Federal Register: May 11, 2004 (Volume 69, Number 91)
DOCID: FR Doc 04-10352
OFFICE OF MANAGEMENT AND BUDGET
Treasury Department
CFR Citation: 2 CFR Part 215
NOTICE: Part V
DOCUMENT ACTION: Policy guidance relocation to 2 CFR chapter II.
SUBJECT CATEGORY:
Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations (OMB Circular A-110)
DATES: Part 215 is effective May 11, 2004. This document republishes the existing OMB Circular A110, which already is in effect.
DOCUMENT SUMMARY:
The Office of Management and Budget (OMB) is relocating Circular A110 to title 2 in the Code of Federal Regulations (2 CFR), subtitle A, chapter II, subchapter B, part 215 as part of an initiative to provide the public with a central location for Federal government policies on grants and other financial assistance and nonprocurement agreements. This document relates to the previous document in today's Federal Register which established 2 CFR as that central location. Consolidating the OMB guidance and colocating the agency regulations provides a good foundation for streamlining and simplifying the policy framework for grants and agreements as part of the efforts to implement the Federal Financial Assistance Management Improvement Act of 1999 (Pub. L. 106107).
SUMMARY:
Executive Office of the President, Management and Budget Office,
SUPPLEMENTAL INFORMATION
In a Federal Register document [68 FR 33883] published on June 6, 2003, OMB proposed to establish title 2 of the Code of Federal Regulations (CFR) to serve as the central location for Federal government policies on grants and other financial assistance and nonprocurement agreements. The document in today's Federal Register immediately preceding this notice describes the comments received on the proposal and our responses and establishes the new title 2 CFR, with a subtitle AGovernmentwide Grants and Agreements, and a subtitle BFederal Agency Regulations for Grants and Agreements.
It is important to note that OMB plans to publish its guidance in title 2 in two phases. In the first phase, we are publishing the circulars in their current form in chapter II of subtitle A. During the first phase, agencies may publish their regulations implementing this guidance in subtitle B if they wish, but are not required to do so. In the second phase, OMB will publish guidance in chapter I of subtitle A after we: (1) Propose for public comment any changes to streamline and simplify the guidance based on recommendations from the interagency working groups implementing Public Law 106107; and (2) resolve the comments and finalize the guidance with the help of the working groups.
The OMB guidance published in this notice is a relocation of OMB Circular A110, Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other NonProfit Organizations. We have made minor adjustments to conform to the formatting requirements of the CFR, but there are no substantive changes of any type. Agency implementing regulations may continue to reference this guidance using its circular number, title, and section numbers which remain the same, only now preceded by the 2 CFR part number (215). For example, under OMB Circular A110, section 24 discusses program income, and in 2 CFR program income is discussed in Sec. 215.24.
List of Subjects in 2 CFR Part 215
Accounting, Colleges and universities, Grant programs, Grants
administration, Hospitals, Nonprofit organizations, Reporting and recordkeeping requirements.
Dated: April 29, 2004.
Joshua B. Bolten,
Director.
Authority and Issuance
For the reasons set forth above, the Office of Management and Budget
amends 2 CFR subtitle A, chapter II by adding a part 215 as set forth below.
[[Page 26282]]
PART 215UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND
AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NONPROFIT ORGANIZATIONS (OMB CIRCULAR A110)
Sec.
215.0 About this part.
Subpart AGeneral
215.1 Purpose.
215.2 Definitions.
215.3 Effect on other issuances.
215.4 Deviations.
215.5 Subawards.
Subpart BPreAward Requirements
215.10 Purpose.
215.11 Preaward policies.
215.12 Forms for applying for Federal assistance.
215.13 Debarment and suspension.
215.14 Special award conditions.
215.15 Metric system of measurement.
215.16 Resource Conservation and Recovery Act.
215.17 Certifications and representations.
Subpart CPostAward Requirements
Financial and Program Management
215.20 Purpose of financial and program management.
215.21 Standards for financial management systems.
215.22 Payment.
215.23 Cost sharing or matching.
215.24 Program income.
215.25 Revision of budget and program plans.
215.26 NonFederal audits.
215.27 Allowable costs.
215.28 Period of availability of funds.
215.29 Conditional exemptions.
Property Standards
215.30 Purpose of property standards.
215.31 Insurance coverage.
215.32 Real property.
215.33 Federallyowned and exempt property.
215.34 Equipment.
215.35 Supplies and other expendable property.
215.36 Intangible property.
215.37 Property trust relationship.
Procurement Standards
215.40 Purpose of procurement standards.
215.41 Recipient responsibilities.
215.42 Codes of conduct.
215.43 Competition.
215.44 Procurement procedures.
215.45 Cost and price analysis.
215.46 Procurement records.
215.47 Contract administration.
215.48 Contract provisions.
Reports and Records
215.50 Purpose of reports and records.
215.51 Monitoring and reporting program performance.
215.52 Financial reporting.
215.53 Retention and access requirements for records.
Termination and Enforcement
215.60 Purpose of termination and enforcement.
215.61 Termination.
215.62 Enforcement.
Subpart DAftertheAward Requirements
215.70 Purpose.
215.71 Closeout procedures.
215.72 Subsequent adjustments and continuing responsibilities. 215.73 Collection of amounts due.
Appendix A to Part 215Contract Provisions
Authority: 31 U.S.C. 503; 31 U.S.C. 1111; 41 U.S.C. 405;
Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR 10737, 3 CFR, 19661970, p. 939.
Sec. 215.0 About this part.
(a) Purpose. This part contains OMB guidance to Federal agencies on
the administration of grants to and agreements with institutions of
higher education, hospitals, and other nonprofit organizations. The
guidance sets forth standards for obtaining consistency and uniformity
in the agencies' administration of those grants and agreements.
(b) Applicability. (1) Except as provided herein, the standards set
forth in this part are applicable to all Federal agencies. If any
statute specifically prescribes policies or specific requirements that
differ from the standards provided in this part, the provisions of the statute shall govern.
(2) The provisions of subparts A through D of this part shall be
applied by Federal agencies to recipients. Recipients shall apply the
provisions of those subparts to subrecipients performing substantive
work under grants and agreements that are passed through or awarded by
the primary recipient, if such subrecipients are organizations described in paragraph (a) of this section.
(3) This part does not apply to grants, contracts, or other
agreements between the Federal Government and units of State or local
governments covered by OMB Circular A102, ``Grants and Cooperative
Agreements with State and Local Governments'' \1\ and the Federal
agencies' grants management common rule (see Sec. 215.5) which
standardize the administrative requirements Federal agencies impose on
State and local grantees. In addition, subawards and contracts to State
or local governments are not covered by this part. However, this part
applies to subawards made by State and local governments to organizations covered by this part.
\1\ See 5 CFR 1310.9 for availability of OMB circulars.
(4) Federal agencies may apply the provisions of subparts A through
D of this part to commercial organizations, foreign governments,
organizations under the jurisdiction of foreign governments, and international organizations.
(c) OMB responsibilities. OMB is responsible for:
(1) Issuing and maintaining the guidance in this part.
(2) Interpreting the policy requirements in this part and providing
assistance to ensure effective and efficient implementation.
(3) Reviewing Federal agency regulations implementing the guidance in this part, as required by Executive Order 12866.
(4) Granting any deviations to Federal agencies from the guidance
in this part, as provided in Sec. 215.4. Exceptions will only be made
in particular cases where adequate justification is presented.
(5) Conducting broad oversight of governmentwide compliance with the guidance in this part.
(d) Federal agency responsibilities. The head of each Federal
agency that awards and administers grants and agreements subject to the guidance in this part is responsible for:
(1) Implementing the guidance in subparts A through D of this part
by adopting the language in those subparts unless different provisions are required by Federal statute or are approved by OMB.
(2) Ensuring that the agency's components and subcomponents comply
with the agency's implementation of the guidance in subparts A through D of this part.
(3) Requesting approval from OMB for deviations from the guidance
in subparts A through D of this part in situations where the guidance requires that approval.
(4) Performing other functions specified in this part.
(e) Relationship to previous issuance. The guidance in this part
previously was issued as OMB Circular A110. Subparts A through D of
this part contain the guidance that was in the attachment to the OMB
circular. Appendix A to this part contains the guidance that was in the appendix to the attachment.
(f) Information Contact. Further information concerning this part
may be obtained by contacting the Office of Federal Financial
Management, Office of Management and Budget, Washington, DC 20503, telephone (202) 3953993.
[[Page 26283]]
(g) Termination Review Date. This part will have a policy review three years from the date of issuance.
Subpart AGeneral
Sec. 215.1 Purpose.
This part establishes uniform administrative requirements for
Federal grants and agreements awarded to institutions of higher
education, hospitals, and other nonprofit organizations. Federal
awarding agencies shall not impose additional or inconsistent
requirements, except as provided in Sec. 215.4, and Sec. 215.14 or
unless specifically required by Federal statute or executive order.
Nonprofit organizations that implement Federal programs for the States are also subject to State requirements.
Sec. 215.2 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
intransit insurance, shall be included or excluded from the unit
acquisition cost in accordance with the recipient's regular accounting practices.
(d) Advance means a payment made by Treasury check or other
appropriate payment mechanism to a recipient upon its request either
before outlays are made by the recipient or through the use of predetermined payment schedules.
(e) Award means financial assistance that provides support or
stimulation to accomplish a public purpose. Awards include grants and
other agreements in the form of money or property in lieu of money, by
the Federal Government to an eligible recipient. The term does not
include: technical assistance, which provides services instead of
money; other assistance in the form of loans, loan guarantees, interest
subsidies, or insurance; direct payments of any kind to individuals;
and, contracts which are required to be entered into and administered under procurement laws and regulations.
(f) Cash contributions means the recipient's cash outlay, including
the outlay of money contributed to the recipient by third parties.
(g) Closeout means the process by which a Federal awarding agency
determines that all applicable administrative actions and all required
work of the award have been completed by the recipient and Federal awarding agency.
(h) Contract means a procurement contract under an award or
subaward, and a procurement subcontract under a recipient's or subrecipient's contract.
(i) Cost sharing or matching means that portion of project or program costs not borne by the Federal Government.
(j) Date of completion means the date on which all work under an
award is completed or the date on the award document, or any supplement or amendment thereto, on which Federal sponsorship ends.
(k) Disallowed costs means those charges to an award that the
Federal awarding agency determines to be unallowable, in accordance
with the applicable Federal cost principles or other terms and conditions contained in the award.
(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 $5,000 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 nonprofit institution of higher
education or nonprofit 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 inkind 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 inkind 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
[[Page 26284]]
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. 215.24(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 federallyfunded projects, the sale of commodities or items
fabricated under an award, license fees and royalties on patents and
copyrights, and interest on loans made with award funds. Interest
earned on advances of Federal funds is not program income. Except as
otherwise provided in Federal awarding agency regulations or the terms
and conditions of the award, program income does not include the
receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them.
(y) Project costs means all allowable costs, as set forth in the
applicable Federal cost principles, incurred by a recipient and the
value of the contributions made by third parties in accomplishing the objectives of the award during the project period.
(z) Project period means the period established in the award document during which Federal sponsorship begins and ends.
(aa) Property means, unless otherwise stated, real property, equipment, intangible property and debt instruments.
(bb) Real property means land, including land improvements,
structures and appurtenances thereto, but excludes movable machinery and equipment.
(cc) Recipient means an organization receiving financial assistance
directly from Federal awarding agencies to carry out a project or
program. The term includes public and private institutions of higher
education, public and private hospitals, and other quasipublic and
private nonprofit 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 governmentowned contractor
operated facilities or research centers providing continued support for
missionoriented, largescale programs that are governmentowned or
controlled, or are designated as federallyfunded 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 nonprofit institutions. ``Research''
is defined as a systematic study directed toward fuller scientific
knowledge or understanding of the subject studied. ``Development'' is
the systematic use of knowledge and understanding gained from research
directed toward the production of useful materials, devices, systems,
or methods, including design and development of prototypes and
processes. The term research also includes activities involving the
training of individuals in research techniques where such activities
utilize the same facilities as other research and development
activities and where such activities are not included in the instruction function.
(ee) Small awards means a grant or cooperative agreement not
exceeding the small purchase threshold fixed at 41 U.S.C. 403(11) (currently $25,000).
(ff) Subaward means an award of 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 Sec. 215.2(e).
(gg) Subrecipient means the legal entity to which a subaward is
made and which is accountable to the recipient for the use of the funds
provided. The term may include foreign or international organizations
(such as agencies of the United Nations) at the discretion of the Federal awarding agency.
(hh) Supplies means all personal property excluding equipment,
intangible property, and debt instruments as defined in this section,
and inventions of a contractor conceived or first actually reduced to
practice in the performance of work under a funding agreement
(``subject inventions''), as defined in 37 CFR part 401, ``Rights to
Inventions Made by Nonprofit Organizations and Small Business Firms
Under Government Grants, Contracts, and Cooperative Agreements.''
(ii) Suspension means an action by a Federal awarding agency that
temporarily withdraws Federal sponsorship under an award, pending
corrective action by the recipient or pending a decision to terminate
the award by the Federal awarding agency. Suspension of an award is a
separate action from suspension under Federal agency regulations
implementing E.O. 12549 (51 FR 6370, 3 CFR, 1986 Comp., p. 189) and
E.O. 12689 (54 FR 34131, 3 CFR, 1989 Comp., p. 235), ``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 inkind contributions means the value of noncash
contributions provided by nonFederal 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 whereby funds are
advanced to the recipient to cover its estimated disbursement needs for a given initial period.
Sec. 215.3 Effect on other issuances.
For awards subject to this part, all administrative requirements of
codified program regulations, program manuals, handbooks and other
nonregulatory materials which are inconsistent with the requirements of
this part shall be superseded, except to the extent they are required
by statute, or authorized in accordance with the deviations provision in Sec. 215.4.
[[Page 26285]]
Sec. 215.4 Deviations.
The Office of Management and Budget (OMB) may grant exceptions for classes of grants or recipients subject to the requirements of this part when exceptions are not prohibited by statute. However, in the interest of maximum uniformity, exceptions from the requirements of this part shall be permitted only in unusual circumstances. Federal awarding agencies may apply more restrictive requirements to a class of recipients when approved by OMB. Federal awarding agencies may apply less restrictive requirements when awarding small awards, except for those requirements which are statutory. Exceptions on a casebycase basis may also be made by Federal awarding agencies.
Sec. 215.5 Subawards.
Unless sections of this part specifically exclude subrecipients
from coverage, the provisions of this part shall be applied to
subrecipients performing work under awards if such subrecipients are
institutions of higher education, hospitals or other nonprofit
organizations. State and local government subrecipients are subject to
the provisions of regulations implementing the grants management common
rule, ``Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments,'' published at 7 CFR parts
3015 and 3016, 10 CFR part 600, 13 CFR part 143, 15 CFR part 24, 22 CFR
part 135, 24 CFR parts 44, 85, 111, 511, 570, 571, 575, 590, 850, 882,
905, 941, 968, 970, and 990, 28 CFR part 66, 29 CFR parts 97 and 1470,
32 CFR part 278, 34 CFR parts 74 and 80, 36 CFR part 1207, 38 CFR part
43, 40 CFR parts 30, 31, and 33, 43 CFR part 12, 44 CFR part 13, 45 CFR
parts 74, 92, 602, 1157, 1174, 1183, 1234, and 2015, and 49 CFR part 18.
Subpart BPreAward Requirements
Sec. 215.10 Purpose.
Sections 215.11 through 215.17 prescribe forms and instructions and
other preaward matters to be used in applying for Federal awards. Sec. 215.11 Preaward policies.
(a) Use of Grants and Cooperative Agreements, and Contracts. In
each instance, the Federal awarding agency shall decide on the
appropriate award instrument (i.e., grant, cooperative agreement, or
contract). The Federal Grant and Cooperative Agreement Act (31 U.S.C.
630108) governs the use of grants, cooperative agreements and
contracts. A grant or cooperative agreement shall be used only when the
principal purpose of a transaction is to accomplish a public purpose of
support or stimulation authorized by Federal statute. The statutory
criterion for choosing between grants and cooperative agreements is
that for the latter, ``substantial involvement is expected between the
executive agency and the State, local government, or other recipient
when carrying out the activity contemplated in the agreement.''
Contracts shall be used when the principal purpose is acquisition of
property or services for the direct benefit or use of the Federal Government.
(b) Public Notice and Priority Setting. Federal awarding agencies
shall notify the public of its intended funding priorities for
discretionary grant programs, unless funding priorities are established by Federal statute.
Sec. 215.12 Forms for applying for Federal assistance.
(a) Federal awarding agencies shall comply with the applicable
report clearance requirements of 5 CFR part 1320, ``Controlling
Paperwork Burdens on the Public,'' with regard to all forms used by the
Federal awarding agency in place of or as a supplement to the Standard Form 424 (SF424) series.
(b) Applicants shall use the SF424 series or those forms and instructions prescribed by the Federal awarding agency.
(c) For Federal programs covered by E.O. 12372, ``Intergovernmental
Review of Federal Programs,'' (47 FR 30959, 3 CFR, 1982 Comp., p. 197)
the applicant shall complete the appropriate sections of the SF424
(Application for Federal Assistance) indicating whether the application
was subject to review by the State Single Point of Contact (SPOC). The
name and address of the SPOC for a particular State can be obtained
from the Federal awarding agency or the Catalog of Federal Domestic
Assistance. The SPOC shall advise the applicant whether the program for
which application is made has been selected by that State for review.
(d) Federal awarding agencies that do not use the SF424 form
should indicate whether the application is subject to review by the State under E.O. 12372.
Sec. 215.13 Debarment and suspension.
Federal awarding agencies and recipients shall comply with the nonprocurement debarment and suspension common rule (see Sec. 215.5) implementing E.O.s 12549 and 12689, ``Debarment and Suspension.'' This common rule restricts subawards and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Sec. 215.14 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 this part, has not conformed to the terms and conditions of a previous award, or is not otherwise responsible, Federal awarding agencies may impose additional requirements as needed, provided that such applicant or recipient is notified in writing as to: the nature of the additional requirements, the reason why the additional requirements are being imposed, the nature of the corrective action needed, the time allowed for completing the corrective actions, and the method for requesting reconsideration of the additional requirements imposed. Any special conditions shall be promptly removed once the conditions that prompted them have been corrected. Sec. 215.15 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 businessrelated 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. Federal awarding agencies shall follow the provisions of E.O. 12770, ``Metric Usage in Federal Government Programs'' (56 FR 35801, 3 CFR, 1991 Comp., p. 343).
Sec. 215.16 Resource Conservation and Recovery Act.
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 the
Environmental Protection Agency (EPA) (40 CFR parts 247254).
Accordingly, State and local institutions of higher education, hospitals, and nonprofit organizations that receive direct
[[Page 26286]]
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 the EPA guidelines.
Sec. 215.17 Certifications and representations.
Unless prohibited by statute or codified regulation, each Federal
awarding agency is authorized and encouraged to 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.
Subpart CPost Award Requirements
Financial and Program Management
Sec. 215.20 Purpose of financial and program management.
Sections 215.21 through 215.28 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. 215.21 Standards for financial management systems.
(a) Federal awarding agencies shall require recipients to relate
financial data to performance data and develop unit cost information whenever practical.
(b) Recipients' financial management systems shall provide for the following.
(1) Accurate, current and complete disclosure of the financial
results of each federallysponsored project or program in accordance
with the reporting requirements set forth in Sec. 215.52. If a Federal
awarding agency requires reporting on an accrual basis from a recipient
that maintains its records on other than an accrual basis, the
recipient shall not be required to establish an accrual accounting
system. These recipients may develop such accrual data for its reports on the basis of an analysis of the documentation on hand.
(2) Records that identify adequately the source and application of
funds for federallysponsored 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 TreasuryState Agreements
or the CMIA default procedures codified at 31 CFR part 205,
``Withdrawal of Cash from the Treasury for Advances under Federal Grant and Other Programs.''
(6) Written procedures for determining the reasonableness,
allocability and allowability of costs in accordance with the
provisions of the applicable Federal cost principles and the terms and conditions of the award.
(7) Accounting records including cost accounting records that are supported by source documentation.
(c) Where the Federal Government guarantees or insures the
repayment of money borrowed by the recipient, the Federal awarding
agency, at its discretion, may require adequate bonding and insurance
if the bonding and insurance requirements of the recipient are not
deemed adequate to protect the interest of the Federal Government.
(d) The Federal awarding agency may require adequate fidelity bond
coverage where the recipient lacks sufficient coverage to protect the Federal Government's interest.
(e) Where bonds are required in the situations described above, the
bonds shall be obtained from companies holding certificates of
authority as acceptable sureties, as prescribed in 31 CFR part 223,
``Surety Companies Doing Business with the United States.'' Sec. 215.22 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 TreasuryState CMIA agreements or default procedures codified at 31 CFR part 205.
(b) Recipients are to be paid in advance, provided they maintain or demonstrate the willingness to maintain:
(1) Written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient, and
(2) Financial management systems that meet the standards for fund
control and accountability as established in Sec. 215.21. Cash
advances to a recipient organization shall be limited to the minimum
amounts needed and be timed to be in accordance with the actual,
immediate cash requirements of the recipient organization in carrying
out the purpose of the approved program or project. The timing and
amount of cash advances shall be as close as is administratively
feasible to the actual disbursements by the recipient organization for
direct program or project costs and the proportionate share of any allowable indirect costs.
(c) Whenever possible, advances shall be consolidated to cover
anticipated cash needs for all awards made by the Federal awarding agency to the recipient.
(1) Advance payment mechanisms include, but are not limited to, Treasury check and electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
(3) Recipients shall be authorized to submit requests for advances
and reimbursements at least monthly when electronic fund transfers are not used.
(d) Requests for Treasury check advance payment shall be submitted
on SF270, ``Request for Advance or Reimbursement,'' or other forms as
may be authorized by OMB. This form is not to be used when Treasury
check advance payments are made to the recipient automatically through
the use of a predetermined payment schedule or if precluded by special
Federal awarding agency instructions for electronic funds transfer.
(e) Reimbursement is the preferred method when the requirements in
Sec. 215.12(b) cannot be met. Federal awarding agencies may also use
this method on any construction agreement, or if the major portion of
the construction project is accomplished through private market
financing or Federal loans, and the Federal assistance constitutes a minor portion of the project.
[[Page 26287]]
(1) When the reimbursement method is used, the Federal awarding
agency shall make payment within 30 days after receipt of the billing, unless the billing is improper.
(2) Recipients shall be authorized to submit request for
reimbursement at least monthly when electronic funds transfers are not used.
(f) If a recipient cannot meet the criteria for advance payments
and the Federal awarding agency has determined that reimbursement is
not feasible because the recipient lacks sufficient working capital,
the Federal awarding agency may provide cash on a working capital
advance basis. Under this procedure, the Federal awarding agency shall
advance cash to the recipient to cover its estimated disbursement needs
for an initial period generally geared to the awardee's disbursing
cycle. Thereafter, the Federal awarding agency shall reimburse the
recipient for its actual cash disbursements. The working capital
advance method of payment shall not be used for recipients unwilling or
unable to provide timely advances to their subrecipient to meet the subrecipient's actual cash disbursements.
(g) To the extent available, recipients shall disburse funds
available from repayments to and interest earned on a revolving fund,
program income, rebates, refunds, contract settlements, audit
recoveries and interest earned on such funds before requesting additional cash payments.
(h) Unless otherwise required by statute, Federal awarding agencies
shall not withhold payments for proper charges made by recipients at
any time during the project period unless paragraphs (h)(1) or (2) of this section apply.
(1) A recipient has failed to comply with the project objectives,
the terms and conditions of the award, or Federal reporting requirements.
(2) The recipient or subrecipient is delinquent in a debt to the
United States as defined in OMB Circular A129, ``Managing Federal
Credit Programs.'' Under such conditions, the Federal awarding agency
may, upon reasonable notice, inform the recipient that payments shall
not be made for obligations incurred after a specified date until the
conditions are corrected or the indebtedness to the Federal Government is liquidated.
(i) Standards governing the use of banks and other institutions as
depositories of funds advanced under awards are as follows.
(1) Except for situations described in paragraph (i)(2) of this
section, Federal awarding agencies shall not require separate
depository accounts for funds provided to a recipient or establish any
eligibility requirements for depositories for funds provided to a
recipient. However, recipients must be able to account for the receipt, obligation and expenditure of funds.
(2) Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible.
(j) Consistent with the national goal of expanding the
opportunities for womenowned and minorityowned business enterprises,
recipients shall be encouraged to use womenowned and minorityowned
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 paragraphs (k)(1), (2) or (3) of this section apply.
(1) The recipient receives less than $120,000 in Federal awards per year.
(2) The best reasonably available interest bearing account would
not be expected to earn interest in excess of $250 per year on Federal cash balances.
(3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non Federal cash resources.
(l) For those entities where CMIA and its implementing regulations
at 31 CFR part 205 do not apply, interest earned on Federal advances
deposited in interest bearing accounts shall be remitted annually to
Department of Health and Human Services, Payment Management System,
Rockville, MD 20852. Interest amounts up to $250 per year may be
retained by the recipient for administrative expense. State
universities and hospitals shall comply with CMIA, as it pertains to
interest. If an entity subject to CMIA uses its own funds to pay pre
award costs for discretionary awards without prior written approval
from the Federal awarding agency, it waives its right to recover the interest under CMIA.
(m) Except as noted elsewhere in this part, only the following
forms shall be authorized for the recipients in requesting advances and
reimbursements. Federal agencies shall not require more than an original and two copies of these forms.
(1) SF270, Request for Advance or Reimbursement. Each Federal
awarding agency shall adopt the SF270 as a standard form for all
nonconstruction programs when electronic funds transfer or
predetermined advance methods are not used. Federal awarding agencies,
however, have the option of using this form for construction programs
in lieu of the SF271, ``Outlay Report and Request for Reimbursement for Construction Programs.''
(2) SF271, Outlay Report and Request for Reimbursement for
Construction Programs. Each Federal awarding agency shall adopt the SF
271 as the standard form to be used for requesting reimbursement for
construction programs. However, a Federal awarding agency may
substitute the SF270 when the Federal awarding agency determines that it provides adequate information to meet Federal needs.
Sec. 215.23 Cost sharing or matching.
(a) All contributions, including cash and third party inkind,
shall be accepted as part of the recipient's cost sharing or matching
when such contributions meet all of the following criteria. (1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other federally assisted project or program.
(3) Are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award,
except where authorized by Federal statute to be used for cost sharing or matching.
(6) Are provided for in the approved budget when required by the Federal awarding agency.
(7) Conform to other provisions of this part, as applicable.
(b) Unrecovered indirect costs may be included as part of cost
sharing or matching only with the prior approval of the Federal awarding agency.
(c) Values for recipient contributions of services and property
shall be established in accordance with the applicable cost principles.
If a Federal awarding agency authorizes recipients to donate buildings
or land for construction/facilities acquisition projects or longterm
use, the value of the donated property for cost sharing or matching
shall be the lesser of paragraphs (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 Federal awarding agency may approve the
use of the current fair market value of the donated property, even if
it exceeds the certified value at the time of donation to the project. [[Page 26288]]
(d) Volunteer services furnished by professional and technical
personnel, consultants, and other skilled and unskilled labor may be
counted as cost sharing or matching if the service is an integral and
necessary part of an approved project or program. Rates for volunteer
services shall be consistent with those paid for similar work in the
recipient's organization. In those instances in which the required
skills are not found in the recipient organization, rates shall be
consistent with those paid for similar work in the labor market in
which the recipient competes for the kind of services involved. In
either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation.
(e) When an employer other than the recipient furnishes the
services of an employee, these services shall be valued at the
employee's regular rate of pay (plus an amount of fringe benefits that
are reasonable, allowable, and allocable, but exclusive of overhead
costs), provided these services are in the same skill for which the employee is normally paid.
(f) Donated supplies may include such items as expendable
equipment, office supplies, laboratory supplies or workshop and
classroom supplies. Value assessed to donated supplies included in the
cost sharing or matching share shall be reasonable and shall not exceed
the fair market value of the property at the time of the donation.
(g) The method used for determining cost sharing or matching for
donated equipment, buildings and land for which title passes to the
recipient may differ according to the purpose of the award, if paragraphs (g)(1) or (2) of this section apply.
(1) If the purpose of the award is to assist the recipient in the
acquisition of equipment, buildings or land, the total value of the
donated property may be claimed as cost sharing or matching.
(2) If the purpose of the award is to support activities that
require the use of equipment, buildings or land, normally only
depreciation or use charges for equipment and buildings may be made.
However, the full value of equipment or other capital assets and fair
rental charges for land may be allowed, provided that the Federal awarding agency has approved the charges.
(h) The value of donated property shall be determined in accordance
with the usual accounting policies of the recipient, with the following qualifications.
(1) The value of donated land and buildings shall not exceed its
fair market value at the time of donation to the recipient as
established by an independent appraiser (e.g., certified real property
appraiser or General Services Administration representative) and certified by a responsible official of the recipient.
(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 privatelyowned 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 inkind 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. 215.24 Program income.
(a) Federal awarding agencies 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 Federal awarding agency regulations
or the terms and conditions of the award, shall be used in one or more of the ways listed in the following.
(1) Added to funds committed to the project by the Federal awarding
agency and recipient and used to further eligible project or program objectives.
(2) Used to finance the nonFederal share of the project or program.
(3) Deducted from the total project or program allowable cost in
determining the net allowable costs on which the Federal share of costs is based.
(c) When an agency authorizes the disposition of program income as
described in paragraphs (b)(1) or (b)(2) 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 Federal awarding agency does not specify
in its regulations or the terms and conditions of the award how program
income is to be used, paragraph (b)(3) 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 the awarding agency indicates in the terms and
conditions another alternative on the award or the recipient is subject to special award conditions, as indicated in Sec. 215.14.
(e) Unless Federal awarding agency regulations or the terms and
conditions of the award provide otherwise, recipients shall have no
obligation to the Federal Government regarding program income earned after the end of the project period.
(f) If authorized by Federal awarding agency regulations or the
terms and conditions of the award, costs incident to the generation of
program income may be deducted from gross income to determine program
income, provided these costs have not been charged to the award.
(g) Proceeds from the sale of property shall be handled in
accordance with the requirements of the Property Standards (see Sec. 215.30 through Sec. 215.37).
(h) Unless Federal awarding agency regulations or the terms and
condition of the award provide otherwise, recipients shall have no
obligation to the Federal Government with respect to program income
earned from license fees and royalties for copyrighted material,
patents, patent applications, trademarks, and inventions produced under
an award. However, Patent and Trademark Amendments (35 U.S.C. 18) apply
to inventions made under an experimental, developmental, or research award.
Sec. 215.25 Revision of budget and program plans.
(a) The budget plan is the financial expression of the project or
program as approved during the award process. It may include either the
Federal and nonFederal share, or only the Federal share, depending
upon Federal awarding agency requirements. It shall be related to
performance for program evaluation purposes whenever appropriate.
(b) Recipients are required to report deviations from budget and
program plans, and request prior approvals for budget and program plan revisions, in accordance with this section.
(c) For nonconstruction awards, recipients shall request prior
approvals from Federal awarding agencies for one or more of the following program or budget related reasons.
(1) Change in the scope or the objective of the project or program
(even if there is no associated budget revision requiring prior written approval).
[[Page 26289]]
(2) Change in a key person specified in the application or award document.
(3) The absence for more than three months, or a 25 percent
reduction in time devoted to the project, by the approved project director or principal investigator.
(4) The need for additional Federal funding.
(5) The transfer of amounts budgeted for indirect costs to absorb
increases in direct costs, or vice versa, if approval is required by the Federal awarding agency.
(6) The inclusion, unless waived by the Federal awarding agency, of
costs that require prior approval in accordance with OMB Circular A21,
``Cost Principles for Educational Institutions,'' and OMB Circular A
122, ``Cost Principles for NonProfit Organizations,'' or 45 CFR part
74 Appendix E, ``Principles for Determining Costs Applicable to
Research and Development under Grants and Contracts with Hospitals,''
or 48 CFR part 31, ``Contract Cost Principles and Procedures,'' as applicable.
(7) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of expense.
(8) Unless described in the application and funded in the approved
awards, the subaward, transfer or contracting out of any work under an
award. This provision does not apply to the purchase of supplies, material, equipment or general support services.
(d) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.
(e) Except for requirements listed in paragraphs (c)(1) and (c)(4)
of this section, Federal awarding agencies are authorized, at their
option, to waive costrelated and administrative prior written
approvals required by OMB Circulars A21 and A122. Such waivers may
include authorizing recipients to do any one or more of the following.
(1) Incur preaward costs 90 calendar days prior to award or more
than 90 calendar days with the prior approval of the Federal awarding
agency. All preaward costs are incurred at the recipient's risk (i.e.,
the Federal awarding agency is under no obligation to reimburse such
costs if for any reason the recipient does not receive an award or if
the award is less than anticipated and inadequate to cover such costs).
(2) Initiate a onetime extension of the expiration date of the
award of up to 12 months unless one or more of the following conditions
apply. For onetime extensions, the recipient must notify the Federal
awarding agency in writing with the supporting reasons and revised
expiration date at least 10 days before the expiration date specified
in the award. This onetime extension may not be exercised merely for the purpose of using unobligated balances.
(i) The terms and conditions of award prohibit the extension. (ii) The extension requires additional Federal funds.
(iii) The extension involves any change in the approved objectives or scope of the project.
(3) Carry forward unobligated balances to subsequent funding periods.
(4) For awards that support research, unless the Federal awarding
agency provides otherwise in the award or in the agency's regulations,
the prior approval requirements described in this paragraph (e) are
automatically waived (i.e., recipients need not obtain such prior
approvals) unless one of the conditions included in paragraph (e)(2) applies.
(f) The Federal awarding agency may, at its option, restrict the
transfer of funds among direct cost categories or programs, functions
and activities for awards in which the Federal share of the project
exceeds $100,000 and the cumulative amount of such transfers exceeds or
is expected to exceed 10 percent of the total budget as last approved
by the Federal awarding agency. No Federal awarding agency shall permit
a transfer that would cause any Federal appropriation or part thereof
to be used for purposes other than those consistent with the original intent of the appropriation.
(g) All other changes to nonconstruction budgets, except for the
changes described in paragraph (j) of this section, do not require prior approval.
(h) For construction awards, recipients shall request prior written
approval promptly from Federal awarding agencies for budget revisions
whenever paragraphs (h)(1), (2) or (3) of this section apply.
(1) The revision results from changes in the scope or the objective of the project or program.
(2) The need arises for additional Federal funds to complete the project.
(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. 215.27.
(i) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.
(j) When a Federal awarding agency makes an award that provides
support for both construction and nonconstruction work, the Federal
awarding agency may require the recipient to request prior approval
from the Federal awarding agency before making any fund or budget transfers between the two types of work supported.
(k) For both construction and nonconstruction awards, Federal
awarding agencies shall require recipients to notify the Federal
awarding agency in writing promptly whenever the amount of Federal
authorized funds is expected to exceed the needs of the recipient for
the project period by more than $5000 or five percent of the Federal
award, whichever is greater. This notification shall not be required if
an application for additional funding is submitted for a continuation award.
(l) When requesting approval for budget revisions, recipients shall
use the budget forms that were used in the application unless the
Federal awarding agency indicates a letter of request suffices.
(m) Within 30 calendar days from the date of receipt of the request
for budget revisions, Federal awarding agencies shall review the
request and notify the recipient whether the budget revisions have been
approved. If the revision is still under consideration at the end of 30
calendar days, the Federal awarding agency shall inform the recipient
in writing of the date when the recipient may expect the decision. Sec. 215.26 NonFederal audits.
(a) Recipients and subrecipients that are institutions of higher
education or other nonprofit organizations (including hospitals) shall
be subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 75017507) and revised OMB Circular A 133, ``Audits of States, Local Governments, and NonProfit
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. 75017507) and revised OMB Circular A133, ``Audits of States, Local Governments, and NonProfit Organizations.''
(c) Forprofit hospitals not covered by the audit provisions of
revised OMB Circular A133 shall be subject to the audit requirements of the Federal awarding agencies.
(d) Commercial organizations shall be subject to the audit
requirements of the Federal awarding agency or the prime recipient as incorporated into the award document.
[[Page 26290]]
Sec. 215.27 Allowable costs.
For each kind of recipient, there is a set of Federal principles for determining allowable costs. Allowability of costs shall be determined in accordance with the cost principles applicable to the entity incurring the costs. Thus, allowability of costs incurred by State, local or federallyrecognized Indian tribal governments is determined in accordance with the provisions of OMB Circular A87, ``Cost Principles for State, Local, and Indian Tribal Governments.'' The allowability of costs incurred by nonprofit organizations is determined in accordance with the provisions of OMB Circular A122, ``Cost Principles for NonProfit Organizations.'' The allowability of costs incurred by institutions of higher education is determined in accordance with the provisions of OMB Circular A21, ``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 nonprofit organizations listed in Attachment C to Circular A122 is determined in accordance with the provisions of the Federal Acquisition Regulation (FAR) at 48 CFR part 31.
Sec. 215.28 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 preaward costs authorized by the Federal awarding agency.
Sec. 215.29 Conditional exemptions.
(a) OMB authorizes conditional exemption from OMB administrative
requirements and cost principles circulars for certain Federal programs
with statutorilyauthorized consolidated planning and consolidated
administrative funding, that are identified by a Federal agency and
approved by the head of the Executive department or establishment. A
Federal agency shall consult with OMB during its consideration of whether to grant such an exemption.
(b) To promote efficiency in State and local program
administration, when Federal nonentitlement programs with common
purposes have specific statutorilyauthorized consolidated planning and
consolidated administrative funding and where most of the State
agency's resources come from nonFederal sources, Federal agencies may
exempt these covered Stateadministered, nonentitlement grant programs
from certain OMB grants management requirements. The exemptions would
be from all but the allocability of costs provisions of OMB Circulars
A87 (Attachment A, subsection C.3), ``Cost Principles for State,
Local, and Indian Tribal Governments,'' A21 (Section C, subpart 4),
``Cost Principles for Educational Institutions,'' and A122 (Attachment
A, subsection A.4), ``Cost Principles for NonProfit Organizations,)''
and from all of the administrative requirements provisions of Part 215
(OMB Circular A110, ``Uniform Administrative Requirements for Grants
and Agreements with Institutions of Higher Education, Hospitals, and
Other NonProfit Organizations,'') and the agencies' grants management common rule (see Sec. 215.5).
(c) When a Federal agency provides this flexibility, as a
prerequisite to a State's exercising this option, a State must adopt
its own written fiscal and administrative requirements for expending
and accounting for all funds, which are consistent with the provisions
of OMB Circular A87, and extend such policies to all subrecipients.
These fiscal and administrative requirements must be sufficiently
specific to ensure that: funds are used in compliance with all
applicable Federal statutory and regulatory provisions, costs are
reasonable and necessary for operating these programs, and funds are
not be used for general expenses required to carry out other responsibilities of a State or its subrecipients.
Property Standards
Sec. 215.30 Purpose of property standards.
Sections 215.31 through 215.37 set forth uniform standards governing management and disposition of property furnished by the Federal Government whose cost was charged to a project supported by a Federal award. Federal awarding agencies shall require recipients to observe these standards under awards and shall not impose additional requirements, unless specifically required by Federal statute. The recipient may use its own property management standards and procedures provided it observes the provisions of Sec. 215.31 through Sec. 215.37.
Sec. 215.31 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. Federallyowned property need not be insured unless required by the terms and conditions of the award.
Sec. 215.32 Real property.
Each Federal awarding agency shall prescribe requirements for recipients concerning the use and disposition of real property acquired in whole or in part under awards. Unless otherwise provided by statute, such requirements, at a minimum, shall contain the following. (a) Title to real property shall vest in the recipient subject to the condition that the recipient shall use the real property for the authorized purpose of the project as long as it is needed and shall not encumber the property without approval of the Federal awarding agency. (b) The recipient shall obtain written approval by the Federal awarding agency for the use of real property in other federally sponsored projects when the recipient determines that the property is no longer needed for the purpose of the original project. Use in other projects shal
FOR FURTHER INFORMATION CONTACT
Elizabeth Phillips, Office of Federal
Financial Management, Office of Management and Budget, telephone (202)
3953053 (direct) or (202) 3953993 (main office) and email:
ephillip@omb.eop.gov.