[Federal Register Volume 61, Number 200 (Tuesday, October 15, 1996)]
[Notices]
[Pages 53757-53759]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26247]


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AGENCY FOR INTERNATIONAL DEVELOPMENT


Notice

    Pursuant to Section 207(d) of the Agricultural Trade and 
Development and Assistance Act of 1954, as amended, (otherwise known as 
Pub. L. 480), notice is hereby given that the Pub. L. 480 Title II 
Draft Close-Out Guidance is being made available to interested parties 
for the required thirty (30) day comment period.
    Individuals who wish to receive a copy of the draft guidelines 
should contact: Office of Food for Peace, Room 323, SA-8, Agency for 
International Development, Washington, D.C. 20523-0809. Contact person: 
Gwen Johnson, (703) 351-0110. Individuals who have questions or 
comments on the draft guidelines, should contact Susan Morawetz at 
(703) 351-0135.
    The thirty day comment period will begin on the date that this 
announcement is published in the Federal Register.

    Dated: September 26, 1996.
William T. Oliver,
Director, Office of Food for Peace.

PUBLIC LAW 480, TITLE II CLOSE-OUT PLAN GUIDANCE

Background

    This guidance should be used by all Title II projects that are in 
the process of closing out, and the documents described below should be 
used as a reference in preparing a close-out plan. Cooperating Sponsors 
(CSs) should plan to submit close-up plans to the Office of Food for 
Peace (FFP) six months prior to the expiration of the project/activity 
authorization, unless there have been discussions with BHR/FFP 
concerning continuation of the project.

I. Reference Documents

    A. USAID Regulation 11, Section 211.11 Suspension, termination and 
expiration of program.
    This section states, in pertinent parts, that:
    ``(a) Termination or Suspension by A.I.D.* * * When a program is 
terminated or suspended, title to commodities which have been 
transferred to the cooperating sponsor, or monetized proceeds, program 
income and real or personal property procured with monetized proceeds 
or program income shall, at the written request of USAID, the 
Diplomatic Post or AID/W, be transferred to the U.S. Government by the 
cooperating sponsor or shall otherwise be transferred by the 
cooperating sponsor as directed by A.I.D. Any then excess commodities 
on hand at the time the program is terminated shall be disposed of in 
accordance with Section 211.5 (o) and (p) or as otherwise instructed by 
USAID or the Diplomatic Post.''
    ``(b) Expiration of Program. Upon expiration of the approved 
program under circumstances other than those described in paragraph 
(a), the cooperating sponsor shall deposit with the U.S. Disbursing 
Officer, American Embassy, with instructions to credit the deposit to 
CCC Account No. 20FT401, any remaining monetized proceeds or program 
income, or the cooperating sponsor shall obtain approval from AID/W for 
the use of such monetized proceeds or program income, or real or 
personal property procured with such proceeds or income, for purposes 
consistent with those authorized for support from A.I.D.''
    Based on the above, all remaining property, funds and commodities 
must be accounted for at the termination of the project and transferred 
to the USG, unless USAID approves a plan to allow the Cooperating 
Sponsor (CS) to use or dispose of the assets. Thus, the close-out plan 
must be negotiated between USAID and the Cooperating Sponsor for the 
disposition of all remaining assets.
B. OMB Circular A-110 and Handbook 13--Grants:
    In preparing the guidance, BHR/FFP has followed the following:
    (1) OMB Circular A-110;
    (2) AID Handbook (HB) 13 for grants;
    (3) AID's codification of OMB Circular A-110, called 22 CFR 226; 
and
    (4) AID's Automated Directives System (ADS) Chapter 591 on 
Financial Audits of USAID Contractors, Grantees and Host Government 
Recipients (which will soon be available on the Internet).
    Note that Circular A-110 pertains to all U.S. Government-supported 
grants and agreements, and HB 13 interprets sections of A-110 relevant 
for AID-funded agreements. Per HB 13, close-out is defined as follows: 
``The closeout of a grant or cooperative agreement is the process by 
which AID determines that all applicable administrative actions and all 
required work of the grant or cooperative agreement have been completed 
by the recipient and AID * * *''
    Handbook 13 also states that ``AID closeout procedures include the 
following requirements:
    a. Upon request, AID shall make prompt payments to a recipient for 
allowable reimbursable costs under the grant or cooperative agreement 
being closed out.
    b. The recipient shall immediately refund any balance of 
unobligated (unencumbered) cash that AID has advanced or paid and that 
is not authorized to be retained by the recipient for use in other 
grants or cooperative agreements.
    c. AID shall obtain from the recipient within 90 calendar days 
after the date of completion of the grant or cooperative agreement all 
financial, performance, and other reports required as the condition of 
the grant or cooperative agreement. AID may grant extensions when 
requested by the recipient.
    d. When authorized by the grant or cooperative agreements, AID 
shall make a settlement for any upward or downward adjustments to AID's 
share of costs after these reports are received.
    e. The recipient shall account for any property acquired with AID 
funds, or received from the Government in accordance with the 
provisions of paragraph 1T of this chapter.
    f. In the event a final audit has not been performed prior to the 
closeout of the grant or cooperative agreement, AID shall retain the 
right to recover an appropriate amount after fully considering the 
recommendations on questioned costs resulting from the final audit.''
C. USAID Regulation 2, Overseas Shipments of Supplies by Voluntary Non-
Profit Relief Agencies
    Cooperating Sponsors that received PL480 funds for Ocean, Inland, 
Internal Transportation, Storage and Handling (ITSH) should also report 
on the status of these funds in their close-out plans. ITSH would only 
apply to CSs implementing emergency rather than development programs. 
USAID

[[Page 53758]]

Regulation 2 for Shipping should be referenced for this purpose.

II. Regulations and Sources of USAID Funds

    Regulation 11 (22 CFR, Part 211) pertains to use and disposition of 
Title II resources. However, because Reg. 11 does not contain specific 
grant agreement language, AID's Handbook 13 is typically used as 
guidance in the management of Section 202(e) grants. Thus, this 
handbook, any provisions that are part of a CS's grant agreement, as 
well as the 22 CFR (Part 226.71--Close Out Procedures) should be 
referenced when closing out Section 202(e) grants and activities. 
Likewise, if a CS has received Development Assistance (DA) resources 
(most likely through a Mission-funded grant), the CS should use 
Handbook 13 and 22. CFR, Sub-Part D for reference.

    Note on Relationship of This Guidance to Other AID Regulations 
and Instructions: Grants and cooperative agreements negotiated with 
USAID frequently contain standard provisions for closing them out. 
The close-out provisions in these grant agreements should be 
consistent with provisions found in the regulations and handbooks 
cited above. The food-aid related grants most likely to contain 
close-out language include the following: Section 202(e), 
Institutional Strengthening Grants (ISGs), and Development 
Assistance Grants provided by the Mission for Title II program 
support.
    It is also important to note that because most food aid projects 
receive more than one type of funding (e.g. Title II commodities, 
202(e), ISGs, ITSH, etc.), CSs will be expected to follow the close-
out regulations associated with each of these resources (as 
stipulated in the grant agreement or funding document). The guidance 
contained herewith is not intended to replace any of the regulations 
associated with specific funding sources, but rather to provide a 
format in which CSs can report to BHR/FFP and USAID Missions their 
overall plans for closing out a specific food aid program, 
regardless of the source of funding.

III. Responsibilities Within USAID

    Note that BHR/FFP serves as Grants Officer for Section 202(e) 
grants and handles Title II-related issues; M/OP serves as Grants 
Officer for Institutional Strengthening Grants, Matching Grants and 
other DA-funded support from Washington. If grants were provided 
directly by Missions to CSs, the Mission grants officer will need to be 
consulted on termination of the grant during close out. Although 
coordination with several offices could be required depending upon the 
source of funds, in all cases, both the Mission and BHR/FFP should be 
consulted during close out and receive copies of the CS's close-out 
plans. The CS should also expect to work closely with the Mission in 
determining the feasibility of various close-out options.
    Although Missions and FFP should both be consulted during close-
out, note that final approval of close-out plans will be carried out in 
accordance with the signed agreements between USAID and the Cooperating 
Sponsors, and approved as follows:
    Title II commodities, Section 202(e), monetization proceeds, and 
ITSH: Final approval will be provided by BHR/FFP with Mission 
concurrence.
    Development Assistance Funds, Including FFP-provided Institutional 
Strengthening Grants: Final approval will be provided by the cognizant 
grants officer whose office awarded the grant. This would likely be the 
Mission (if the funds were Mission provided) or the Office of 
Procurement in AID/Washington.

Guidelines For Preparing Plan

    To assist in preparation of close-out plans for submission to 
Missions and USAID/W, BHR/FFP is providing the following guidance for 
submission of closeout plans by all CSs:

I. Summary on Close-Out

    (1) Provide a brief summary of why the project is being suspended/
terminated and the implications, if any, for the country and Title II 
beneficiaries, the project, and the CS's in-country operations.
    (2) Provide a brief summary of resources provided over the life of 
the project by USAID, the CS, the host government, other donors and 
beneficiaries. Also briefly summarize the sectors supported, and the 
location in the country where investments were made.
    (3) Provide a brief summary (by component if relevant) of where the 
project is at this point in meeting its stated goals and objectives, 
and where it will be at the date of close out.
    (4) State whether there have been any recent audits of the project 
(or will be) and the status of resolving outstanding audit 
recommendations. Attach a copy of the audit to the close-out plan or 
send separately to the USAID Mission and BHR/FFP (if this has not 
already occurred).
    (5) State whether there have been (or will be) a final or impact 
evaluation of the project. If it has been completed, attach a copy of 
the evaluation to the close-out plan or send separately to the USAID 
Mission and BHR/FFP (if this has not already occurred). If an 
evaluation has not been completed but is planned, discuss briefly plans 
to carry out the evaluation and if possible, attach the evaluation 
Scope of Work (SOW).

II. Lessons Learned

    Provide a brief summary of lessons learned from the project that 
might be relevant to design, implementation and evaluation of other 
Title II projects, either in the present country or others.

III. Close-Out Schedule

    Provide a detailed implementation plan and schedule for closing out 
the project that details the disposition of property and equipment; the 
termination of staff; the finalization of all audits, evaluations and 
required reports; the settling of claims; and other critical 
activities.

IV. Final Reports

    Provide any reports (e.g. final report, Annual Results Report, 
Final Evaluation) required either in the project agreement, or in 
writing by USAID.

V. Disposition of Commodities, Assets, Equipment, and Funds

    (1) Commodities: Prior to the project completion date, all 
commodities should be distributed to the intended recipients. If this 
is not possible, the CS should propose an alternative solution, and 
advise the Mission and BHR/FFP of the quantities, location and 
condition of the food.
    (2) Non-expendable property/equipment procured through Section 
202(e), monetization or other USAID-provided funds: The close-out plan 
should include an inventory of all non-expendable property/equipment 
procured with funds provided by USAID, or obtained through a 
monetization of Title II commodities with a unit acquisition cost 
exceeding $5000, and with a useful life estimated to exceed two years. 
The CS should describe how it proposes to dispose of each piece of 
property and what will be done with the proceeds if the items are sold.

    (Note: For additional information on and definitions of non-
expendable property/equipment (as defined by the U.S. Government), 
please check OMB Circular 110, Subpart A and/or USAID's 22 CFR, 
sections 226.2, 226.34 and 226.71).
(3) Monetization-Generated Local Currency and Program Income
    (a) The close-out plan should identify the balance of local 
currency and program income that will remain at the date of close out. 
Note that local currency and program income should include all 
resources applied to implementation of the subject Title II

[[Page 53759]]

project, including Title II and Title III monetization proceeds, 
interest and reflows, container funds and beneficiary contributions. If 
a balance is anticipated, the close-out plan should describe a proposed 
use or transfer of the remaining monetization proceeds. Proposed uses 
must be consistent with those authorized in USAID Regulation 11, 
Section 211.5.
    (b) If USAID authorizes use of remaining local currency and program 
income by the cooperating sponsor, to ensure that the resources are 
being used for the agreed-upon purpose, the CS will be expected to 
report annually on how these funds, as well as any interest and 
reflows, are being used. USAID and the CS will negotiate the length of 
time this annual reporting shall continue, based upon what makes sense 
given the agreed-upon activities. Use of the funds should also be 
reflected in the CS's annual A-133 audit.
    For use of local currencies and program income in revolving 
accounts or similar mechanisms, in addition to the aforementioned 
reports and audits, it is likely that the appropriate Food for Peace 
Officer/USAID Food Aid manager will have to actually monitor the 
account's first use of the post-program funds (one revolution or one 
cycle of the revolving account after close-out).
(4) Dollar resources (from Section 202(e), Mission provided Development 
Assistance (DA) funding, and Title II Transportation Funding)
    (a) As stated in the background section, for any dollar resources 
provided by USAID for support of food aid programs, the Cooperating 
Sponsor should follow any close-out guidance attached as standard 
provisions to its grant agreement.
    (b) The CS should provide detailed information on all outstanding 
invoices that will be submitted for ocean and inland transportation 
charges applicable to the close-out project/activity. Only invoices for 
reported charges can be honored.
    (c) If there are ITSH resources remaining at the end of the 
project, these funds can be used in other countries approved in the 
Procurement Authorization and Purchase Request (PA/PR). Otherwise, the 
ITSH funds will be deobligated and returned to the U.S. Government. In 
all cases, the CS will need to submit a pipeline analysis and proposal 
for using or returning remaining ITSH funds to FFP's Emergency Response 
Division, prior to any movement of funds.
    (d) As with remaining monetized funds, the close-out plan should 
identify the source and balance of all dollar resources (including 
interest and reflows) that will remain at the date of close out. If a 
balance is anticipated, the close-out plan should include a proposed 
use or transfer of the remaining dollar proceeds. Proposed uses must be 
consistent with those authorized in USAID Regulation 11. Note that 
because dollar resources require the greatest degree of monitoring by 
the U.S. Government, USAID Offices and Missions will be encouraged not 
to approve the reprogramming of remaining U.S. dollar resources after 
close-out, but rather to have these funds returned to the U.S. 
Government.
    (e) If USAID should authorize the use of remaining dollar resources 
by the cooperating sponsor, to ensure that the resources are being used 
for the agreed-upon purposes, the CS will be expected to report 
annually on how these funds, as well as any interest and reflows, are 
being used. USAID and the CS will negotiate the length of time this 
annual reporting shall continue, as well as the likelihood of on-site 
monitoring by the appropriate regional or other Food For Peace Officer/
USAID Food Aid manager, based upon what makes sense given the agreed-
upon activities. Use of the funds should also be reflected in the CS's 
annual A-133 audit.

VI. Outstanding Claims

    (a) All outstanding claims resulting from damage, loss or improper 
distribution of commodities must be completed prior to termination of 
the Title II agreement. These must be done in accordance with section 
211.9 of Regulation 11.
    (b) It is recommended that before the close-out plan is submitted, 
the CS notify USAID (the Mission and BHR/FFP) in writing if there are 
losses for which it is directly responsible pursuant to Reg. 11, 
Section 211.9(d). These cases will need to be individually reviewed by 
USAID and by the U.S. Department of Agriculture's (USDA's) Office of 
Debt Management, which should be contacted at the following: USDA 
Office of Debt Management, Kansas City Management Office, P.O. Box 
419205, Kansas City, MO 64141-6205, phone: (816) 926-6158.
    (c) It is also advisable that before the close-out plan is 
submitted, the CS notify the Mission and BHR/FFP if there are losses 
due to the fault of others, pursuant to Reg. 11, Section 211.9(e), and 
whether the CS has filed a claim, made demands for collection, and 
pursued legal action. These cases will have to be individually reviewed 
by USAID and by USDA.

VII. Audit

    (a) A U.S.-based non-profit organization is required to submit its 
OMB Circular A-133 Audits within 13 months after the close of its 
fiscal year, which shall be accepted as fulfilling the close-out audit 
requirements. Individual close-out audits (of specific country 
projects) will only be requested when a specific need is identified by 
USAID personnel, and coordinated with the Office of Procurement's 
Contract Audit Management Branch (M/OP/PS/CAM). (Ref. ADS 591.5.8).
    (b) For non-U.S.-based organizations, the contract/grant officer 
shall determine whether a close-out audit shall be conducted based on a 
review of the organization's audits covering all of the fiscal year 
periods for the agreements to be closed out. A request for a specific 
close-out audit shall be made by USAID personnel to the cognizant 
Regional Inspector General's Office (Ref. ADS 591.5.8).
    (c) Should an audit concern arise regarding receipt and 
disbursement of Title II program and grant funds, such records shall be 
retained for 3 years from the receipt by USAID of the audit report.

VIII. Personnel

    To the extent that the CS must discharge and/or reassign staff as a 
result of this program termination, the CS must comply with all 
discharge, reassignment and severance laws of the host country. The 
close-out plan should describe how this will be accomplished and the 
associated costs.

IX. Close-Out Budget

    The CS should provide a budget detailing all costs associated with 
close-out (e.g. legal resolution of claims, payment of loans, 
disposition of property, completion of audits and evaluations, and 
termination of personnel). The plan should clearly identify whether 
these expenditures were planned in the original program budget, or 
whether additional resources will be needed to meet these expenses. If 
the latter, the plan should describe how the CS plans to cover these 
unanticipated expenses.

X. Other Relevant Information

    If there is other information relevant to the close-out of this 
Title II project which has not been requested in other parts of this 
guidance, the CS should provide this information under item X.

[FR Doc. 96-26247 Filed 10-11-96; 8:45 am]
BILLING CODE 6116-01-M