest. The Secretary shall transmit a copy of each such written
exemption to Congress immediately after making such a determination.
(b) The Department of Defense may issue supplemental regulations to
implement paragraph (a) of this section.
Subpart F--Agency Reports
Sec. 34.600 Semi-annual compilation.
(a) The head of each agency shall collect and compile the disclosure
reports (see appendix B) and, on May 31 and November 30 of each year,
submit to the Secretary of the Senate and the Clerk of the House of
Representatives a report containing a compilation of the information
contained in the disclosure reports received during the six-month period
ending on March 31 or September 30, respectively, of that year.
(b) The report, including the compilation, shall be available for
public inspection 30 days after receipt of the report by the Secretary
and the Clerk.
[[Page 408]]
(c) Information that involves intelligence matters shall be reported
only to the Select Committee on Intelligence of the Senate, the
Permanent Select Committee on Intelligence of the House of
Representatives, and the Committees on Appropriations of the Senate and
the House of Representatives in accordance with procedures agreed to by
such committees. Such information shall not be available for public
inspection.
(d) Information that is classified under Executive Order 12356 or
any successor order shall be reported only to the Committee on Foreign
Relations of the Senate and the Committee on Foreign Affairs of the
House of Representatives or the Committees on Armed Services of the
Senate and the House of Representatives (whichever such committees have
jurisdiction of matters involving such information) and to the
Committees on Appropriations of the Senate and the House of
Representatives in accordance with procedures agreed to by such
committees. Such information shall not be available for public
inspection.
(e) The first semi-annual compilation shall be submitted on May 31,
1990, and shall contain a compilation of the disclosure reports received
from December 23, 1989 to March 31, 1990.
(f) Major agencies, designated by the Office of Management and
Budget (OMB), are required to provide machine-readable compilations to
the Secretary of the Senate and the Clerk of the House of
Representatives no later than with the compilations due on May 31, 1991.
OMB shall provide detailed specifications in a memorandum to these
agencies.
(g) Non-major agencies are requested to provide machine-readable
compilations to the Secretary of the Senate and the Clerk of the House
of Representatives.
(h) Agencies shall keep the originals of all disclosure reports in
the official files of the agency.
Sec. 34.605 Inspector General report.
(a) The Inspector General, or other official as specified in
paragraph (b) of this section, of each agency shall prepare and submit
to Congress each year, commencing with submission of the President's
Budget in 1991, an evaluation of the compliance of that agency with, and
the effectiveness of, the requirements herein. The evaluation may
include any recommended changes that may be necessary to strengthen or
improve the requirements.
(b) In the case of an agency that does not have an Inspector
General, the agency official comparable to an Inspector General shall
prepare and submit the annual report, or, if there is no such comparable
official, the head of the agency shall prepare and submit the annual
report.
(c) The annual report shall be submitted at the same time the agency
submits its annual budget justifications to Congress.
(d) The annual report shall include the following: All alleged
violations relating to the agency's covered Federal actions during the
year covered by the report, the actions taken by the head of the agency
in the year covered by the report with respect to those alleged
violations and alleged violations in previous years, and the amounts of
civil penalties imposed by the agency in the year covered by the report.
Appendix A to Part 34--Certification Regarding Lobbying
Certification for Contracts, Grants, Loans, and Cooperative Agreements
The undersigned certifies, to the best of his or her knowledge and
belief, that:
(1) No Federal appropriated funds have been paid or will be paid, by
or on behalf of the undersigned, to any person for influencing or
attempting to influence an officer or employee of an agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been
paid or will be paid to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress
in connection with this Federal contract, grant, loan, or cooperative
agreement, the undersigned shall complete
[[Page 409]]
and submit Standard Form-LLL, ``Disclosure Form to Report Lobbying,'' in
accordance with its instructions.
(3) The undersigned shall require that the language of this
certification be included in the award documents for all subawards at
all tiers (including subcontracts, subgrants, and contracts under
grants, loans, and cooperative agreements) and that all subrecipients
shall certify and disclose accordingly.
This certification is a material representation of fact upon which
reliance was placed when this transaction was made or entered into.
Submission of this certification is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required certification shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.
Statement for Loan Guarantees and Loan Insurance
The undersigned states, to the best of his or her knowledge and
belief, that:
If any funds have been paid or will be paid to any person for
influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with this commitment
providing for the United States to insure or guarantee a loan, the
undersigned shall complete and submit Standard Form-LLL, ``Disclosure
Form to Report Lobbying,'' in accordance with its instructions.
Submission of this statement is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required statement shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.
[[Page 410]]
Appendix B to Part 34--Disclosure Form to Report Lobbying
[[Page 411]]
[[Page 412]]
[[Page 413]]
PART 35--STATE AND LOCAL ASSISTANCE--Table of Contents
Sec.
35.001 Applicability.
Subpart A--Environmental Program Grants
General
35.100 Purpose of the subpart.
35.101 Environmental programs covered by the subpart.
35.102 Definitions of terms.
Preparing an Application
35.104 Components of a complete application.
35.105 Time frame for submitting an application.
35.107 Work plans.
35.108 Funding period.
35.109 Consolidated grants.
EPA Action on Application
35.110 Time frame for EPA action.
35.111 Criteria for approving an application.
35.112 Factors considered in determining award amount.
35.113 Reimbursement for pre-award costs.
Post-Award Requirements
35.114 Amendments and other changes.
35.115 Evaluation of performance.
35.116 Direct implementation.
35.117 Unused funds.
35.118 Unexpended balances.
Performance Partnership Grants
35.130 Purpose of Performance Partnership Grants.
35.132 Requirements summary.
35.133 Programs eligible for inclusion.
35.134 Eligible recipients.
35.135 Activities eligible for funding.
35.136 Cost share requirements.
35.137 Application requirements.
35.138 Competitive grants.
Air Pollution Control (Section 105)
35.140 Purpose.
35.141 Definitions.
35.143 Allotment.
35.145 Maximum federal share.
35.146 Maintenance of effort.
35.147 Minimum cost share for a Performance Partnership Grant.
35.148 Award limitations.
Water Pollution Control (Section 106)
35.160 Purpose.
35.161 Definition.
35.162 Basis for allotment.
35.165 Maintenance of effort.
35.168 Award limitations.
Public Water System Supervision (Section 1443(a))
35.170 Purpose.
35.172 Allotment.
35.175 Maximum federal share.
35.178 Award limitations.
Underground Water Source Protection (Section 1443(b))
35.190 Purpose.
35.192 Basis for allotment.
35.195 Maximum federal share.
35.198 Award limitation.
Hazardous Waste Management (Section 3011(a))
35.210 Purpose.
35.212 Basis for allotment.
35.215 Maximum federal share.
35.218 Award limitation.
Pesticide Cooperative Enforcement (Section 23(a)(1))
35.230 Purpose.
35.232 Basis for allotment.
35.235 Maximum federal share.
Pesticide Applicator Certification and Training (Section 23(a)(2))
35.240 Purpose.
35.242 Basis for allotment.
35.245 Maximum federal share.
Pesticide Program Implementation (Section 23(a)(1))
35.250 Purpose.
35.251 Basis for allotment.
35.252 Maximum federal share.
Nonpoint Source Management (Section 319(h))
35.260 Purpose.
35.265 Maximum federal share.
35.266 Maintenance of effort.
35.268 Award limitations.
Lead-Based Paint Program (Section 404(g))
35.270 Purpose.
35.272 Funding coordination.
State Indoor Radon Grants (Section 306)
35.290 Purpose.
35.292 Basis for allotment.
35.295 Maximum federal share.
35.298 Award limitations.
Toxic Substances Compliance Monitoring (Section 28 )
35.310 Purpose.
35.312 Competitive process.
35.315 Maximum federal share.
35.318 Award limitation.
[[Page 414]]
State Underground Storage Tanks (Section 2007(f)(2))
35.330 Purpose.
35.332 Basis for allotment.
35.335 Maximum federal share.
Pollution Prevention State Grants (Section 6605)
35.340 Purpose.
35.342 Competitive process.
35.343 Definitions.
35.345 Eligible applicants.
35.348 Award limitation.
35.349 Maximum federal share.
Water Quality Cooperative Agreements (Section 104(b)(3))
35.360 Purpose.
35.362 Competitive process.
35.364 Maximum federal share.
State Wetlands Development Grants (Section 104(b)(3))
35.380 Purpose.
35.382 Competitive process.
35.385 Maximum federal share.
State Administration (Section 205(g))
35.400 Purpose.
35.402 Allotment.
35.405 Maintenance of effort.
35.408 Award limitations.
Water Quality Management Planning Grants (Section 205(j)(2))
35.410 Purpose.
35.412 Allotment.
35.415 Maximum federal share.
35.418 Award limitations.
Subpart B--Environmental Program Grants for Tribes
General--All Grants
35.500 Purpose of the subpart.
35.501 Environmental programs covered by the subpart.
35.502 Definitions of terms.
35.503 Deviation from this subpart.
35.504 Eligibility of an Intertribal Consortium.
Preparing an Application
35.505 Components of a complete application.
35.506 Time frame for submitting an application.
35.507 Work plans.
35.508 Funding period.
35.509 Consolidated grants.
EPA Action on Application
35.510 Time frame for EPA action.
35.511 Criteria for approving an application.
35.512 Factors considered in determining award amount.
35.513 Reimbursement for pre-award costs.
Post-award Requirements
35.514 Amendments and other changes.
35.515 Evaluation of performance.
35.516 Direct implementation.
35.517 Unused funds.
35.518 Unexpended balances.
Performance Partnership Grants
35.530 Purpose of Performance Partnership Grants.
35.532 Requirements summary.
35.533 Programs eligible for inclusion.
35.534 Eligible recipients.
35.535 Activities eligible for funding.
35.536 Cost share requirements.
35.537 Application requirements.
35.538 Project period.
Indian Environmental General Assistance Program (GAP)
35.540 Purpose.
35.542 Definitions. [Reserved]
35.543 Eligible recipients.
35.545 Eligible activities.
35.548 Award limitation.
Air Pollution Control (Section 105)
35.570 Purpose.
35.572 Definitions.
35.573 Eligible Tribe.
35.575 Maximum federal share.
35.576 Maintenance of effort.
35.578 Award limitation.
Water Pollution Control (Sections 106 and 518)
35.580 Purpose.
35.582 Definitions.
35.583 Eligible recipients.
35.585 Maximum federal share.
35.588 Award limitations.
Water Quality Cooperative Agreements (Section 104(b)(3))
35.600 Purpose.
35.603 Competitive process.
35.604 Maximum federal share.
Wetlands Development Grant Program (Section 104(b)(3))
35.610 Purpose.
35.613 Competitive process.
35.615 Maximum federal share.
Nonpoint Source Management Grants (Sections 319(h) and 518(f))
35.630 Purpose.
35.632 Definition.
35.633 Eligibility requirements.
35.635 Maximum federal share.
35.636 Maintenance of effort.
[[Page 415]]
35.638 Award limitations.
Pesticide Cooperative Enforcement (Section 23 (a)(1))
35.640 Purpose.
35.641 Eligible recipients.
35.642 Maximum federal share.
35.645 Basis for allotment.
Pesticide Applicator Certification and Training (Section 23(a)(2))
35.646 Purpose.
35.649 Maximum federal share.
Pesticide Program Implementation (Section 23(a)(1))
35.650 Purpose.
35.653 Eligible recipients.
35.655 Basis for allotment.
35.659 Maximum federal share.
Pollution Prevention Grants (Section 6605)
35.660 Purpose.
35.661 Competitive process.
35.662 Definitions.
35.663 Eligible recipients.
35.668 Award limitations.
35.669 Maximum federal share.
Public Water System Supervision (Sections 1443(a) and 1451)
35.670 Purpose.
35.672 Definition.
35.673 Annual amount reserved by EPA.
35.675 Maximum federal share.
35.676 Eligible recipients.
35.678 Award limitations.
Underground Water Source Protection (Section 1443(b))
35.680 Purpose.
35.682 Definition.
35.683 Annual amount reserved by EPA.
35.685 Maximum federal share.
35.686 Eligible recipients
35.688 Award limitations.
Lead-Based Paint Program (Section 404(g))
35.690 Purpose.
35.691 Funding coordination.
35.693 Eligible recipients.
Indoor Radon Grants (Section 306)
35.700 Purpose.
35.702 Basis for allotment.
35.703 Eligible recipients.
35.705 Maximum federal share.
35.708 Award limitations.
Toxic Substances Compliance Monitoring (Section 28)
35.710 Purpose.
35.712 Competitive process.
35.713 Eligible recipients.
35.715 Maximum federal share.
35.718 Award limitation.
Hazardous Waste Management Program Grants (P.L. 105-276)
35.720 Purpose.
35.723 Competitive process.
35.725 Maximum federal share.
Underground Storage Tanks Program Grants (P.L. 105-276)
35.730 Purpose.
35.731 Eligible recipients.
35.732 Basis for allotment.
35.735 Maximum federal share.
Subparts C-D [Reserved]
Subpart E--Grants for Construction of Treatment Works--Clean Water Act
35.900 Purpose.
35.901 Program policy.
35.903 Summary of construction grant program.
35.905 Definitions.
35.907 Municipal pretreatment program.
35.908 Innovative and alternative technologies.
35.909 Step 2 = 3 grants.
35.910 Allocation of funds.
35.910-1 Allotments.
35.910-2 Period of availability; reallotment.
35.910-3--35.910-4 [Reserved]
35.910-5 Additional allotments of previously withheld sums.
35.910-6 Fiscal Year 1977 public works allotments.
35.910-7 Fiscal Year 1977 Supplemental Appropriations Act allotments.
35.910-8 Allotments for Fiscal Years 1978-1981.
35.910-9 Allotment of Fiscal Year 1978 appropriation.
35.910-10 Allotment of Fiscal Year 1979 appropriation.
35.910-11 Allotment of Fiscal Year 1980 appropriation.
35.910-12 Reallotment of deobligated funds of Fiscal Year 1978.
35.912 Delegation to State agencies.
35.915 State priority system and project priority list.
35.915-1 Reserves related to the project priority list.
35.917 Facilities planning (step 1).
35.917-1 Content of facilities plan.
35.917-2 State responsibilities.
35.917-3 Federal assistance.
35.917-4 Planning scope and detail.
35.917-5 Public participation.
35.917-6 Acceptance by implementing governmental units.
35.917-7 State review and certification of facilities plan.
35.917-8 Submission and approval of facilities plan.
[[Page 416]]
35.917-9 Revision or amendment of facilities plan.
35.918 Individual systems.
35.918-1 Additional limitations on awards for individual systems.
35.918-2 Eligible and ineligible costs.
35.918-3 Requirements for discharge of effluents.
35.920 Grant application.
35.920-1 Eligibility.
35.920-2 Procedure.
35.920-3 Contents of application.
35.925 Limitations on award.
35.925-1 Facilities planning.
35.925-2 Water quality management plans and agencies.
35.925-3 Priority determination.
35.925-4 State allocation.
35.925-5 Funding and other capabilities.
35.925-6 Permits.
35.925-7 Design.
35.925-8 Environmental review.
35.925-9 Civil rights.
35.925-10 Operation and maintenance program.
35.925-11 User charges and industrial cost recovery.
35.925-12 Property.
35.925-13 Sewage collection system.
35.925-14 Compliance with environmental laws.
35.925-15 Treatment of industrial wastes.
35.925-16 Federal activities.
35.925-17 Retained amounts for reconstruction and expansion.
35.925-18 Limitation upon project costs incurred prior to award.
35.925-19 [Reserved]
35.925-20 Procurement.
35.925-21 Storm sewers.
35.926 Value engineering (VE).
35.927 Sewer system evaluation and rehabilitation.
35.927-1 Infiltration/inflow analysis.
35.927-2 Sewer system evaluation survey.
35.927-3 Rehabilitation.
35.927-4 Sewer use ordinance.
35.927-5 Project procedures.
35.928 Requirements for an industrial cost recovery system.
35.928-1 Approval of the industrial cost recovery system.
35.928-2 Use of industrial cost recovery payments.
35.928-3 Implementation of the industrial cost recovery system.
35.928-4 Moratorium on industrial cost recovery payments.
35.929 Requirements for user charge system.
35.929-1 Approval of the user charge system.
35.929-2 General requirements for all user charge systems.
35.929-3 Implementation of the user charge system.
35.930 Award of grant assistance.
35.930-1 Types of projects.
35.930-2 Grant amount.
35.930-3 Grant term.
35.930-4 Project scope.
35.930-5 Federal share.
35.930-6 Limitation on Federal share.
35.935 Grant conditions.
35.935-1 Grantee responsibilities.
35.935-2 Procurement.
35.935-3 Property.
35.935-4 Step 2 = 3 projects.
35.935-5 Davis-Bacon and related statutes.
35.935-6 Equal employment opportunity.
35.935-7 Access.
35.935-8 Supervision.
35.935-9 Project initiation and completion.
35.935-10 Copies of contract documents.
35.935-11 Project changes.
35.935-12 Operation and maintenance.
35.935-13 Submission and approval of user charge systems.
35.935-14 Final inspection.
35.935-15 Submission and approval of industrial cost recovery system.
35.935-16 Sewer use ordinance and evaluation/rehabilitation program.
35.935-17 Training facility.
35.935-18 Value engineering.
35.935-19 Municipal pretreatment program.
35.935-20 Innovative processes and techniques.
35.936 Procurement.
35.936-1 Definitions.
35.936-2 Grantee procurement systems; State or local law.
35.936-3 Competition.
35.936-4 Profits.
35.936-5 Grantee responsibility.
35.936-6 EPA responsibility.
35.936-7 Small and minority business.
35.936-8 Privity of contract.
35.936-9 Disputes.
35.936-10 Federal procurement regulations.
35.936-11 General requirements for subagreements.
35.936-12 Documentation.
35.936-13 Specifications.
35.936-14 Force account work.
35.936-15 Limitations on subagreement award.
35.936-16 Code or standards of conduct.
35.936-17 Fraud and other unlawful or corrupt practices.
35.936-18 Negotiation of subagreements.
35.936-19 Small purchases.
35.936-20 Allowable costs.
35.936-21 Delegation to State agencies; certification of procurement
systems.
35.936-22 Bonding and insurance.
35.937 Subagreements for architectural or engineering services.
35.937-1 Type of contract (subagreement).
35.937-2 Public notice.
35.937-3 Evaluation of qualifications.
35.937-4 Solicitation and evaluation of proposals.
35.937-5 Negotiation.
35.937-6 Cost and price considerations.
35.937-7 Profit.
[[Page 417]]
35.937-8 Award of subagreement.
35.937-9 Required solicitation and subagreement provisions.
35.937-10 Subagreement payments--architectural or engineering services.
35.937-11 Applicability to existing contracts.
35.937-12 Subcontracts under subagreements for architectural or
engineering services.
35.938 Construction contracts (subagreements) of grantees.
35.938-1 Applicability.
35.938-2 Performance by contract.
35.938-3 Type of contract.
35.938-4 Formal advertising.
35.938-5 Negotiation of contract amendments (change orders).
35.938-6 Progress payments to contractors.
35.938-7 Retention from progress payments.
35.938-8 Required construction contract provisions.
35.938-9 Subcontracts under construction contracts.
35.939 Protests.
35.940 Determination of allowable costs.
35.940-1 Allowable project costs.
35.940-2 Unallowable costs.
35.940-3 Costs allowable, if approved.
35.940-4 Indirect costs.
35.940-5 Disputes concerning allowable costs.
35.945 Grant payments.
35.950 Suspension, termination or annulment of grants.
35.955 Grant amendments to increase grant amounts.
35.960 Disputes.
35.965 Enforcement.
35.970 Contract enforcement.
Appendix A to Subpart E--Cost-Effectiveness Analysis Guidelines
Appendix B to Subpart E--Federal Guidelines--User Charges For Operation
and Maintenance of Publicly Owned Treatment Works
Appendix C-1 to Subpart E--Required Provisions--Consulting Engineering
Agreements
Appendix C-2 to Subpart E--Required Provisions--Construction Contracts
Appendix D to Subpart E--EPA Transition Policy--Existing Consulting
Engineering Agreements
Appendix E to Subpart E--Innovative and Alternative Technology
Guidelines
Subparts F-G [Reserved]
Subpart H--Cooperative Agreements for Protecting and Restoring Publicly
Owned Freshwater Lakes
35.1600 Purpose.
35.1603 Summary of clean lakes assistance program.
35.1605 Definitions.
35.1605-1 The Act.
35.1605-2 Freshwater lake.
35.1605-3 Publicly owned freshwater lake.
35.1605-4 Nonpoint source.
35.1605-5 Eutrophic lake.
35.1605-6 Trophic condition.
35.1605-7 Desalinization.
35.1605-8 Diagnostic-feasibility study.
35.1605-9 Indian Tribe set forth at 40 CFR 130.6(d).
35.1610 Eligibility.
35.1613 Distribution of funds.
35.1615 Substate agreements.
35.1620 Application requirements.
35.1620-1 Types of assistance.
35.1620-2 Contents of applications.
35.1620-3 Environmental evaluation.
35.1620-4 Public participation.
35.1620-5 State work programs and lake priority lists.
35.1620-6 Intergovernmental review.
35.1630 State lake classification surveys.
35.1640 Application review and evaluation.
35.1640-1 Application review criteria.
35.1650 Award.
35.1650-1 Project period.
35.1650-2 Limitations on awards.
35.1650-3 Conditions on award.
35.1650-4 Payment.
35.1650-5 Allowable costs.
35.1650-6 Reports.
Appendix A to Subpart H--Requirements for Diagnostic-Feasibility Studies
and Environmental Evaluations
Subpart I--Grants for Construction of Treatment Works
35.2000 Purpose and policy.
35.2005 Definitions.
35.2010 Allotment; reallotment.
35.2012 Capitalization grants.
35.2015 State priority system and project priority list.
35.2020 Reserves.
35.2021 Reallotment of reserves.
35.2023 Water quality management planning.
35.2024 Combined sewer overflows.
35.2025 Allowance and advance of allowance.
35.2030 Facilities planning.
35.2032 Innovative and alternative technologies.
35.2034 Privately owned individual systems.
35.2035 Rotating biological contractor (RBC) replacement grants.
35.2036 Design/build project grants.
35.2040 Grant application.
35.2042 Review of grant applications.
35.2050 Effect of approval or certification of documents.
35.2100 Limitations on award.
35.2101 Advanced treatment.
35.2102 Water quality management planning.
35.2103 Priority determination.
35.2104 Funding and other considerations.
35.2105 Debarment and suspension.
[[Page 418]]
35.2106 Plan of operation.
35.2107 Intermunicipal service agreements.
35.2108 Phased or segmented treatment works.
35.2109 Step 2=3.
35.2110 Access to individual systems.
35.2111 Revised water quality standards.
35.2112 Marine discharge waiver applicants.
35.2113 Environmental review.
35.2114 Value engineering.
35.2116 Collection system.
35.2118 Preaward costs.
35.2120 Infiltration/Inflow.
35.2122 Approval of user charge system and proposed sewer use
ordinance.
35.2123 Reserve capacity.
35.2125 Treatment of wastewater from industrial users.
35.2127 Federal facilities.
35.2130 Sewer use ordinance.
35.2140 User charge system.
35.2152 Federal share.
35.2200 Grant conditions.
35.2202 Step 2=3 projects.
35.2203 Step 7 projects.
35.2204 Project changes.
35.2205 Maximum allowable project cost.
35.2206 Operation and maintenance.
35.2208 Adoption of sewer use ordinance and user charge system.
35.2210 Land acquisition.
35.2211 Field testing for Innovative and Alternative Technology Report.
35.2212 Project initiation.
35.2214 Grantee responsibilities.
35.2216 Notice of building completion and final inspection.
35.2218 Project performance.
35.2250 Determination of allowable costs.
35.2260 Advance purchase of eligible land.
35.2262 Funding of field testing.
35.2300 Grant payments.
35.2350 Subagreement enforcement.
Appendix A to Subpart I--Determination of Allowable Costs
Appendix B to Subpart I--Allowance for Facilities Planning and Design
Subpart J--Construction Grants Program Delegation to States
35.3000 Purpose.
35.3005 Policy.
35.3010 Delegation agreement.
35.3015 Extent of State responsibilities.
35.3020 Certification procedures.
35.3025 Overview of State performance under delegation.
35.3030 Right of review of State decision.
35.3035 Public participation.
Subpart K--State Water Pollution Control Revolving Funds
35.3100 Policy and purpose.
35.3105 Definitions.
35.3110 Fund establishment.
35.3115 Eligible activities of the SRF.
35.3120 Authorized types of assistance.
35.3125 Limitations on SRF assistance.
35.3130 The capitalization grant agreement.
35.3135 Specific capitalization grant agreement requirements.
35.3140 Environmental review requirements.
35.3145 Application of other Federal authorities.
35.3150 Intended Use Plan (IUP).
35.3155 Payments.
35.3160 Cash draw rules.
35.3165 Reports and audits.
35.3170 Corrective action.
Appendix A to Subpart K--Criteria for Evaluating a State's Proposed
NEPA-Like Process
Subpart L--Drinking Water State Revolving Funds
35.3500 Purpose, policy, and applicability.
35.3505 Definitions.
35.3510 Establishment of the DWSRF program.
35.3515 Allotment and withholdings of funds.
35.3520 Systems, projects, and project-related costs eligible for
assistance from the Fund.
35.3525 Authorized types of assistance from the Fund.
35.3530 Limitations on uses of the Fund.
35.3535 Authorized set-aside activities.
35.3540 Requirements for funding set-aside activities.
35.3545 Capitalization grant agreement.
35.3550 Specific capitalization grant agreement requirements.
35.3555 Intended Use Plan (IUP).
35.3560 General payment and cash draw rules.
35.3565 Specific cash draw rules for authorized types of assistance
from the Fund.
35.3570 Reports and audits.
35.3575 Application of Federal cross-cutting authorities (cross-
cutters).
35.3580 Environmental review requirements.
35.3585 Compliance assurance procedures.
Appendix A to Subpart L--Criteria for Evaluating a State's Proposed
NEPA-Like Process.
Subpart M--Grants for Technical Assistance
General
35.4000 Authority.
35.4005 What is a Technical Assistance Grant?
35.4010 What does this subpart do?
35.4011 Do the general grant regulations for nonprofit organizations
apply to TAGs?
35.4012 If there appears to be a difference between the requirements in
40 CFR part 30
[[Page 419]]
and this subpart, which regulations should my group follow?
35.4015 Do certain words in this subpart have specific meaning?
Who Is Eligible?
35.4020 Is my community group eligible for a TAG?
35.4025 Is there any way my group can get a TAG if it is currently
ineligible?
35.4030 Can I be a part of a TAG group if I belong to an ineligible
group?
35.4035 Does EPA use the same eligibility criteria for TAGs at
``Federal facility'' sites?
35.4040 How many groups can receive a TAG at one Superfund site?
Your Responsibilities as a TAG Recipient
35.4045 What requirements must my group meet as a TAG recipient?
35.4050 Must my group contribute toward the cost of a TAG?
35.4055 What if my group can't come up with the ``matching funds?''
How Much Money TAGs Provide
35.4060 How much money can my group receive through a TAG?
35.4065 How can my group get more than $50,000?
What TAGs Can Pay for
35.4070 How can my group spend TAG money?
35.4075 Are there things my group can't spend TAG money for?
How You Get the Money
35.4080 Does my group get a lump sum up front, or does EPA reimburse us
for costs we incur?
35.4085 Can my group get an ``advance payment'' to help us get started?
35.4090 If my group is eligible for an advance payment, how do we get
our funds?
35.4095 What can my group pay for with an advance payment?
35.4100 Can my group incur any costs prior to the award of our grant?
How to Apply for a TAG
35.4105 What is the first step for getting a TAG?
35.4106 What information should an LOI include?
35.4110 What does EPA do once it receives the first LOI from a group?
35.4115 After the public notice that EPA has received an LOI, how much
time does my group have to form a coalition or submit a
separate LOI?
35.4120 What does my group do next?
35.4125 What else does my group need to do?
35.4130 What must be included in my group's budget?
35.4135 What period of time should my group's budget cover?
35.4140 What must be included in my group's work plan?
35.4145 How much time do my group or other interested groups have to
submit a TAG application to EPA?
35.4150 What happens after my group submits its application to EPA?
35.4155 How does EPA decide whether to award a TAG to our group?
35.4160 What does EPA do if more than one group applies for a TAG at
the same site?
35.4161 Does the TAG application process affect the schedule for work
at my site?
35.4165 When does EPA award a TAG?
Managing Your TAG
35.4170 What kinds of reporting does EPA require?
35.4175 What other reporting and record keeping requirements are there?
35.4180 Must my group keep financial records after we finish our TAG?
35.4185 What does my group do with reports our technical advisor
prepares for us?
Procuring a Technical Advisor or Other Contractor With TAG Funds
35.4190 How does my group identify a qualified technical advisor?
35.4195 Are there certain people my group cannot select to be our
technical advisor, grant administrator, or other contractor
under the grant?
35.4200 What restrictions apply to contractors my group procures for
our TAG?
35.4205 How does my group procure a technical advisor or any other
contractor?
35.4210 Must my group solicit and document bids for our procurements?
35.4215 What if my group can't find an adequate number of potential
sources for a technical advisor or other contractor?
35.4220 How does my group ensure a prospective contractor does not have
a conflict of interest?
35.4225 What if my group decides a prospective contractor has a
conflict of interest?
35.4230 What are my group's contractual responsibilities once we
procure a contractor?
35.4235 Are there specific provisions my group's contract(s) must
contain?
Requirements for TAG Contractors
35.4240 What provisions must my group's TAG contractor comply with if
it subcontracts?
Grant Disputes, Termination, and Enforcement
35.4245 How does my group resolve a disagreement with EPA regarding our
TAG?
35.4250 Under what circumstances would EPA terminate my group's TAG?
[[Page 420]]
35.4255 Can my group terminate our TAG?
35.4260 What other steps might EPA take if my group fails to comply
with the terms and conditions of our award?
Closing Out a TAG
35.4265 How does my group close out our TAG?
Other Things You Need to Know
35.4270 Definitions.
35.4275 Where can my group get the documents this subpart references
(for example, OMB circulars, other subparts, forms)?
Subpart N [Reserved]
Subpart O--Cooperative Agreements and Superfund State Contracts for
Superfund Response Actions
General
35.6000 Authority.
35.6005 Purpose and scope.
35.6010 Eligibility.
35.6015 Definitions.
35.6020 Other statutory provisions.
35.6025 Deviation from this subpart.
Pre-Remedial Response Cooperative Agreements
35.6050 Eligibility for pre-remedial Cooperative Agreements.
35.6055 State-lead pre-remedial Cooperative Agreements.
35.6060 Political subdivision-lead pre-remedial Cooperative Agreements.
35.6070 Indian Tribe-lead pre-remedial Cooperative Agreements.
Remedial Response Cooperative Agreements
35.6100 Eligibility for remedial Cooperative Agreements.
35.6105 State-lead remedial Cooperative Agreements.
35.6110 Indian Tribe-lead remedial Cooperative Agreements.
35.6115 Political subdivision-lead remedial Cooperative Agreements.
35.6120 Notification of the out-of-State or out-of-Indian Tribal
jurisdiction transfer of CERCLA waste.
Enforcement Cooperative Agreements
35.6145 Eligibility for enforcement Cooperative Agreements.
35.6150 Activities eligible for funding under enforcement Cooperative
Agreements.
35.6155 State, political subdivision or Indian Tribe-lead enforcement
Cooperative Agreements.
Removal Response Cooperative Agreements
35.6200 Eligibility for removal Cooperative Agreements.
35.6205 Removal Cooperative Agreements.
Core Program Cooperative Agreements
35.6215 Eligibility for Core Program Cooperative Agreements.
35.6220 General.
35.6225 Activities eligible for funding under Core Program Cooperative
Agreements.
35.6230 Application requirements.
35.6235 Cost sharing.
Support Agency Cooperative Agreements
35.6240 Eligibility for support agency Cooperative Agreements.
35.6245 Allowable activities.
35.6250 Support agency Cooperative Agreement requirements.
35.6255 Cost sharing.
Financial Administration Requirements Under a Cooperative Agreement
35.6270 Standards for financial management systems.
35.6275 Period of availability of funds.
35.6280 Payments.
35.6285 Recipient payment of response costs.
35.6290 Program income.
Personal Property Requirements Under a Cooperative Agreement
35.6300 General personal property acquisition and use requirements.
35.6305 Obtaining supplies.
35.6310 Obtaining equipment.
35.6315 Alternative methods for obtaining property.
35.6320 Usage rate.
35.6325 Title and EPA interest in CERCLA-funded property.
35.6330 Title to federally owned property.
35.6335 Property management standards.
35.6340 Disposal of CERCLA-funded property.
35.6345 Equipment disposal options.
35.6350 Disposal of federally owned property.
Real Property Requirements Under a Cooperative Agreement
35.6400 Acquisition and transfer of interest.
35.6405 Use.
Copyright Requirements Under a Cooperative Agreement
35.6450 General requirements.
Use of Recipient Employees (``Force Account'') Under a Cooperative
Agreement
35.6500 General requirements.
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Procurement Requirements Under a Cooperative Agreement
35.6550 Procurement system standards.
35.6555 Competition.
35.6560 Master list of debarred, suspended, and voluntarily excluded
persons.
35.6565 Procurement methods.
35.6570 Use of the same engineer during subsequent phases of response.
35.6575 Restrictions on types of contracts.
35.6580 Contracting with minority and women's business enterprises
(MBE/WBE), small businesses, and labor surplus area firms.
35.6585 Cost and price analysis.
35.6590 Bonding and insurance.
35.6595 Contract provisions.
35.6600 Contractor claims.
35.6605 Privity of contract.
35.6610 Contracts awarded by a contractor.
Reports Required Under a Cooperative Agreement
35.6650 Quarterly progress reports.
35.6655 Notification of significant developments.
35.6660 Property inventory reports.
35.6665 Procurement reports.
35.6670 Financial reports.
Records Requirements Under a Cooperative Agreement
35.6700 Project records.
35.6705 Records retention.
35.6710 Records access.
Other Administrative Requirements for Cooperative Agreements
35.6750 Modifications.
35.6755 Monitoring program performance.
35.6760 Enforcement and termination for convenience.
35.6765 Non-Federal audit.
35.6770 Disputes.
35.6775 Exclusion of third-party benefits.
35.6780 Closeout.
35.6785 Collection of amounts due.
35.6790 High risk recipients.
Requirements for Administering a Superfund State Contract (SSC)
35.6800 General.
35.6805 Contents of an SSC.
35.6815 Administrative requirements.
35.6820 Conclusion of the SSC.
Subpart P--Financial Assistance for the National Estuary Program
35.9000 Applicability.
35.9005 Purpose.
35.9010 Definitions.
35.9015 Summary of annual process.
35.9020 Planning targets.
35.9030 Work program.
35.9035 Budget period.
35.9040 Application for assistance.
35.9045 EPA action on application.
35.9050 Assistance amount.
35.9055 Evaluation of recipient performance.
35.9060 Maximum Federal share.
35.9065 Limitations.
35.9070 National program assistance agreements.
Authority: 42 U.S.C. 4368b, unless otherwise noted.
Sec. 35.001 Applicability.
This part codifies policies and procedures for financial assistance
awarded by the Environmental Protection Agency (EPA) to State,
interstate, and local agencies, Indian Tribes and Intertribal Consortia
for pollution abatement and control programs. These provisions
supplement the EPA general assistance regulations in 40 CFR part 31.
[66 FR 1734, Jan. 9, 2001]
Subpart A--Environmental Program Grants
Authority: 42 U.S.C. 7401 et seq.; 33 U.S.C. 1251 et seq.; 42 U.S.C.
300f et seq.; 42 U.S.C. 6901 et seq.; 7 U.S.C. 136 et seq.; 15 U.S.C.
2601 et seq.; 42 U.S.C. 13101 et seq.; Pub. L. 104-134, 110 Stat. 1321,
1321-299 (1996); Pub. L. 105-65, 111 Stat. 1344, 1373 (1997).
Source: 66 FR 1734, Jan. 9, 2001, unless otherwise noted.
General
Sec. 35.100 Purpose of the subpart.
This subpart establishes administrative requirements for all grants
awarded to State, interstate, and local agencies and other entities for
the environmental programs listed in Sec. 35.101. This subpart
supplements requirements in EPA's general grant regulations found at 40
CFR parts 30 and 31. Sections 35.100--35.118 contain administrative
requirements that apply to all environmental program grants included in
this subpart. Sections 35.130-35.418 contain requirements that apply to
specified environmental program grants. Many of these environmental
programs also have programmatic and technical requirements that are
published elsewhere in the Code of Federal Regulations.
[[Page 422]]
Sec. 35.101 Environmental programs covered by the subpart.
(a) The requirements in this subpart apply to all grants awarded for
the following programs:
(1) Performance partnership grants (Omnibus Consolidated Rescissions
and Appropriations Act of 1996, Pub. Law 104-134, 110 Stat. 1321, 1321-
299 (1996) and Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1998, Pub. Law
105-65, 111 Stat. 1344, 1373 (1997)).
(2) Air pollution control (section 105 of the Clean Air Act).
(3) Water pollution control (section 106 of the Clean Water Act).
(4) Public water system supervision (section 1443(a) of the Safe
Drinking Water Act).
(5) Underground water source protection (section 1443(b) of the Safe
Drinking Water Act).
(6) Hazardous waste management (section 3011(a) of the Solid Waste
Disposal Act).
(7) Pesticide cooperative enforcement (section 23(a)(1) of the
Federal Insecticide, Fungicide, and Rodenticide Act).
(8) Pesticide applicator certification and training (section
23(a)(2) of the Federal Insecticide, Fungicide, and Rodenticide Act).
(9) Pesticide program implementation (section 23(a)(1) of the
Federal Insecticide, Fungicide, and Rodenticide Act).
(10) Nonpoint source management (sections 205(j)(5) and 319(h) of
the Clean Water Act).
(11) Lead-based paint program (section 404(g) of the Toxic
Substances Control Act).
(12) State indoor radon grants (section 306 of the Toxic Substances
Control Act).
(13) Toxic substances compliance monitoring (section 28 of the Toxic
Substances Control Act).
(14) State underground storage tanks (section 2007(f)(2) of the
Solid Waste Disposal Act).
(15) Pollution prevention state grants (section 6605 of the
Pollution Prevention Act of 1990).
(16) Water quality cooperative agreements (section 104(b)(3) of the
Clean Water Act).
(17) Wetlands development grants program (section 104(b)(3) of the
Clean Water Act).
(18) State administration of construction grant, permit, and
planning programs (section 205(g) of the Clean Water Act).
(19) Water quality management planning (section 205(j)(2) of the
Clean Water Act).
(b) Unless otherwise prohibited by statute or regulation, the
requirements in Sec. 35.100 through Sec. 35.118 of this subpart also
apply to grants under environmental programs established after this
subpart becomes effective if specified in Agency guidance for such
programs.
(c) In the event a grant is awarded from EPA headquarters for one of
the programs listed in paragraph (a) of this section, this subpart shall
apply and the term ``Regional Administrator'' shall mean ``Assistant
Administrator'.
Sec. 35.102 Definitions of terms.
Terms are defined as follows when they are used in this subpart.
Allotment. EPA's calculation of the funds that may be available to
an eligible recipient for an environmental program grant. An allotment
is not an entitlement.
Consolidated grant. A single grant made to a recipient consolidating
funds from more than one environmental grant program. After the award is
made, recipients must account for grant funds in accordance with the
funds' original environmental program sources. Consolidated grants are
not Performance Partnership Grants.
Environmental program. A program for which EPA awards grants under
the authorities listed in Sec. 35.101. The grants are subject to the
requirements of this subpart.
Funding period. The period of time specified in the grant agreement
during which the recipient may expend or obligate funds for the purposes
set forth in the agreement.
National program guidance. Guidance issued by EPA's National Program
Managers for establishing and maintaining effective environmental
programs. This guidance establishes national goals, objectives, and
priorities
[[Page 423]]
as well as the core performance measures and other information to be
used in monitoring progress. The guidance may also set out specific
environmental strategies, criteria for evaluating programs, and other
elements of program implementation.
Outcome. The environmental result, effect, or consequence that will
occur from carrying out an environmental program or activity that is
related to an environmental or programmatic goal or objective. Outcomes
must be quantitative, and they may not necessarily be achievable during
a grant funding period. See ``output.''
Output. An environmental activity or effort and associated work
products related to an environmental goal or objective that will be
produced or provided over a period of time or by a specified date.
Outputs may be quantitative or qualitative but must be measurable during
a grant funding period. See ``outcome.''
Performance Partnership Agreement. A negotiated agreement signed by
the EPA Regional Administrator and an appropriate official of a State
agency and designated as a Performance Partnership Agreement. Such
agreements typically set out jointly developed goals, objectives, and
priorities; the strategies to be used in meeting them; the roles and
responsibilities of the State and EPA; and the measures to be used in
assessing progress. A Performance Partnership Agreement may be used as
all or part of a work plan for a grant if it meets the requirements for
a work plan set out in Sec. 35.107.
Performance Partnership Grant. A single grant combining funds from
more than one environmental program. A Performance Partnership Grant may
provide for administrative savings or programmatic flexibility to direct
grant resources where they are most needed to address public health and
environmental priorities (see also Sec. 35.130). Each Performance
Partnership Grant has a single, integrated budget and recipients do not
need to account for grant funds in accordance with the funds' original
environmental program sources.
Planning target. The amount of funds that the Regional Administrator
suggests a grant applicant consider in developing its application,
including the work plan, for an environmental program.
Regional supplemental guidance. Guidance to environmental program
applicants prepared by the Regional Administrator, based on the national
program guidance and specific regional and applicant circumstances, for
use in preparing a grant application.
Work plan commitments. The outputs and outcomes associated with each
work plan component, as established in the grant agreement.
Work plan component. A negotiated set or group of work plan
commitments established in the grant agreement. A work plan may have one
or more work plan components.
Preparing an Application
Sec. 35.104 Components of a complete application.
A complete application for an environmental program must:
(a) Meet the requirements in 40 CFR part 31, subpart B;
(b) Include a proposed work plan (Sec. 35.107); and
(c) Specify the environmental program and the amount of funds
requested.
Sec. 35.105 Time frame for submitting an application.
An applicant should submit a complete application to EPA at least 60
days before the beginning of the proposed funding period.
Sec. 35.107 Work plans.
(a) Bases for negotiating work plans. The work plan is negotiated
between the applicant and the Regional Administrator and reflects
consideration of national, regional, and State environmental and
programmatic needs and priorities.
(1) Negotiation considerations. In negotiating the work plan, the
Regional Administrator and applicant will consider such factors as
national program guidance; any regional supplemental guidance; goals,
objectives, and priorities proposed by the applicant; other jointly
identified needs or priorities; and the planning target.
[[Page 424]]
(2) National program guidance. If an applicant proposes a work plan
that differs significantly from the goals and objectives, priorities, or
core performance measures in the national program guidance associated
with the proposed activities, the Regional Administrator must consult
with the appropriate National Program Manager before agreeing to the
work plan.
(3) Use of existing guidance. An applicant should base the grant
application on the national program guidance in place at the time the
application is being prepared.
(b) Work plan requirements. (1) The work plan is the basis for the
management and evaluation of performance under the grant agreement.
(2) An approvable work plan must specify:
(i) The work plan components to be funded under the grant;
(ii) The estimated work years and the estimated funding amounts for
each work plan component;
(iii) The work plan commitments for each work plan component and a
time frame for their accomplishment;
(iv) A performance evaluation process and reporting schedule in
accordance with Sec. 35.115 of this subpart; and
(v) The roles and responsibilities of the recipient and EPA in
carrying out the work plan commitments.
(3) The work plan must be consistent with applicable federal
statutes; regulations; circulars; executive orders; and EPA delegations,
approvals, or authorizations.
(c) Performance Partnership Agreement as work plan. An applicant may
use a Performance Partnership Agreement or a portion of a Performance
Partnership Agreement as the work plan for an environmental program
grant if the portions of the Performance Partnership Agreement that
serve as all or part of the grant work plan:
(1) Are clearly identified and distinguished from other portions of
the Performance Partnership Agreement; and
(2) Meet the requirements in Sec. 35.107(b).
Sec. 35.108 Funding period.
The Regional Administrator and applicant may negotiate the length of
the funding period for environmental program grants, subject to
limitations in appropriations acts.
Sec. 35.109 Consolidated grants.
(a) Any applicant eligible to receive funds from more than one
environmental program may submit an application for a consolidated
grant. For consolidated grants, an applicant prepares a single budget
and work plan covering all of the environmental programs included in the
application. The consolidated budget must identify each environmental
program to be included, the amount of each program's funds, and the
extent to which each program's funds support each work plan component.
Recipients of consolidated grants must account for grant funds in
accordance with the funds' environmental program sources; funds included
in a consolidated grant from a particular environmental program may be
used only for that program.
(b) Insular areas that choose to consolidate environmental program
grants may be exempted by the Regional Administrator from requirements
of this subpart in accordance with 48 U.S.C. 1469a.
EPA Action on Application
Sec. 35.110 Time frame for EPA action.
The Regional Administrator will review a complete application and
either approve, conditionally approve, or disapprove it within 60 days
of receipt. This period may be extended by mutual agreement between EPA
and the applicant. The Regional Administrator will award the funds for
approved or conditionally approved applications when the funds are
available.
Sec. 35.111 Criteria for approving an application.
(a) The Regional Administrator may approve an application upon
determining that:
(1) The application meets the requirements of this subpart and 40
CFR part 31;
(2) The application meets the requirements of all applicable federal
statutes; regulations; circulars; executive orders; and delegations,
approvals, or authorizations;
[[Page 425]]
(3) The proposed work plan complies with the requirements of
Sec. 35.107; and
(4) The achievement of the proposed work plan is feasible,
considering such factors as the applicant's existing circumstances, past
performance, program authority, organization, resources, and procedures.
(b) If the Regional Administrator finds the application does not
satisfy the criteria in paragraph (a) of this section, the Regional
Administrator may either:
(1) Conditionally approve the application if only minor changes are
required, with grant conditions necessary to ensure compliance with the
criteria, or
(2) Disapprove the application in writing.
Sec. 35.112 Factors considered in determining award amount.
(a) After approving an application under Sec. 35.111, the Regional
Administrator will consider such factors as the applicant's allotment,
the extent to which the proposed work plan is consistent with EPA
guidance and mutually agreed upon priorities, and the anticipated cost
of the work plan relative to the proposed work plan components, to
determine the amount of funds to be awarded.
(b) If the Regional Administrator finds the requested level of
funding is not justified or the work plan does not comply with the
requirements of Sec. 35.107, the Regional Administrator will attempt to
negotiate a resolution of the issues with the applicant before
determining the award amount. The Regional Administrator may determine
that the award amount will be less than the amount allotted or
requested.
Sec. 35.113 Reimbursement for pre-award costs.
(a) Notwithstanding the requirements of 40 CFR 31.23(a) and OMB cost
principles, EPA may reimburse recipients for pre-award costs incurred
from the beginning of the funding period established in the grant
agreement if such costs would have been allowable if incurred after the
award and the recipients submitted complete grant applications before
the beginning of the budget period. Such costs must be identified in the
grant application EPA approves.
(b) The applicant incurs pre-award costs at its own risk. EPA is
under no obligation to reimburse such costs unless they are included in
an approved grant award.
Post-Award Requirements
Sec. 35.114 Amendments and other changes.
The provisions of 40 CFR 31.30 do not apply to environmental program
grants awarded under this subpart. The following provisions govern
amendments and other changes to grant work plans and budgets after the
work plan is negotiated and a grant awarded.
(a) Changes requiring prior approval. Recipients may make
significant changes in work plan commitments only after obtaining the
Regional Administrator's prior written approval. EPA, in consultation
with the recipient, will document these revisions including budgeted
amounts associated with the revisions.
(b) Changes requiring approval. Recipients must request, in writing,
grant amendments for changes requiring increases in environmental
program grant amounts and extensions of the funding period. Recipients
may begin implementing a change before the amendment has been approved
by EPA, but do so at their own risk. If EPA approves the change, EPA
will issue a grant amendment. EPA will notify the recipient in writing
if the change is disapproved.
(c) Changes not requiring approval. Other than those situations
described in paragraphs (a) and (b) of this section, recipients do not
need to obtain approval for changes, including changes in grant work
plans, budgets, or other components of grant agreements, unless the
Regional Administrator determines approval requirements should be
imposed on a specific recipient for a specified period of time.
(d) OMB cost principles. The Regional Administrator may waive in
writing approval requirements for specific recipients and costs
contained in OMB cost principles.
(e) Changes in consolidated grants. Recipients of consolidated
grants under
[[Page 426]]
Sec. 35.109 may not transfer funds among environmental programs.
(f) Subgrants. Subgrantees must request required approvals in
writing from the recipient and the recipient shall approve or disapprove
the request in writing. A recipient will not approve any work plan or
budget revision which is inconsistent with the purpose or terms and
conditions of the federal grant to the recipient. If the revision
requested by the subgrantee would result in a significant change to the
recipient's approved grant which requires EPA approval, the recipient
will obtain EPA's approval before approving the subgrantee's request.
Sec. 35.115 Evaluation of performance.
(a) Joint evaluation process. The applicant and the Regional
Administrator will develop a process for jointly evaluating and
reporting progress and accomplishments under the work plan. A
description of the evaluation process and a reporting schedule must be
included in the work plan (see Sec. 35.107(b)(2)(iv)). The schedule must
require the recipient to report at least annually and must satisfy the
requirements for progress reporting under 40 CFR 31.40(b).
(b) Elements of the evaluation process. The evaluation process must
provide for:
(1) A discussion of accomplishments as measured against work plan
commitments;
(2) A discussion of the cumulative effectiveness of the work
performed under all work plan components;
(3) A discussion of existing and potential problem areas; and
(4) Suggestions for improvement, including, where feasible,
schedules for making improvements.
(c) Resolution of issues. If the joint evaluation reveals that the
recipient has not made sufficient progress under the work plan, the
Regional Administrator and the recipient will negotiate a resolution
that addresses the issues. If the issues cannot be resolved through
negotiation, the Regional Administrator may take appropriate measures
under 40 CFR 31.43. The recipient may request review of the Regional
Administrator's decision under the dispute processes in 40 CFR 31.70.
(d) Evaluation reports. The Regional Administrator will ensure that
the required evaluations are performed according to the negotiated
schedule and that copies of evaluation reports are placed in the
official files and provided to the recipient.
Sec. 35.116 Direct implementation.
If funds remain in a State's allotment for an environmental program
grant either after grants for that environmental program have been made
or because no grant was made, the Regional Administrator may, subject to
any limitations contained in appropriation acts, use all or part of the
funds to support a federal program required by law in the State in the
absence of an acceptable State program.
Sec. 35.117 Unused funds.
If funds for an environmental program grant remain in a State's
allotment either after an initial environmental program grant has been
made or because no grant was made, and the Regional Administrator does
not use the funds under Sec. 35.116 of this subpart, the Regional
Administrator may award the funds to any eligible recipient in the
region, including the same State or an Indian Tribe or Tribal
consortium, for the same environmental program or for a Performance
Partnership Grant, subject to any limitations in appropriation acts.
Sec. 35.118 Unexpended balances.
Subject to any relevant provisions of law, if a recipient's
Financial Status Report shows unexpended balances, the Regional
Administrator will deobligate the unexpended balances and make them
available, to either the same recipient in the same region or other
eligible recipients, including Indian Tribes and Tribal Consortia, for
environmental program grants.
Performance Partnership Grants
Sec. 35.130 Purpose of Performance Partnership Grants.
(a) Purpose of section. Sections 35.130 through 35.138 govern
Performance Partnership Grants to States and interstate agencies
authorized in the Omnibus Consolidated Rescissions and
[[Page 427]]
Appropriations Act of 1996, (Pub. L. 104-134; 110 Stat. 1321, 1321-299
(1996)) and the Departments of Veterans Affairs and Housing and Urban
Development, and Independent Agencies Appropriations Act, 1998, (Pub. L.
105-65; 111 Stat. 1344, 1373 (1997)).
(b) Purpose of program. Performance Partnership Grants enable States
and interstate agencies to combine funds from more than one
environmental program grant into a single grant with a single budget.
Recipients do not need to account for Performance Partnership Grant
funds in accordance with the funds' original environmental program
sources; they need only account for total Performance Partnership Grant
expenditures subject to the requirements of this subpart. The
Performance Partnership Grant program is designed to:
(1) Strengthen partnerships between EPA and State and interstate
agencies through joint planning and priority-setting and better
deployment of resources;
(2) Provide State and interstate agencies with flexibility to direct
resources where they are most needed to address environmental and public
health priorities;
(3) Link program activities more effectively with environmental and
public health goals and program outcomes;
(4) Foster development and implementation of innovative approaches
such as pollution prevention, ecosystem management, and community-based
environmental protection strategies; and
(5) Provide savings by streamlining administrative requirements.
Sec. 35.132 Requirements summary.
Applicants and recipients of Performance Partnership Grants must
meet:
(a) The requirements in Secs. 35.100 to 35.118, which apply to all
environmental program grants, including Performance Partnership Grants;
and
(b) The requirements in Secs. 35.130 to 35.138, which apply only to
Performance Partnership Grants.
Sec. 35.133 Programs eligible for inclusion.
(a) Eligible programs. Except as provided in paragraph (b) of this
section, the environmental programs eligible, in accordance with
appropriation acts, for inclusion in a Performance Partnership Grant are
listed in Sec. 35.101(a)(2) through (17). (Funds available from the
section 205(g) State Administration Grants program (Sec. 35.100(b)(18))
and the Water Quality Management Planning Grant program
(Sec. 35.100(b)(19)) may not be included in Performance Partnership
Grants.)
(b) Changes in eligible programs. The Administrator may, in guidance
or regulation, describe subsequent additions, deletions, or changes to
the list of environmental programs eligible for inclusion in Performance
Partnership Grants.
Sec. 35.134 Eligible recipients.
(a) Eligible agencies. All State agencies (including environmental,
health, agriculture, and other agencies) and interstate agencies
eligible to receive funds from more than one environmental program may
receive Performance Partnership Grants
(b) Designated agency. A State agency must be designated by a
Governor, State legislature, or other authorized State process to
receive grants under each of the environmental programs to be combined
in the Performance Partnership Grant. If it is not the designated agency
for a particular grant program to be included in the Performance
Partnership Grant, the State agency must have an agreement with the
State agency that does have the designation regarding how the funds will
be shared between the agencies.
(c) Programmatic requirements. In order to include funds from an
environmental program grant listed in Sec. 35.101 of this subpart in a
Performance Partnership Grant, applicants must meet the requirements for
award of each of the environmental programs from which funds are
combined in the agency's Performance Partnership Grant, except the
requirements at Secs. 35.268(b) and (c), 35.272, and 35.298 (c), (d),
(e), and (g). These requirements can be found in this regulation
beginning at Sec. 35.140.
Sec. 35.135 Activities eligible for funding.
(a) A recipient may use a Performance Partnership Grant, subject to
the
[[Page 428]]
requirements of paragraph (c) of this section, to fund any activity that
is eligible for funding under at least one of the environmental programs
from which funds are combined into the grant.
(b) A recipient may also use a Performance Partnership Grant to fund
multi-media activities that are eligible in accordance with paragraph
(a) of this section and have been agreed to by the Regional
Administrator. Such activities may include multi-media permitting and
enforcement and pollution prevention, ecosystem management, community-
based environmental protection, and other innovative approaches.
(c) A recipient may not use a Performance Partnership Grant to fund
activities eligible only under a specific environmental program grant
unless some or all of the recipient's allotted funds for that program
have been included in the Performance Partnership Grant.
Sec. 35.136 Cost share requirements.
(a) An applicant for a Performance Partnership Grant must provide a
non-federal cost share that is not less than the sum of the minimum non-
federal cost share required under each of the environmental programs
that are combined in the Performance Partnership Grant. Cost share
requirements for the individual environmental programs are described in
Secs. 35.140 to 35.418.
(b) When an environmental program included in the Performance
Partnership Grant has both a matching and maintenance of effort
requirement, the greater of the two amounts will be used to calculate
the minimum cost share attributed to that environmental program.
Sec. 35.137 Application requirements.
(a) An application for a Performance Partnership Grant must contain:
(1) A list of the environmental programs and the amount of funds
from each program to be combined in the Performance Partnership Grant;
(2) A consolidated budget;
(3) A consolidated work plan that addresses each program being
combined in the grant and that meets the requirements of Sec. 35.107;
and,
(4) A rationale, commensurate with the extent of any programmatic
flexibility (i.e., increased effort in some programs and decreased
effort in others) indicated in the work plan, that explains the basis
for the applicant's priorities, the expected environmental or other
benefits to be achieved, and the anticipated impact on any environmental
programs or program areas proposed for reduced effort.
(b) The applicant and the Regional Administrator will negotiate
regarding the information necessary to support the rationale for
programmatic flexibility required in paragraph (a)(4) of this section.
The rationale may be supported by information from a variety of sources,
including a Performance Partnership Agreement or comparable negotiated
document, the evaluation report required in Sec. 35.125, and other
environmental and programmatic data sources.
(c) A State agency seeking programmatic flexibility is encouraged to
include a description of efforts to involve the public in developing the
State agency's priorities.
Sec. 35.138 Competitive grants.
(a) Some environmental program grants are awarded through a
competitive process. An applicant and the Regional Administrator may
agree to add funds available for a competitive grant to a Performance
Partnership Grant. If this is done, the work plan commitments that would
have been included in the competitive grant must be included in the
Performance Partnership Grant work plan. After the funds have been added
to the Performance Partnership Grant, the recipient does not need to
account for these funds in accordance with the funds' original
environmental program source.
(b) If the projected completion date for competitive grant work plan
commitments added to a Performance Partnership Grant is after the end of
the Performance Partnership Grant funding period, the Regional
Administrator and the applicant will agree in writing as to how the work
plan commitments will be carried over into future work plans.
[[Page 429]]
Air Pollution Control (Section 105)
Sec. 35.140 Purpose.
(a) Purpose of section. Sections 35.140 through 35.148 govern Air
Pollution Control Grants to State, local, interstate, or intermunicipal
air pollution control agencies (as defined in section 302(b) of the
Clean Air Act) authorized under section 105 of the Act.
(b) Purpose of program. Air Pollution Control Grants are awarded to
administer programs that prevent and control air pollution or implement
national ambient air quality standards.
(c) Program regulations. Refer to 40 CFR parts 49, 50, 51, 52, 58,
60, 61, 62, and 81 for associated program regulations.
Sec. 35.141 Definitions.
In addition to the definitions in Sec. 35.102, the following
definitions apply to the Clean Air Act's section 105 grant program:
Implementing means any activity related to planning, developing,
establishing, carrying-out, improving, or maintaining programs for the
prevention and control of air pollution or implementation of national
primary and secondary ambient air quality standards.
Nonrecurrent expenditures are those expenditures which are shown by
the recipient to be of a nonrepetitive, unusual, or singular nature that
would not reasonably be expected to recur in the foreseeable future.
Costs categorized as nonrecurrent must be approved in the grant
agreement or an amendment thereto.
Recurrent expenditures are those expenses associated with the
activities of a continuing environmental program. All expenditures are
considered recurrent unless justified by the applicant as nonrecurrent
and approved as such in the grant award or an amendment thereto.
Sec. 35.143 Allotment.
(a) The Administrator allots air pollution control funds under
section 105 of the Clean Air Act based on a number of factors,
including:
(1) Population;
(2) The extent of actual or potential air pollution problems; and
(3) The financial need of each agency.
(b) The Regional Administrator shall allot to a State not less than
one-half of one percent nor more than 10 percent of the annual section
105 grant appropriation.
(c) The Administrator may award funds on a competitive basis.
Sec. 35.145 Maximum federal share.
(a) The Regional Administrator may provide air pollution control
agencies, as defined in section 302(b) of the Clean Air Act, up to
three-fifths of the approved costs of implementing programs for the
prevention and control of air pollution or implementing national primary
and secondary ambient air quality standards.
(b) Revenue collected pursuant to a State's Title V operating permit
program may not be used to meet the cost share requirements of section
105.
Sec. 35.146 Maintenance of effort.
(a) To receive funds under section 105, an agency must expend
annually, for recurrent section 105 program expenditures, an amount of
non-federal funds at least equal to such expenditures during the
preceding fiscal year.
(b) In order to award grants in a timely manner each fiscal year,
the Regional Administrator shall compare an agency's proposed
expenditure level, as detailed in the agency's grant application, to
that agency's expenditure level in the second preceding fiscal year.
When expenditure data for the preceding fiscal year is complete, the
Regional Administrator shall use this information to determine the
agency's compliance with its maintenance of effort requirement.
(c) If the expenditure data for the preceding fiscal year shows that
an agency did not meet the requirements of Sec. 35.146, the Regional
Administrator will take action to recover the grant funds for the year
in which the agency did not maintain its level of effort.
(d) The Regional Administrator may grant an exception to
Sec. 35.146(a) if, after notice and opportunity for a public hearing,
the Regional Administrator determines that a reduction in expenditure is
attributable to a non-selective reduction of the programs of all
executive branch agencies of the applicable unit of government.
[[Page 430]]
(e) The Regional Administrator will not award section 105 funds
unless the applicant provides assurance that the grant will not supplant
non-federal funds that would otherwise be available for maintaining the
section 105 program.
Sec. 35.147 Minimum cost share for a Performance Partnership Grant.
(a) To calculate the cost share for a Performance Partnership Grant
(see Secs. 35.130 through 35.138) in the initial and subsequent years
that it includes section 105 funds, the minimum cost share contribution
for the section 105 program will be the match requirement set forth in
Sec. 35.145, or the maintenance of effort established under Sec. 35.146
in the first year that the section 105 grant is included in a
Performance Partnership Grant, whichever is greater.
(b) If an air pollution control agency includes its section 105 air
program funding in a Performance Partnership Grant and subsequently
withdraws that program from the grant:
(1) The required maintenance of effort amount for the section 105
program for the first year after the program is withdrawn will be equal
to the maintenance of effort amount required in the year the agency
included the section 105 program in the Performance Partnership Grant.
(2) The maximum federal share for the section 105 program in the
first and subsequent years after the grant is withdrawn may not be more
than three-fifths of the approved cost of the program.
(c) The Regional Administrator may approve an exception from
paragraph (b) of this section upon determining that exceptional
circumstances justify a reduction in the maintenance of effort,
including when an air pollution control agency reduces section 105
funding as part of a non-selective reduction of the programs of all
executive branch agencies of the applicable unit of government.
Sec. 35.148 Award limitations.
(a) The Regional Administrator will not award section 105 funds to
an interstate or intermunicipal agency:
(1) That does not provide assurance that it can develop a
comprehensive plan for the air quality control region which includes
representation of appropriate State, interstate, local, Tribal, and
international interests; and
(2) Without consulting with the appropriate official designated by
the Governor or Governors of the State or States affected or the
appropriate official of any affected Indian Tribe or Tribes.
(b) The Regional Administrator will not disapprove an application
for or terminate or annul a section 105 grant without prior notice and
opportunity for a public hearing in the affected State or States.
Water Pollution Control (Section 106)
Sec. 35.160 Purpose.
(a) Purpose of section. Sections 35.160 through 35.168 govern Water
Pollution Control Grants to State and interstate agencies (as defined in
section 502 of the Clean Water Act) authorized under section 106 of the
Clean Water Act.
(b) Purpose of program. Water Pollution Control Grants are awarded
to assist in administering programs for the prevention, reduction, and
elimination of water pollution, including programs for the development
and implementation of ground-water protection strategies. Some of these
activities may also be eligible for funding under sections 104(b)(3)
(Water Quality Cooperative Agreements and Wetlands Development Grants),
205(j)(2) (Water Quality Management Planning), and section 205(g) (State
Administration Grants) of the Clean Water Act. (See Secs. 35.160,
35.360, 35.380, 35.400, and 35.410.)
(c) Associated program requirements. Program requirements for water
quality planning and management activities are provided in 40 CFR part
130.
Sec. 35.161 Definition.
Recurrent expenditures are those expenditures associated with the
activities of a continuing Water Pollution Control program. All
expenditures, except those for equipment purchases of $5,000 or more,
are considered recurrent unless justified by the applicant as
nonrecurrent and approved as such in the grant award or an amendment
thereto.
[[Page 431]]
Sec. 35.162 Basis for allotment.
(a) Allotments. Each fiscal year funds appropriated for Water
Pollution Control grants to State and interstate agencies will be
allotted to States and interstate agencies on the basis of the extent of
the pollution problems in the respective States. A portion of the funds
appropriated for States under the Water Pollution Control grant program
will be set aside for allotment to eligible interstate agencies. The
interstate allotment will be 2.6 percent of the funds available under
this paragraph.
(b) State allotment formula. The Water Pollution Control State grant
allotment formula establishes an allotment ratio for each State based on
six components selected to reflect the extent of the water pollution
problem in the respective States. The formula provides a funding floor
for each State with provisions for periodic adjustments for inflation
and a maximum funding level (150 percent of its previous fiscal year
allotment).
(1) Components and component weights--(i) Components. The six
components used in the Water Pollution Control State grant allotment
formula are: Surface Water Area; Ground Water Use; Water Quality
Impairment; Point Sources; Nonpoint Sources; and Population of Urbanized
Area. The components for the formula are presented in Table 1 of this
section, with their associated elements, sub-elements, and supporting
data sources.
[[Page 432]]
[GRAPHIC] [TIFF OMITTED] TR09JA01.019
(ii) Component weights. To account for the fact that not all of the
selected formula components contribute equally to the extent of the
pollution problem within the States, each formula component is weighted
individually. Final component weights will be phased-in by Fiscal Year
(FY) 2004, according to the schedule presented in Table 2 of this
section:
[[Page 433]]
Table 2--Component Weights in the Water Pollution Control State Grant
Allotment Formula
------------------------------------------------------------------------
FY2001-
Component FY 2000 FY2003 FY2004+
(percent) (percent) (percent)
------------------------------------------------------------------------
Surface Water Area..................... 13 13 12
Ground Water Use....................... 11 12 12
Water Quality Impairment............... 13 25 35
Point Sources.......................... 25 17 13
Nonpoint Sources....................... 18 15 13
Population of Urbanized Area........... 20 18 15
--------------------------------
Total.............................. 100 100 100
------------------------------------------------------------------------
(2) Funding floor. A funding floor is established for each State.
Each State's funding floor will be at least equal to its FY 2000
allotment in all future years unless the funds appropriated for States
under the Water Pollution Control grant program decrease from the FY
2000 amount.
(3) Funding decrease. If the appropriation for Water Pollution
Control State grants decreases in future years, the funding floor will
be disregarded and all State allotments will be reduced by an equal
percentage.
(4) Inflation adjustment. Funding floors for each State will be
adjusted for inflation when the funds appropriated for Water Pollution
Control State grants increase from the preceding fiscal year. These
adjustments will be made on the basis of the cumulative change in the
Consumer Price Index (CPI), published by the U.S. Department of Labor,
since the most recent year in which Water Pollution Control State grant
funding last increased. Inflation adjustments to State funding floors
will be capped at the lesser of the percentage change in appropriated
funds or the cumulative percentage change in the inflation rate.
(5) Cap on annual funding increases. The maximum allotment to any
State will be 150 percent of that State's allotment for the previous
fiscal year.
(6) Cap on component ratio. A component ratio is equal to each
State's share of the national total of a single component. The cap on
each of the six State formula components ratios is 10 percent. If a
State's calculated component ratio for a particular component exceeds
the 10 percent cap, the State will instead be assigned 10 percent for
that component. The component ratios for all other States will be
adjusted accordingly.
(7) Update cycle. The data used in the State formula will be
periodically updated. The first update will impact allotments for FY
2001, and will consist of updating the data used to support the Water
Quality Impairment component of the formula. These data will be updated
using the currently available Clean Water Act section 305(b) reports.
After this initial update, the data used to support all six components
of the Water Pollution Control State grant allotment formula will be
updated in FY 2003 (for use in the determination of FY 2004 allotments).
Thereafter, all data will be updated every five years (e.g., in FY 2008
for FY 2009 allotments and in FY 2013 for FY 2014 allotments.) There
will be an annual adjustment to the funding floor for all States, based
on the appropriation for Water Pollution Control State grants and
changes in the CPI.
(c) Interstate allotment formula. EPA will set-aside 2.6 percent of
the funds appropriated for the Water Pollution Control State grant
program for interstate agencies. The interstate agency Water Pollution
Control grant allotment formula consists of two parts: a base allotment
and a variable allotment.
(1) Base allotment. Each eligible interstate agency shall be
provided a base allotment of $125,000 to help fund coordination
activities among its member States. However, no more than 50 percent of
the total available interstate set-aside may be allotted as part of the
base allotment. If, given the 50 percent limitation placed on the base
allotment, the amount of interstate
[[Page 434]]
set-aside funds is insufficient to provide each interstate agency with
$125,000, then each interstate agency will receive a base allotment
equal to 50 percent of the total interstate set-aside divided by the
total number of eligible interstate agencies.
(2) Variable allotment. The variable allotment provides for funds to
be distributed to interstate agencies on the basis of the extent of the
pollution problems in the respective States. Funds not allotted under
the base allotment will be allotted to eligible interstate agencies
based on each interstate agency's share of their member States' Water
Pollution Control grant formula allotment ratios. Updates of the data
for the six components of the Water Pollution Control State grant
allocation formula will automatically result in corresponding updates to
the variable allotment portion of the interstate allotments. The
allotment ratios for those States involved in compacts with more than
one interstate agency will be allocated among such interstate agencies
based on the percentage of each State's territory that is situated
within the drainage basin or watershed area covered by each compact.
Sec. 35.165 Maintenance of effort.
To receive a Water Pollution Control grant, a State or interstate
agency must expend annually for recurrent section 106 program
expenditures an amount of non-federal funds at least equal to
expenditures during the fiscal year ending June 30, 1971.
Sec. 35.168 Award limitations.
(a) The Regional Administrator may award section 106 funds to a
State only if:
(1) The State monitors and compiles, analyzes, and reports water
quality data as described in section 106(e)(1) of the Clean Water Act;
(2) The State has authority comparable to that in section 504 of the
Clean Water Act and adequate contingency plans to implement such
authority;
(3) There is no federally-assumed enforcement as defined in section
309(a)(2) of the Clean Water Act in effect with respect to the State
agency;
(4) The State's work plan shows that the activities to be funded are
coordinated, as appropriate, with activities proposed for funding under
sections 205(g) and (j) of the Clean Water Act; and
(5) The State filed with the Administrator within 120 days after
October 18, 1972, a summary report of the current status of the State
pollution control program, including the criteria used by the State in
determining priority of treatment works.
(b) The Regional Administrator may award section 106 funds to an
interstate agency only if:
(1) The interstate agency filed with the Administrator within 120
days after October 18, 1972, a summary report of the current status of
the State pollution control program, including the criteria used by the
State in determining priority of treatment works.
(2) There is no federally-assumed enforcement as defined in section
309(a)(2) of the Clean Water Act in effect with respect to the
interstate agency.
Public Water System Supervision (Section 1443(a))
Sec. 35.170 Purpose.
(a) Purpose of section. Sections 35.170 through 35.178 govern Public
Water System Supervision Grants to States (as defined in section 1401
(13)(A) of the Safe Drinking Water Act) authorized under section 1443(a)
of the Act.
(b) Purpose of program. Public Water System Supervision Grants are
awarded to carry out public water system supervision programs including
implementation and enforcement of the requirements of the Act that apply
to public water systems.
(c) Associated program regulations. Associated program regulations
are found in 40 CFR parts 141, 142, and 143.
Sec. 35.172 Allotment.
(a) Basis for allotment. The Administrator allots funds for grants
to support States' Public Water System Supervision programs based on
each State's population, geographic area, numbers of community and non-
community water systems, and other relevant factors.
[[Page 435]]
(b) Allotment limitation. No State, except American Samoa, Guam, the
Virgin Islands, and the Commonwealth of the Northern Mariana Islands,
shall be allotted less than $334,500 (which is one percent of the FY
1989 appropriation).
Sec. 35.175 Maximum federal share.
The Regional Administrator may provide a maximum of 75 percent of
the State's approved work plan costs.
Sec. 35.178 Award limitations.
(a) Initial grants. The Regional Administrator will not make an
initial award unless the applicant has an approved Public Water System
Supervision program or agrees to establish an approvable program within
one year of the initial award.
(b) Subsequent grants. The Regional Administrator will not award a
grant to a State after the initial award unless the applicant has
assumed and maintained primary enforcement responsibility for the
State's Public Water System Supervision program.
Underground Water Source Protection (Section 1443(b))
Sec. 35.190 Purpose.
(a) Purpose of section. Sections 35.190 through 35.198 govern
Underground Water Source Protection Grants to States (as defined in
section 1401(13)(A) of the Safe Drinking Water Act) authorized under
section 1443(b) of the Act.
(b) Purpose of program. The Underground Water Source Protection
Grants are awarded to carry out underground water source protection
programs.
(c) Associated program regulations. Associated program regulations
are found in 40 CFR 124, 144, 145, 146, and 147.
Sec. 35.192 Basis for allotment.
The Administrator allots funds for grants to support State's
underground water source protection programs based on such factors as
population, geographic area, extent of underground injection practices,
and other relevant factors.
Sec. 35.195 Maximum federal share.
The Regional Administrator may provide a maximum of 75 percent of a
State's approved work plant costs.
Sec. 35.198 Award limitation.
The Regional Administrator will only award section 1443(b) funds to
States that have primary enforcement responsibility for the underground
water source protection program.
Hazardous Waste Management (Section 3011(a))
Sec. 35.210 Purpose.
(a) Purpose of section. Sections 35.210 through 35.218 govern
Hazardous Waste Management Grants to States (as defined in section 1004
of the Solid Waste Disposal Act) under section 3011(a) of the Act.
(b) Purpose of program. Hazardous Waste Management Grants are
awarded to assist States in the development and implementation of
authorized State hazardous waste management programs.
(c) Associated program regulations. Associated program regulations
are at 40 CFR part 124, subparts B, E, and F; 40 CFR parts 260 through
266; 40 CFR parts 268 through 273; and 40 CFR part 279.
Sec. 35.212 Basis for allotment.
The Administrator allots funds for Hazardous Waste Management Grants
in accordance with section 3011(b) of the Solid Waste Disposal Act based
on factors including:
(a) The extent to which hazardous waste is generated, transported,
treated, stored, and disposed of in the State;
(b) The extent to which human beings and the environment in the
State are exposed to such waste, and;
(c) Other factors the Administrator deems appropriate.
Sec. 35.215 Maximum federal share.
The Regional Administrator may provide up to 75 percent of the
approved work plant costs.
Sec. 35.218 Award limitation.
The Regional Administrator will not award Hazardous Waste Management
[[Page 436]]
Grants to a State with interim or final hazardous waste authorization
unless the applicant is the lead agency designated in the authorization
agreement.
Pesticide Cooperative Enforcement (Section 23(a)(1))
Sec. 35.230 Purpose.
(a) Purpose of section. Sections 35.230 through 35.235 govern
Pesticide Enforcement Cooperative Agreements to States (as defined in
section 2 of Federal Insecticide, Fungicide, and Rodenticide Act) under
section 23(a)(1) of the Act.
(b) Purpose of program. Pesticides Enforcement Cooperative
Agreements are awarded to assist States to implement pesticide
enforcement programs.
(c) Program regulations. Associated program regulations are at 40
CFR parts 150 through 189 and 19 CFR part 12.
Sec. 35.232 Basis for allotment.
(a) Factors for FIFRA enforcement program funding. The factors
considered in allotment of funds for enforcement of FIFRA are:
(1) The State's population,
(2) The number of pesticide-producing establishments,
(3) The numbers of certified private and commercial pesticide
applicators,
(4) The number of farms and their acreage, and
(5) As appropriate, the State's potential farm worker protection
concerns.
(b) Final allotments. Final allotments are negotiated between each
State and the appropriate Regional Administrator.
Sec. 35.235 Maximum federal share.
The Regional Administrator may provide up to 100 percent of the
approved work plan costs.
Pesticide Applicator Certification and Training (Section 23(a)(2))
Sec. 35.240 Purpose.
(a) Purpose of section. Sections 35.240 through 35.245 govern
Pesticide Applicator Certification and Training Grants to States (as
defined in section 2 of Federal Insecticide, Fungicide, and Rodenticide
Act) under section 23(a)(2) of the Act.
(b) Purpose of program. Pesticide Applicator Certification and
Training Grants are awarded to train and certify restricted use
pesticide applicators.
(c) Associated program regulations. Associated program regulations
are found in 40 CFR parts 162, 170, and 171.
Sec. 35.242 Basis for allotment.
The Regional Administrator considers two factors in allotting
pesticides applicator certification and training funds:
(a) The number of farms in each State; and
(b) The numbers of private and commercial applicators requiring
certification and recertification in each State.
Sec. 35.245 Maximum federal share.
The Regional Administrator may provide up to 50 percent of the
approved work plan costs.
Pesticide Program Implementation (Section 23(a)(1))
Sec. 35.250 Purpose.
(a) Purpose of section. Sections 35.250 through 35.259 govern
Pesticide Program Implementation Cooperative Agreements to States (as
defined in section 2 of Federal Insecticide, Fungicide, and Rodenticide
Act) under section 23(a)(1) of the Act.
(b) Purpose of program. Pesticide Program Implementation Cooperative
Agreements are awarded to assist States to develop and implement
pesticide programs, including programs that protect workers,
groundwater, and endangered species from pesticide risks and for other
pesticide management programs designated by the Administrator.
(c) Program regulations. Associated program regulations are at 40
CFR parts 150 through 189 and 19 CFR part 12.
Sec. 35.251 Basis for allotment.
(a) Factors for pesticide program implementation funding. The
factors considered in allotment of funds for pesticide program
implementation are based
[[Page 437]]
upon potential ground water, endangered species, and worker protection
concerns in each State relative to other States and on other factors the
Administrator deems appropriate for these or other pesticide program
implementation activities.
(b) Final allotments. Final allotments are negotiated between each
State and the appropriate Regional Administrator.
Sec. 35.252 Maximum federal share.
The Regional Administrator may provide up to 100 percent of the
approved work plan costs.
Nonpoint Source-Management (Section 319(h))
Sec. 35.260 Purpose.
(a) Purpose of section. Sections 35.260 through 35.268 govern
Nonpoint Source Management Grants to States (as defined in section 502
of the Clean Water Act) authorized under section 319 of the Act.
(b) Purpose of program. Nonpoint Source Management Grants may be
awarded for the implementation of EPA-approved nonpoint source
management programs, including ground-water quality protection
activities, that will advance the implementation of a comprehensive
approved nonpoint source management program.
Sec. 35.265 Maximum federal share.
The Regional Administrator may provide up to 60 percent of the
approved work plan costs in any fiscal year. The non-federal share of
costs must be provided from non-federal sources.
Sec. 35.266 Maintenance of effort.
To receive section 319 funds in any fiscal year, a State must agree
to maintain its aggregate expenditures from all other sources for
programs for controlling nonpoint pollution and improving the quality of
the State's waters at or above the average level of such expenditures in
Fiscal Years 1985 and 1986.
Sec. 35.268 Award limitations.
The following limitations apply to funds appropriated and awarded
under section 319(h) of the Act in any fiscal year.
(a) Award amount. The Regional Administrator will award no more than
15 percent of the amount appropriated to carry out section 319(h) of the
Act to any one State. This amount includes any grants to any local
public agency or organization with authority to control pollution from
nonpoint sources in any area of the State.
(b) Financial assistance to persons. States may use funds for
financial assistance to persons only to the extent that such assistance
is related to the cost of demonstration projects.
(c) Administrative costs. Administrative costs in the form of
salaries, overhead, or indirect costs for services provided and charged
against activities and programs carried out with these funds shall not
exceed 10 percent of the funds the State receives in any fiscal year.
The cost of implementing enforcement and regulatory activities,
education, training, technical assistance, demonstration projects, and
technology transfer programs are not subject to this limitation.
(d) Requirements. The Regional Administrator will not award section
319(h) funds to a State unless:
(1) Approved assessment report. EPA has approved the State's
assessment report on nonpoint sources, prepared in accordance with
section 319(a) of the Act;
(2) Approved State management program. EPA has approved the State's
management program for nonpoint sources, prepared in accordance with
section 319(b) of the Act;
(3) Progress on reducing pollutant loadings. The Regional
Administrator determines that the State made satisfactory progress in
the preceding fiscal year in meeting its schedule for achieving
implementation of best management practices to reduce pollutant loadings
from categories of nonpoint sources, or particular nonpoint sources,
designated in the State's management program. The State must have
developed this schedule in accordance with section 319(b)(2)(c) of the
Act;
(4) Activity and output descriptions. The work plan briefly
describes each significant category of nonpoint source
[[Page 438]]
activity and the work plan commitments to be produced for each category;
and
(5) Significant watershed projects. For watershed projects whose
costs exceed $50,000, the work plan also contains:
(i) A brief synopsis of the watershed implementation plan outlining
the problem(s) to be addressed;
(ii) The project's goals and objectives; and
(iii) The performance measures or environmental indicators that will
be used to evaluate the results of the project.
Lead-Based Paint Program (Section 404(g))
Sec. 35.270 Purpose.
(a) Purpose of section. Sections 35.270 through 35.278 govern Lead-
Based Paint Program Grants to States (as defined in section 3 of the
Toxic Substances Control Act), under section 404(g) of the Act.
(b) Purpose of program. Lead-Based Paint Program Grants are awarded
to develop and carry out authorized programs to ensure that individuals
employed in lead-based paint activities are properly trained; that
training programs are accredited; and that contractors employed in such
activities are certified.
(c) Associated program regulations. Associated program regulations
are found in 40 CFR part 745.
Sec. 35.272 Funding coordination.
Recipients must use the lead-based paint program funding in a way
that complements any related assistance they receive from other federal
sources for lead-based paint activities.
State Indoor Radon Grants (Section 306)
Sec. 35.290 Purpose.
(a) Purpose of section. Sections 35.290 through 35.298 govern Indoor
Radon Grants to States (as defined in section 3 of the Toxic Substances
Control Act, which include territories and the District of Columbia)
under section 306 of the Toxic Substances Control Act.
(b) Purpose of program. (1) State Indoor Radon Grants are awarded to
assist States with the development and implementation of programs that
assess and mitigate radon and that aim at reducing radon health risks.
State Indoor Radon Grant funds may be used for the following eligible
activities:
(i) Survey of radon levels, including special surveys of geographic
areas or classes of buildings (such as public buildings, school
buildings, high-risk residential construction types);
(ii) Development of public information and education materials
concerning radon assessment, mitigation, and control programs;
(iii) Implementation of programs to control radon on existing and
new structures;
(iv) Purchase by the State of radon measurement equipment and
devices;
(v) Purchase and maintenance of analytical equipment connected to
radon measurement and analysis, including costs of calibration of such
equipment;
(vi) Payment of costs of EPA-approved training programs related to
radon for permanent State or local employees;
(vii) Payment of general overhead and program administration costs
in accordance with Sec. 35.298(d);
(viii) Development of a data storage and management system for
information concerning radon occurrence, levels, and programs;
(ix) Payment of costs of demonstration of radon mitigation methods
and technologies as approved by EPA, including State participation in
the EPA Home Evaluation Program; and
(x) A toll-free radon hotline to provide information and technical
assistance.
(2) States may use grant funds to assist local governments in
implementation of activities eligible for assistance under paragraphs
(b)(1)(ii), (iii), and (vi) of this section.
(3) In implementing paragraphs (b)(1)(iv) and (ix) of this section,
a State should make every effort, consistent with the goals and
successful operation of the State radon program, to give preference to
low-income persons.
(4) Funds appropriated for section 306 may not be used to cover the
costs of federal proficiency rating programs under section 305(a)(2) of
the Act.
[[Page 439]]
Funds appropriated for section 306 and grants awarded under section 306
may be used to cover the costs of State proficiency rating programs.
Sec. 35.292 Basis for allotment.
(a) The Regional Administrator will allot State Indoor Radon Grant
funds based on the criteria in EPA Guidance in accordance with sections
306(d) and (e) of the Toxic Substances Control Act.
(b) No State may receive a State Indoor Radon Grant in excess of 10
percent of the total appropriated amount made available each fiscal
year.
Sec. 35.295 Maximum federal share.
The Regional Administrator may provide State agencies up to 50
percent of the approved costs for the development and implementation of
radon program activities.