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OMB Guidance § 200.503
§ 200.502 Basis for determining Federal awards expended. (a) Determining Federal awards expended. The determination of when a Federal award is expended must be
based on when the activity related to
the Federal award occurs. Generally,
the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and
the terms and conditions of Federal
awards, such as: expenditure/expense
transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts
with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients;
the use of loan proceeds under loan and
loan guarantee programs; the receipt of
property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of
amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. (b) Loan and loan guarantees (loans).
Since the Federal Government is at
risk for loans until the debt is repaid,
the following guidelines must be used
to calculate the value of Federal
awards expended under loan programs,
except as noted in paragraphs (c) and
(d) of this section:
(1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes
continuing compliance requirements;
plus
(3) Any interest subsidy, cash, or administrative cost allowance received. (c) Loan and loan guarantees (loans) at
IHEs. When loans are made to students
of an IHE but the IHE does not make
the loans, then only the value of loans
made during the audit period must be
considered Federal awards expended in
that audit period. The balance of loans
for previous audit periods is not included as Federal awards expended because the lender accounts for the prior balances.
(d) Prior loan and loan guarantees
(loans). Loans, the proceeds of which
were received and expended in prior
years, are not considered Federal
awards expended under this part when
the Federal statutes, regulations, and
the terms and conditions of Federal
awards pertaining to such loans impose
no continuing compliance requirements other than to repay the loans. (e) Endowment funds. The cumulative
balance of Federal awards for endowment funds that are federally restricted are considered Federal awards expended in each audit period in which
the funds are still restricted.
(f) Free rent. Free rent received by
itself is not considered a Federal award
expended under this part. However, free
rent received as part of a Federal
award to carry out a Federal program
must be included in determining Federal awards expended and subject to audit under this part.
(g) Valuing non-cash assistance. Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the
time of receipt or the assessed value
provided by the Federal agency.
(h) Medicare. Medicare payments to a
non-Federal entity for providing patient care services to Medicare-eligible individuals are not considered Federal
awards expended under this part.
(i) Medicaid. Medicaid payments to a
subrecipient for providing patient care
services to Medicaid-eligible individuals are not considered Federal awards expended under this part unless a state
requires the funds to be treated as Federal awards expended because reimbursement is on a cost-reimbursement basis.
(j) Certain loans provided by the National Credit Union Administration. For purposes of this part, loans made from
the National Credit Union Share Insurance Fund and the Central Liquidity Facility that are funded by contributions from insured non-Federal entities are not considered Federal awards expended.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75887, Dec. 19, 2014]
§ 200.503 Relation to other audit requirements.
(a) An audit conducted in accordance
with this part must be in lieu of any financial audit of Federal awards which VerDate Sep<11>2014 13:23 Jun 29, 2021 Jkt 253005 PO 00000 Frm 00209 Fmt 8010 Sfmt 8010 Y:\SGML\253005.XXX 253005
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§ 200.504 2 CFR Ch. II (1–1–21 Edition)
a non-Federal entity is required to undergo under any other Federal statute or regulation. To the extent that such
audit provides a Federal agency with
the information it requires to carry
out its responsibilities under Federal
statute or regulation, a Federal agency
must rely upon and use that information.
(b) Notwithstanding subsection (a), a
Federal agency, Inspectors General, or
GAO may conduct or arrange for additional audits which are necessary to carry out its responsibilities under
Federal statute or regulation. The provisions of this part do not authorize any non-Federal entity to constrain, in
any manner, such Federal agency from
carrying out or arranging for such additional audits, except that the Federal agency must plan such audits to not be
duplicative of other audits of Federal
awards. Prior to commencing such an
audit, the Federal agency or passthrough entity must review the FAC for recent audits submitted by the nonFederal entity, and to the extent such audits meet a Federal agency or passthrough entity’s needs, the Federal agency or pass-through entity must
rely upon and use such audits. Any additional audits must be planned and performed in such a way as to build
upon work performed, including the
audit documentation, sampling, and
testing already performed, by other
auditors.
(c) The provisions of this part do not
limit the authority of Federal agencies
to conduct, or arrange for the conduct
of, audits and evaluations of Federal
awards, nor limit the authority of any
Federal agency Inspector General or
other Federal official. For example, requirements that may be applicable under the FAR or CAS and the terms
and conditions of a cost-reimbursement
contract may include additional applicable audits to be conducted or arranged for by Federal agencies. (d) Federal agency to pay for additional
audits. A Federal agency that conducts
or arranges for additional audits must,
consistent with other applicable Federal statutes and regulations, arrange for funding the full cost of such additional audits.
(e) Request for a program to be audited
as a major program. A Federal awarding
agency may request that an auditee
have a particular Federal program audited as a major program in lieu of the Federal awarding agency conducting or
arranging for the additional audits. To
allow for planning, such requests
should be made at least 180 calendar
days prior to the end of the fiscal year
to be audited. The auditee, after consultation with its auditor, should promptly respond to such a request by
informing the Federal awarding agency
whether the program would otherwise
be audited as a major program using
the risk-based audit approach described in §200.518 and, if not, the estimated incremental cost. The Federal awarding agency must then promptly
confirm to the auditee whether it
wants the program audited as a major
program. If the program is to be audited as a major program based upon this Federal awarding agency request,
and the Federal awarding agency
agrees to pay the full incremental
costs, then the auditee must have the
program audited as a major program. A
pass-through entity may use the provisions of this paragraph for a subrecipient. [78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49570, Aug. 13, 2020]
§ 200.504 Frequency of audits.
Except for the provisions for biennial
audits provided in paragraphs (a) and
(b) of this section, audits required by
this part must be performed annually.
Any biennial audit must cover both
years within the biennial period.
(a) A state, local government, or Indian tribe that is required by constitution or statute, in effect on January 1, 1987, to undergo its audits less frequently than annually, is permitted to undergo its audits pursuant to this
part biennially. This requirement must
still be in effect for the biennial period.
(b) Any nonprofit organization that
had biennial audits for all biennial periods ending between July 1, 1992, and January 1, 1995, is permitted to undergo its audits pursuant to this part biennially. § 200.505 Sanctions.
In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal
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OMB Guidance § 200.507
agencies and pass-through entities
must take appropriate action as provided in §200.339.
[85 FR 49571, Aug. 13, 2020]
§ 200.506 Audit costs.
See §200.425.
[85 FR 49571, Aug. 13, 2020]
§ 200.507 Program-specific audits.
(a) Program-specific audit guide available. In some cases, a program-specific audit guide will be available to provide
specific guidance to the auditor with
respect to internal controls, compliance requirements, suggested audit procedures, and audit reporting requirements. A listing of current program-specific audit guides can be found in the compliance supplement, Part 8,
Appendix VI, Program-Specific Audit
Guides, which includes a website where
a copy of the guide can be obtained.
When a current program-specific audit
guide is available, the auditor must
follow GAGAS and the guide when performing a program-specific audit. (b) Program-specific audit guide not
available. (1) When a current programspecific audit guide is not available, the auditee and auditor must have basically the same responsibilities for the Federal program as they would have
for an audit of a major program in a
single audit.
(2) The auditee must prepare the financial statement(s) for the Federal program that includes, at a minimum,
a schedule of expenditures of Federal
awards for the program and notes that
describe the significant accounting
policies used in preparing the schedule,
a summary schedule of prior audit findings consistent with the requirements of §200.511(b), and a corrective action
plan consistent with the requirements
of §200.511(c).
(3) The auditor must:
(i) Perform an audit of the financial
statement(s) for the Federal program
in accordance with GAGAS;
(ii) Obtain an understanding of internal controls and perform tests of internal controls over the Federal program consistent with the requirements of
§200.514(c) for a major program;
(iii) Perform procedures to determine
whether the auditee has complied with
Federal statutes, regulations, and the
terms and conditions of Federal awards
that could have a direct and material
effect on the Federal program consistent with the requirements of §200.514(d) for a major program;
(iv) Follow up on prior audit findings,
perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the
auditee in accordance with the requirements of §200.511, and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior
audit finding; and
(v) Report any audit findings consistent with the requirements of §200.516.
(4) The auditor’s report(s) may be in
the form of either combined or separate reports and may be organized differently from the manner presented in this section. The auditor’s report(s)
must state that the audit was conducted in accordance with this part and include the following:
(i) An opinion (or disclaimer of opinion) as to whether the financial statement(s) of the Federal program is presented fairly in all material respects in accordance with the stated accounting
policies;
(ii) A report on internal control related to the Federal program, which must describe the scope of testing of
internal control and the results of the
tests;
(iii) A report on compliance which includes an opinion (or disclaimer of opinion) as to whether the auditee
complied with laws, regulations, and
the terms and conditions of Federal
awards which could have a direct and
material effect on the Federal program; and
(iv) A schedule of findings and questioned costs for the Federal program that includes a summary of the auditor’s results relative to the Federal program in a format consistent with
§200.515(d)(1) and findings and questioned costs consistent with the requirements of §200.515(d)(3). (c) Report submission for program-specific audits. (1) The audit must be completed and the reporting required by paragraph (c)(2) or (c)(3) of this section
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§ 200.508 2 CFR Ch. II (1–1–21 Edition)
submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period, unless a
different period is specified in a program-specific audit guide. Unless restricted by Federal law or regulation, the auditee must make report copies
available for public inspection.
Auditees and auditors must ensure
that their respective parts of the reporting package do not include protected personally identifiable information. (2) When a program-specific audit
guide is available, the auditee must
electronically submit to the FAC the
data collection form prepared in accordance with §200.512(b), as applicable to a program-specific audit, and the reporting required by the program-specific audit guide. (3) When a program-specific audit
guide is not available, the reporting
package for a program-specific audit
must consist of the financial statement(s) of the Federal program, a summary schedule of prior audit findings, and a corrective action plan as described in paragraph (b)(2) of this section, and the auditor’s report(s) described in paragraph (b)(4) of this section. The data collection form prepared in accordance with §200.512(b), as applicable to a program-specific audit, and one copy of this reporting package
must be electronically submitted to
the FAC.
(d) Other sections of this part may
apply. Program-specific audits are subject to:
(1) 200.500 Purpose through 200.503 Relation to other audit requirements, paragraph (d);
(2) 200.504 Frequency of audits
through 200.506 Audit costs;
(3) 200.508 Auditee responsibilities
through 200.509 Auditor selection;
(4) 200.511 Audit findings follow-up;
(5) 200.512 Report submission, paragraphs (e) through (h); (6) 200.513 Responsibilities;
(7) 200.516 Audit findings through
200.517 Audit documentation;
(8) 200.521 Management decision; and
(9) Other referenced provisions of this
part unless contrary to the provisions
of this section, a program-specific
audit guide, or program statutes and
regulations.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75887, Dec. 19, 2014; 85 FR 49571, Aug. 13,
2020]
AUDITEES
§ 200.508 Auditee responsibilities.
The auditee must:
(a) Procure or otherwise arrange for
the audit required by this part in accordance with §200.509, and ensure it is properly performed and submitted
when due in accordance with §200.512.
(b) Prepare appropriate financial
statements, including the schedule of
expenditures of Federal awards in accordance with §200.510. (c) Promptly follow up and take corrective action on audit findings, including preparation of a summary schedule of prior audit findings and a
corrective action plan in accordance
with §200.511(b) and (c), respectively.
(d) Provide the auditor with access to
personnel, accounts, books, records,
supporting documentation, and other
information as needed for the auditor
to perform the audit required by this
part.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49572, Aug. 13, 2020]
§ 200.509 Auditor selection.
(a) Auditor procurement. In procuring
audit services, the auditee must follow
the procurement standards prescribed
by the Procurement Standards in
§§200.317 through 200.326 of subpart D of
this part or the FAR (48 CFR part 42),
as applicable. When procuring audit
services, the objective is to obtain
high-quality audits. In requesting proposals for audit services, the objectives and scope of the audit must be made
clear and the non-Federal entity must
request a copy of the audit organization’s peer review report which the auditor is required to provide under
GAGAS. Factors to be considered in
evaluating each proposal for audit
services include the responsiveness to
the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of peer and external quality control reviews, and price.
Whenever possible, the auditee must
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make positive efforts to utilize small
businesses, minority-owned firms, and
women’s business enterprises, in procuring audit services as stated in §200.321, or the FAR (48 CFR part 42),
as applicable.
(b) Restriction on auditor preparing indirect cost proposals. An auditor who prepares the indirect cost proposal or
cost allocation plan may not also be selected to perform the audit required by this part when the indirect costs recovered by the auditee during the prior year exceeded $1 million. This restriction applies to the base year used in the preparation of the indirect cost
proposal or cost allocation plan and
any subsequent years in which the resulting indirect cost agreement or cost allocation plan is used to recover costs.
(c) Use of Federal auditors. Federal
auditors may perform all or part of the
work required under this part if they
comply fully with the requirements of
this part.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49572, Aug. 13, 2020]
§ 200.510 Financial statements.
(a) Financial statements. The auditee
must prepare financial statements that
reflect its financial position, results of
operations or changes in net assets,
and, where appropriate, cash flows for
the fiscal year audited. The financial
statements must be for the same organizational unit and fiscal year that is chosen to meet the requirements of
this part. However, non-Federal entitywide financial statements may also include departments, agencies, and other organizational units that have separate
audits in accordance with §200.514(a)
and prepare separate financial statements.
(b) Schedule of expenditures of Federal
awards. The auditee must also prepare
a schedule of expenditures of Federal
awards for the period covered by the
auditee’s financial statements which
must include the total Federal awards
expended as determined in accordance
with §200.502. While not required, the
auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to
make the schedule easier to use. For
example, when a Federal program has
multiple Federal award years, the
auditee may list the amount of Federal
awards expended for each Federal
award year separately. At a minimum,
the schedule must:
(1) List individual Federal programs
by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the
cluster of programs, and provide the
applicable Federal agency name. For
R&D, total Federal awards expended
must be shown either by individual
Federal award or by Federal agency
and major subdivision within the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services.
(2) For Federal awards received as a
subrecipient, the name of the passthrough entity and identifying number assigned by the pass-through entity
must be included.
(3) Provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is
not available. For a cluster of programs also provide the total for the cluster.
(4) Include the total amount provided
to subrecipients from each Federal program.
(5) For loan or loan guarantee programs described in §200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. (6) Include notes that describe that
significant accounting policies used in
preparing the schedule, and note
whether or not the auditee elected to
use the 10% de minimis cost rate as
covered in §200.414.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75887, Dec. 19, 2014; 85 FR 49572, Aug. 13,
2020]
§ 200.511 Audit findings follow-up.
(a) General. The auditee is responsible
for follow-up and corrective action on
all audit findings. As part of this responsibility, the auditee must prepare a summary schedule of prior audit findings. The auditee must also prepare a VerDate Sep<11>2014 13:23 Jun 29, 2021 Jkt 253005 PO 00000 Frm 00213 Fmt 8010 Sfmt 8010 Y:\SGML\253005.XXX 253005
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§ 200.512 2 CFR Ch. II (1–1–21 Edition)
corrective action plan for current year
audit findings. The summary schedule
of prior audit findings and the corrective action plan must include the reference numbers the auditor assigns to audit findings under §200.516(c). Since
the summary schedule may include
audit findings from multiple years, it
must include the fiscal year in which
the finding initially occurred. The corrective action plan and summary schedule of prior audit findings must
include findings relating to the financial statements which are required to be reported in accordance with
GAGAS.
(b) Summary schedule of prior audit
findings. The summary schedule of
prior audit findings must report the
status of all audit findings included in
the prior audit’s schedule of findings
and questioned costs. The summary
schedule must also include audit findings reported in the prior audit’s summary schedule of prior audit findings except audit findings listed as corrected in accordance with paragraph (b)(1) of this section, or no longer valid
or not warranting further action in accordance with paragraph (b)(3) of this section.
(1) When audit findings were fully
corrected, the summary schedule need
only list the audit findings and state
that corrective action was taken.
(2) When audit findings were not corrected or were only partially corrected, the summary schedule must describe
the reasons for the finding’s recurrence
and planned corrective action, and any
partial corrective action taken. When
corrective action taken is significantly
different from corrective action previously reported in a corrective action plan or in the Federal agency’s or passthrough entity’s management decision, the summary schedule must provide an
explanation.
(3) When the auditee believes the
audit findings are no longer valid or do
not warrant further action, the reasons
for this position must be described in
the summary schedule. A valid reason
for considering an audit finding as not
warranting further action is that all of
the following have occurred:
(i) Two years have passed since the
audit report in which the finding occurred was submitted to the FAC; (ii) The Federal agency or passthrough entity is not currently following up with the auditee on the audit finding; and
(iii) A management decision was not
issued.
(c) Corrective action plan. At the completion of the audit, the auditee must prepare, in a document separate from
the auditor’s findings described in
§200.516, a corrective action plan to address each audit finding included in the current year auditor’s reports. The corrective action plan must provide the name(s) of the contact person(s) responsible for corrective action, the corrective action planned, and the anticipated completion date. If the auditee does not agree with the audit findings
or believes corrective action is not required, then the corrective action plan must include an explanation and specific reasons.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49572, Aug. 13, 2020]
§ 200.512 Report submission.
(a) General. (1) The audit must be
completed and the data collection form
described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be
submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due
date falls on a Saturday, Sunday, or
Federal holiday, the reporting package
is due the next business day.
(2) Unless restricted by Federal statutes or regulations, the auditee must make copies available for public inspection. Auditees and auditors must ensure that their respective parts of
the reporting package do not include
protected personally identifiable information.
(b) Data collection. The FAC is the repository of record for subpart F of this part reporting packages and the data
collection form. All Federal agencies,
pass-through entities and others interested in a reporting package and data collection form must obtain it by accessing the FAC.
(1) The auditee must submit required
data elements described in Appendix X
to Part 200, which state whether the
audit was completed in accordance
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OMB Guidance § 200.512
with this part and provides information about the auditee, its Federal programs, and the results of the audit.
The data must include information
available from the audit required by
this part that is necessary for Federal
agencies to use the audit to ensure integrity for Federal programs. The data elements and format must be approved
by OMB, available from the FAC, and
include collections of information from
the reporting package described in
paragraph (c) of this section. A senior
level representative of the auditee (e.g.,
state controller, director of finance,
chief executive officer, or chief financial officer) must sign a statement to be included as part of the data collection that says that the auditee complied with the requirements of this part, the data were prepared in accordance with this part (and the instructions accompanying the form), the reporting package does not include protected personally identifiable information, the information included in its entirety is accurate and complete, and
that the FAC is authorized to make the
reporting package and the form publicly available on a website. (2) Exception for Indian Tribes and
Tribal Organizations. An auditee that is
an Indian tribe or a tribal organization
(as defined in the Indian Self-Determination, Education and Assistance Act (ISDEAA), 25 U.S.C. 450b(l)) may
opt not to authorize the FAC to make
the reporting package publicly available on a Web site, by excluding the authorization for the FAC publication in the statement described in paragraph
(b)(1) of this section. If this option is
exercised, the auditee becomes responsible for submitting the reporting package directly to any pass-through
entities through which it has received
a Federal award and to pass-through
entities for which the summary schedule of prior audit findings reported the status of any findings related to Federal awards that the pass-through entity provided. Unless restricted by Federal statute or regulation, if the auditee opts not to authorize publication, it must make copies of the reporting package available for public inspection. (3) Using the information included in
the reporting package described in
paragraph (c) of this section, the auditor must complete the applicable data elements of the data collection form.
The auditor must sign a statement to
be included as part of the data collection form that indicates, at a minimum, the source of the information included in the form, the auditor’s responsibility for the information, that the form is not a substitute for the reporting package described in paragraph (c) of this section, and that the content
of the form is limited to the collection
of information prescribed by OMB.
(c) Reporting package. The reporting
package must include the:
(1) Financial statements and schedule of expenditures of Federal awards discussed in §200.510(a) and (b), respectively;
(2) Summary schedule of prior audit
findings discussed in §200.511(b);
(3) Auditor’s report(s) discussed in
§200.515; and
(4) Corrective action plan discussed
in §200.511(c).
(d) Submission to FAC. The auditee
must electronically submit to the FAC
the data collection form described in
paragraph (b) of this section and the
reporting package described in paragraph (c) of this section. (e) Requests for management letters
issued by the auditor. In response to requests by a Federal agency or passthrough entity, auditees must submit a copy of any management letters issued
by the auditor.
(f) Report retention requirements.
Auditees must keep one copy of the
data collection form described in paragraph (b) of this section and one copy of the reporting package described in
paragraph (c) of this section on file for
three years from the date of submission to the FAC.
(g) FAC responsibilities. The FAC must
make available the reporting packages
received in accordance with paragraph
(c) of this section and §200.507(c) to the
public, except for Indian tribes exercising the option in (b)(2) of this section, and maintain a data base of completed audits, provide appropriate information to Federal agencies, and follow up with known auditees that have not submitted the required data collection forms and reporting packages.
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§ 200.513 2 CFR Ch. II (1–1–21 Edition)
(h) Electronic filing. Nothing in this
part must preclude electronic submissions to the FAC in such manner as may be approved by OMB.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75887, Dec. 19, 2014; 85 FR 49573, Aug. 13,
2020]
FEDERAL AGENCIES
§ 200.513 Responsibilities.
(a)(1) Cognizant agency for audit responsibilities. A non-Federal entity expending more than $50 million a year in Federal awards must have a cognizant
agency for audit. The designated cognizant agency for audit must be the Federal awarding agency that provides
the predominant amount of funding directly (direct funding) (as listed on the Schedule of expenditures of Federal
awards, see §200.510(b)) to a non-Federal entity unless OMB designates a specific cognizant agency for audit.
When the direct funding represents less
than 25 percent of the total expenditures (as direct and subawards) by the non-Federal entity, then the Federal
agency with the predominant amount
of total funding is the designated cognizant agency for audit. (2) To provide for continuity of cognizance, the determination of the predominant amount of direct funding must be based upon direct Federal
awards expended in the non-Federal entity’s fiscal years ending in 2019, and every fifth year thereafter.
(3) Notwithstanding the manner in
which audit cognizance is determined,
a Federal awarding agency with cognizance for an auditee may reassign cognizance to another Federal awarding agency that provides substantial funding and agrees to be the cognizant
agency for audit. Within 30 calendar
days after any reassignment, both the
old and the new cognizant agency for
audit must provide notice of the
change to the FAC, the auditee, and, if
known, the auditor. The cognizant
agency for audit must:
(i) Provide technical audit advice and
liaison assistance to auditees and auditors.
(ii) Obtain or conduct quality control
reviews on selected audits made by
non-Federal auditors, and provide the
results to other interested organizations. Cooperate and provide support to the Federal agency designated by OMB
to lead a governmentwide project to
determine the quality of single audits
by providing a reliable estimate of the
extent that single audits conform to
applicable requirements, standards,
and procedures; and to make recommendations to address noted audit quality issues, including recommendations for any changes to applicable requirements, standards and procedures indicated by the results of the project.
The governmentwide project can rely
on the current and on-going quality
control review work performed by the
agencies, State auditors, and professional audit associations. This governmentwide audit quality project must be performed once every 6 years (or at
such other interval as determined by
OMB), and the results must be public.
(iii) Promptly inform other affected
Federal agencies and appropriate Federal law enforcement officials of any direct reporting by the auditee or its
auditor required by GAGAS or statutes
and regulations.
(iv) Advise the community of independent auditors of any noteworthy or important factual trends related to the
quality of audits stemming from quality control reviews. Significant problems or quality issues consistently identified through quality control reviews of audit reports must be referred to appropriate state licensing agencies
and professional bodies.
(v) Advise the auditor, Federal
awarding agencies, and, where appropriate, the auditee of any deficiencies found in the audits when the deficiencies require corrective action by the auditor. When advised of deficiencies, the auditee must work with the auditor to take corrective action.
If corrective action is not taken, the
cognizant agency for audit must notify
the auditor, the auditee, and applicable
Federal awarding agencies and passthrough entities of the facts and make recommendations for follow-up action.
Major inadequacies or repetitive substandard performance by auditors must be referred to appropriate state licensing agencies and professional bodies for disciplinary action.
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OMB Guidance § 200.513
Federal agencies that are in addition
to the audits made pursuant to this
part, so that the additional audits or
reviews build upon rather than duplicate audits performed in accordance with this part.
(vii) Coordinate a management decision for cross-cutting audit findings (see in §200.1 of this part) that affect
the Federal programs of more than one
agency when requested by any Federal
awarding agency whose awards are included in the audit finding of the auditee.
(viii) Coordinate the audit work and
reporting responsibilities among auditors to achieve the most cost-effective audit.
(ix) Provide advice to auditees as to
how to handle changes in fiscal years.
(b) Oversight agency for audit responsibilities. An auditee who does not have a designated cognizant agency for
audit will be under the general oversight of the Federal agency determined in accordance with §200.1 oversight
agency for audit. A Federal agency with
oversight for an auditee may reassign
oversight to another Federal agency
that agrees to be the oversight agency
for audit. Within 30 calendar days after
any reassignment, both the old and the
new oversight agency for audit must
provide notice of the change to the
FAC, the auditee, and, if known, the
auditor. The oversight agency for
audit:
(1) Must provide technical advice to
auditees and auditors as requested.
(2) May assume all or some of the responsibilities normally performed by a cognizant agency for audit.
(c) Federal awarding agency responsibilities. The Federal awarding agency must perform the following for the
Federal awards it makes (See also the
requirements of §200.211):
(1) Ensure that audits are completed
and reports are received in a timely
manner and in accordance with the requirements of this part. (2) Provide technical advice and
counsel to auditees and auditors as requested.
(3) Follow-up on audit findings to ensure that the recipient takes appropriate and timely corrective action. As part of audit follow-up, the Federal
awarding agency must:
(i) Issue a management decision as
prescribed in §200.521;
(ii) Monitor the recipient taking appropriate and timely corrective action; (iii) Use cooperative audit resolution
mechanisms (see the definition of cooperative audit resolution in §200.1 of this part) to improve Federal program outcomes through better audit resolution, follow-up, and corrective action; and
(iv) Develop a baseline, metrics, and
targets to track, over time, the effectiveness of the Federal agency’s process to follow-up on audit findings and on the effectiveness of Single Audits in
improving non-Federal entity accountability and their use by Federal awarding agencies in making award decisions. (4) Provide OMB annual updates to
the compliance supplement and work
with OMB to ensure that the compliance supplement focuses the auditor to test the compliance requirements most
likely to cause improper payments,
fraud, waste, abuse or generate audit
finding for which the Federal awarding
agency will take sanctions.
(5) Provide OMB with the name of a
single audit accountable official from
among the senior policy officials of the
Federal awarding agency who must be:
(i) Responsible for ensuring that the
agency fulfills all the requirements of
paragraph (c) of this section and effectively uses the single audit process to reduce improper payments and improve
Federal program outcomes.
(ii) Held accountable to improve the
effectiveness of the single audit process
based upon metrics as described in
paragraph (c)(3)(iv) of this section.
(iii) Responsible for designating the
Federal agency’s key management single audit liaison.
(6) Provide OMB with the name of a
key management single audit liaison
who must:
(i) Serve as the Federal awarding
agency’s management point of contact
for the single audit process both within
and outside the Federal Government.
(ii) Promote interagency coordination, consistency, and sharing in areas such as coordinating audit follow-up;
identifying higher-risk non-Federal entities; providing input on single audit and follow-up policy; enhancing the
utility of the FAC; and studying ways
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§ 200.514 2 CFR Ch. II (1–1–21 Edition)
to use single audit results to improve
Federal award accountability and best
practices.
(iii) Oversee training for the Federal
awarding agency’s program management personnel related to the single audit process.
(iv) Promote the Federal awarding
agency’s use of cooperative audit resolution mechanisms. (v) Coordinate the Federal awarding
agency’s activities to ensure appropriate and timely follow-up and corrective action on audit findings. (vi) Organize the Federal cognizant
agency for audit’s follow-up on crosscutting audit findings that affect the Federal programs of more than one
Federal awarding agency.
(vii) Ensure the Federal awarding
agency provides annual updates of the
compliance supplement to OMB.
(viii) Support the Federal awarding
agency’s single audit accountable official’s mission.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75887, Dec. 19, 2014; 85 FR 49573, Aug. 13,
2020]
AUDITORS
§ 200.514 Scope of audit.
(a) General. The audit must be conducted in accordance with GAGAS. The audit must cover the entire operations
of the auditee, or, at the option of the
auditee, such audit must include a series of audits that cover departments, agencies, and other organizational
units that expended or otherwise administered Federal awards during such audit period, provided that each such
audit must encompass the financial
statements and schedule of expenditures of Federal awards for each such department, agency, and other organizational unit, which must be considered to be a non-Federal entity. The financial statements and schedule of expenditures of Federal awards must be for the same audit period.
(b) Financial statements. The auditor
must determine whether the financial
statements of the auditee are presented
fairly in all material respects in accordance with generally accepted accounting principles. The auditor must also determine whether the schedule of
expenditures of Federal awards is stated fairly in all material respects in relation to the auditee’s financial statements as a whole. (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the
Federal Government issued by the
Comptroller General of the United
States and the Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
(2) In addition to the requirements of
GAGAS, the auditor must perform procedures to obtain an understanding of internal control over Federal programs
sufficient to plan the audit to support
a low assessed level of control risk of
noncompliance for major programs.
(3) Except as provided in paragraph
(c)(4) of this section, the auditor must:
(i) Plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program; and
(ii) Perform testing of internal control as planned in paragraph (c)(3)(i) of this section.
(4) When internal control over some
or all of the compliance requirements
for a major program are likely to be ineffective in preventing or detecting noncompliance, the planning and performing of testing described in paragraph (c)(3) of this section are not required for those compliance requirements. However, the auditor must report a significant deficiency or material weakness in accordance with §200.516 Audit findings, assess the related control risk at the maximum, and consider whether additional compliance tests are required because of ineffective internal control.
(d) Compliance. (1) In addition to the
requirements of GAGAS, the auditor
must determine whether the auditee
has complied with Federal statutes,
regulations, and the terms and conditions of Federal awards that may have a direct and material effect on each of
its major programs.
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OMB Guidance § 200.515
(2) The principal compliance requirements applicable to most Federal programs and the compliance requirements of the largest Federal programs are included in the compliance supplement.
(3) For the compliance requirements
related to Federal programs contained
in the compliance supplement, an audit
of these compliance requirements will
meet the requirements of this part.
Where there have been changes to the
compliance requirements and the
changes are not reflected in the compliance supplement, the auditor must determine the current compliance requirements and modify the audit procedures accordingly. For those Federal programs not covered in the compliance supplement, the auditor must follow the compliance supplement’s guidance for programs not included in the supplement.
(4) When internal control over some
or all of the compliance requirements
for a major program are likely to be ineffective in preventing or detecting noncompliance, the planning and performing of testing described in paragraph (c)(3) of this section are not required for those compliance requirements. However, the auditor must report a significant deficiency or material weakness in accordance with §200.516, assess the related control risk
at the
(e) Audit follow-up. The auditor must
follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the
auditee in accordance with §200.511(b),
and report, as a current year audit
finding, when the auditor concludes
that the summary schedule of prior
audit findings materially misrepresents the status of any prior audit finding. The auditor must perform audit follow-up procedures regardless of
whether a prior audit finding relates to
a major program in the current year.
(f) Data collection form. As required in
§200.512(b)(3), the auditor must complete and sign specified sections of the data collection form.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75887, Dec. 19, 2014; 85 FR 49574, Aug. 13,
2020]
§ 200.515 Audit reporting.
The auditor’s report(s) may be in the
form of either combined or separate reports and may be organized differently from the manner presented in this section. The auditor’s report(s) must state that the audit was conducted in accordance with this part and include the following:
(a) Financial statements. The auditor
must determine and provide an opinion
(or disclaimer of opinion) whether the
financial statements of the auditee are
presented fairly in all materials respects in accordance with generally accepted accounting principles (or a special purpose framework such as cash, modified cash, or regulatory as required by state law). The auditor must also decide whether the schedule of expenditures of Federal awards is stated fairly in all material respects in relation to the auditee’s financial statements as a whole. (b) A report on internal control over
financial reporting and compliance
with provisions of laws, regulations,
contracts, and award agreements, noncompliance with which could have a material effect on the financial statements. This report must describe the scope of testing of internal control and
compliance and the results of the tests,
and, where applicable, it will refer to
the separate schedule of findings and
questioned costs described in paragraph (d) of this section. (c) A report on compliance for each
major program and a report on internal
control over compliance. This report
must describe the scope of testing of
internal control over compliance, include an opinion or disclaimer of opinion as to whether the auditee complied with Federal statutes, regulations, and
the terms and conditions of Federal
awards which could have a direct and
material effect on each major program
and refer to the separate schedule of
findings and questioned costs described
in paragraph (d) of this section.
(d) A schedule of findings and questioned costs which must include the following three components:
(1) A summary of the auditor’s results, which must include:
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§ 200.516 2 CFR Ch. II (1–1–21 Edition)
(i) The type of report the auditor
issued on whether the financial statements audited were prepared in accordance with GAAP (i.e., unmodified opinion, qualified opinion, adverse opinion, or disclaimer of opinion);
(ii) Where applicable, a statement
about whether significant deficiencies
or material weaknesses in internal control were disclosed by the audit of the financial statements;
(iii) A statement as to whether the
audit disclosed any noncompliance
that is material to the financial statements of the auditee; (iv) Where applicable, a statement
about whether significant deficiencies
or material weaknesses in internal control over major programs were disclosed by the audit; (v) The type of report the auditor
issued on compliance for major programs (i.e., unmodified opinion, qualified opinion, adverse opinion, or disclaimer of opinion); (vi) A statement as to whether the
audit disclosed any audit findings that
the auditor is required to report under
§200.516(a);
(vii) An identification of major programs by listing each individual major program; however, in the case of a cluster of programs, only the cluster name as shown on the Schedule of Expenditures of Federal Awards is required; (viii) The dollar threshold used to
distinguish between Type A and Type B
programs, as described in §200.518(b)(1)
or (3) when a recalculation of the Type
A threshold is required for large loan
or loan guarantees; and
(ix) A statement as to whether the
auditee qualified as a low-risk auditee
under §200.520.
(2) Findings relating to the financial
statements which are required to be reported in accordance with GAGAS. (3) Findings and questioned costs for
Federal awards which must include
audit findings as defined in §200.516(a).
(i) Audit findings (e.g., internal control findings, compliance findings, questioned costs, or fraud) that relate
to the same issue must be presented as
a single audit finding. Where practical,
audit findings should be organized by
Federal agency or pass-through entity.
(ii) Audit findings that relate to both
the financial statements and Federal
awards, as reported under paragraphs
(d)(2) and (d)(3) of this section, respectively, must be reported in both sections of the schedule. However, the reporting in one section of the schedule may be in summary form with a reference to a detailed reporting in the other section of the schedule.
(e) Nothing in this part precludes
combining of the audit reporting required by this section with the reporting required by §200.512(b) when allowed by GAGAS and appendix X to this part.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75887, Dec. 19, 2014; 85 FR 49574, Aug. 13,
2020]
§ 200.516 Audit findings.
(a) Audit findings reported. The auditor must report the following as audit findings in a schedule of findings and
questioned costs:
(1) Significant deficiencies and material weaknesses in internal control over major programs and significant
instances of abuse relating to major
programs. The auditor’s determination
of whether a deficiency in internal control is a significant deficiency or a material weakness for the purpose of reporting an audit finding is in relation to a type of compliance requirement
for a major program identified in the
Compliance Supplement.
(2) Material noncompliance with the
provisions of Federal statutes, regulations, or the terms and conditions of Federal awards related to a major program. The auditor’s determination of whether a noncompliance with the provisions of Federal statutes, regulations, or the terms and conditions of Federal awards is material for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program identified in the compliance supplement. (3) Known questioned costs that are
greater than $25,000 for a type of compliance requirement for a major program. Known questioned costs are those specifically identified by the
auditor. In evaluating the effect of
questioned costs on the opinion on
compliance, the auditor considers the
best estimate of total costs questioned
(likely questioned costs), not just the
questioned costs specifically identified
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OMB Guidance § 200.516
(known questioned costs). The auditor
must also report known questioned
costs when likely questioned costs are
greater than $25,000 for a type of compliance requirement for a major program. In reporting questioned costs, the auditor must include information
to provide proper perspective for judging the prevalence and consequences of the questioned costs.
(4) Known questioned costs that are
greater than $25,000 for a Federal program which is not audited as a major program. Except for audit follow-up,
the auditor is not required under this
part to perform audit procedures for
such a Federal program; therefore, the
auditor will normally not find questioned costs for a program that is not audited as a major program. However,
if the auditor does become aware of
questioned costs for a Federal program
that is not audited as a major program
(e.g., as part of audit follow-up or other
audit procedures) and the known questioned costs are greater than $25,000, then the auditor must report this as an
audit finding.
(5) The circumstances concerning
why the auditor’s report on compliance
for each major program is other than
an unmodified opinion, unless such circumstances are otherwise reported as audit findings in the schedule of findings and questioned costs for Federal awards.
(6) Known or likely fraud affecting a
Federal award, unless such fraud is
otherwise reported as an audit finding
in the schedule of findings and questioned costs for Federal awards. This paragraph does not require the auditor
to report publicly information which
could compromise investigative or
legal proceedings or to make an additional reporting when the auditor confirms that the fraud was reported outside the auditor’s reports under the direct reporting requirements of GAGAS. (7) Instances where the results of
audit follow-up procedures disclosed
that the summary schedule of prior
audit findings prepared by the auditee
in accordance with §200.511(b) materially misrepresents the status of any prior audit finding.
(b) Audit finding detail and clarity.
Audit findings must be presented in
sufficient detail and clarity for the
auditee to prepare a corrective action
plan and take corrective action, and
for Federal agencies and pass-through
entities to arrive at a management decision. The following specific information must be included, as applicable, in audit findings:
(1) Federal program and specific Federal award identification including the Assistance Listings title and number,
Federal award identification number
and year, name of Federal agency, and
name of the applicable pass-through
entity. When information, such as the
Assistance Listings title and number
or Federal award identification number, is not available, the auditor must provide the best information available
to describe the Federal award.
(2) The criteria or specific requirement upon which the audit finding is based, including the Federal statutes,
regulations, or the terms and conditions of the Federal awards. Criteria generally identify the required or desired state or expectation with respect to the program or operation. Criteria
provide a context for evaluating evidence and understanding findings. (3) The condition found, including
facts that support the deficiency identified in the audit finding. (4) A statement of cause that identifies the reason or explanation for the condition or the factors responsible for
the difference between the situation
that exists (condition) and the required
or desired state (criteria), which may
also serve as a basis for recommendations for corrective action. (5) The possible asserted effect to
provide sufficient information to the
auditee and Federal agency, or passthrough entity in the case of a subrecipient, to permit them to determine the cause and effect to facilitate
prompt and proper corrective action. A
statement of the effect or potential effect should provide a clear, logical link to establish the impact or potential
impact of the difference between the
condition and the criteria.
(6) Identification of questioned costs
and how they were computed. Known
questioned costs must be identified by
applicable Assistance Listings number(s) and applicable Federal award identification number(s).
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§ 200.517 2 CFR Ch. II (1–1–21 Edition)
(7) Information to provide proper perspective for judging the prevalence and consequences of the audit findings,
such as whether the audit findings represent an isolated instance or a systemic problem. Where appropriate, instances identified must be related to the universe and the number of cases
examined and be quantified in terms of
dollar value. The auditor should report
whether the sampling was a statistically valid sample. (8) Identification of whether the
audit finding was a repeat of a finding
in the immediately prior audit and if
so any applicable prior year audit finding numbers.
(9) Recommendations to prevent future occurrences of the deficiency identified in the audit finding. (10) Views of responsible officials of
the auditee.
(c) Reference numbers. Each audit
finding in the schedule of findings and
questioned costs must include a reference number in the format meeting the requirements of the data collection
form submission required by §200.512(b)
to allow for easy referencing of the
audit findings during follow-up.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49574, Aug. 13, 2020]
§ 200.517 Audit documentation.
(a) Retention of audit documentation.
The auditor must retain audit documentation and reports for a minimum of three years after the date of
issuance of the auditor’s report(s) to
the auditee, unless the auditor is notified in writing by the cognizant agency for audit, oversight agency for audit,
cognizant agency for indirect costs, or
pass-through entity to extend the retention period. When the auditor is aware that the Federal agency, passthrough entity, or auditee is contesting an audit finding, the auditor must contact the parties contesting
the audit finding for guidance prior to
destruction of the audit documentation
and reports.
(b) Access to audit documentation.
Audit documentation must be made
available upon request to the cognizant
or oversight agency for audit or its designee, cognizant agency for indirect cost, a Federal agency, or GAO at the
completion of the audit, as part of a
quality review, to resolve audit findings, or to carry out oversight responsibilities consistent with the purposes of this part. Access to audit documentation includes the right of Federal agencies to obtain copies of audit documentation, as is reasonable and necessary. § 200.518 Major program determination.
(a) General. The auditor must use a
risk-based approach to determine
which Federal programs are major programs. This risk-based approach must include consideration of: current and
prior audit experience, oversight by
Federal agencies and pass-through entities, and the inherent risk of the Federal program. The process in paragraphs (b) through (h) of this section must be followed.
(b) Step one. (1) The auditor must
identify the larger Federal programs,
which must be labeled Type A programs. Type A programs are defined as Federal programs with Federal awards
expended during the audit period exceeding the levels outlined in the table in this paragraph (b)(1):
Total Federal awards expended Type A/B threshold
Equal to or exceed $750,000
but less than or equal to
$25 million.
$750,000.
Exceed $25 million but less
than or equal to $100 million.
Total Federal awards expended times .03.
Exceed $100 million but less
than or equal to $1 billion.
$3 million.
Exceed $1 billion but less
than or equal to $10 billion.
Total Federal awards expended times .003.
Exceed $10 billion but less
than or equal to $20 billion.
$30 million.
Exceed $20 billion ................. Total Federal awards expended times .0015. (2) Federal programs not labeled
Type A under paragraph (b)(1) of this
section must be labeled Type B programs.
(3) The inclusion of large loan and
loan guarantees (loans) must not result
in the exclusion of other programs as
Type A programs. When a Federal program providing loans exceeds four times the largest non-loan program it
is considered a large loan program, and
the auditor must consider this Federal
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OMB Guidance § 200.518
Type A programs. This recalculation of
the Type A program is performed after
removing the total of all large loan
programs. For the purposes of this
paragraph a program is only considered
to be a Federal program providing
loans if the value of Federal awards expended for loans within the program comprises fifty percent or more of the
total Federal awards expended for the
program. A cluster of programs is
treated as one program and the value
of Federal awards expended under a
loan program is determined as described in §200.502.
(4) For biennial audits permitted
under §200.504, the determination of
Type A and Type B programs must be
based upon the Federal awards expended during the two-year period. (c) Step two. (1) The auditor must
identify Type A programs which are
low-risk. In making this determination, the auditor must consider whether the requirements in §200.519(c), the results of audit follow-up, or any
changes in personnel or systems affecting the program indicate significantly increased risk and preclude the program from being low risk. For a Type A program to be considered low-risk, it
must have been audited as a major program in at least one of the two most recent audit periods (in the most recent audit period in the case of a biennial audit), and, in the most recent audit period, the program must have
not had:
(i) Internal control deficiencies
which were identified as material
weaknesses in the auditor’s report on
internal control for major programs as
required under §200.515(c);
(ii) A modified opinion on the program in the auditor’s report on major programs as required under §200.515(c);
or
(iii) Known or likely questioned costs
that exceed five percent of the total
Federal awards expended for the program.
(2) Notwithstanding paragraph (c)(1)
of this section, OMB may approve a
Federal awarding agency’s request that
a Type A program may not be considered low risk for a certain recipient.
For example, it may be necessary for a
large Type A program to be audited as
a major program each year at a particular recipient to allow the Federal awarding agency to comply with 31
U.S.C. 3515. The Federal awarding
agency must notify the recipient and,
if known, the auditor of OMB’s approval at least 180 calendar days prior to the end of the fiscal year to be audited.
(d) Step three. (1) The auditor must
identify Type B programs which are
high-risk using professional judgment
and the criteria in §200.519. However,
the auditor is not required to identify
more high-risk Type B programs than
at least one fourth the number of lowrisk Type A programs identified as lowrisk under Step 2 (paragraph (c) of this section). Except for known material
weakness in internal control or compliance problems as discussed in §200.519(b)(1) and (2) and (c)(1), a single
criterion in risk would seldom cause a
Type B program to be considered highrisk. When identifying which Type B programs to risk assess, the auditor is
encouraged to use an approach which
provides an opportunity for different
high-risk Type B programs to be audited as major over a period of time. (2) The auditor is not expected to perform risk assessments on relatively small Federal programs. Therefore, the
auditor is only required to perform risk
assessments on Type B programs that
exceed twenty-five percent (0.25) of the
Type A threshold determined in Step 1
(paragraph (b) of this section).
(e) Step four. At a minimum, the
auditor must audit all of the following
as major programs:
(1) All Type A programs not identified as low risk under step two (paragraph (c)(1) of this section). (2) All Type B programs identified as
high-risk under step three (paragraph
(d) of this section).
(3) Such additional programs as may
be necessary to comply with the percentage of coverage rule discussed in paragraph (f) of this section. This may
require the auditor to audit more programs as major programs than the number of Type A programs.
(f) Percentage of coverage rule. If the
auditee meets the criteria in §200.520,
the auditor need only audit the major
programs identified in Step 4 (paragraphs (e)(1) and (2) of this section) and such additional Federal programs with
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§ 200.519 2 CFR Ch. II (1–1–21 Edition)
Federal awards expended that, in aggregate, all major programs encompass at least 20 percent (0.20) of total Federal awards expended. Otherwise, the auditor must audit the major programs
identified in Step 4 (paragraphs (e)(1)
and (2) of this section) and such additional Federal programs with Federal awards expended that, in aggregate, all
major programs encompass at least 40
percent (0.40) of total Federal awards
expended.
(g) Documentation of risk. The auditor
must include in the audit documentation the risk analysis process used in determining major programs.
(h) Auditor’s judgment. When the
major program determination was performed and documented in accordance with this Subpart, the auditor’s judgment in applying the risk-based approach to determine major programs must be presumed correct. Challenges
by Federal agencies and pass-through
entities must only be for clearly improper use of the requirements in this part. However, Federal agencies and
pass-through entities may provide
auditors guidance about the risk of a
particular Federal program and the
auditor must consider this guidance in
determining major programs in audits
not yet completed.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75887, Dec. 19, 2014; 85 FR 49574, Aug. 13,
2020]
§ 200.519 Criteria for Federal program
risk.
(a) General. The auditor’s determination should be based on an overall evaluation of the risk of noncompliance occurring that could be material to the Federal program. The auditor must
consider criteria, such as described in
paragraphs (b), (c), and (d) of this section, to identify risk in Federal programs. Also, as part of the risk analysis, the auditor may wish to discuss a particular Federal program with
auditee management and the Federal
agency or pass-through entity.
(b) Current and prior audit experience.
(1) Weaknesses in internal control over
Federal programs would indicate higher risk. Consideration should be given to the control environment over Federal programs and such factors as the expectation of management’s adherence to Federal statutes, regulations, and the terms and conditions of Federal awards and the competence and experience of personnel who administer
the Federal programs.
(i) A Federal program administered
under multiple internal control structures may have higher risk. When assessing risk in a large single audit, the auditor must consider whether weaknesses are isolated in a single operating unit (e.g., one college campus) or pervasive throughout the entity.
(ii) When significant parts of a Federal program are passed through to subrecipients, a weak system for monitoring subrecipients would indicate higher risk.
(2) Prior audit findings would indicate higher risk, particularly when the situations identified in the audit findings could have a significant impact on a Federal program or have not been
corrected.
(3) Federal programs not recently audited as major programs may be of higher risk than Federal programs recently audited as major programs without audit findings. (c) Oversight exercised by Federal agencies and pass-through entities. (1) Oversight exercised by Federal agencies or pass-through entities could be used to
assess risk. For example, recent monitoring or other reviews performed by an oversight entity that disclosed no
significant problems would indicate
lower risk, whereas monitoring that
disclosed significant problems would
indicate higher risk.
(2) Federal agencies, with the concurrence of OMB, may identify Federal programs that are higher risk. OMB
will provide this identification in the
compliance supplement.
(d) Inherent risk of the Federal program. (1) The nature of a Federal program may indicate risk. Consideration should be given to the complexity of
the program and the extent to which
the Federal program contracts for
goods and services. For example, Federal programs that disburse funds through third-party contracts or have
eligibility criteria may be of higher
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high risk for noncompliance with requirements of §200.430, but otherwise be at low risk.
(2) The phase of a Federal program in
its life cycle at the Federal agency
may indicate risk. For example, a new
Federal program with new or interim
regulations may have higher risk than
an established program with time-tested regulations. Also, significant changes in Federal programs, statutes,
regulations, or the terms and conditions of Federal awards may increase risk.
(3) The phase of a Federal program in
its life cycle at the auditee may indicate risk. For example, during the first and last years that an auditee participates in a Federal program, the risk may be higher due to start-up or closeout of program activities and staff. (4) Type B programs with larger Federal awards expended would be of higher risk than programs with substantially smaller Federal awards expended. [78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49575, Aug. 13, 2020]
§ 200.520 Criteria for a low-risk
auditee.
An auditee that meets all of the following conditions for each of the preceding two audit periods must qualify as a low-risk auditee and be eligible for
reduced audit coverage in accordance
with §200.518.
(a) Single audits were performed on
an annual basis in accordance with the
provisions of this Subpart, including
submitting the data collection form
and the reporting package to the FAC
within the timeframe specified in
§200.512. A non-Federal entity that has
biennial audits does not qualify as a
low-risk auditee.
(b) The auditor’s opinion on whether
the financial statements were prepared
in accordance with GAAP, or a basis of
accounting required by state law, and
the auditor’s in relation to opinion on
the schedule of expenditures of Federal
awards were unmodified.
(c) There were no deficiencies in internal control which were identified as material weaknesses under the requirements of GAGAS.
(d) The auditor did not report a substantial doubt about the auditee’s ability to continue as a going concern. (e) None of the Federal programs had
audit findings from any of the following in either of the preceding two audit periods in which they were classified as Type A programs:
(1) Internal control deficiencies that
were identified as material weaknesses
in the auditor’s report on internal control for major programs as required under §200.515(c);
(2) A modified opinion on a major
program in the auditor’s report on
major programs as required under
§200.515(c); or
(3) Known or likely questioned costs
that exceeded five percent of the total
Federal awards expended for a Type A
program during the audit period.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49575, Aug. 13, 2020]
MANAGEMENT DECISIONS
§ 200.521 Management decision.
(a) General. The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed
costs, make financial adjustments, or
take other action. If the auditee has
not completed corrective action, a
timetable for follow-up should be
given. Prior to issuing the management decision, the Federal agency or pass-through entity may request additional information or documentation from the auditee, including a request
for auditor assurance related to the
documentation, as a way of mitigating
disallowed costs. The management decision should describe any appeal process available to the auditee. While not required, the Federal agency or passthrough entity may also issue a management decision on findings relating to the financial statements which are
required to be reported in accordance
with GAGAS.
(b) Federal agency. As provided in
§200.513(a)(3)(vii), the cognizant agency
for audit must be responsible for coordinating a management decision for audit findings that affect the programs
of more than one Federal agency. As
provided in §200.513(c)(3)(i), a Federal
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awarding agency is responsible for
issuing a management decision for
findings that relate to Federal awards
it makes to non-Federal entities.
(c) Pass-through entity. As provided in
§200.332(d), the pass-through entity
must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes
to subrecipients.
(d) Time requirements. The Federal
awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report.
(e) Reference numbers. Management
decisions must include the reference
numbers the auditor assigned to each
audit finding in accordance with
§200.516(c).
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49575, Aug. 13, 2020]
APPENDIX I TO PART 200—FULL TEXT OF
NOTICE OF FUNDING OPPORTUNITY
The full text of the notice of funding opportunity is organized in sections. The required format outlined in this appendix indicates immediately following the title of each section whether that section is required in
every announcement or is a Federal awarding agency option. The format is designed so that similar types of information will appear
in the same sections in announcements of
different Federal funding opportunities. Toward that end, there is text in each of the following sections to describe the types of information that a Federal awarding agency would include in that section of an actual
announcement.
A Federal awarding agency that wishes to
include information that the format does not
specifically discuss may address that subject
in whatever section(s) is most appropriate.
For example, if a Federal awarding agency
chooses to address performance goals in the
announcement, it might do so in the funding
opportunity description, the application content, or the reporting requirements.
Similarly, when this format calls for a
type of information to be in a particular section, a Federal awarding agency wishing to address that subject in other sections may
elect to repeat the information in those sections or use cross references between the sections (there should be hyperlinks for crossreferences in any electronic versions of the announcement). For example, a Federal
awarding agency may want to include Section A information about the types of nonFederal entities who are eligible to apply.
The format specifies a standard location for
that information in Section C.1 but does not
preclude repeating the information in Section A or creating a cross reference between Section A and C.1, as long as a potential applicant can find the information quickly and easily from the standard location.
The sections of the full text of the announcement are described in the following paragraphs.
A. PROGRAM DESCRIPTION—REQUIRED
This section contains the full program description of the funding opportunity. It may be as long as needed to adequately communicate to potential applicants the areas in which funding may be provided. It describes
the Federal awarding agency’s funding priorities or the technical or focus areas in which the Federal awarding agency intends to provide assistance. As appropriate, it may include any program history (e.g., whether this is a new program or a new or changed area of
program emphasis). This section must include program goals and objectives, a reference to the relevant Assistance Listings, a description of how the award will contribute
to the achievement of the program’s goals
and objectives, and the expected performance goals, indicators, targets, baseline data, data collection, and other outcomes such
Federal awarding agency expects to achieve,
and may include examples of successful
projects that have been funded previously.
This section also may include other information the Federal awarding agency deems necessary, and must at a minimum include citations for authorizing statutes and regulations for the funding opportunity.
B. FEDERAL AWARD INFORMATION—REQUIRED
This section provides sufficient information to help an applicant make an informed decision about whether to submit a proposal.
Relevant information could include the total
amount of funding that the Federal awarding
agency expects to award through the announcement; the expected performance indicators, targets, baseline data, and data collection; the anticipated number of Federal awards; the expected amounts of individual
Federal awards (which may be a range); the
amount of funding per Federal award, on average, experienced in previous years; and the anticipated start dates and periods of performance for new Federal awards. This section also should address whether applications for renewal or supplementation of existing projects are eligible to compete with applications for new Federal awards.
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This section also must indicate the type(s)
of assistance instrument (e.g., grant, cooperative agreement) that may be awarded if applications are successful. If cooperative agreements may be awarded, this section either should describe the ‘‘substantial involvement’’ that the Federal awarding agency expects to have or should reference where the potential applicant can find that information (e.g., in the funding opportunity description in Section A. or Federal award administration information in Section D. If procurement contracts also may be awarded,
this must be stated.
C. ELIGIBILITY INFORMATION
This section addresses the considerations
or factors that determine applicant or application eligibility. This includes the eligibility of particular types of applicant organizations, any factors affecting the eligibility of the principal investigator or project director, and any criteria that make particular projects ineligible. Federal agencies should
make clear whether an applicant’s failure to
meet an eligibility criterion by the time of
an application deadline will result in the
Federal awarding agency returning the application without review or, even though an application may be reviewed, will preclude
the Federal awarding agency from making a
Federal award. Key elements to be addressed
are:
1. Eligible Applicants—Required. Announcements must clearly identify the types of entities that are eligible to apply. If there are no restrictions on eligibility, this section
may simply indicate that all potential applicants are eligible. If there are restrictions on eligibility, it is important to be clear about
the specific types of entities that are eligible, not just the types that are ineligible.
For example, if the program is limited to
nonprofit organizations subject to 26 U.S.C.
501(c)(3) of the tax code (26 U.S.C. 501(c)(3)),
the announcement should say so. Similarly,
it is better to state explicitly that Native
American tribal organizations are eligible
than to assume that they can unambiguously
infer that from a statement that nonprofit
organizations may apply. Eligibility also can
be expressed by exception, (e.g., open to all
types of domestic applicants other than individuals). This section should refer to any portion of Section D specifying documentation that must be submitted to support an eligibility determination (e.g., proof of
501(c)(3) status as determined by the Internal
Revenue Service or an authorizing tribal resolution). To the extent that any funding restriction in Section D.6 could affect the eligibility of an applicant or project, the announcement must either restate that restriction in this section or provide a cross-reference to its description in Section D.6.
2. Cost Sharing or Matching—Required. Announcements must state whether there is required cost sharing, matching, or cost participation without which an application would be ineligible (if cost sharing is not required, the announcement must explicitly say so). Required cost sharing may be a certain percentage or amount, or may be in the form of contributions of specified items or
activities (e.g., provision of equipment). It is
important that the announcement be clear
about any restrictions on the types of cost
(e.g., in-kind contributions) that are acceptable as cost sharing. Cost sharing as an eligibility criterion includes requirements based in statute or regulation, as described in
§200.306 of this Part. This section should
refer to the appropriate portion(s) of section
D. stating any pre-award requirements for
submission of letters or other documentation
to verify commitments to meet cost-sharing
requirements if a Federal award is made.
3. Other—Required, if applicable. If there are
other eligibility criteria (i.e., criteria that
have the effect of making an application or
project ineligible for Federal awards, whether referred to as ‘‘responsiveness’’ criteria, ‘‘go-no go’’ criteria, ‘‘threshold’’ criteria, or
in other ways), must be clearly stated and
must include a reference to the regulation of
requirement that describes the restriction,
as applicable. For example, if entities that
have been found to be in violation of a particular Federal statute are ineligible, it is important to say so. This section must also
state any limit on the number of applications an applicant may submit under the announcement and make clear whether the limitation is on the submitting organization,
individual investigator/program director, or
both. This section should also address any
eligibility criteria for beneficiaries or for
program participants other than Federal
award recipients.
D. APPLICATION AND SUBMISSION INFORMATION
1. Address to Request Application Package—
Required. Potential applicants must be told
how to get application forms, kits, or other
materials needed to apply (if this announcement contains everything needed, this section need only say so). An Internet address where the materials can be accessed is acceptable. However, since high-speed Internet access is not yet universally available for
downloading documents, and applicants may
have additional accessibility requirements,
there also should be a way for potential applicants to request paper copies of materials, such as a U.S. Postal Service mailing address, telephone or FAX number, Telephone Device for the Deaf (TDD), Text Telephone
(TTY) number, and/or Federal Information
Relay Service (FIRS) number.
2. Content and Form of Application Submission—Required. This section must identify VerDate Sep<11>2014 13:23 Jun 29, 2021 Jkt 253005 PO 00000 Frm 00227 Fmt 8010 Sfmt 8002 Y:\SGML\253005.XXX 253005
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the required content of an application and
the forms or formats that an applicant must
use to submit it. If any requirements are
stated elsewhere because they are general requirements that apply to multiple programs or funding opportunities, this section should
refer to where those requirements may be
found. This section also should include required forms or formats as part of the announcement or state where the applicant may obtain them.
This section should specifically address
content and form or format requirements
for:
i. Pre-applications, letters of intent, or
white papers required or encouraged (see
Section D.4), including any limitations on
the number of pages or other formatting requirements similar to those for full applications. ii. The application as a whole. For all submissions, this would include any limitations on the number of pages, font size and typeface, margins, paper size, number of copies, and sequence or assembly requirements. If
electronic submission is permitted or required, this could include special requirements for formatting or signatures. iii. Component pieces of the application
(e.g., if all copies of the application must
bear original signatures on the face page or
the program narrative may not exceed 10
pages). This includes any pieces that may be
submitted separately by third parties (e.g.,
references or letters confirming commitments from third parties that will be contributing a portion of any required cost sharing). iv. Information that successful applicants
must submit after notification of intent to
make a Federal award, but prior to a Federal
award. This could include evidence of compliance with requirements relating to human subjects or information needed to comply
with the National Environmental Policy Act
(NEPA) (42 U.S.C. 4321–4370h).
3. Unique entity identifier and System for
Award Management (SAM)—Required. This
paragraph must state clearly that each applicant (unless the applicant is an individual or Federal awarding agency that is excepted
from those requirements under 2 CFR
25.110(b) or (c), or has an exception approved
by the Federal awarding agency under 2 CFR
25.110(d)) is required to: (i) Be registered in
SAM before submitting its application; (ii)
Provide a valid unique entity identifier in its
application; and (iii) Continue to maintain
an active SAM registration with current information at all times during which it has an active Federal award or an application or
plan under consideration by a Federal awarding agency. It also must state that the Federal awarding agency may not make a Federal award to an applicant until the applicant has complied with all applicable unique entity identifier and SAM requirements and,
if an applicant has not fully complied with
the requirements by the time the Federal
awarding agency is ready to make a Federal
award, the Federal awarding agency may determine that the applicant is not qualified to receive a Federal award and use that determination as a basis for making a Federal award to another applicant.
4. Submission Dates and Times—Required.
Announcements must identify due dates and
times for all submissions. This includes not
only the full applications but also any preliminary submissions (e.g., letters of intent, white papers, or pre-applications). It also includes any other submissions of information before Federal award that are separate from
the full application. If the funding opportunity is a general announcement that is open for a period of time with no specific due
dates for applications, this section should
say so. Note that the information on dates
that is included in this section also must appear with other overview information in a location preceding the full text of the announcement (see §200.204 of this part).
5. Intergovernmental Review—Required, if applicable. If the funding opportunity is subject to Executive Order 12372, ‘‘Intergovernmental Review of Federal Programs,’’ the notice must say so and applicants must contact their state’s Single Point of Contact (SPOC) to find out about and comply with
the state’s process under Executive Order
12372, it may be useful to inform potential
applicants that the names and addresses of
the SPOCs are listed in the Office of Management and Budget’s website.
6. Funding Restrictions—Required. Notices
must include information on funding restrictions in order to allow an applicant to develop an application and budget consistent with program requirements. Examples are
whether construction is an allowable activity, if there are any limitations on direct costs such as foreign travel or equipment
purchases, and if there are any limits on indirect costs (or facilities and administrative costs). Applicants must be advised if Federal
awards will not allow reimbursement of preFederal award costs.
7. Other Submission Requirements— Required.
This section must address any other submission requirements not included in the other paragraphs of this section. This might include the format of submission, i.e., paper or electronic, for each type of required submission. Applicants should not be required to submit in more than one format and this section should indicate whether they may choose whether to submit applications in
hard copy or electronically, may submit only
in hard copy, or may submit only electronically.
This section also must indicate where applications (and any pre-applications) must be submitted if sent by postal mail, electronic
means, or hand-delivery. For postal mail
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1With respect to electronic methods for
providing information about funding opportunities or accepting applicants’ submissions of information, each Federal awarding agency is responsible for compliance with Section 508 of the Rehabilitation Act of 1973 (29
U.S.C. 794d).
submission, this must include the name of an
office, official, individual or function (e.g.,
application receipt center) and a complete
mailing address. For electronic submission,
this must include the URL or email address;
whether a password(s) is required; whether
particular software or other electronic capabilities are required; what to do in the event of system problems and a point of contact
who will be available in the event the applicant experiences technical difficulties. 1 E. APPLICATION REVIEW INFORMATION
1. Criteria—Required. This section must address the criteria that the Federal awarding agency will use to evaluate applications.
This includes the merit and other review criteria that evaluators will use to judge applications, including any statutory, regulatory, or other preferences (e.g., minority status or
Native American tribal preferences) that
will be applied in the review process. These
criteria are distinct from eligibility criteria
that are addressed before an application is
accepted for review and any program policy
or other factors that are applied during the
selection process, after the review process is
completed. The intent is to make the application process transparent so applicants can make informed decisions when preparing
their applications to maximize fairness of
the process. The announcement should clearly describe all criteria, including any subcriteria. If criteria vary in importance, the announcement should specify the relative
percentages, weights, or other means used to
distinguish among them. For statutory, regulatory, or other preferences, the announcement should provide a detailed explanation of those preferences with an explicit indication of their effect (e.g., whether they result in additional points being assigned).
If an applicant’s proposed cost sharing will
be considered in the review process (as opposed to being an eligibility criterion described in Section C.2), the announcement must specifically address how it will be considered (e.g., to assign a certain number of additional points to applicants who offer
cost sharing, or to break ties among applications with equivalent scores after evaluation against all other factors). If cost sharing will
not be considered in the evaluation, the announcement should say so, so that there is no ambiguity for potential applicants. Vague
statements that cost sharing is encouraged,
without clarification as to what that means,
are unhelpful to applicants. It also is important that the announcement be clear about any restrictions on the types of cost (e.g., inkind contributions) that are acceptable as cost sharing.
2. Review and Selection Process—Required.
This section may vary in the level of detail
provided. The announcement must list any
program policy or other factors or elements,
other than merit criteria, that the selecting
official may use in selecting applications for
Federal award (e.g., geographical dispersion,
program balance, or diversity). The Federal
awarding agency may also include other appropriate details. For example, this section may indicate who is responsible for evaluation against the merit criteria (e.g., peers external to the Federal awarding agency or Federal awarding agency personnel) and/or
who makes the final selections for Federal
awards. If there is a multi-phase review process (e.g., an external panel advising internal Federal awarding agency personnel who
make final recommendations to the deciding
official), the announcement may describe the
phases. It also may include: the number of
people on an evaluation panel and how it operates, the way reviewers are selected, reviewer qualifications, and the way that conflicts of interest are avoided. With respect to electronic methods for providing information about funding opportunities or accepting applicants’ submissions of information, each Federal awarding agency is responsible
for compliance with Section 508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d).
In addition, if the Federal awarding agency
permits applicants to nominate suggested reviewers of their applications or suggest those they feel may be inappropriate due to a conflict of interest, that information should be included in this section.
3. For any Federal award under a notice of
funding opportunity, if the Federal awarding
agency anticipates that the total Federal
share will be greater than the simplified acquisition threshold on any Federal award under a notice of funding opportunity may
include, over the period of performance, this
section must also inform applicants:
i. That the Federal awarding agency, prior
to making a Federal award with a total
amount of Federal share greater than the
simplified acquisition threshold, is required
to review and consider any information
about the applicant that is in the designated
integrity and performance system accessible
through SAM (currently FAPIIS) (see 41
U.S.C. 2313);
ii. That an applicant, at its option, may review information in the designated integrity and performance systems accessible through
SAM and comment on any information about
itself that a Federal awarding agency previously entered and is currently in the designated integrity and performance system accessible through SAM;
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iii. That the Federal awarding agency will
consider any comments by the applicant, in
addition to the other information in the designated integrity and performance system, in making a judgment about the applicant’s
integrity, business ethics, and record of performance under Federal awards when completing the review of risk posed by applicants as described in §200.206.
4. Anticipated Announcement and Federal
Award Dates—Optional. This section is intended to provide applicants with information they can use for planning purposes. If there is a single application deadline followed by the simultaneous review of all applications, the Federal awarding agency can include in this section information about the
anticipated dates for announcing or notifying successful and unsuccessful applicants and for having Federal awards in place. If applications are received and evaluated on a ‘‘rolling’’ basis at different times during an
extended period, it may be appropriate to
give applicants an estimate of the time needed to process an application and notify the applicant of the Federal awarding agency’s
decision.
F. FEDERAL AWARD ADMINISTRATION
INFORMATION
1. Federal Award Notices—Required. This
section must address what a successful applicant can expect to receive following selection. If the Federal awarding agency’s practice is to provide a separate notice stating that an application has been selected before
it actually makes the Federal award, this
section would be the place to indicate that
the letter is not an authorization to begin
performance (to the extent that it allows
charging to Federal awards of pre-award
costs at the non-Federal entity’s own risk).
This section should indicate that the notice
of Federal award signed by the grants officer
(or equivalent) is the authorizing document,
and whether it is provided through postal
mail or by electronic means and to whom. It
also may address the timing, form, and content of notifications to unsuccessful applicants. See also §200.211.
2. Administrative and National Policy Requirements—Required. This section must identify the usual administrative and national policy requirements the Federal awarding
agency’s Federal awards may include. Providing this information lets a potential applicant identify any requirements with which it would have difficulty complying if
its application is successful. In those cases,
early notification about the requirements allows the potential applicant to decide not to apply or to take needed actions before receiving the Federal award. The announcement need not include all of the terms and conditions of the Federal award, but may
refer to a document (with information about
how to obtain it) or Internet site where applicants can see the terms and conditions. If this funding opportunity will lead to Federal
awards with some special terms and conditions that differ from the Federal awarding agency’s usual (sometimes called ‘‘general’’)
terms and conditions, this section should
highlight those special terms and conditions.
Doing so will alert applicants that have received Federal awards from the Federal awarding agency previously and might not
otherwise expect different terms and conditions. For the same reason, the announcement should inform potential applicants about special requirements that could apply
to particular Federal awards after the review
of applications and other information, based
on the particular circumstances of the effort
to be supported (e.g., if human subjects were
to be involved or if some situations may justify special terms on intellectual property, data sharing or security requirements).
3. Reporting—Required. This section must
include general information about the type
(e.g., financial or performance), frequency,
and means of submission (paper or electronic) of post-Federal award reporting requirements. Highlight any special reporting requirements for Federal awards under this
funding opportunity that differ (e.g., by report type, frequency, form/format, or circumstances for use) from what the Federal awarding agency’s Federal awards usually
require. Federal awarding agencies must also
describe in this section all relevant requirements such as those at 2 CFR 180.335 and 180.350.
If the Federal share of any Federal award
may include more than $500,000 over the period of performance, this section must inform potential applicants about the post award reporting requirements reflected in
appendix XII to this part.
G. FEDERAL AWARDING AGENCY CONTACT(S)—
REQUIRED
The announcement must give potential applicants a point(s) of contact for answering questions or helping with problems while the
funding opportunity is open. The intent of
this requirement is to be as helpful as possible to potential applicants, so the Federal awarding agency should consider approaches
such as giving:
i. Points of contact who may be reached in
multiple ways (e.g., by telephone, FAX, and/
or email, as well as regular mail).
ii. A fax or email address that multiple
people access, so that someone will respond
even if others are unexpectedly absent during critical periods. iii. Different contacts for distinct kinds of
help (e.g., one for questions of programmatic
content and a second for administrative
questions).
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H. OTHER INFORMATION—OPTIONAL
This section may include any additional
information that will assist a potential applicant. For example, the section might:
i. Indicate whether this is a new program
or a one-time initiative.
ii. Mention related programs or other upcoming or ongoing Federal awarding agency funding opportunities for similar activities.
iii. Include current Internet addresses for
Federal awarding agency Web sites that may
be useful to an applicant in understanding
the program.
iv. Alert applicants to the need to identify
proprietary information and inform them
about the way the Federal awarding agency
will handle it.
v. Include certain routine notices to applicants (e.g., that the Federal Government is not obligated to make any Federal award as
a result of the announcement or that only
grants officers can bind the Federal Government to the expenditure of funds). [78 FR 78608, Dec. 26, 2013, as amended at 80
FR 43310, July 22, 2015; 85 FR 49575, Aug. 13,
2020]
APPENDIX II TO PART 200—CONTRACT
PROVISIONS FOR NON-FEDERAL ENTITY CONTRACTS UNDER FEDERAL AWARDS
In addition to other provisions required by
the Federal agency or non-Federal entity, all
contracts made by the non-Federal entity
under the Federal award must contain provisions covering the following, as applicable. (A) Contracts for more than the simplified
acquisition threshold, which is the inflation
adjusted amount determined by the Civilian
Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils)
as authorized by 41 U.S.C. 1908, must address
administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for
such sanctions and penalties as appropriate.
(B) All contracts in excess of $10,000 must
address termination for cause and for convenience by the non-Federal entity including the manner by which it will be effected and
the basis for settlement.
(C) Equal Employment Opportunity. Except as otherwise provided under 41 CFR Part 60, all contracts that meet the definition of ‘‘federally assisted construction contract’’ in 41 CFR Part 60–1.3 must include the equal opportunity clause provided under 41
CFR 60–1.4(b), in accordance with Executive
Order 11246, ‘‘Equal Employment Opportunity’’ (30 FR 12319, 12935, 3 CFR Part, 1964– 1965 Comp., p. 339), as amended by Executive
Order 11375, ‘‘Amending Executive Order
11246 Relating to Equal Employment Opportunity,’’ and implementing regulations at 41 CFR part 60, ‘‘Office of Federal Contract
Compliance Programs, Equal Employment
Opportunity, Department of Labor.’’
(D) Davis-Bacon Act, as amended (40 U.S.C.
3141–3148). When required by Federal program
legislation, all prime construction contracts
in excess of $2,000 awarded by non-Federal
entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141–3144, and 3146–3148) as supplemented by
Department of Labor regulations (29 CFR
Part 5, ‘‘Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction’’). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination
made by the Secretary of Labor. In addition,
contractors must be required to pay wages
not less than once a week. The non-Federal
entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract
must be conditioned upon the acceptance of
the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency.
The contracts must also include a provision
for compliance with the Copeland ‘‘AntiKickback’’ Act (40 U.S.C. 3145), 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 must 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 or she is otherwise entitled.
The non-Federal entity must report all suspected or reported violations to the Federal awarding agency.
(E) Contract Work Hours and Safety
Standards Act (40 U.S.C. 3701–3708). Where
applicable, all contracts awarded by the nonFederal entity in excess of $100,000 that involve the employment of mechanics or laborers must include a provision for compliance with 40 U.S.C. 3702 and 3704, as supplemented
by Department of Labor regulations (29 CFR
Part 5). Under 40 U.S.C. 3702 of the Act, each
contractor must 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 one and a half times the basic rate of pay for all hours
worked in excess of 40 hours in the work
week. The requirements of 40 U.S.C. 3704 are
applicable to construction work and provide
that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary,
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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. (F) Rights to Inventions Made Under a
Contract or Agreement. If the Federal award
meets the definition of ‘‘funding agreement’’
under 37 CFR §401.2 (a) and the recipient or
subrecipient wishes to enter into a contract
with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that ‘‘funding agreement,’’ the recipient or subrecipient must comply with the requirements of 37 CFR Part 401, ‘‘Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,’’ and any implementing regulations issued by the awarding agency. (G) Clean Air Act (42 U.S.C. 7401–7671q.) and
the Federal Water Pollution Control Act (33
U.S.C. 1251–1387), as amended—Contracts and
subgrants of amounts in excess of $150,000
must contain a provision that requires the
non-Federal award to agree to comply with
all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401–7671q) and the Federal Water
Pollution Control Act as amended (33 U.S.C.
1251–1387). Violations must be reported to the
Federal awarding agency and the Regional
Office of the Environmental Protection
Agency (EPA).
(H) Debarment and Suspension (Executive
Orders 12549 and 12689)—A contract award
(see 2 CFR 180.220) must not be made to parties listed on the governmentwide exclusions in the System for Award Management
(SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189)
and 12689 (3 CFR part 1989 Comp., p. 235),
‘‘Debarment and Suspension.’’ SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority
other than Executive Order 12549.
(I) Byrd Anti-Lobbying Amendment (31
U.S.C. 1352)—Contractors that apply or bid
for an award exceeding $100,000 must 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 must 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 non-Federal award.
(J) See §200.323.
(K) See §200.216.
(L) See §200.322.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75888, Dec. 19, 2014; 85 FR 49577, Aug. 13,
2020]
APPENDIX III TO PART 200—INDIRECT
(F&A) COSTS IDENTIFICATION AND
ASSIGNMENT, AND RATE DETERMINATION FOR INSTITUTIONS OF HIGHER
EDUCATION (IHES)
A. GENERAL
This appendix provides criteria for identifying and computing indirect (or indirect (F&A)) rates at IHEs (institutions). Indirect
(F&A) costs are those that are incurred for
common or joint objectives and therefore
cannot be identified readily and specifically
with a particular sponsored project, an instructional activity, or any other institutional activity. See subsection B.1 for a discussion of the components of indirect (F&A) costs.
1. Major Functions of an Institution
Refers to instruction, organized research,
other sponsored activities and other institutional activities as defined in this section:
a. Instruction means the teaching and
training activities of an institution. Except
for research training as provided in subsection b, this term includes all teaching and training activities, whether they are offered
for credits toward a degree or certificate or
on a non-credit basis, and whether they are
offered through regular academic departments or separate divisions, such as a summer school division or an extension division.
Also considered part of this major function
are departmental research, and, where
agreed to, university research.
(1) Sponsored instruction and training means
specific instructional or training activity established by grant, contract, or cooperative agreement. For purposes of the cost principles, this activity may be considered a major function even though an institution’s
accounting treatment may include it in the
instruction function.
(2) Departmental research means research,
development and scholarly activities that
are not organized research and, consequently, are not separately budgeted and accounted for. Departmental research, for
purposes of this document, is not considered
as a major function, but as a part of the instruction function of the institution. (3) Only mandatory cost sharing or cost
sharing specifically committed in the project
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cost rate or reflected in any allocation of indirect costs. Salary costs above statutory limits are not considered cost sharing.
b. Organized research means all research
and development activities of an institution
that are separately budgeted and accounted
for. It includes:
(1) Sponsored research means all research
and development activities that are sponsored by Federal and non-Federal agencies and organizations. This term includes activities involving the training of individuals in research techniques (commonly called research training) where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function. (2) University research means all research
and development activities that are separately budgeted and accounted for by the institution under an internal application of institutional funds. University research, for purposes of this document, must be combined with sponsored research under the function of organized research.
c. Other sponsored activities means programs
and projects financed by Federal and nonFederal agencies and organizations which involve the performance of work other than instruction and organized research. Examples of such programs and projects are health
service projects and community service programs. However, when any of these activities are undertaken by the institution without
outside support, they may be classified as
other institutional activities.
d. Other institutional activities means all activities of an institution except for instruction, departmental research, organized research, and other sponsored activities, as defined in this section; indirect (F&A) cost activities identified in this Appendix paragraph B, Identification and assignment of indirect (F&A) costs; and specialized services facilities described in §200.468 of this part.
2. Criteria for Distribution
a. Base period. A base period for distribution of indirect (F&A) costs is the period during which the costs are incurred. The
base period normally should coincide with
the fiscal year established by the institution,
but in any event the base period should be so
selected as to avoid inequities in the distribution of costs. b. Need for cost groupings. The overall objective of the indirect (F&A) cost allocation process is to distribute the indirect (F&A)
costs described in Section B, Identification
and assignment of indirect (F&A) costs, to
the major functions of the institution in proportions reasonably consistent with the nature and extent of their use of the institution’s resources. In order to achieve this objective, it may be necessary to provide for selective distribution by establishing separate groupings of cost within one or more of the indirect (F&A) cost categories referred
to in subsection B.1. In general, the cost
groupings established within a category
should constitute, in each case, a pool of
those items of expense that are considered to
be of like nature in terms of their relative
contribution to (or degree of remoteness
from) the particular cost objectives to which
distribution is appropriate. Cost groupings
should be established considering the general
guides provided in subsection c of this section. Each such pool or cost grouping should then be distributed individually to the related cost objectives, using the distribution base or method most appropriate in light of
the guidelines set forth in subsection d of
this section.
c. General considerations on cost groupings.
The extent to which separate cost groupings
and selective distribution would be appropriate at an institution is a matter of judgment to be determined on a case-by-case basis. Typical situations which may warrant
the establishment of two or more separate
cost groupings (based on account classification or analysis) within an indirect (F&A) cost category include but are not limited to
the following:
(1) If certain items or categories of expense
relate solely to one of the major functions of
the institution or to less than all functions,
such expenses should be set aside as a separate cost grouping for direct assignment or selective allocation in accordance with the
guides provided in subsections b and d.
(2) If any types of expense ordinarily treated as general administration or departmental administration are charged to Federal awards as direct costs, expenses applicable to other activities of the institution when incurred for the same purposes in like
circumstances must, through separate cost
groupings, be excluded from the indirect
(F&A) costs allocable to those Federal
awards and included in the direct cost of
other activities for cost allocation purposes.
(3) If it is determined that certain expenses
are for the support of a service unit or facility whose output is susceptible of measurement on a workload or other quantitative basis, such expenses should be set aside as a
separate cost grouping for distribution on
such basis to organized research, instructional, and other activities at the institution or within the department.
(4) If activities provide their own purchasing, personnel administration, building maintenance or similar service, the distribution of general administration and general expenses, or operation and maintenance expenses to such activities should be accomplished through cost groupings which include only that portion of central indirect (F&A)
costs (such as for overall management)
which are properly allocable to such activities.
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(5) If the institution elects to treat fringe
benefits as indirect (F&A) charges, such
costs should be set aside as a separate cost
grouping for selective distribution to related
cost objectives.
(6) The number of separate cost groupings
within a category should be held within
practical limits, after taking into consideration the materiality of the amounts involved and the degree of precision attainable through less selective methods of distribution.
d. Selection of distribution method.
(1) Actual conditions must be taken into
account in selecting the method or base to
be used in distributing individual cost
groupings. The essential consideration in selecting a base is that it be the one best suited for assigning the pool of costs to cost objectives in accordance with benefits derived; with a traceable cause-and-effect relationship; or with logic and reason, where neither benefit nor a cause-and-effect relationship is
determinable.
(2) If a cost grouping can be identified directly with the cost objective benefitted, it should be assigned to that cost objective.
(3) If the expenses in a cost grouping are
more general in nature, the distribution may
be based on a cost analysis study which results in an equitable distribution of the costs. Such cost analysis studies may take
into consideration weighting factors, population, or space occupied if appropriate. Cost analysis studies, however, must (a) be appropriately documented in sufficient detail for subsequent review by the cognizant agency
for indirect costs, (b) distribute the costs to
the related cost objectives in accordance
with the relative benefits derived, (c) be statistically sound, (d) be performed specifically at the institution at which the results are to
be used, and (e) be reviewed periodically, but
not less frequently than rate negotiations,
updated if necessary, and used consistently.
Any assumptions made in the study must be
stated and explained. The use of cost analysis studies and periodic changes in the method of cost distribution must be fully
justified.
(4) If a cost analysis study is not performed, or if the study does not result in an equitable distribution of the costs, the distribution must be made in accordance with the appropriate base cited in Section B, unless one of the following conditions is met:
(a) It can be demonstrated that the use of
a different base would result in a more equitable allocation of the costs, or that a more readily available base would not increase the
costs charged to Federal awards, or
(b) The institution qualifies for, and elects
to use, the simplified method for computing
indirect (F&A) cost rates described in Section D.
(5) Notwithstanding subsection (3), effective July 1, 1998, a cost analysis or base other than that in Section B must not be used to
distribute utility or student services costs.
Instead, subsection B.4.c, may be used in the
recovery of utility costs.
e. Order of distribution.
(1) Indirect (F&A) costs are the broad categories of costs discussed in Section B.1. (2) Depreciation, interest expenses, operation and maintenance expenses, and general administrative and general expenses should
be allocated in that order to the remaining
indirect (F&A) cost categories as well as to
the major functions and specialized service
facilities of the institution. Other cost categories may be allocated in the order determined to be most appropriate by the institutions. When cross allocation of costs is made as provided in subsection (3), this order of allocation does not apply. (3) Normally an indirect (F&A) cost category will be considered closed once it has been allocated to other cost objectives, and
costs may not be subsequently allocated to
it. However, a cross allocation of costs between two or more indirect (F&A) cost categories may be used if such allocation will result in a more equitable allocation of
costs. If a cross allocation is used, an appropriate modification to the composition of the indirect (F&A) cost categories described
in Section B is required.
B. IDENTIFICATION AND ASSIGNMENT OF
INDIRECT (F&A) COSTS
1. Definition of Facilities and Administration
See §200.414 which provides the basis for
these indirect cost requirements.
2. Depreciation
a. The expenses under this heading are the
portion of the costs of the institution’s
buildings, capital improvements to land and
buildings, and equipment which are computed in accordance with §200.436. b. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be allocated in the following manner:
(1) Depreciation on buildings used exclusively in the conduct of a single function, and on capital improvements and equipment
used in such buildings, must be assigned to
that function.
(2) Depreciation on buildings used for more
than one function, and on capital improvements and equipment used in such buildings, must be allocated to the individual functions
performed in each building on the basis of
usable square feet of space, excluding common areas such as hallways, stairwells, and rest rooms.
(3) Depreciation on buildings, capital improvements and equipment related to space (e.g., individual rooms, laboratories) used
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treated as follows. The cost of each jointly
used unit of space must be allocated to benefitting functions on the basis of:
(a) The employee full-time equivalents
(FTEs) or salaries and wages of those individual functions benefitting from the use of that space; or
(b) Institution-wide employee FTEs or salaries and wages applicable to the benefitting major functions (see Section A.1) of the institution.
(4) Depreciation on certain capital improvements to land, such as paved parking areas, fences, sidewalks, and the like, not included in the cost of buildings, must be allocated to user categories of students and employees on a full-time equivalent basis. The amount allocated to the student category
must be assigned to the instruction function
of the institution. The amount allocated to
the employee category must be further allocated to the major functions of the institution in proportion to the salaries and wages of all employees applicable to those functions.
3. Interest
Interest on debt associated with certain
buildings, equipment and capital improvements, as defined in §200.449, must be classified as an expenditure under the category Facilities. These costs must be allocated in
the same manner as the depreciation on the
buildings, equipment and capital improvements to which the interest relates.
4. Operation and Maintenance Expenses
a. The expenses under this heading are
those that have been incurred for the administration, supervision, operation, maintenance, preservation, and protection of the institution’s physical plant. They include expenses normally incurred for such items as janitorial and utility services; repairs and
ordinary or normal alterations of buildings,
furniture and equipment; care of grounds;
maintenance and operation of buildings and
other plant facilities; security; earthquake
and disaster preparedness; environmental
safety; hazardous waste disposal; property,
liability and all other insurance relating to
property; space and capital leasing; facility
planning and management; and central receiving. The operation and maintenance expense category should also include its allocable share of fringe benefit costs, depreciation, and interest costs. b. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be allocated in the same manner as described in subsection
2.b for depreciation.
c. A utility cost adjustment of up to 1.3
percentage points may be included in the negotiated indirect cost rate of the IHE for organized research, per the computation alternatives in paragraphs (c)(1) and (2) of this section:
(1) Where space is devoted to a single function and metering allows unambiguous measurement of usage related to that space, costs must be assigned to the function located in
that space.
(2) Where space is allocated to different
functions and metering does not allow unambiguous measurement of usage by function, costs must be allocated as follows:
(i) Utilities costs should be apportioned to
functions in the same manner as depreciation, based on the calculated difference between the site or building actual square footage for monitored research laboratory space (site, building, floor, or room), and a separate calculation prepared by the IHE using the ‘‘effective square footage’’ described in
subsection (c)(2)(ii) of this section.
(ii) ‘‘Effective square footage’’ allocated to
research laboratory space must be calculated
as the actual square footage times the relative energy utilization index (REUI) posted on the OMB Web site at the time of a rate
determination.
A. This index is the ratio of a laboratory
energy use index (lab EUI) to the corresponding index for overall average college or university space (college EUI).
B. In July 2012, values for these two indices
(taken respectively from the Lawrence
Berkeley Laboratory ‘‘Labs for the 21st Century’’ benchmarking tool and the US Department of Energy ‘‘Buildings Energy Databook’’ and were 310 kBtu/sq ft-yr. and
155 kBtu/sq ft-yr., so that the adjustment
ratio is 2.0 by this methodology. To retain
currency, OMB will adjust the EUI numbers
from time to time (no more often than annually nor less often than every 5 years), using reliable and publicly disclosed data. Current
values of both the EUIs and the REUI will be
posted on the OMB website.
5. General Administration and General Expenses
a. The expenses under this heading are
those that have been incurred for the general
executive and administrative offices of educational institutions and other expenses of a general character which do not relate solely
to any major function of the institution; i.e.,
solely to (1) instruction, (2) organized research, (3) other sponsored activities, or (4) other institutional activities. The general
administration and general expense category
should also include its allocable share of
fringe benefit costs, operation and maintenance expense, depreciation, and interest costs. Examples of general administration
and general expenses include: Those expenses
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services, budget and planning, personnel
management, and safety and risk management; the office of the General Counsel; and the operations of the central administrative
management information systems. General
administration and general expenses must
not include expenses incurred within nonuniversity-wide deans’ offices, academic departments, organized research units, or similar organizational units. (See subsection 6.) b. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be grouped first according to common major functions of the
institution to which they render services or
provide benefits. The aggregate expenses of
each group must then be allocated to serviced or benefitted functions on the modified total cost basis. Modified total costs consist
of the same elements as those in Section C.2.
When an activity included in this indirect
(F&A) cost category provides a service or
product to another institution or organization, an appropriate adjustment must be made to either the expenses or the basis of
allocation or both, to assure a proper allocation of costs.
6. Departmental Administration Expenses
a. The expenses under this heading are
those that have been incurred for administrative and supporting services that benefit common or joint departmental activities or
objectives in academic deans’ offices, academic departments and divisions, and organized research units. Organized research units include such units as institutes, study
centers, and research centers. Departmental
administration expenses are subject to the
following limitations.
(1) Academic deans’ offices. Salaries and
operating expenses are limited to those attributable to administrative functions. (2) Academic departments:
(a) Salaries and fringe benefits attributable to the administrative work (including bid and proposal preparation) of faculty (including department heads) and other professional personnel conducting research and/or instruction, must be allowed at a rate of 3.6
percent of modified total direct costs. This
category does not include professional business or professional administrative officers.
This allowance must be added to the computation of the indirect (F&A) cost rate for major functions in Section C; the expenses
covered by the allowance must be excluded
from the departmental administration cost
pool. No documentation is required to support this allowance. (b) Other administrative and supporting
expenses incurred within academic departments are allowable provided they are treated consistently in like circumstances. This would include expenses such as the salaries
of secretarial and clerical staffs, the salaries
of administrative officers and assistants,
travel, office supplies, stockrooms, and the
like.
(3) Other fringe benefit costs applicable to
the salaries and wages included in subsections (1) and (2) are allowable, as well as an appropriate share of general administration and general expenses, operation and maintenance expenses, and depreciation.
(4) Federal agencies may authorize reimbursement of additional costs for department heads and faculty only in exceptional cases
where an institution can demonstrate undue
hardship or detriment to project performance.
b. The following guidelines apply to the determination of departmental administrative costs as direct or indirect (F&A) costs.
(1) In developing the departmental administration cost pool, special care should be exercised to ensure that costs incurred for the same purpose in like circumstances are
treated consistently as either direct or indirect (F&A) costs. For example, salaries of technical staff, laboratory supplies (e.g.,
chemicals), telephone toll charges, animals,
animal care costs, computer costs, travel
costs, and specialized shop costs must be
treated as direct costs wherever identifiable
to a particular cost objective. Direct charging of these costs may be accomplished through specific identification of individual
costs to benefitting cost objectives, or
through recharge centers or specialized service facilities, as appropriate under the circumstances. See §§200.413(c) and 200.468. (2) Items such as office supplies, postage,
local telephone costs, and memberships must
normally be treated as indirect (F&A) costs.
c. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be allocated as follows:
(1) The administrative expenses of the
dean’s office of each college and school must
be allocated to the academic departments
within that college or school on the modified
total cost basis.
(2) The administrative expenses of each
academic department, and the department’s
share of the expenses allocated in subsection
(1) must be allocated to the appropriate functions of the department on the modified total cost basis.
7. Sponsored Projects Administration
a. The expenses under this heading are limited to those incurred by a separate organization(s) established primarily to administer sponsored projects, including such functions
as grant and contract administration (Federal and non-Federal), special security, purchasing, personnel, administration, and editing and publishing of research and other reports. They include the salaries and expenses of the head of such organization, assistants,
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supporting activities maintained by the organization, such as stock rooms, print shops, and the like. This category also includes an
allocable share of fringe benefit costs, general administration and general expenses, operation and maintenance expenses, and depreciation. Appropriate adjustments will be made for services provided to other functions
or organizations.
b. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be allocated to the major functions of the institution under
which the sponsored projects are conducted
on the basis of the modified total cost of
sponsored projects.
c. An appropriate adjustment must be
made to eliminate any duplicate charges to
Federal awards when this category includes
similar or identical activities as those included in the general administration and general expense category or other indirect
(F&A) cost items, such as accounting, procurement, or personnel administration.
8. Library Expenses
a. The expenses under this heading are
those that have been incurred for the operation of the library, including the cost of books and library materials purchased for
the library, less any items of library income
that qualify as applicable credits under
§200.406. The library expense category should
also include the fringe benefits applicable to
the salaries and wages included therein, an
appropriate share of general administration
and general expense, operation and maintenance expense, and depreciation. Costs incurred in the purchases of rare books (museum-type books) with no value to Federal awards should not be allocated to them.
b. In the absence of the alternatives provided for in Section A.2.d, the expenses included in this category must be allocated first on the basis of primary categories of
users, including students, professional employees, and other users. (1) The student category must consist of
full-time equivalent students enrolled at the
institution, regardless of whether they earn
credits toward a degree or certificate.
(2) The professional employee category
must consist of all faculty members and
other professional employees of the institution, on a full-time equivalent basis. This category may also include post-doctorate
fellows and graduate students.
(3) The other users category must consist
of a reasonable factor as determined by institutional records to account for all other users of library facilities.
c. Amount allocated in paragraph b of this
section must be assigned further as follows:
(1) The amount in the student category
must be assigned to the instruction function
of the institution.
(2) The amount in the professional employee category must be assigned to the major functions of the institution in proportion to the salaries and wages of all faculty members and other professional employees
applicable to those functions.
(3) The amount in the other users category
must be assigned to the other institutional
activities function of the institution.
9. Student Administration and Services
a. The expenses under this heading are
those that have been incurred for the administration of student affairs and for services to students, including expenses of such activities as deans of students, admissions, registrar, counseling and placement services, student advisers, student health and infirmary services, catalogs, and commencements and convocations. The salaries of members of the academic staff whose responsibilities to the institution require administrative work that benefits sponsored projects may also be included to the extent that the
portion charged to student administration is
determined in accordance with subpart E of
this Part. This expense category also includes the fringe benefit costs applicable to the salaries and wages included therein, an
appropriate share of general administration
and general expenses, operation and maintenance, interest expense, and depreciation. b. In the absence of the alternatives provided for in Section A.2.d, the expenses in this category must be allocated to the instruction function, and subsequently to Federal awards in that function.
10. Offset for Indirect (F&A) Expenses Otherwise Provided for by the Federal Government a. The items to be accumulated under this
heading are the reimbursements and other
payments from the Federal Government
which are made to the institution to support
solely, specifically, and directly, in whole or
in part, any of the administrative or service
activities described in subsections 2 through
9. b. The items in this group must be treated
as a credit to the affected individual indirect
(F&A) cost category before that category is
allocated to benefitting functions.
C. DETERMINATION AND APPLICATION OF
INDIRECT (F&A) COST RATE OR RATES
1. Indirect (F&A) Cost Pools
a. (1) Subject to subsection b, the separate
categories of indirect (F&A) costs allocated
to each major function of the institution as
prescribed in Section B, must be aggregated
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subsection 2 to arrive at a single indirect
(F&A) cost rate for each function.
(2) The rate for each function is used to
distribute indirect (F&A) costs to individual
Federal awards of that function. Since a
common pool is established for each major
function of the institution, a separate indirect (F&A) cost rate would be established for each of the major functions described in Section A.1 under which Federal awards are carried out. (3) Each institution’s indirect (F&A) cost
rate process must be appropriately designed
to ensure that Federal sponsors do not in
any way subsidize the indirect (F&A) costs of
other sponsors, specifically activities sponsored by industry and foreign governments.
Accordingly, each allocation method used to
identify and allocate the indirect (F&A) cost
pools, as described in Sections A.2 and B.2
through B.9, must contain the full amount of
the institution’s modified total costs or
other appropriate units of measurement used
to make the computations. In addition, the
final rate distribution base (as defined in
subsection 2) for each major function (organized research, instruction, etc., as described in Section A.1 functions of an institution)
must contain all the programs or activities
which utilize the indirect (F&A) costs allocated to that major function. At the time an indirect (F&A) cost proposal is submitted to
a cognizant agency for indirect costs, each
institution must describe the process it uses
to ensure that Federal funds are not used to
subsidize industry and foreign government
funded programs.
2. The Distribution Basis
Indirect (F&A) costs must be distributed to
applicable Federal awards and other benefitting activities within each major function (see section A.1) on the basis of modified
total direct costs (MTDC), consisting of all
salaries and wages, fringe benefits, materials
and supplies, services, travel, and up to the
first $25,000 of each subaward (regardless of
the period covered by the subaward). MTDC
is defined in §200.1. For this purpose, an indirect (F&A) cost rate should be determined for each of the separate indirect (F&A) cost
pools developed pursuant to subsection 1.
The rate in each case should be stated as the
percentage which the amount of the particular indirect (F&A) cost pool is of the modified total direct costs identified with
such pool.
3. Negotiated Lump Sum for Indirect (F&A)
Costs
A negotiated fixed amount in lieu of indirect (F&A) costs may be appropriate for selfcontained, off-campus, or primarily subcontracted activities where the benefits derived from an institution’s indirect (F&A) services
cannot be readily determined. Such negotiated indirect (F&A) costs will be treated as an offset before allocation to instruction, organized research, other sponsored activities, and other institutional activities. The base
on which such remaining expenses are allocated should be appropriately adjusted.
4. Predetermined Rates for Indirect (F&A) Costs
Public Law 87–638 (76 Stat. 437) as amended
(41 U.S.C. 4708) authorizes the use of predetermined rates in determining the ‘‘indirect costs’’ (indirect (F&A) costs) applicable under research agreements with educational
institutions. The stated objectives of the law
are to simplify the administration of costtype research and development contracts (including grants) with educational institutions, to facilitate the preparation of their budgets, and to permit more expeditious
closeout of such contracts when the work is
completed. In view of the potential advantages offered by this procedure, negotiation of predetermined rates for indirect (F&A)
costs for a period of two to four years should
be the norm in those situations where the
cost experience and other pertinent facts
available are deemed sufficient to enable the
parties involved to reach an informed judgment as to the probable level of indirect (F&A) costs during the ensuing accounting
periods.
5. Negotiated Fixed Rates and Carry-Forward
Provisions
When a fixed rate is negotiated in advance
for a fiscal year (or other time period), the
over- or under-recovery for that year may be
included as an adjustment to the indirect
(F&A) cost for the next rate negotiation.
When the rate is negotiated before the carryforward adjustment is determined, the carryforward amount may be applied to the next subsequent rate negotiation. When such adjustments are to be made, each fixed rate negotiated in advance for a given period will be computed by applying the expected indirect
(F&A) costs allocable to Federal awards for
the forecast period plus or minus the carryforward adjustment (over- or under-recovery) from the prior period, to the forecast distribution base. Unrecovered amounts under lump-sum agreements or cost-sharing provisions of prior years must not be carried forward for consideration in the new rate negotiation. There must, however, be an advance understanding in each case between the institution and the cognizant agency for indirect costs as to whether these differences will be considered in the rate negotiation
rather than making the determination after
the differences are known. Further, institutions electing to use this carry-forward provision may not subsequently change without prior approval of the cognizant agency for
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over- or under-recovery during the period in
which negotiated fixed rates and carry-forward provisions were followed will be included in the subsequent post-determined rates. Where multiple rates are used, the
same procedure will be applicable for determining each rate.
6. Provisional and Final Rates for Indirect
(F&A) Costs
Where the cognizant agency for indirect
costs determines that cost experience and
other pertinent facts do not justify the use
of predetermined rates, or a fixed rate with
a carry-forward, or if the parties cannot
agree on an equitable rate, a provisional rate
must be established. To prevent substantial
overpayment or underpayment, the provisional rate may be adjusted by the cognizant agency for indirect costs during the institution’s fiscal year. Predetermined or fixed rates may replace provisional rates at any
time prior to the close of the institution’s
fiscal year. If a provisional rate is not replaced by a predetermined or fixed rate prior to the end of the institution’s fiscal year, a
final rate will be established and upward or
downward adjustments will be made based on
the actual allowable costs incurred for the
period involved.
7. Fixed Rates for the Life of the Sponsored
Agreement
a. Except as provided in paragraph (c)(1) of
§200.414, Federal agencies must use the negotiated rates in effect at the time of the initial award throughout the life of the Federal award. Award levels for Federal awards may
not be adjusted in future years as a result of
changes in negotiated rates. ‘‘Negotiated
rates’’ per the rate agreement include final,
fixed, and predetermined rates and exclude
provisional rates. ‘‘Life’’ for the purpose of
this subsection means each competitive segment of a project. A competitive segment is a period of years approved by the Federal
awarding agency at the time of the Federal
award. If negotiated rate agreements do not
extend through the life of the Federal award
at the time of the initial award, then the negotiated rate for the last year of the Federal award must be extended through the end of
the life of the Federal award.
b. Except as provided in §200.414, when an
educational institution does not have a negotiated rate with the Federal Government at the time of an award (because the educational institution is a new recipient or the parties cannot reach agreement on a rate),
the provisional rate used at the time of the
award must be adjusted once a rate is negotiated and approved by the cognizant agency for indirect costs.
8. Limitation on Reimbursement of
Administrative Costs
a. Notwithstanding the provisions of subsection C.1.a, the administrative costs charged to Federal awards awarded or
amended (including continuation and renewal awards) with effective dates beginning on or after the start of the institution’s first
fiscal year which begins on or after October
1, 1991, must be limited to 26% of modified
total direct costs (as defined in subsection 2)
for the total of General Administration and
General Expenses, Departmental Administration, Sponsored Projects Administration, and Student Administration and Services
(including their allocable share of depreciation, interest costs, operation and maintenance expenses, and fringe benefits costs, as provided by Section B, and all other types of
expenditures not listed specifically under
one of the subcategories of facilities in Section B.
b. Institutions should not change their accounting or cost allocation methods if the effect is to change the charging of a particular type of cost from F&A to direct, or to reclassify costs, or increase allocations from the administrative pools identified in paragraph
B.1 of this Appendix to the other F&A cost
pools or fringe benefits. Cognizant agencies
for indirect cost are authorized to allow
changes where an institution’s charging
practices are at variance with acceptable
practices followed by a substantial majority
of other institutions.
9. Alternative Method for Administrative Costs
a. Notwithstanding the provisions of subsection C.1.a, an institution may elect to claim a fixed allowance for the ‘‘Administration’’ portion of indirect (F&A) costs. The allowance could be either 24% of modified
total direct costs or a percentage equal to
95% of the most recently negotiated fixed or
predetermined rate for the cost pools included under ‘‘Administration’’ as defined in Section B.1, whichever is less. Under this alternative, no cost proposal need be prepared for the ‘‘Administration’’ portion of the indirect (F&A) cost rate nor is further identification or documentation of these costs required (see subsection c). Where a negotiated indirect (F&A) cost agreement includes this
alternative, an institution must make no
further charges for the expenditure categories described in Section B.5, Section B.6, Section B.7, and Section B.9.
b. In negotiations of rates for subsequent
periods, an institution that has elected the
option of subsection a may continue to exercise it at the same rate without further identification or documentation of costs. c. If an institution elects to accept a
threshold rate as defined in subsection a of
this section, it is not required to perform a
detailed analysis of its administrative costs.
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However, in order to compute the facilities
components of its indirect (F&A) cost rate,
the institution must reconcile its indirect
(F&A) cost proposal to its financial statements and make appropriate adjustments and reclassifications to identify the costs of
each major function as defined in Section
A.1, as well as to identify and allocate the facilities components. Administrative costs that are not identified as such by the institution’s accounting system (such as those incurred in academic departments) will be classified as instructional costs for purposes
of reconciling indirect (F&A) cost proposals
to financial statements and allocating facilities costs.
10. Individual Rate Components
In order to provide mutually agreed-upon
information for management purposes, each
indirect (F&A) cost rate negotiation or determination must include development of a rate for each indirect (F&A) cost pool as well
as the overall indirect (F&A) cost rate.
11. Negotiation and Approval of Indirect (F&A)
Rate
a. Cognizant agency for indirect costs is
defined in Subpart A.
(1) Cost negotiation cognizance is assigned
to the Department of Health and Human
Services (HHS) or the Department of Defense’s Office of Naval Research (DOD), normally depending on which of the two agencies (HHS or DOD) provides more funds directly to the educational institution for the most recent three years. Information on
funding must be derived from relevant data
gathered by the National Science Foundation. In cases where neither HHS nor DOD provides Federal funding directly to an educational institution, the cognizant agency for indirect costs assignment must default to
HHS. Notwithstanding the method for cognizance determination described in this section, other arrangements for cognizance of a particular educational institution may also
be based in part on the types of research performed at the educational institution and must be decided based on mutual agreement
between HHS and DOD. Where a non-Federal
entity only receives funds as a subrecipient,
see §200.332.
(2) After cognizance is established, it must
continue for a five-year period.
b. Acceptance of rates. See §200.414.
c. Correcting deficiencies. The cognizant
agency for indirect costs must negotiate
changes needed to correct systems deficiencies relating to accountability for Federal awards. Cognizant agencies for indirect costs must address the concerns of other affected agencies, as appropriate, and must negotiate special rates for Federal agencies that are required to limit recovery of indirect costs by statute. d. Resolving questioned costs. The cognizant agency for indirect costs must conduct any necessary negotiations with an educational institution regarding amounts questioned by audit that are due the Federal Government related to costs covered by a negotiated agreement. e. Reimbursement. Reimbursement to cognizant agencies for indirect costs for work performed under this Part may be made by
reimbursement billing under the Economy
Act, 31 U.S.C. 1535.
f. Procedure for establishing facilities and
administrative rates must be established by
one of the following methods:
(1) Formal negotiation. The cognizant
agency for indirect costs is responsible for
negotiating and approving rates for an educational institution on behalf of all Federal agencies. Federal awarding agencies that do
not have cognizance for indirect costs must
notify the cognizant agency for indirect
costs of specific concerns (i.e., a need to establish special cost rates) which could affect the negotiation process. The cognizant agency for indirect costs must address the concerns of all interested agencies, as appropriate. A pre-negotiation conference may be scheduled among all interested agencies, if
necessary. The cognizant agency for indirect
costs must then arrange a negotiation conference with the educational institution. (2) Other than formal negotiation. The cognizant agency for indirect costs and educational institution may reach an agreement on rates without a formal negotiation conference; for example, through correspondence or use of the simplified method described in this section D of this Appendix. g. Formalizing determinations and agreements. The cognizant agency for indirect costs must formalize all determinations or
agreements reached with an educational institution and provide copies to other agencies having an interest. Determinations should include a description of any adjustments, the actual amount, both dollar and percentage adjusted, and the reason for making adjustments. h. Disputes and disagreements. Where the
cognizant agency for indirect costs is unable
to reach agreement with an educational institution with regard to rates or audit resolution, the appeal system of the cognizant agency for indirect costs must be followed
for resolution of the disagreement.
12. Standard Format for Submission
For facilities and administrative (indirect
(F&A)) rate proposals, educational institutions must use the standard format, shown in section E of this appendix, to submit their
indirect (F&A) rate proposal to the cognizant agency for indirect costs. The cognizant agency for indirect costs may, on an institution-by-institution basis, grant exceptions from all or portions of Part II of the VerDate Sep<11>2014 13:23 Jun 29, 2021 Jkt 253005 PO 00000 Frm 00240 Fmt 8010 Sfmt 8002 Y:\SGML\253005.XXX 253005
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standard format requirement. This requirement does not apply to educational institutions that use the simplified method for calculating indirect (F&A) rates, as described in Section D of this Appendix.
As provided in section C.10 of this appendix, each F&A cost rate negotiation or determination must include development of a rate for each F&A cost pool as well as the overall
F&A rate.
D. SIMPLIFIED METHOD FOR SMALL
INSTITUTIONS
1. General
a. Where the total direct cost of work covered by this Part at an institution does not exceed $10 million in a fiscal year, the simplified procedure described in subsections 2 or 3 may be used in determining allowable
indirect (F&A) costs. Under this simplified
procedure, the institution’s most recent annual financial report and immediately available supporting information must be utilized as a basis for determining the indirect (F&A)
cost rate applicable to all Federal awards.
The institution may use either the salaries
and wages (see subsection 2) or modified
total direct costs (see subsection 3) as the
distribution basis.
b. The simplified procedure should not be
used where it produces results which appear
inequitable to the Federal Government or
the institution. In any such case, indirect
(F&A) costs should be determined through
use of the regular procedure.
2. Simplified Procedure—Salaries and Wages
Base
a. Establish the total amount of salaries
and wages paid to all employees of the institution.
b. Establish an indirect (F&A) cost pool
consisting of the expenditures (exclusive of
capital items and other costs specifically
identified as unallowable) which customarily
are classified under the following titles or
their equivalents:
(1) General administration and general expenses (exclusive of costs of student administration and services, student activities, student aid, and scholarships). (2) Operation and maintenance of physical
plant and depreciation (after appropriate adjustment for costs applicable to other institutional activities). (3) Library.
(4) Department administration expenses,
which will be computed as 20 percent of the
salaries and expenses of deans and heads of
departments.
In those cases where expenditures classified under subsection (1) have previously been allocated to other institutional activities, they may be included in the indirect (F&A) cost pool. The total amount of salaries and wages included in the indirect (F&A) cost pool must be separately identified.
c. Establish a salary and wage distribution
base, determined by deducting from the total
of salaries and wages as established in subsection a from the amount of salaries and wages included under subsection b.
d. Establish the indirect (F&A) cost rate,
determined by dividing the amount in the indirect (F&A) cost pool, subsection b, by the amount of the distribution base, subsection
c.
e. Apply the indirect (F&A) cost rate to direct salaries and wages for individual agreements to determine the amount of indirect (F&A) costs allocable to such agreements.
3. Simplified Procedure—Modified Total Direct
Cost Base
a. Establish the total costs incurred by the
institution for the base period.
b. Establish an indirect (F&A) cost pool
consisting of the expenditures (exclusive of
capital items and other costs specifically
identified as unallowable) which customarily
are classified under the following titles or
their equivalents:
(1) General administration and general expenses (exclusive of costs of student administration and services, student activities, student aid, and scholarships). (2) Operation and maintenance of physical
plant and depreciation (after appropriate adjustment for costs applicable to other institutional activities). (3) Library.
(4) Department administration expenses,
which will be computed as 20 percent of the
salaries and expenses of deans and heads of
departments. In those cases where expenditures classified under subsection (1) have previously been allocated to other institutional activities, they may be included in the indirect (F&A) cost pool. The modified total
direct costs amount included in the indirect
(F&A) cost pool must be separately identified.
c. Establish a modified total direct cost
distribution base, as defined in Section C.2,
The distribution basis, that consists of all
institution’s direct functions.
d. Establish the indirect (F&A) cost rate,
determined by dividing the amount in the indirect (F&A) cost pool, subsection b, by the amount of the distribution base, subsection
c.
e. Apply the indirect (F&A) cost rate to
the modified total direct costs for individual
agreements to determine the amount of indirect (F&A) costs allocable to such agreements.
E. DOCUMENTATION REQUIREMENTS
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proposals for claiming costs under the regular method is available on the OMB website.
F. CERTIFICATION
1. Certification of Charges
To assure that expenditures for Federal
awards are proper and in accordance with
the agreement documents and approved
project budgets, the annual and/or final fiscal reports or vouchers requesting payment under the agreements will include a certification, signed by an authorized official of the university, which reads ‘‘By signing this
report, I certify to the best of my knowledge
and belief that the report is true, complete,
and accurate, and the expenditures, disbursements and cash receipts are for the purposes and intent set forth in the award documents.
I am aware that any false, fictitious, or
fraudulent information, or the omission of
any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise. (U.S. Code, Title 18, Section 1001 and Title 31, Sections 3729–3733 and 3801–3812)’’.
2. Certification of Indirect (F&A) Costs
a. Policy. Cognizant agencies must not accept a proposed indirect cost rate unless such costs have been certified by the educational institution using the Certificate of indirect (F&A) Costs set forth in subsection
F.2.c
b. The certificate must be signed on behalf
of the institution by the chief financial officer or an individual designated by an individual at a level no lower than vice president or chief financial officer.
An indirect (F&A) cost rate is not binding
upon the Federal Government if the most recent required proposal from the institution has not been certified. Where it is necessary
to establish indirect (F&A) cost rates, and
the institution has not submitted a certified
proposal for establishing such rates in accordance with the requirements of this section, the Federal Government must unilaterally establish such rates. Such rates may be based upon audited historical data or such
other data that have been furnished to the
cognizant agency for indirect costs and for
which it can be demonstrated that all unallowable costs have been excluded. When indirect (F&A) cost rates are unilaterally established by the Federal Government because of failure of the institution to submit a certified proposal for establishing such rates in accordance with this section, the rates established will be set at a level low enough to ensure that potentially unallowable costs
will not be reimbursed.
c. Certificate. The certificate required by
this section must be in the following form:
Certificate of Indirect (F&A) Costs
This is to certify that to the best of my
knowledge and belief:
(1) I have reviewed the indirect (F&A) cost
proposal submitted herewith;
(2) All costs included in this proposal [identify date] to establish billing or final indirect (F&A) costs rate for [identify period covered by rate] are allowable in accordance
with the requirements of the Federal agreement(s) to which they apply and with the cost principles applicable to those agreements.
(3) This proposal does not include any costs
which are unallowable under subpart E of
this part such as (without limitation): Public
relations costs, contributions and donations,
entertainment costs, fines and penalties, lobbying costs, and defense of fraud proceedings; and (4) All costs included in this proposal are
properly allocable to Federal agreements on
the basis of a beneficial or causal relationship between the expenses incurred and the agreements to which they are allocated in
accordance with applicable requirements.
I declare that the foregoing is true and correct.
Institution of Higher Education:
Signature: llllllllllllllllll
Name of Official: llllllllllllll
Title: llllllllllllllllllll
Date of Execution: lllllllllllll
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75888, Dec. 19, 2014; 80 FR 54409, Sept. 10,
2015; 85 FR 49577, Aug. 13, 2020]
APPENDIX IV TO PART 200—INDIRECT
(F&A) COSTS IDENTIFICATION AND
ASSIGNMENT, AND RATE DETERMINATION FOR NONPROFIT ORGANIZATIONS A. GENERAL
1. Indirect costs are those that have been
incurred for common or joint objectives and
cannot be readily identified with a particular final cost objective. Direct cost of minor amounts may be treated as indirect
costs under the conditions described in
§200.413(d). After direct costs have been determined and assigned directly to awards or other work as appropriate, indirect costs are
those remaining to be allocated to benefitting cost objectives. A cost may not be allocated to a Federal award as an indirect cost if any other cost incurred for the same purpose, in like circumstances, has been assigned to a Federal award as a direct cost.
2. ‘‘Major nonprofit organizations’’ are defined in paragraph (a) of §200.414. See indirect cost rate reporting requirements in sections B.2.e and B.3.g of this Appendix.
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B. ALLOCATION OF INDIRECT COSTS AND
DETERMINATION OF INDIRECT COST RATES
1. General
a. If a nonprofit organization has only one
major function, or where all its major functions benefit from its indirect costs to approximately the same degree, the allocation of indirect costs and the computation of an
indirect cost rate may be accomplished
through simplified allocation procedures, as
described in section B.2 of this Appendix.
b. If an organization has several major
functions which benefit from its indirect
costs in varying degrees, allocation of indirect costs may require the accumulation of such costs into separate cost groupings
which then are allocated individually to benefitting functions by means of a base which best measures the relative degree of benefit.
The indirect costs allocated to each function
are then distributed to individual Federal
awards and other activities included in that
function by means of an indirect cost rate(s).
c. The determination of what constitutes
an organization’s major functions will depend on its purpose in being; the types of services it renders to the public, its clients,
and its members; and the amount of effort it
devotes to such activities as fundraising,
public information and membership activities.
d. Specific methods for allocating indirect
costs and computing indirect cost rates
along with the conditions under which each
method should be used are described in section B.2 through B.5 of this Appendix. e. The base period for the allocation of indirect costs is the period in which such costs are incurred and accumulated for allocation
to work performed in that period. The base
period normally should coincide with the organization’s fiscal year but, in any event, must be so selected as to avoid inequities in
the allocation of the costs.
2. Simplified Allocation Method
a. Where an organization’s major functions
benefit from its indirect costs to approximately the same degree, the allocation of indirect costs may be accomplished by (i) separating the organization’s total costs for the base period as either direct or indirect, and
(ii) dividing the total allowable indirect
costs (net of applicable credits) by an equitable distribution base. The result of this process is an indirect cost rate which is used
to distribute indirect costs to individual
Federal awards. The rate should be expressed
as the percentage which the total amount of
allowable indirect costs bears to the base selected. This method should also be used where an organization has only one major
function encompassing a number of individual projects or activities, and may be used where the level of Federal awards to an
organization is relatively small.
b. Both the direct costs and the indirect
costs must exclude capital expenditures and
unallowable costs. However, unallowable
costs which represent activities must be included in the direct costs under the conditions described in §200.413(e). c. The distribution base may be total direct costs (excluding capital expenditures and other distorting items, such as subawards for $25,000 or more), direct salaries and wages, or other base which results in an
equitable distribution. The distribution base
must exclude participant support costs as defined in §200.1. d. Except where a special rate(s) is required in accordance with section B.5 of this Appendix, the indirect cost rate developed
under the above principles is applicable to
all Federal awards of the organization. If a
special rate(s) is required, appropriate modifications must be made in order to develop the special rate(s).
e. For an organization that receives more
than $10 million in direct Federal funding in
a fiscal year, a breakout of the indirect cost
component into two broad categories, Facilities and Administration as defined in paragraph (a) of §200.414, is required. The rate in each case must be stated as the percentage
which the amount of the particular indirect
cost category (i.e., Facilities or Administration) is of the distribution base identified with that category.
3. Multiple Allocation Base Method
a. General. Where an organization’s indirect costs benefit its major functions in varying degrees, indirect costs must be accumulated into separate cost groupings, as described in subparagraph b. Each grouping must then be allocated individually to benefitting functions by means of a base which best measures the relative benefits. The default allocation bases by cost pool are described in section B.3.c of this Appendix. b. Identification of indirect costs. Cost
groupings must be established so as to permit the allocation of each grouping on the basis of benefits provided to the major functions. Each grouping must constitute a pool of expenses that are of like character in
terms of functions they benefit and in terms
of the allocation base which best measures
the relative benefits provided to each function. The groupings are classified within the two broad categories: ‘‘Facilities’’ and ‘‘Administration,’’ as described in section A.3 of this Appendix. The indirect cost pools are defined as follows:
(1) Depreciation. The expenses under this
heading are the portion of the costs of the
organization’s buildings, capital improvements to land and buildings, and equipment which are computed in accordance with
§200.436.
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(2) Interest. Interest on debt associated
with certain buildings, equipment and capital improvements are computed in accordance with §200.449. (3) Operation and maintenance expenses.
The expenses under this heading are those
that have been incurred for the administration, operation, maintenance, preservation, and protection of the organization’s physical
plant. They include expenses normally incurred for such items as: janitorial and utility services; repairs and ordinary or normal alterations of buildings, furniture and equipment; care of grounds; maintenance and operation of buildings and other plant facilities; security; earthquake and disaster preparedness; environmental safety; hazardous waste disposal; property, liability and other
insurance relating to property; space and
capital leasing; facility planning and management; and central receiving. The operation and maintenance expenses category must also include its allocable share of
fringe benefit costs, depreciation, and interest costs. (4) General administration and general expenses. The expenses under this heading are those that have been incurred for the overall
general executive and administrative offices
of the organization and other expenses of a
general nature which do not relate solely to
any major function of the organization. This
category must also include its allocable
share of fringe benefit costs, operation and
maintenance expense, depreciation, and interest costs. Examples of this category include central offices, such as the director’s office, the office of finance, business services, budget and planning, personnel, safety and risk management, general counsel, management information systems, and library costs.
In developing this cost pool, special care
should be exercised to ensure that costs incurred for the same purpose in like circumstances are treated consistently as either direct or indirect costs. For example, salaries of technical staff, project supplies,
project publication, telephone toll charges,
computer costs, travel costs, and specialized
services costs must be treated as direct costs
wherever identifiable to a particular program. The salaries and wages of administrative and pooled clerical staff should normally be treated as indirect costs. Direct charging of these costs may be appropriate
as described in §200.413. Items such as office
supplies, postage, local telephone costs, periodicals and memberships should normally be treated as indirect costs.
c. Allocation bases. Actual conditions
must be taken into account in selecting the
base to be used in allocating the expenses in
each grouping to benefitting functions. The
essential consideration in selecting a method
or a base is that it is the one best suited for
assigning the pool of costs to cost objectives
in accordance with benefits derived; a traceable cause and effect relationship; or logic and reason, where neither the cause nor the
effect of the relationship is determinable.
When an allocation can be made by assignment of a cost grouping directly to the function benefitted, the allocation must be made in that manner. When the expenses in a cost
grouping are more general in nature, the allocation must be made through the use of a selected base which produces results that are
equitable to both the Federal Government
and the organization. The distribution must
be made in accordance with the bases described herein unless it can be demonstrated that the use of a different base would result
in a more equitable allocation of the costs,
or that a more readily available base would
not increase the costs charged to Federal
awards. The results of special cost studies
(such as an engineering utility study) must
not be used to determine and allocate the indirect costs to Federal awards. (1) Depreciation. Depreciation expenses
must be allocated in the following manner:
(a) Depreciation on buildings used exclusively in the conduct of a single function, and on capital improvements and equipment
used in such buildings, must be assigned to
that function.
(b) Depreciation on buildings used for more
than one function, and on capital improvements and equipment used in such buildings, must be allocated to the individual functions
performed in each building on the basis of
usable square feet of space, excluding common areas, such as hallways, stairwells, and restrooms.
(c) Depreciation on buildings, capital improvements and equipment related space (e.g., individual rooms, and laboratories)
used jointly by more than one function (as
determined by the users of the space) must
be treated as follows. The cost of each jointly used unit of space must be allocated to the benefitting functions on the basis of:
(i) the employees and other users on a fulltime equivalent (FTE) basis or salaries and wages of those individual functions benefitting from the use of that space; or (ii) organization-wide employee FTEs or
salaries and wages applicable to the benefitting functions of the organization. (d) Depreciation on certain capital improvements to land, such as paved parking areas, fences, sidewalks, and the like, not included in the cost of buildings, must be allocated to user categories on a FTE basis and distributed to major functions in proportion
to the salaries and wages of all employees
applicable to the functions.
(2) Interest. Interest costs must be allocated in the same manner as the depreciation on the buildings, equipment and capital equipment to which the interest relates.
(3) Operation and maintenance expenses.
Operation and maintenance expenses must
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be allocated in the same manner as the depreciation.
(4) General administration and general expenses. General administration and general expenses must be allocated to benefitting
functions based on modified total costs
(MTC). The MTC is the modified total direct
costs (MTDC), as described in §200.1, plus the
allocated indirect cost proportion. The expenses included in this category could be grouped first according to major functions of
the organization to which they render services or provide benefits. The aggregate expenses of each group must then be allocated to benefitting functions based on MTC.
d. Order of distribution.
(1) Indirect cost categories consisting of
depreciation, interest, operation and maintenance, and general administration and general expenses must be allocated in that order to the remaining indirect cost categories as
well as to the major functions of the organization. Other cost categories should be allocated in the order determined to be most appropriate by the organization. This order of allocation does not apply if cross allocation
of costs is made as provided in section B.3.d.2
of this Appendix.
(2) Normally, an indirect cost category will
be considered closed once it has been allocated to other cost objectives, and costs must not be subsequently allocated to it.
However, a cross allocation of costs between
two or more indirect costs categories could
be used if such allocation will result in a
more equitable allocation of costs. If a cross
allocation is used, an appropriate modification to the composition of the indirect cost categories is required.
e. Application of indirect cost rate or
rates. Except where a special indirect cost
rate(s) is required in accordance with section
B.5 of this Appendix, the separate groupings
of indirect costs allocated to each major
function must be aggregated and treated as a
common pool for that function. The costs in
the common pool must then be distributed to
individual Federal awards included in that
function by use of a single indirect cost rate.
f. Distribution basis. Indirect costs must
be distributed to applicable Federal awards
and other benefitting activities within each
major function on the basis of MTDC (see
definition in §200.1).
g. Individual Rate Components. An indirect cost rate must be determined for each separate indirect cost pool developed. The
rate in each case must be stated as the percentage which the amount of the particular indirect cost pool is of the distribution base
identified with that pool. Each indirect cost
rate negotiation or determination agreement
must include development of the rate for
each indirect cost pool as well as the overall
indirect cost rate. The indirect cost pools
must be classified within two broad categories: ‘‘Facilities’’ and ‘‘Administration,’’ as described in §200.414(a).
4. Direct Allocation Method
a. Some nonprofit organizations treat all
costs as direct costs except general administration and general expenses. These organizations generally separate their costs into three basic categories: (i) General administration and general expenses, (ii) fundraising, and (iii) other direct functions (including projects performed under Federal awards). Joint costs, such as depreciation,
rental costs, operation and maintenance of
facilities, telephone expenses, and the like
are prorated individually as direct costs to
each category and to each Federal award or
other activity using a base most appropriate
to the particular cost being prorated.
b. This method is acceptable, provided each
joint cost is prorated using a base which accurately measures the benefits provided to each Federal award or other activity. The
bases must be established in accordance with
reasonable criteria and be supported by current data. This method is compatible with the Standards of Accounting and Financial
Reporting for Voluntary Health and Welfare
Organizations issued jointly by the National
Health Council, Inc., the National Assembly
of Voluntary Health and Social Welfare Organizations, and the United Way of America. c. Under this method, indirect costs consist exclusively of general administration and general expenses. In all other respects,
the organization’s indirect cost rates must
be computed in the same manner as that described in section B.2 of this Appendix.
5. Special Indirect Cost Rates
In some instances, a single indirect cost
rate for all activities of an organization or
for each major function of the organization
may not be appropriate, since it would not
take into account those different factors
which may substantially affect the indirect
costs applicable to a particular segment of
work. For this purpose, a particular segment
of work may be that performed under a single Federal award or it may consist of work under a group of Federal awards performed
in a common environment. These factors
may include the physical location of the
work, the level of administrative support required, the nature of the facilities or other resources employed, the scientific disciplines
or technical skills involved, the organizational arrangements used, or any combination thereof. When a particular segment of work is performed in an environment which
appears to generate a significantly different
level of indirect costs, provisions should be
made for a separate indirect cost pool applicable to such work. The separate indirect cost pool should be developed during the
course of the regular allocation process, and
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the separate indirect cost rate resulting
therefrom should be used, provided it is determined that (i) the rate differs significantly from that which would have been obtained under sections B.2, B.3, and B.4 of this Appendix, and (ii) the volume of work to
which the rate would apply is material.
C. NEGOTIATION AND APPROVAL OF INDIRECT
COST RATES
1. Definitions
As used in this section, the following terms
have the meanings set forth in this section:
a. Cognizant agency for indirect costs means
the Federal agency responsible for negotiating and approving indirect cost rates for a nonprofit organization on behalf of all Federal agencies. b. Predetermined rate means an indirect cost
rate, applicable to a specified current or future period, usually the organization’s fiscal year. The rate is based on an estimate of the
costs to be incurred during the period. A predetermined rate is not subject to adjustment. c. Fixed rate means an indirect cost rate
which has the same characteristics as a predetermined rate, except that the difference between the estimated costs and the actual
costs of the period covered by the rate is carried forward as an adjustment to the rate computation of a subsequent period.
d. Final rate means an indirect cost rate
applicable to a specified past period which is
based on the actual costs of the period. A
final rate is not subject to adjustment.
e. Provisional rate or billing rate means a
temporary indirect cost rate applicable to a
specified period which is used for funding, interim reimbursement, and reporting indirect costs on Federal awards pending the establishment of a final rate for the period. f. Indirect cost proposal means the documentation prepared by an organization to substantiate its claim for the reimbursement
of indirect costs. This proposal provides the
basis for the review and negotiation leading
to the establishment of an organization’s indirect cost rate. g. Cost objective means a function, organizational subdivision, contract, Federal award, or other work unit for which cost data are
desired and for which provision is made to
accumulate and measure the cost of processes, projects, jobs and capitalized projects.
2. Negotiation and Approval of Rates
a. Unless different arrangements are
agreed to by the Federal agencies concerned,
the Federal agency with the largest dollar
value of Federal awards directly funded to an
organization will be designated as the cognizant agency for indirect costs for the negotiation and approval of the indirect cost rates and, where necessary, other rates such
as fringe benefit and computer charge-out
rates. Once an agency is assigned cognizance
for a particular nonprofit organization, the
assignment will not be changed unless there
is a shift in the dollar volume of the Federal
awards directly funded to the organization
for at least three years. All concerned Federal agencies must be given the opportunity to participate in the negotiation process but,
after a rate has been agreed upon, it will be
accepted by all Federal agencies. When a
Federal agency has reason to believe that
special operating factors affecting its Federal awards necessitate special indirect cost rates in accordance with section B.5 of this
Appendix, it will, prior to the time the rates
are negotiated, notify the cognizant agency
for indirect costs. (See also §200.414.) If the
nonprofit does not receive any funding from
any Federal agency, the pass-through entity
is responsible for the negotiation of the indirect cost rates in accordance with §200.332(a)(4).
b. Except as otherwise provided in
§200.414(f), a nonprofit organization which
has not previously established an indirect
cost rate with a Federal agency must submit
its initial indirect cost proposal immediately
after the organization is advised that a Federal award will be made and, in no event, later than three months after the effective
date of the Federal award.
c. Unless approved by the cognizant agency
for indirect costs in accordance with
§200.414(g), organizations that have previously established indirect cost rates must submit a new indirect cost proposal to the
cognizant agency for indirect costs within
six months after the close of each fiscal year.
d. A predetermined rate may be negotiated
for use on Federal awards where there is reasonable assurance, based on past experience and reliable projection of the organization’s
costs, that the rate is not likely to exceed a
rate based on the organization’s actual costs.
e. Fixed rates may be negotiated where
predetermined rates are not considered appropriate. A fixed rate, however, must not be negotiated if (i) all or a substantial portion
of the organization’s Federal awards are expected to expire before the carry-forward adjustment can be made; (ii) the mix of Federal and non-Federal work at the organization is
too erratic to permit an equitable carry-forward adjustment; or (iii) the organization’s operations fluctuate significantly from year
to year.
f. Provisional and final rates must be negotiated where neither predetermined nor fixed rates are appropriate. Predetermined or
fixed rates may replace provisional rates at
any time prior to the close of the organization’s fiscal year. If that event does not occur, a final rate will be established and upward or downward adjustments will be made based on the actual allowable costs incurred
for the period involved.
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g. The results of each negotiation must be
formalized in a written agreement between
the cognizant agency for indirect costs and
the nonprofit organization. The cognizant
agency for indirect costs must make available copies of the agreement to all concerned Federal agencies.
h. If a dispute arises in a negotiation of an
indirect cost rate between the cognizant
agency for indirect costs and the nonprofit
organization, the dispute must be resolved in
accordance with the appeals procedures of
the cognizant agency for indirect costs.
i. To the extent that problems are encountered among the Federal agencies in connection with the negotiation and approval process, OMB will lend assistance as required to resolve such problems in a timely manner.
D. Certification of Indirect (F&A) Costs
(1) Required Certification. No proposal to
establish indirect (F&A) cost rates must be
acceptable unless such costs have been certified by the nonprofit organization using the Certificate of Indirect (F&A) Costs set
forth in section j. of this appendix. The certificate must be signed on behalf of the organization by an individual at a level no lower than vice president or chief financial officer
for the organization.
(2) Each indirect cost rate proposal must
be accompanied by a certification in the following form:
Certificate of Indirect (F&A) Costs
This is to certify that to the best of my
knowledge and belief:
(1) I have reviewed the indirect (F&A) cost
proposal submitted herewith;
(2) All costs included in this proposal [identify date] to establish billing or final indirect (F&A) costs rate for [identify period covered by rate] are allowable in accordance
with the requirements of the Federal awards
to which they apply and with subpart E of
this part.
(3) This proposal does not include any costs
which are unallowable under subpart E of
this part such as (without limitation): Public
relations costs, contributions and donations,
entertainment costs, fines and penalties, lobbying costs, and defense of fraud proceedings; and (4) All costs included in this proposal are
properly allocable to Federal awards on the
basis of a beneficial or causal relationship
between the expenses incurred and the Federal awards to which they are allocated in accordance with applicable requirements.
I declare that the foregoing is true and correct.
Nonprofit Organization: lllllllllll
Signature: llllllllllllllllll
Name of Official: llllllllllllll
Title: llllllllllllllllllll
Date of Execution: lllllllllllll
[78 FR 78608, Dec. 26, 2013, as amended at 80
FR 54410, Sept. 10, 2015; 85 FR 49579, Aug. 13,
2020]
APPENDIX V TO PART 200—STATE/LOCAL
GOVERNMENTWIDE CENTRAL SERVICE
COST ALLOCATION PLANS
A. GENERAL
1. Most governmental units provide certain
services, such as motor pools, computer centers, purchasing, accounting, etc., to operating agencies on a centralized basis. Since federally-supported awards are performed
within the individual operating agencies,
there needs to be a process whereby these
central service costs can be identified and
assigned to benefitted activities on a reasonable and consistent basis. The central service cost allocation plan provides that process.
All costs and other data used to distribute
the costs included in the plan should be supported by formal accounting and other records that will support the propriety of the
costs assigned to Federal awards.
2. Guidelines and illustrations of central
service cost allocation plans are provided in
a brochure published by the Department of
Health and Human Services entitled ‘‘A
Guide for State, Local and Indian Tribal Governments: Cost Principles and Procedures for Developing Cost Allocation Plans and Indirect
Cost Rates for Agreements with the Federal
Government.’’ A copy of this brochure may be
obtained from the HHS Cost Allocation Services or at their website.
B. DEFINITIONS
1. Agency or operating agency means an organizational unit or sub-division within a governmental unit that is responsible for the
performance or administration of Federal
awards or activities of the governmental
unit.
2. Allocated central services means central
services that benefit operating agencies but
are not billed to the agencies on a fee-forservice or similar basis. These costs are allocated to benefitted agencies on some reasonable basis. Examples of such services might include general accounting, personnel administration, purchasing, etc.
3. Billed central services means central services that are billed to benefitted agencies or programs on an individual fee-for-service or
similar basis. Typical examples of billed central services include computer services, transportation services, insurance, and
fringe benefits.
4. Cognizant agency for indirect costs is defined in §200.1. The determination of cognizant agency for indirect costs for states and local governments is described in section
F.1.
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5. Major local government means local government that receives more than $100 million in direct Federal awards subject to this Part.
C. SCOPE OF THE CENTRAL SERVICE COST
ALLOCATION PLANS
The central service cost allocation plan
will include all central service costs that
will be claimed (either as a billed or an allocated cost) under Federal awards and will be documented as described in section E. omitted from the plan will not be reimbursed.
D. SUBMISSION REQUIREMENTS
1. Each state will submit a plan to the Department of Health and Human Services for each year in which it claims central service
costs under Federal awards. The plan should
include (a) a projection of the next year’s allocated central service cost (based either on actual costs for the most recently completed
year or the budget projection for the coming
year), and (b) a reconciliation of actual allocated central service costs to the estimated costs used for either the most recently completed year or the year immediately preceding the most recently completed year.
2. Each major local government is also required to submit a plan to its cognizant agency for indirect costs annually.
3. All other local governments claiming
central service costs must develop a plan in
accordance with the requirements described
in this Part and maintain the plan and related supporting documentation for audit.
These local governments are not required to
submit their plans for Federal approval unless they are specifically requested to do so by the cognizant agency for indirect costs.
Where a local government only receives
funds as a subrecipient, the pass-through entity will be responsible for monitoring the subrecipient’s plan.
4. All central service cost allocation plans
will be prepared and, when required, submitted within six months prior to the beginning of each of the governmental unit’s fiscal years in which it proposes to claim central service costs. Extensions may be granted by the cognizant agency for indirect costs on a case-by-case basis.
E. DOCUMENTATION REQUIREMENTS FOR
SUBMITTED PLANS
The documentation requirements described
in this section may be modified, expanded, or
reduced by the cognizant agency for indirect
costs on a case-by-case basis. For example,
the requirements may be reduced for those
central services which have little or no impact on Federal awards. Conversely, if a review of a plan indicates that certain additional information is needed, and will likely be needed in future years, it may be routinely requested in future plan submissions.
Items marked with an asterisk (*) should be
submitted only once; subsequent plans
should merely indicate any changes since the
last plan.
1. General
All proposed plans must be accompanied by
the following: an organization chart sufficiently detailed to show operations including the central service activities of the state/
local government whether or not they are
shown as benefitting from central service
functions; a copy of the Comprehensive Annual Financial Report (or a copy of the Executive Budget if budgeted costs are being proposed) to support the allowable costs of each central service activity included in the plan;
and, a certification (see subsection 4.) that
the plan was prepared in accordance with
this Part, contains only allowable costs, and
was prepared in a manner that treated similar costs consistently among the various Federal awards and between Federal and
non-Federal awards/activities.
2. Allocated Central Services
For each allocated central service*, the
plan must also include the following: a brief
description of the service, an identification
of the unit rendering the service and the operating agencies receiving the service, the items of expense included in the cost of the
service, the method used to distribute the
cost of the service to benefitted agencies,
and a summary schedule showing the allocation of each service to the specific benefitted agencies. If any self-insurance funds or
fringe benefits costs are treated as allocated
(rather than billed) central services, documentation discussed in subsections 3.b. and c. must also be included.
3. Billed Services
a. General. The information described in
this section must be provided for all billed
central services, including internal service
funds, self-insurance funds, and fringe benefit funds. b. Internal service funds.
(1) For each internal service fund or similar activity with an operating budget of $5 million or more, the plan must include: A
brief description of each service; a balance
sheet for each fund based on individual accounts contained in the governmental unit’s accounting system; a revenue/expenses statement, with revenues broken out by source, e.g., regular billings, interest earned, etc.; a
listing of all non-operating transfers (as defined by GAAP) into and out of the fund; a description of the procedures (methodology)
used to charge the costs of each service to
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determined under this part, with an explanation of how variances will be handled. (2) Revenues must consist of all revenues
generated by the service, including unbilled
and uncollected revenues. If some users were
not billed for the services (or were not billed
at the full rate for that class of users), a
schedule showing the full imputed revenues
associated with these users must be provided. Expenses must be broken out by object cost categories (e.g., salaries, supplies, etc.).
c. Self-insurance funds. For each self-insurance fund, the plan must include: the fund balance sheet; a statement of revenue and
expenses including a summary of billings
and claims paid by agency; a listing of all
non-operating transfers into and out of the
fund; the type(s) of risk(s) covered by the
fund (e.g., automobile liability, workers’
compensation, etc.); an explanation of how
the level of fund contributions are determined, including a copy of the current actuarial report (with the actuarial assumptions used) if the contributions are determined on
an actuarial basis; and, a description of the
procedures used to charge or allocate fund
contributions to benefitted activities. Reserve levels in excess of claims (1) submitted and adjudicated but not paid, (2) submitted
but not adjudicated, and (3) incurred but not
submitted must be identified and explained.
d. Fringe benefits. For fringe benefit costs,
the plan must include: a listing of fringe benefits provided to covered employees, and the overall annual cost of each type of benefit;
current fringe benefit policies; and procedures used to charge or allocate the costs of the benefits to benefitted activities. In addition, for pension and post-retirement health insurance plans, the following information
must be provided: the governmental unit’s
funding policies, e.g., legislative bills, trust
agreements, or state-mandated contribution
rules, if different from actuarially determined rates; the pension plan’s costs accrued for the year; the amount funded, and date(s)
of funding; a copy of the current actuarial
report (including the actuarial assumptions);
the plan trustee’s report; and, a schedule
from the activity showing the value of the
interest cost associated with late funding.
4. Required Certification
Each central service cost allocation plan
will be accompanied by a certification in the
following form:
CERTIFICATE OF COST ALLOCATION
PLAN
This is to certify that I have reviewed the
cost allocation plan submitted herewith and
to the best of my knowledge and belief:
(1) All costs included in this proposal [identify date] to establish cost allocations or billings for [identify period covered by plan] are allowable in accordance with the requirements of this Part and the Federal award(s) to which they apply. Unallowable costs have
been adjusted for in allocating costs as indicated in the cost allocation plan. (2) All costs included in this proposal are
properly allocable to Federal awards on the
basis of a beneficial or causal relationship
between the expenses incurred and the Federal awards to which they are allocated in accordance with applicable requirements.
Further, the same costs that have been
treated as indirect costs have not been
claimed as direct costs. Similar types of
costs have been accounted for consistently.
I declare that the foregoing is true and correct.
Governmental Unit: lllllllllllll
Signature: llllllllllllllllll
Name of Official: llllllllllllll
Title: llllllllllllllllllll
Date of Execution: lllllllllllll
F. NEGOTIATION AND APPROVAL OF CENTRAL
SERVICE PLANS
1. Federal Cognizant Agency for Indirect Costs
Assignments for Cost Negotiation
In general, unless different arrangements
are agreed to by the concerned Federal agencies, for central service cost allocation plans, the cognizant agency responsible for
review and approval is the Federal agency
with the largest dollar value of total Federal
awards with a governmental unit. For indirect cost rates and departmental indirect cost allocation plans, the cognizant agency
is the Federal agency with the largest dollar
value of direct Federal awards with a governmental unit or component, as appropriate.
Once designated as the cognizant agency for
indirect costs, the Federal agency must remain so for a period of five years. In addition, the following Federal agencies continue to be responsible for the indicated governmental entities:
Department of Health and Human Services—
Public assistance and state-wide cost allocation plans for all states (including the District of Columbia and Puerto Rico), state and local hospitals, libraries and health districts.
Department of the Interior—Indian tribal
governments, territorial governments, and
state and local park and recreational districts.
Department of Labor—State and local labor
departments.
Department of Education—School districts
and state and local education agencies.
Department of Agriculture—State and local
agriculture departments.
Department of Transportation—State and
local airport and port authorities and transit
districts.
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Department of Commerce—State and local
economic development districts.
Department of Housing and Urban Development—State and local housing and development districts.
Environmental Protection Agency—State and
local water and sewer districts.
2. Review
All proposed central service cost allocation
plans that are required to be submitted will
be reviewed, negotiated, and approved by the
cognizant agency for indirect costs on a
timely basis. The cognizant agency for indirect costs will review the proposal within six months of receipt of the proposal and either
negotiate/approve the proposal or advise the
governmental unit of the additional documentation needed to support/evaluate the proposed plan or the changes required to
make the proposal acceptable. Once an
agreement with the governmental unit has
been reached, the agreement will be accepted
and used by all Federal agencies, unless prohibited or limited by statute. Where a Federal awarding agency has reason to believe that special operating factors affecting its
Federal awards necessitate special consideration, the funding agency will, prior to the time the plans are negotiated, notify the
cognizant agency for indirect costs.
3. Agreement
The results of each negotiation must be
formalized in a written agreement between
the cognizant agency for indirect costs and
the governmental unit. This agreement will
be subject to re-opening if the agreement is
subsequently found to violate a statute or
the information upon which the plan was negotiated is later found to be materially incomplete or inaccurate. The results of the negotiation must be made available to all
Federal agencies for their use.
4. Adjustments
Negotiated cost allocation plans based on a
proposal later found to have included costs
that: (a) are unallowable (i) as specified by
law or regulation, (ii) as identified in subpart
F, General Provisions for selected Items of
Cost of this Part, or (iii) by the terms and
conditions of Federal awards, or (b) are unallowable because they are clearly not allocable to Federal awards, must be adjusted, or a refund must be made at the option of the
cognizant agency for indirect costs, including earned or imputed interest from the date of transfer and debt interest, if applicable,
chargeable in accordance with applicable
Federal cognizant agency for indirect costs
regulations. Adjustments or cash refunds
may include, at the option of the cognizant
agency for indirect costs, earned or imputed
interest from the date of expenditure and delinquent debt interest, if applicable, chargeable in accordance with applicable cognizant agency claims collection regulations. These
adjustments or refunds are designed to correct the plans and do not constitute a reopening of the negotiation.
G. OTHER POLICIES
1. Billed Central Service Activities
Each billed central service activity must
separately account for all revenues (including imputed revenues) generated by the service, expenses incurred to furnish the service, and profit/loss.
2. Working Capital Reserves
Internal service funds are dependent upon
a reasonable level of working capital reserve
to operate from one billing cycle to the next.
Charges by an internal service activity to
provide for the establishment and maintenance of a reasonable level of working capital reserve, in addition to the full recovery of costs, are allowable. A working capital reserve as part of retained earnings of up to 60 calendar days cash expenses for normal operating purposes is considered reasonable. A working capital reserve exceeding 60 calendar days may be approved by the cognizant agency for indirect costs in exceptional cases.
3. Carry-Forward Adjustments of Allocated
Central Service Costs
Allocated central service costs are usually
negotiated and approved for a future fiscal
year on a ‘‘fixed with carry-forward’’ basis.
Under this procedure, the fixed amounts for
the future year covered by agreement are
not subject to adjustment for that year.
However, when the actual costs of the year
involved become known, the differences between the fixed amounts previously approved and the actual costs will be carried forward
and used as an adjustment to the fixed
amounts established for a later year. This
‘‘carry-forward’’ procedure applies to all central services whose costs were fixed in the approved plan. However, a carry-forward adjustment is not permitted, for a central service activity that was not included in the approved plan, or for unallowable costs that must be reimbursed immediately.
4. Adjustments of Billed Central Services
Billing rates used to charge Federal awards
must be based on the estimated costs of providing the services, including an estimate of the allocable central service costs. A comparison of the revenue generated by each billed service (including total revenues
whether or not billed or collected) to the actual allowable costs of the service will be made at least annually, and an adjustment
will be made for the difference between the
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revenue and the allowable costs. These adjustments will be made through one of the following adjustment methods: (a) a cash refund including earned or imputed interest from the date of transfer and debt interest, if
applicable, chargeable in accordance with
applicable Federal cognizant agency for indirect costs regulations to the Federal Government for the Federal share of the adjustment, (b) credits to the amounts charged to the individual programs, (c) adjustments to
future billing rates, or (d) adjustments to allocated central service costs. Adjustments to allocated central services will not be permitted where the total amount of the adjustment for a particular service (Federal share and non-Federal) share exceeds $500,000. Adjustment methods may include, at the option of the cognizant agency, earned or imputed
interest from the date of expenditure and delinquent debt interest, if applicable, chargeable in accordance with applicable cognizant agency claims collection regulations.
5. Records Retention
All central service cost allocation plans
and related documentation used as a basis
for claiming costs under Federal awards
must be retained for audit in accordance
with the records retention requirements contained in subpart D of this part.
6. Appeals
If a dispute arises in the negotiation of a
plan between the cognizant agency for indirect costs and the governmental unit, the dispute must be resolved in accordance with
the appeals procedures of the cognizant
agency for indirect costs.
7. OMB Assistance
To the extent that problems are encountered among the Federal agencies or governmental units in connection with the negotiation and approval process, OMB will lend assistance, as required, to resolve such problems in a timely manner. [78 FR 78608, Dec. 26, 2013, as amended at 80
FR 54410, Sept. 10, 2015; 85 FR 49581, Aug. 13,
2020]
APPENDIX VI TO PART 200—PUBLIC
ASSISTANCE COST ALLOCATION PLANS
A. GENERAL
Federally-financed programs administered
by state public assistance agencies are funded predominately by the Department of Health and Human Services (HHS). In support of its stewardship requirements, HHS has published requirements for the development, documentation, submission, negotiation, and approval of public assistance cost allocation plans in Subpart E of 45 CFR Part
95. All administrative costs (direct and indirect) are normally charged to Federal awards by implementing the public assistance cost
allocation plan. This Appendix extends these
requirements to all Federal awarding agencies whose programs are administered by a state public assistance agency. Major federally-financed programs typically administered by state public assistance agencies include: Temporary Aid to Needy Families (TANF), Medicaid, Food Stamps, Child Support Enforcement, Adoption Assistance and Foster Care, and Social Services Block
Grant.
B. DEFINITIONS
1. State public assistance agency means a
state agency administering or supervising
the administration of one or more public assistance programs operated by the state as identified in Subpart E of 45 CFR Part 95.
For the purpose of this Appendix, these programs include all programs administered by the state public assistance agency.
2. State public assistance agency costs means
all costs incurred by, or allocable to, the
state public assistance agency, except expenditures for financial assistance, medical contractor payments, food stamps, and payments for services and goods provided directly to program recipients.
C. POLICY
State public assistance agencies will develop, document and implement, and the Federal Government will review, negotiate,
and approve, public assistance cost allocation plans in accordance with Subpart E of 45 CFR Part 95. The plan will include all programs administered by the state public assistance agency. Where a letter of approval or disapproval is transmitted to a state public assistance agency in accordance with Subpart E, the letter will apply to all Federal agencies and programs. The remaining sections of this Appendix (except for the requirement for certification) summarize the provisions of Subpart E of 45 CFR Part 95.
D. SUBMISSION, DOCUMENTATION, AND APPROVAL OF PUBLIC ASSISTANCE COST ALLOCATION PLANS
1. State public assistance agencies are required to promptly submit amendments to the cost allocation plan to HHS for review
and approval.
2. Under the coordination process outlined
in section E, affected Federal agencies will
review all new plans and plan amendments
and provide comments, as appropriate, to
HHS. The effective date of the plan or plan
amendment will be the first day of the calendar quarter following the event that required the amendment, unless another date is specifically approved by HHS. HHS, as the
cognizant agency for indirect costs acting on
behalf of all affected Federal agencies, will,
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as necessary, conduct negotiations with the
state public assistance agency and will inform the state agency of the action taken on the plan or plan amendment.
E. REVIEW OF IMPLEMENTATION OF APPROVED
PLANS
1. Since public assistance cost allocation
plans are of a narrative nature, the review
during the plan approval process consists of
evaluating the appropriateness of the proposed groupings of costs (cost centers) and the related allocation bases. As such, the
Federal Government needs some assurance
that the cost allocation plan has been implemented as approved. This is accomplished by reviews by the Federal awarding agencies,
single audits, or audits conducted by the
cognizant agency for indirect costs.
2. Where inappropriate charges affecting
more than one Federal awarding agency are
identified, the cognizant HHS cost negotiation office will be advised and will take the lead in resolving the issue(s) as provided for
in Subpart E of 45 CFR Part 95.
3. If a dispute arises in the negotiation of
a plan or from a disallowance involving two
or more Federal awarding agencies, the dispute must be resolved in accordance with the appeals procedures set out in 45 CFR Part 16.
Disputes involving only one Federal awarding agency will be resolved in accordance with the Federal awarding agency’s appeal
process.
4. To the extent that problems are encountered among the Federal awarding agencies or governmental units in connection with
the negotiation and approval process, the Office of Management and Budget will lend assistance, as required, to resolve such problems in a timely manner.
F. UNALLOWABLE COSTS
Claims developed under approved cost allocation plans will be based on allowable costs as identified in this Part. Where unallowable
costs have been claimed and reimbursed,
they will be refunded to the program that reimbursed the unallowable cost using one of the following methods: (a) a cash refund, (b)
offset to a subsequent claim, or (c) credits to
the amounts charged to individual Federal
awards. Cash refunds, offsets, and credits
may include at the option of the cognizant
agency for indirect cost, earned or imputed
interest from the date of expenditure and delinquent debt interest, if applicable, chargeable in accordance with applicable cognizant agency for indirect cost claims collection
regulations.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49581, Aug. 13, 2020]
APPENDIX VII TO PART 200—STATES AND
LOCAL GOVERNMENT AND INDIAN
TRIBE INDIRECT COST PROPOSALS
A. GENERAL
1. Indirect costs are those that have been
incurred for common or joint purposes.
These costs benefit more than one cost objective and cannot be readily identified with a particular final cost objective without effort disproportionate to the results achieved.
After direct costs have been determined and
assigned directly to Federal awards and
other activities as appropriate, indirect costs
are those remaining to be allocated to benefitted cost objectives. A cost may not be allocated to a Federal award as an indirect cost if any other cost incurred for the same
purpose, in like circumstances, has been assigned to a Federal award as a direct cost.
2. Indirect costs include (a) the indirect
costs originating in each department or
agency of the governmental unit carrying
out Federal awards and (b) the costs of central governmental services distributed through the central service cost allocation
plan (as described in Appendix V to this part)
and not otherwise treated as direct costs.
3. Indirect costs are normally charged to
Federal awards by the use of an indirect cost
rate. A separate indirect cost rate(s) is usually necessary for each department or agency of the governmental unit claiming indirect costs under Federal awards. Guidelines and illustrations of indirect cost proposals
are provided in a brochure published by the
Department of Health and Human Services
entitled ‘‘A Guide for States and Local Government Agencies: Cost Principles and Procedures for Establishing Cost Allocation Plans and Indirect Cost Rates for Grants and Contracts with the Federal Government.’’ A copy of this brochure may be obtained from HHS Cost Allocation Services or at their website.
4. Because of the diverse characteristics
and accounting practices of governmental
units, the types of costs which may be classified as indirect costs cannot be specified in all situations. However, typical examples of
indirect costs may include certain state/
local-wide central service costs, general administration of the non-Federal entity accounting and personnel services performed within the non-Federal entity, depreciation
on buildings and equipment, the costs of operating and maintaining facilities.
5. This Appendix does not apply to state
public assistance agencies. These agencies
should refer instead to Appendix VI to this
part.
B. DEFINITIONS
1. Base means the accumulated direct costs
(normally either total direct salaries and
wages or total direct costs exclusive of any
extraordinary or distorting expenditures)
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used to distribute indirect costs to individual Federal awards. The direct cost base selected should result in each Federal award
bearing a fair share of the indirect costs in
reasonable relation to the benefits received
from the costs.
2. Base period for the allocation of indirect
costs is the period in which such costs are incurred and accumulated for allocation to activities performed in that period. The base period normally should coincide with the
governmental unit’s fiscal year, but in any
event, must be so selected as to avoid inequities in the allocation of costs.
3. Cognizant agency for indirect costs means
the Federal agency responsible for reviewing
and approving the governmental unit’s indirect cost rate(s) on the behalf of the Federal Government. The cognizant agency for indirect costs assignment is described in Appendix V, section F.
4. Final rate means an indirect cost rate applicable to a specified past period which is based on the actual allowable costs of the period. A final audited rate is not subject to adjustment.
5. Fixed rate means an indirect cost rate
which has the same characteristics as a predetermined rate, except that the difference between the estimated costs and the actual,
allowable costs of the period covered by the
rate is carried forward as an adjustment to
the rate computation of a subsequent period.
6. Indirect cost pool is the accumulated
costs that jointly benefit two or more programs or other cost objectives.
7. Indirect cost rate is a device for determining in a reasonable manner the proportion of indirect costs each program should bear. It is the ratio (expressed as a percentage) of the indirect costs to a direct cost base.
8. Indirect cost rate proposal means the documentation prepared by a governmental unit or subdivision thereof to substantiate its request for the establishment of an indirect cost rate.
9. Predetermined rate means an indirect cost
rate, applicable to a specified current or future period, usually the governmental unit’s fiscal year. This rate is based on an estimate
of the costs to be incurred during the period.
Except under very unusual circumstances, a
predetermined rate is not subject to adjustment. (Because of legal constraints, predetermined rates are not permitted for Federal contracts; they may, however, be used for grants or cooperative agreements.) Predetermined rates may not be used by governmental units that have not submitted and negotiated the rate with the cognizant agency for indirect costs. In view of the potential advantages offered by this procedure, negotiation of predetermined rates for indirect costs for a period of two to four years should
be the norm in those situations where the
cost experience and other pertinent facts
available are deemed sufficient to enable the
parties involved to reach an informed judgment as to the probable level of indirect costs during the ensuing accounting periods.
10. Provisional rate means a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement, and reporting indirect costs on Federal awards pending the establishment of a ‘‘final’’ rate for that period.
C. ALLOCATION OF INDIRECT COSTS AND
DETERMINATION OF INDIRECT COST RATES
1. General
a. Where a governmental unit’s department or agency has only one major function, or where all its major functions benefit from
the indirect costs to approximately the same
degree, the allocation of indirect costs and
the computation of an indirect cost rate may
be accomplished through simplified allocation procedures as described in subsection 2. b. Where a governmental unit’s department or agency has several major functions which benefit from its indirect costs in varying degrees, the allocation of indirect costs may require the accumulation of such costs
into separate cost groupings which then are
allocated individually to benefitted functions by means of a base which best measures the relative degree of benefit. The indirect costs allocated to each function are then distributed to individual Federal
awards and other activities included in that
function by means of an indirect cost rate(s).
c. Specific methods for allocating indirect
costs and computing indirect cost rates
along with the conditions under which each
method should be used are described in subsections 2, 3 and 4.
2. Simplified Method
a. Where a non-Federal entity’s major
functions benefit from its indirect costs to
approximately the same degree, the allocation of indirect costs may be accomplished by (1) classifying the non-Federal entity’s
total costs for the base period as either direct or indirect, and (2) dividing the total allowable indirect costs (net of applicable credits) by an equitable distribution base.
The result of this process is an indirect cost
rate which is used to distribute indirect
costs to individual Federal awards. The rate
should be expressed as the percentage which
the total amount of allowable indirect costs
bears to the base selected. This method
should also be used where a governmental
unit’s department or agency has only one
major function encompassing a number of individual projects or activities, and may be used where the level of Federal awards to
that department or agency is relatively
small.
b. Both the direct costs and the indirect
costs must exclude capital expenditures and
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unallowable costs. However, unallowable
costs must be included in the direct costs if
they represent activities to which indirect
costs are properly allocable.
c. The distribution base may be (1) total direct costs (excluding capital expenditures and other distorting items, such as passthrough funds, subcontracts in excess of $25,000, participant support costs, etc.), (2)
direct salaries and wages, or (3) another base
which results in an equitable distribution.
3. Multiple Allocation Base Method
a. Where a non-Federal entity’s indirect
costs benefit its major functions in varying
degrees, such costs must be accumulated
into separate cost groupings. Each grouping
must then be allocated individually to benefitted functions by means of a base which best measures the relative benefits.
b. The cost groupings should be established
so as to permit the allocation of each grouping on the basis of benefits provided to the major functions. Each grouping should constitute a pool of expenses that are of like character in terms of the functions they benefit and in terms of the allocation base which best measures the relative benefits
provided to each function. The number of
separate groupings should be held within
practical limits, taking into consideration
the materiality of the amounts involved and
the degree of precision needed.
c. Actual conditions must be taken into account in selecting the base to be used in allocating the expenses in each grouping to benefitted functions. When an allocation can be made by assignment of a cost grouping directly to the function benefitted, the allocation must be made in that manner. When the expenses in a grouping are more general in
nature, the allocation should be made
through the use of a selected base which produces results that are equitable to both the Federal Government and the governmental
unit. In general, any cost element or related
factor associated with the governmental
unit’s activities is potentially adaptable for
use as an allocation base provided that: (1) it
can readily be expressed in terms of dollars
or other quantitative measures (total direct
costs, direct salaries and wages, staff hours
applied, square feet used, hours of usage,
number of documents processed, population
served, and the like), and (2) it is common to
the benefitted functions during the base period.
d. Except where a special indirect cost
rate(s) is required in accordance with paragraph (C)(4) of this Appendix, the separate groupings of indirect costs allocated to each
major function must be aggregated and
treated as a common pool for that function.
The costs in the common pool must then be
distributed to individual Federal awards included in that function by use of a single indirect cost rate. e. The distribution base used in computing
the indirect cost rate for each function may
be (1) total direct costs (excluding capital expenditures and other distorting items such as pass-through funds, subawards in excess of
$25,000, participant support costs, etc.), (2)
direct salaries and wages, or (3) another base
which results in an equitable distribution.
An indirect cost rate should be developed for
each separate indirect cost pool developed.
The rate in each case should be stated as the
percentage relationship between the particular indirect cost pool and the distribution base identified with that pool.
4. Special Indirect Cost Rates
a. In some instances, a single indirect cost
rate for all activities of a non-Federal entity
or for each major function of the agency may
not be appropriate. It may not take into account those different factors which may substantially affect the indirect costs applicable to a particular program or group of programs. The factors may include the physical location of the work, the level of administrative support required, the nature of the facilities or other resources employed, the organizational arrangements used, or any combination thereof. When a particular Federal award is carried out in an environment
which appears to generate a significantly
different level of indirect costs, provisions
should be made for a separate indirect cost
pool applicable to that Federal award. The
separate indirect cost pool should be developed during the course of the regular allocation process, and the separate indirect cost rate resulting therefrom should be used, provided that: (1) The rate differs significantly from the rate which would have been developed under paragraphs (C)(2) and (C)(3) of this Appendix, and (2) the Federal award to
which the rate would apply is material in
amount.
b. Where Federal statutes restrict the reimbursement of certain indirect costs, it may be necessary to develop a special rate
for the affected Federal award. Where a ‘‘restricted rate’’ is required, the same procedure for developing a non-restricted rate will be used except for the additional step of the
elimination from the indirect cost pool those
costs for which the law prohibits reimbursement.
D. SUBMISSION AND DOCUMENTATION OF
PROPOSALS
1. Submission of Indirect Cost Rate Proposals
a. All departments or agencies of the governmental unit desiring to claim indirect costs under Federal awards must prepare an
indirect cost rate proposal and related documentation to support those costs. The proposal and related documentation must be retained for audit in accordance with the VerDate Sep<11>2014 13:23 Jun 29, 2021 Jkt 253005 PO 00000 Frm 00254 Fmt 8010 Sfmt 8002 Y:\SGML\253005.XXX 253005
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records retention requirements contained in
§200.334.
b. A governmental department or agency
unit that receives more than $35 million in
direct Federal funding must submit its indirect cost rate proposal to its cognizant agency for indirect costs. Other governmental department or agency must develop an indirect cost proposal in accordance with the requirements of this Part and maintain the proposal and related supporting documentation for
audit. These governmental departments or
agencies are not required to submit their
proposals unless they are specifically requested to do so by the cognizant agency for indirect costs. Where a non-Federal entity
only receives funds as a subrecipient, the
pass-through entity will be responsible for
negotiating and/or monitoring the subrecipient’s indirect costs. c. Each Indian tribal government desiring
reimbursement of indirect costs must submit
its indirect cost proposal to the Department
of the Interior (its cognizant agency for indirect costs). d. Indirect cost proposals must be developed (and, when required, submitted) within six months after the close of the governmental unit’s fiscal year, unless an exception is approved by the cognizant agency for indirect costs. If the proposed central service cost allocation plan for the same period has
not been approved by that time, the indirect
cost proposal may be prepared including an
amount for central services that is based on
the latest federally-approved central service
cost allocation plan. The difference between
these central service amounts and the
amounts ultimately approved will be compensated for by an adjustment in a subsequent period.
2. Documentation of Proposals
The following must be included with each
indirect cost proposal:
a. The rates proposed, including subsidiary
work sheets and other relevant data, cross
referenced and reconciled to the financial
data noted in subsection b. Allocated central
service costs will be supported by the summary table included in the approved central service cost allocation plan. This summary
table is not required to be submitted with
the indirect cost proposal if the central service cost allocation plan for the same fiscal year has been approved by the cognizant
agency for indirect costs and is available to
the funding agency.
b. A copy of the financial data (financial
statements, comprehensive annual financial
report, executive budgets, accounting reports, etc.) upon which the rate is based. Adjustments resulting from the use of unaudited data will be recognized, where appropriate, by the Federal cognizant agency for indirect costs in a subsequent proposal.
c. The approximate amount of direct base
costs incurred under Federal awards. These
costs should be broken out between salaries
and wages and other direct costs.
d. A chart showing the organizational
structure of the agency during the period for
which the proposal applies, along with a
functional statement(s) noting the duties
and/or responsibilities of all units that comprise the agency. (Once this is submitted, only revisions need be submitted with subsequent proposals.)
3. Required certification.
Each indirect cost rate proposal must be
accompanied by a certification in the following form:
CERTIFICATE OF INDIRECT COSTS
This is to certify that I have reviewed the
indirect cost rate proposal submitted herewith and to the best of my knowledge and belief:
(1) All costs included in this proposal [identify date] to establish billing or final indirect costs rates for [identify period covered by rate] are allowable in accordance with the
requirements of the Federal award(s) to
which they apply and the provisions of this
Part. Unallowable costs have been adjusted
for in allocating costs as indicated in the indirect cost proposal (2) All costs included in this proposal are
properly allocable to Federal awards on the
basis of a beneficial or causal relationship
between the expenses incurred and the agreements to which they are allocated in accordance with applicable requirements. Further, the same costs that have been treated as indirect costs have not been claimed as direct costs. Similar types of costs have been accounted for consistently and the Federal Government will be notified of any accounting changes that would affect the predetermined rate.
I declare that the foregoing is true and correct.
Governmental Unit: lllllllllllll
Signature: llllllllllllllllll
Name of Official: llllllllllllll
Title: llllllllllllllllllll
Date of Execution: lllllllllllll
E. NEGOTIATION AND APPROVAL OF RATES
1. Indirect cost rates will be reviewed, negotiated, and approved by the cognizant agency on a timely basis. Once a rate has
been agreed upon, it will be accepted and
used by all Federal agencies unless prohibited or limited by statute. Where a Federal awarding agency has reason to believe that
special operating factors affecting its Federal awards necessitate special indirect cost rates, the funding agency will, prior to the
time the rates are negotiated, notify the cognizant agency for indirect costs.
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2. The use of predetermined rates, if allowed, is encouraged where the cognizant agency for indirect costs has reasonable assurance based on past experience and reliable projection of the non-Federal entity’s costs, that the rate is not likely to exceed a
rate based on actual costs. Long-term agreements utilizing predetermined rates extending over two or more years are encouraged, where appropriate.
3. The results of each negotiation must be
formalized in a written agreement between
the cognizant agency for indirect costs and
the governmental unit. This agreement will
be subject to re-opening if the agreement is
subsequently found to violate a statute, or
the information upon which the plan was negotiated is later found to be materially incomplete or inaccurate. The agreed upon rates must be made available to all Federal
agencies for their use.
4. Refunds must be made if proposals are
later found to have included costs that (a)
are unallowable (i) as specified by law or regulation, (ii) as identified in §200.420, or (iii) by the terms and conditions of Federal
awards, or (b) are unallowable because they
are clearly not allocable to Federal awards.
These adjustments or refunds will be made
regardless of the type of rate negotiated
(predetermined, final, fixed, or provisional).
F. OTHER POLICIES
1. Fringe Benefit Rates
If overall fringe benefit rates are not approved for the governmental unit as part of the central service cost allocation plan,
these rates will be reviewed, negotiated and
approved for individual recipient agencies
during the indirect cost negotiation process.
In these cases, a proposed fringe benefit rate
computation should accompany the indirect
cost proposal. If fringe benefit rates are not
used at the recipient agency level (i.e., the
agency specifically identifies fringe benefit
costs to individual employees), the governmental unit should so advise the cognizant agency for indirect costs.
2. Billed Services Provided by the Recipient
Agency
In some cases, governmental departments
or agencies (components of the governmental unit) provide and bill for services similar to those covered by central service
cost allocation plans (e.g., computer centers). Where this occurs, the governmental departments or agencies (components of the
governmental unit)should be guided by the
requirements in Appendix V relating to the
development of billing rates and documentation requirements, and should advise the cognizant agency for indirect costs of any
billed services. Reviews of these types of
services (including reviews of costing/billing
methodology, profits or losses, etc.) will be
made on a case-by-case basis as warranted by
the circumstances involved.
3. Indirect Cost Allocations Not Using Rates
In certain situations, governmental departments or agencies (components of the governmental unit), because of the nature of
their Federal awards, may be required to develop a cost allocation plan that distributes indirect (and, in some cases, direct) costs to
the specific funding sources. In these cases, a
narrative cost allocation methodology
should be developed, documented, maintained for audit, or submitted, as appropriate, to the cognizant agency for indirect costs for review, negotiation, and approval.
4. Appeals
If a dispute arises in a negotiation of an indirect cost rate (or other rate) between the cognizant agency for indirect costs and the
governmental unit, the dispute must be resolved in accordance with the appeals procedures of the cognizant agency for indirect costs.
5. Collection of Unallowable Costs and
Erroneous Payments
Costs specifically identified as unallowable
and charged to Federal awards either directly or indirectly will be refunded (including interest chargeable in accordance with applicable Federal cognizant agency for indirect costs regulations).
6. OMB Assistance
To the extent that problems are encountered among the Federal agencies or governmental units in connection with the negotiation and approval process, OMB will lend assistance, as required, to resolve such problems in a timely manner. [78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75889, Dec. 19, 2014; 85 FR 49581, Aug. 13,
2020]
APPENDIX VIII TO PART 200— NONPROFIT ORGANIZATIONS EXEMPTED FROM SUBPART E OF PART 200
1. Advance Technology Institute (ATI),
Charleston, South Carolina
2. Aerospace Corporation, El Segundo, California
3. American Institutes of Research (AIR),
Washington, DC
4. Argonne National Laboratory, Chicago, Illinois
5. Atomic Casualty Commission, Washington, DC
6. Battelle Memorial Institute,
Headquartered in Columbus, Ohio
7. Brookhaven National Laboratory, Upton,
New York
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Packet Pg. 400 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 245
OMB Guidance Pt. 200, App. XII
8. Charles Stark Draper Laboratory, Incorporated, Cambridge, Massachusetts
9. CNA Corporation (CNAC), Alexandria, Virginia
10. Environmental Institute of Michigan,
Ann Arbor, Michigan
11. Georgia Institute of Technology/Georgia
Tech Applied Research Corporation/Georgia Tech Research Institute, Atlanta, Georgia
12. Hanford Environmental Health Foundation, Richland, Washington
13. IIT Research Institute, Chicago, Illinois
14. Institute of Gas Technology, Chicago, Illinois
15. Institute for Defense Analysis, Alexandria, Virginia
16. LMI, McLean, Virginia
17. Mitre Corporation, Bedford, Massachusetts
18. Noblis, Inc., Falls Church, Virginia
19. National Radiological Astronomy Observatory, Green Bank, West Virginia
20. National Renewable Energy Laboratory,
Golden, Colorado
21. Oak Ridge Associated Universities, Oak
Ridge, Tennessee
22. Rand Corporation, Santa Monica, California
23. Research Triangle Institute, Research
Triangle Park, North Carolina
24. Riverside Research Institute, New York,
New York
25. South Carolina Research Authority
(SCRA), Charleston, South Carolina
26. Southern Research Institute, Birmingham, Alabama
27. Southwest Research Institute, San Antonio, Texas
28. SRI International, Menlo Park, California
29. Syracuse Research Corporation, Syracuse, New York
30. Universities Research Association, Incorporated (National Acceleration Lab), Argonne, Illinois
31. Urban Institute, Washington DC
32. Nonprofit insurance companies, such as
Blue Cross and Blue Shield Organizations
33. Other nonprofit organizations as negotiated with Federal awarding agencies [78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49582, Aug. 13, 2020]
APPENDIX IX TO PART 200—HOSPITAL
COST PRINCIPLES
Based on initial feedback, OMB proposes to
establish a review process to consider existing hospital cost determine how best to update and align them with this Part. Until such time as revised guidance is proposed
and implemented for hospitals, the existing
principles located at 45 CFR Part 75 Appendix E, entitled ‘‘Principles for Determining Cost Applicable to Research and Development Under Grants and Contracts with Hospitals,’’ remain in effect. [78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75889, Dec. 19, 2014]
APPENDIX X TO PART 200—DATA
COLLECTION FORM (FORM SF–SAC)
The Data Collection Form SF–SAC is
available on the FAC Web site.
APPENDIX XI TO PART 200—COMPLIANCE
SUPPLEMENT
The compliance supplement is available on
the OMB website.
[85 FR 49582, Aug. 13, 2020]
APPENDIX XII TO PART 200—AWARD
TERM AND CONDITION FOR RECIPIENT
INTEGRITY AND PERFORMANCE MATTERS
A. REPORTING OF MATTERS RELATED TO
RECIPIENT INTEGRITY AND PERFORMANCE
1. General Reporting Requirement
If the total value of your currently active
grants, cooperative agreements, and procurement contracts from all Federal awarding agencies exceeds $10,000,000 for any period of
time during the period of performance of this
Federal award, then you as the recipient during that period of time must maintain the currency of information reported to the System for Award Management (SAM) that is made available in the designated integrity
and performance system (currently the Federal Awardee Performance and Integrity Information System (FAPIIS)) about civil, criminal, or administrative proceedings described in paragraph 2 of this award term and condition. This is a statutory requirement under section 872 of Public Law 110–417, as amended (41 U.S.C. 2313). As required by
section 3010 of Public Law 111–212, all information posted in the designated integrity and performance system on or after April 15,
2011, except past performance reviews required for Federal procurement contracts, will be publicly available.
2. Proceedings About Which You Must Report
Submit the information required about
each proceeding that:
a. Is in connection with the award or performance of a grant, cooperative agreement, or procurement contract from the Federal
Government;
b. Reached its final disposition during the
most recent five-year period; and
c. Is one of the following:
(1) A criminal proceeding that resulted in a
conviction, as defined in paragraph 5 of this
award term and condition;
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Packet Pg. 401 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 246
Pt. 200, App. XII 2 CFR Ch. II (1–1–21 Edition)
(2) A civil proceeding that resulted in a
finding of fault and liability and payment of
a monetary fine, penalty, reimbursement,
restitution, or damages of $5,000 or more;
(3) An administrative proceeding, as defined in paragraph 5. of this award term and condition, that resulted in a finding of fault
and liability and your payment of either a
monetary fine or penalty of $5,000 or more or
reimbursement, restitution, or damages in
excess of $100,000; or
(4) Any other criminal, civil, or administrative proceeding if:
(i) It could have led to an outcome described in paragraph 2.c.(1), (2), or (3) of this award term and condition;
(ii) It had a different disposition arrived at
by consent or compromise with an acknowledgment of fault on your part; and (iii) The requirement in this award term
and condition to disclose information about
the proceeding does not conflict with applicable laws and regulations.
3. Reporting Procedures
Enter in the SAM Entity Management area
the information that SAM requires about
each proceeding described in paragraph 2 of
this award term and condition. You do not
need to submit the information a second
time under assistance awards that you received if you already provided the information through SAM because you were required to do so under Federal procurement contracts that you were awarded.
4. Reporting Frequency
During any period of time when you are
subject to the requirement in paragraph 1 of
this award term and condition, you must report proceedings information through SAM for the most recent five year period, either
to report new information about any proceeding(s) that you have not reported previously or affirm that there is no new information to report. Recipients that have Federal contract, grant, and cooperative agreement awards with a cumulative total value greater than $10,000,000 must disclose semiannually any information about the criminal, civil, and administrative proceedings.
5. Definitions
For purposes of this award term and condition:
a. Administrative proceeding means a nonjudicial process that is adjudicatory in nature in order to make a determination of fault or liability (e.g., Securities and Exchange Commission Administrative proceedings, Civilian Board of Contract Appeals proceedings, and Armed Services Board of
Contract Appeals proceedings). This includes
proceedings at the Federal and State level
but only in connection with performance of a
Federal contract or grant. It does not include audits, site visits, corrective plans, or inspection of deliverables.
b. Conviction, for purposes of this award
term and condition, means a judgment or
conviction of a criminal offense by any court
of competent jurisdiction, whether entered
upon a verdict or a plea, and includes a conviction entered upon a plea of nolo contendere.
c. Total value of currently active grants,
cooperative agreements, and procurement
contracts includes—
(1) Only the Federal share of the funding
under any Federal award with a recipient
cost share or match; and
(2) The value of all expected funding increments under a Federal award and options, even if not yet exercised.
B. [Reserved]
[80 FR 43310, July 22, 2015, as amended at 85
FR 49582, Aug. 13, 2020]
PARTS 201–299 [RESERVED]
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Packet Pg. 402 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 13 ATTACHMENT C CONTINUED
FEDERAL PROVISIONS
Should funding be allocated through American Rescue Plan Act (ARPA; (Title VI of the Social Security Act Section 602 et seq.), the COUNTY will administer and distribute those funds in accordance with ARPA. ARPA requires that payments from the Coronavirus Fiscal Recovery Fund be used to respond to the public health emergency or its negative economic impacts, to respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay, provide government services to the extent the reduction of revenue due to COVID-19 public health emergency, and to make necessary investments in water, sewer or broadband infrastructure. It is effective beginning May 17, 2021 and ends on December 31, 2026.
Subrecipient acknowledges and agrees that this Agreement is subject to the federal requirements, including but not limited to the federal provisions provided below:
1. NON-DISCRIMINATION. Subrecipient shall not be discriminate in the provision of services, allocation of benefits, accommodation in facilities, or employment of personnel on the basis of ethnic group identification, race, religious creed, color, national origin, ancestry, physical handicap, medical condition, marital status or sex in the performance of this Agreement; and, to the extent they shall be found to be applicable hereto, shall comply with the provisions of the California Fair Employment and Housing Act (Gov. Code 12900 et. seq), the Federal Civil Rights Act of 1964 (P.L. 88-352), the Americans with Disabilities Act of 1990 (42 U.S.C. S1210 et seq.) and all other applicable laws or regulations.
2. EQUAL EMPLOYMENT OPPORTUNITY/ FAIR EMPLOYMENT PRACTICES/ FEDERAL PROVISIONS. During the performance of this Agreement, the Subrecipient shall not deny benefits to any person on the basis of religion, color, ethnic group identification, sex, age, physical or mental disability, nor shall they discriminate unlawfully against any employee or applicant for employment because of race, religion, color, national origin, ancestry, physical handicap, mental disability, medical condition, marital status, age, or sex. Subrecipient shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination.
A. Subrecipient shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.), the regulations promulgated thereunder (California Code of Regulations, Title 2, Section 11000 et seq.), the provisions of Executive Order 11246 of Sept. 23, 1965 and of the rules, regulations, and relevant orders of the Secretary of Labor, the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Government Code, Sections 11135-11139.8), and of the rules, regulations or standards adopted by the County to implement such article.
B. The Subrecipient shall comply with the provisions of the Copeland “Anti-Kickback” Act, 18 U.S.C. § 874, 40 U.S.C. § 3145, and the requirements of 29 C.F.R. pt. 3 as may be applicable, which are incorporated by reference into this Agreement.
3. CLEAN AIR ACT. The Subrecipient agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act, as amended, 42 U.S.C. Section 7401 etseq.
The Subrecipient agrees to report each violation to the County and understands and agreesthat the County will, in turn, report each violation as required to assure notification to the California
3.A.5.a
Packet Pg. 403 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 14 Governor's Office of Emergency Services, Federal Emergency Management Agency (FEMA), and the appropriate Environmental Protection Agency Regional Office. The Subrecipient agrees to include these requirements in each subcontract exceeding $150,000 financed in whole or in part with Federal assistance provided by FEMA.
4. FEDERAL WATER POLLUTION CONTROL ACT
The Subrecipient agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. Sections 1251 et seq.
The Subrecipient agrees to report each violation to the County and understands and agrees that the County will, in turn, report each violation as required to assure notification to the Federal Emergency Management Agency (FEMA), and the appropriate Environmental Protection Agency Regional Office.
The Subrecipient agrees to include these requirements in each subcontract exceeding $150,000 financed in whole or in part with Federal assistance provided by FEMA.
5. DEBARMENT AND SUSPENSION CLAUSE
This Agreement is a covered transaction for purposes of 2 C.F.R. pt. 180 and 2 C.F.R. pt. 3000. As such the Subrecipient is required to verify that none of the Subrecipient, its principals (defined at 2 C.F.R. § 180.995), or its affiliates (defined at 2 C.F.R. § 180.905) are excluded (defined at 2 C.F.R. § 180.940) or disqualified (defined at 2 C.F.R. § 180.935).
The Subrecipient must comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C and must include a requirement to comply with these regulations in any lower tier covered transaction it enters into.
This certification is a material representation of fact relied upon by the County. If it is later determined that the Subrecipient did not comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C, in addition to remedies available to the County, the Federal Government may pursue available remedies, including but not limited to suspension and/or debarment.
The bidder or proposer agrees to comply with the requirements of 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C while this offer is valid and throughout the period of any contract that may arise from this offer. The bidder or proposer further agrees to include a provision requiring such compliance in its lower tier covered transactions.
6. BYRD ANTI LOBBYING AMENDMENT, 31 U.S.C. § 1352 (AS AMENDED) Subrecipients who apply or bid for an award of $100,000 or more shall file the required certification.
Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member ofCongress, officer or employee ofCongress, or an employee of amember ofCongress in connection with obtaining any Federal contract, grant, or any other award covered by 31U.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 who in turn will forward the certification(s) to the County.
APPENDIX A, 44 C.F.R. PART 18- CERTIFICATION REGARDING LOBBYING The undersigned [Subrecipient] certifies, to the best of his or her knowledge, that:
A. 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
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Packet Pg. 404 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 15 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.
B. 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 and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions.
C. The undersigned shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts, sub-grants, and contracts under grants, loans, and cooperative agreements) and that all sub-recipients 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 31, U.S.C. § 1352 (as amended by the Lobbying Disclosure Act of 1995). 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.
The Subrecipient certifies or affirms the truthfulness and accuracy of each statement of its certification and disclosure, if any. In addition, the Subrecipient understands and agrees that the provisions of 31 U.S.C. § 3801 et seq., apply to this certification and disclosure, if any.
SUBRECIPIENT
By
Date
7. PROCUREMENT OF RECOVERED MATERIALS
In the performance of this Agreement, the Subrecipient shall make maximum use of products containing recovered materials that are EPA-designated items unless the product cannot be acquired A. Competitively within a timeframe providing for compliance with the contract performance schedule;
B. Meeting contract performance requirements; or
C. At a reasonable price.
Information about this requirement, along with the list of EPA-designated items, is available at EPA’s Comprehensive Procurement Guidelines web site, https://www.epa.gov/smm/comprehensiveprocurement-guideline-cpg-program The Subrecipient also agrees to comply with all other applicable requirements of Section 6002 of the Solid Waste Disposal Act.
8. ACCESS TO RECORDS
The following access to records requirements apply to this Agreement:
A. The Subrecipient agrees to provide the County, the FEMA Administrator, the Comptroller General of the United States, or any of their authorized representatives access to any books, documents, papers, and records of the Subrecipient which are directly pertinent to this Agreement for the purposes of making audits, examinations, excerpts, and transcriptions B. The Subrecipient agrees to permit any of the foregoing parties to reproduce by any means whatsoever or to copy excerpts and transcriptions as reasonably needed.
3.A.5.a
Packet Pg. 405 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 16 C. The Subrecipient agrees to provide the FEMA Administrator or his or her authorized representatives access to construction or other work sites pertaining to the work being completed under the contract.
D. In compliance with the Disaster Recovery Act of 2018, the County and the Subrecipient acknowledge and agree that no language in this contract is intended to prohibit audits or internal reviews by the FEMA Administrator or the Comptroller General of the United States.
9. DEPARTMENT OF HOMELAND SECURITY SEAL, LOGO, FLAGS
The Subrecipient shall not use the DHS seal(s), logos, crests, or reproductions of flags or likenesses of DHS agency officials without specific FEMA pre-approval.
10. COMPLIANCE WITH FEDERAL LAW, REGULATIONS, AND EXECUTIVE ORDERS This is an acknowledgement that FEMA financial assistance will be used to fund all or a portion of the contract. The Subrecipient will comply with all applicable Federal law, regulations, executive orders, FEMA policies, procedures, and directives.
11. NO OBLIGATION BY FEDERAL GOVERNMENT
The Federal Government is not a party to this Agreement and is not subject to any obligations or liabilities to the non-Federal entity, contractor, or any other party pertaining to any matter resulting from the contract.
12. PROGRAM FRAUD AND FALSE OR FRAUDULENT STATEMENTS OR RELATED ACTS
The Subrecipient acknowledges that 31 U.S.C. Chapter 38 (Administrative Remedies for False Claims and Statements) applies to the Subrecipient’s actions pertaining to this Agreement.
13. FEDERAL PREVAILING WAGE
DAVIS-BACON ACT COMPLIANCE (applicable to construction contracts in excess of $2,000 awarded by grantees and subgrantees when required by Federal grant program legislation) To the extent required by any Federal grant programs applicable to expected funding or reimbursement expenses incurred in connection with the services provided under this Agreement, Subrecipient agrees to comply with the Davis-Bacon Act (40 U.S.C. §§ 3141-3144 and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5) as set forth below.
A. The Subrecipient shall be bound to the provisions of the Davis-Bacon Act, and agrees to be bound by all the provisions of Labor Code section 1771 regarding prevailing wages. All labor on this project shall be paid neither less than the greater of the minimum wage rates established by the U.S. Secretary of Labor (Federal Wage Rates), or by the State of California Director of Department of Industrial Relations (State Wage Rates). Current DIR requirements may be found at http://www.dir.ca.gov/lcp.asp. Additionally, wages are required to be paid not less than once a week.
B. The general prevailing wage rates may be accessed at the Department of Labor Home Page at www.wdol.gov. Under the Davis Bacon heading, click on “Selecting DBA WDs.” In the drop down menu
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Packet Pg. 406 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 17 for State, select, “California.” In the drop down menu for County, select “Riverside.” In the drop down menu for Construction Type, make the appropriate selection. Then, click Search.
The Federal minimum wage rates for this project are predetermined by the United States Secretary of Labor. If there is a difference between the minimum wage rates predetermined by the Secretary of Labor and the general prevailing wage rates determined by the Director of the California DIR for similar classifications of labor, the Subrecipient and subcontractors shall pay not less than the higher wage rate. The County will not accept lower State wage rates not specifically included in the Federal minimum wage determinations. This includes “helper” (or other classifications based on hours of experience) or any other classification not appearing in the Federal wage determinations. Where Federal wage determinations do not contain the State wage rate determination otherwise available for use by the Subrecipient and subcontractors, the Subrecipient and subcontractors shall pay not less than the Federal minimum wage rate which most closely approximates the duties of the employees in question.
14. CONTRACT WORK HOURS AND SAFETY STANDARDS (applicable to all contracts in excess of $100,000 that involve the employment of mechanics or laborers, but not to purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence)
A. Compliance: Subrecipient agrees that it shall comply with Sections 3702 and 3704 of the Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 3701–3708) as supplemented by Department of Labor regulations (29 CFR Part 5), which are incorporated herein.
B. Overtime: No contractor or subcontractor contracting for any part of the work under this Agreement which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek.
C. Violation; liability for unpaid wages; liquidated damages: In the event of any violation of the provisions of paragraph B of this section, the Subrecipient and any subcontractor responsible therefore shall be liable for the unpaid wages. In addition, such Subrecipient and subcontractor shall be liable to the United States for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic employed in violation of the provisions of paragraph B, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by paragraph B.
D. Withholding for unpaid wages and liquidated damages: Subrecipient shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other Federal contract with the same prime contractor, or any other federallyassisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set for in paragraph C of this section.
E. Subcontracts: The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraphs A through D of this section and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs A through D of this section.
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Packet Pg. 407 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 18 15. 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 HUD.
16. RIGHTS TO DATA AND COPYRIGHTS – Subrecipients and consultants agree to comply with all applicable provisions pertaining to the use of data and copyrights pursuant to 48 CFR Part 27.4, Federal Acquisition Regulations (FAR).
17. PROHIBITION ON CONTRACTING FOR COVERED TELECOMMUNICATIONS
EQUIPMENT OR SERVICES
A. Definitions. As used in this clause, the terms backhaul; covered foreign country; covered telecommunications equipment or services; interconnection arrangements; roaming; substantial or essential component; and telecommunications equipment or services have the meaning as defined in FEMA Policy, #405-143-1 Prohibitions on Expending FEMA Award Funds for Covered Telecommunications Equipment or Services As used in this clause— B. Prohibitions.
(1) Section 889(b) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019, Pub. L. No. 115-232, and 2 C.F.R. § 200.216 prohibit the head of an executive agency on or after Aug.13, 2020, from obligating or expending grant, cooperative agreement, loan, or loan guarantee funds on certain telecommunications products or from certain entities for national security reasons.
(2) Unless an exception in paragraph (c) of this clause applies, the contractor and its subcontractors may not use grant, cooperative agreement, loan, or loan guarantee funds from the Federal Emergency Management Agency to:
(i) Procure or obtain any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology of any system;
(ii) Enter into, extend, or renew a contract to procure or obtain any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology of any system; (iii) Enter into, extend, or renew contracts with entities that use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system; or (iv)Provide, as part of its performance of this contract, subcontract, or other contractual instrument, any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.
C. Exceptions.
(1) This clause does not prohibit contractors from providing— a. A service that connects to the facilities of a third-party, such as backhaul, roaming, or interconnection arrangements; or
b. Telecommunications equipment that cannot route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles.
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Packet Pg. 408 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 19 (2) By necessary implication and regulation, the prohibitions also do not apply to:
a. Covered telecommunications equipment or services that:
i. Are not used as a substantial or essential component of any system; and ii. Are not used as critical technology of any system.
b. Other telecommunications equipment or services that are not considered covered telecommunications equipment or services.
D. Reporting requirement.
(1) In the event the contractor identifies covered telecommunications equipment or services used as a substantial or essential component of any system, or as critical technology as part of any system, during contract performance, or the contractor is notified of such by a subcontractor at any tier or by any other source, the contractor shall report the information in paragraph (d)(2) of this clause to the recipient or subrecipient, unless elsewhere in this contract are established procedures for reporting the information. (2) The Subrecipient shall report the following information pursuant to paragraph (d)(1) of this clause:
(i) Within one business day from the date of such identification or notification:
The contract number; the order number(s), if applicable; supplier name; supplier unique entity identifier (if known); supplier Commercial and Government Entity (CAGE) code (if known); brand; model number (original equipment manufacturer number, manufacturer part number, or wholesaler number); item description; and any readily available information about mitigation actions undertaken or recommended. ii) Within 10 business days of submitting the information in paragraph (d)(2)(i) of this clause: Any further available information about mitigation actions undertaken or recommended. In addition, the contractor shall describe the efforts it undertook to prevent use or submission of covered telecommunications equipment or services, and any additional efforts that will be incorporated to prevent future use or submission of covered telecommunications equipment or services. Page 10
E. Subcontracts. The Subrecipient shall insert the substance of this clause, including this paragraph (e), in all subcontracts and other contractual instruments.
18. REPORTING OF MATTERS RELATED TO RECIPIENT INTEGRITY AND PERFORMANCE A. General Reporting Requirement
If the total value of your currently active grants, cooperative agreements, and procurement contracts from all Federal awarding agencies exceeds $10,000,000 for any period of time during the period of performance of this Federal award, then you as the recipient during that period of time must maintain the currency of information reported to the System for Award Management (SAM) that is made available in the designated integrity and performance system (currently the Federal Awardee Performance and Integrity Information System (FAPIIS)) about civil, criminal, or administrative proceedings described in paragraph 2 of this award term and condition. This is a statutory requirement under section 872 of Public Law 110-417, as amended (41 U.S.C. 2313). As required by section 3010 of Public Law 111- 212, all information posted in the designated integrity and performance system on or after April 15, 2011, except past performance reviews required for Federal procurement contracts, will be publicly available.
B. Proceedings About Which You Must Report
Submit the information required about each proceeding that:
a. Is in connection with the award or performance of a grant, cooperative agreement, or procurement contract from the Federal Government;
b. Reached its final disposition during the most recent five-year period; and
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Packet Pg. 409 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 20 c. Is one of the following:
(1) A criminal proceeding that resulted in a conviction, as defined in paragraph 5 of this award term and condition;
(2) A civil proceeding that resulted in a finding of fault and liability and payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more; (3) An administrative proceeding, as defined in paragraph 5. of this award term and condition, that resulted in a finding of fault and liability and your payment of either a monetary fine or penalty of $5,000 or more or reimbursement, restitution, or damages in excess of $100,000; or (4) Any other criminal, civil, or administrative proceeding if:
(i) It could have led to an outcome described in paragraph 2.c.(1), (2), or (3) of this award term and condition;
(ii) It had a different disposition arrived at by consent or compromise with an acknowledgment of fault on your part; and
(iii) The requirement in this award term and condition to disclose information about the proceeding does not conflict with applicable laws and regulations.
C. Reporting Procedures
Enter in the SAM Entity Management area the information that SAM requires about each proceeding described in paragraph 2 of this award term and condition. You do not need to submit the information a second time under assistance awards that you received if you already provided the information through SAM because you were required to do so under Federal procurement contracts that you were awarded.
D. Reporting Frequency
During any period of time when you are subject to the requirement in paragraph 1 of this award term and condition, you must report proceedings information through SAM for the most recent five year period, either to report new information about any proceeding(s) that you have not reported previously or affirm that there is no new information to report. Recipients that have Federal contract, grant, and cooperative agreement awards with a cumulative total value greater than $10,000,000 must disclose semiannually any information about the criminal, civil, and administrative proceedings.
E. Definitions
For purposes of this award term and condition:
a. Administrative proceeding means a non-judicial process that is adjudicatory in nature in order to make a determination of fault or liability (e.g., Securities and Exchange Commission Administrative proceedings, Civilian Board of Contract Appeals proceedings, and Armed Services Board of Contract Appeals proceedings). This includes proceedings at the Federal and State level but only in connection with performance of a Federal contract or grant. It does not include audits, site visits, corrective plans, or inspection of deliverables.
b. Conviction, for purposes of this award term and condition, means a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, and includes a conviction entered upon a plea of nolo contendere. c. Total value of currently active grants, cooperative agreements, and procurement contracts includes - (1) Only the Federal share of the funding under any Federal award with a recipient cost share or match; and
(2) The value of all expected funding increments under a Federal award and options, even if not yet exercised.
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Packet Pg. 410 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 21 Attachment D – Indemnification and Insurance Requirements
INDEMNIFICATION
A. Basic Indemnity
1. To the fullest extent permitted by applicable law, Subrecipient agrees to indemnify, hold harmless and defend the County of Riverside, its Agencies, Districts, Departments and Special Districts, Board of Supervisors, elected and appointed officials, and each of their respective directors, members officers, employees, agents, volunteers and representatives ("Indemnitees") and each of them from any and all Losses that arise out of or relate to any act or omission constituting ordinary and not professional negligence (including, without limitation, negligent breach of contract), recklessness, or willful misconduct on the part of Subrecipient or its subconsultants or their respective employees, agents, representatives, or independent contractors.
2. "Losses" shall mean any and all economic and non-economic losses, costs, liabilities, claims, damages, actions, judgements, settlements and expenses, including, without limitation, full and actual attorney's fees (including, without limitation, attorney's fees for trial and on appeal), expert and non-expert witness fees, arbitrator and arbitration fees and mediator and mediation fees.
3. Subrecipient further agrees to and shall indemnify and hold harmless the Indemnitees from all liability arising from suits, claims, demands, actions, or proceedings made by agents, employees or subcontractors of Subrecipient for salary, wages, compensation, health benefits, insurance, retirement or any other benefit not explicitly set forth in this Agreement and arising out of work performed for County pursuant to this Agreement. The Indemnitees shall be entitled to the defense and indemnification provided for hereunder regardless of whether the Loss is in part caused or contributed to by the acts or omissions of an Indemnitee or any other person or entity; provided however, that nothing contained herein shall be construed as obligating Subrecipient to indemnify and hold harmless any Indemnitee to the extent not required under the provisions of Paragraph B below.
B. Indemnity for Design Professionals
1. To the fullest extent permitted by Applicable Law, Subrecipient agrees to defend (through legal counsel reasonably acceptable to County), indemnify and hold harmless the Indemnitees, and each of them, against any and all Losses that arise out of, pertain to, or relate to, any negligence, recklessness or willful misconduct constituting professional negligence on the part of Subrecipient or its Subconsultants, or their respective employees, agents, representatives, or independent contractors. The Indemnitees shall be entitled to the defense, and indemnification provided for hereunder regardless of whether the Loss is, in part, caused or contributed to by the acts or omissions of an Indemnitee or any other person or entity; provided, however, that nothing contained herein shall be construed as obligating Subrecipient to indemnify and hold harmless any Indemnitee to the extent not required under the provisions of this section. Subrecipient shall defend and pay, all costs and fees, including but not limited to attorney fees, cost of investigation, and defense, in any loss, suits, claims, demands, actions, or proceedings to the extent and in proportion to the percentage, such costs and fees arise out of, pertain to, or relate to the negligence, recklessness or willful misconduct of Subrecipient arising out of or from the performance of professional design services under this Agreement. The duty to defend applies to any alleged or actual negligence, recklessness, willful misconduct of Subrecipient. The cost for defense shall apply whether or not Subrecipient is a party to the lawsuit and shall apply whether or not Subrecipient is directly liable to the plaintiffs in the lawsuit. The duty to defend applies even if Indemnitees are alleged or found to be actively negligent, but only in proportion to the percentage of fault or negligence of Subrecipient.
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Packet Pg. 411 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 22 2. Without affecting the rights of County under any other provision of this Agreement, Subrecipient shall not be required to indemnify or hold harmless or provide defense or defense costs to an Indemnitee for a loss due to that Indemnitee's negligence, recklessness or willful misconduct; provided, however, that such negligence, recklessness or willful misconduct has been determined by agreement of Subrecipient and Indemnitee or has been adjudged by the findings of a court of competent jurisdiction.
C. Subrecipient agrees to obtain or cause to be obtained executed defense and indemnity agreements with provisions identical to those set forth in this section from each and every Subconsultant, of every Tier.
D. Subrecipient's indemnification obligations under this Agreement shall not be limited by the amount or type of damages, compensation or benefits payable under any policy of insurance, workers' compensation acts, disability benefit acts or other employee benefit acts.
E. The Indemnitees shall be entitled to recover their attorneys' fees, costs and expert and consultant costs in pursuing or enforcing their right to defense and/or indemnification under this Agreement.
INSURANCE REQUIREMENTS
Without limiting or diminishing the Subrecipient’s obligation to indemnify or hold the County harmless, Subrecipient shall procure and maintain or cause to be maintained, at its sole cost and expense, the following insurance coverages during the term of this Agreement. As respects to the insurance section only, the County herein refers to the County of Riverside, its Agencies, Districts, Special Districts, and Departments, their respective directors, officers, Board of Supervisors, employees, elected or appointed officials, agents or representatives as Additional Insureds.
A. Workers’ Compensation: If the Subrecipient has employees as defined by the State of California, the Subrecipient shall maintain statutory Workers Compensation Insurance (Coverage A) as prescribed by the laws of the State of California. Policy shall include Employers’ Liability (Coverage B) including Occupational Disease with limits not less than $1,000,000 per person per accident. The policy shall be endorsed to waive subrogation in favor of The County of Riverside.
B. Commercial General Liability: Commercial General Liability insurance coverage, including but not limited to, premises liability, unmodified contractual liability, products and completed operations liability, personal and advertising injury, and cross liability coverage, covering claims which may arise from or out of Subrecipient’s performance of its obligations hereunder. Policy shall name the County as Additional Insured. Policy’s limit of liability shall not be less than $2,000,000 per occurrence combined single limit. If such insurance contains a general aggregate limit, it shall apply separately to this agreement or be no less than two (2) times the occurrence limit. Policy shall name the County as Additional Insureds.
C. Vehicle Liability: If vehicles or mobile equipment are used in the performance of the obligations under this Agreement, then Subrecipient shall maintain liability insurance for all owned, non-owned or hired vehicles so used in an amount not less than $1,000,000 per occurrence combined single limit. If such insurance contains a general aggregate limit, it shall apply separately to this agreement or be no less than two (2) times the occurrence limit. Policy shall name the County as Additional Insureds.
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Packet Pg. 412 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 23 D. Professional Liability: Subrecipient shall maintain Professional Liability Insurance providing coverage for the Subrecipient’s performance of work included within this Agreement, with a limit of liability of not less than $1,000,000 per occurrence and $2,000,000 annual aggregate. If Subrecipient’s Professional Liability Insurance is written on a claims made basis rather than an occurrence basis, such insurance shall continue through the term of this Agreement and Subrecipient shall purchase at his sole expense either 1) an Extended Reporting Endorsement (also, known as Tail Coverage); or 2) Prior Dates Coverage from new insurer with a retroactive date back to the date of, or prior to, the inception of this Agreement; or 3) demonstrate through Certificates of Insurance that Subrecipient has Maintained continuous coverage with the same or original insurer. Coverage provided under items 1), 2), or 3) will continue as long as the law allows. Policy shall name the County as Additional Insureds.
E. General Insurance Provisions - All lines:
1. Any insurance carrier providing insurance coverage hereunder shall be admitted to the State of California and have an A M BEST rating of not less than A: VIII (A:8) unless such requirements are waived, in writing, by the County Risk Manager. If the County’s Risk Manager waives a requirement for a particular insurer such waiver is only valid for that specific insurer and only for one policy term.
2. The Subrecipient must declare its insurance self-insured retention for each coverage required herein. If any such self-insured retention exceed $500,000 per occurrence each such retention shall have the prior written consent of the County Risk Manager before the commencement of operations under this Agreement. Upon notification of self-insured retention unacceptable to the County, and at the election of the County’s Risk Manager, Subrecipient’s carriers shall either; 1) reduce or eliminate such self-insured retention as respects this Agreement with the County, or 2) procure a bond which guarantees payment of losses and related investigations, claims administration, and defense costs and expenses.
3. Subrecipient shall cause Subrecipient’s insurance carrier(s) to furnish the County of Riverside with either 1) a properly executed original Certificate(s) of Insurance and certified original copies of Endorsements effecting coverage as required herein, and 2) if requested to do so orally or in writing by the County Risk Manager, provide original Certified copies of policies including all Endorsements and all attachments thereto, showing such insurance is in full force and effect. Further, said Certificate(s) and policies of insurance shall contain the covenant of the insurance carrier(s) that a minimum of thirty (30) days written notice shall be given to the County of Riverside prior to any material modification, cancellation, expiration or reduction in coverage of such insurance. If Subrecipient insurance carrier(s) policies does not meet the minimum notice requirement found herein, Subrecipient shall cause Subrecipient’s insurance carrier(s) to furnish a 30 day Notice of Cancellation Endorsement.
4. In the event of a material modification, cancellation, expiration, or reduction in coverage, this Agreement shall terminate forthwith, unless the County of Riverside receives, prior to such effective date, another properly executed original Certificate of Insurance and
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Packet Pg. 413 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 24 original copies of endorsements or certified original policies, including all endorsements and attachments thereto evidencing coverage’s set forth herein and the insurance required herein is in full force and effect. Subrecipient shall not commence operations until the County has been furnished original Certificate (s) of Insurance and certified original copies of endorsements and if requested, certified original policies of insurance including all endorsements and any and all other attachments as required in this Section. An individual authorized by the insurance carrier to do so on its behalf shall sign the original endorsements for each policy and the Certificate of Insurance.
5. It is understood and agreed to by the parties hereto that the Subrecipient’s insurance shall be construed as primary insurance, and the County's insurance and/or deductibles and/or selfinsured retentions or self-insured programs shall not be construed as contributory.
6. If, during the term of this Agreement or any extension thereof, there is a material change in the scope of services; or, there is a material change in the equipment to be used in the performance of the scope of work; or, the term of this Agreement, including any extensions thereof, exceeds five (5) years; the County reserves the right to adjust the types of insurance and the monetary limits of liability required under this Agreement, if in the County Risk Management's reasonable judgment, the amount or type of insurance carried by the Subrecipient has become inadequate.
7. Subrecipient shall pass down the insurance obligations contained herein to all tiers of subcontractors working under this Agreement.
8. The insurance requirements contained in this Agreement may be met with a program(s) of self-insurance acceptable to the County.
9. Subrecipient agrees to notify County of any claim by a third party or any incident or event that may give rise to a claim arising from the performance of this Agreement
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Packet Pg. 414 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 25 Attachment E - Project Monitoring Requirements
Quarterly Progress Reports shall be submitted on the 21st of the month following the previous quarter. Quarterly reports shall be sent via e-mail to [email protected]. The quarterly report shall include a brief description of the work performed during the reporting period, including photographs, construction status, milestones achieved, financial status report including cost incurred to date, cash flow projections, schedule updates, and any problems encountered in the performance of the work under this Agreement. The progress pay estimate for the reporting period shall be included as part of the quarterly progress report submittal.
In addition to the above, project schedule and cashflow projection updates shall be emailed to the County on a monthly basis.
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Packet Pg. 415 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 26 Attachment F - Construction Requirements
Subrecipient shall:
1. Pursuant to the California Environmental Quality Act ("CEQA"), act as Lead Agency and assume responsibility for preparation, circulation and adoption of all necessary and appropriate CEQA documents pertaining to the construction, operation and maintenance of Infrastructure Project.
2. To the extent that it has not already done so, the Subrecipient shall prepare or cause plans and specifications ("Plans") to be prepared for the Infrastructure Project prior to advertising Infrastructure Project for construction bids.
3. Provide County a copy of the engineering design cost proposal and associated design schedule for the Infrastructure Project.
4. Advertise and award a public works construction contract for the Infrastructure Project and begin construction per the schedules included in Attachment A of this Agreement.
5. Prior to advertising Infrastructure Project for public works construction contract, obtain all necessary permits, approvals, or agreements as may be required by any federal, state and local resource or regulatory agencies pertaining to the construction, operation and maintenance of Infrastructure Project. Assume sole responsibility for compliance with the requirements of all regulatory permits, including any amendments thereto, pertaining to the construction, operation and maintenance of Infrastructure Project.
6. Implement or cause to be implemented, all environmental mitigation required in association with the construction, operation and maintenance of Infrastructure Project.
7. Prior to advertising Infrastructure Project for public works construction contract, obtain all necessary permits, licenses, agreements, approvals, rights of way, rights of entry, encroachment permits, and temporary construction easements as may be needed to construct, operate and maintain the Infrastructure Project.
8. Advertise, award and administer a public works construction contract for the Infrastructure Project pursuant to the provisions of applicable laws for public works of improvements, including but not limited to the California Public Contract Code, Government Code and Labor Code.
9. Certify and cause its contractor to certify, that it is not a target of economic sanctions imposed in response to Russia’s actions in Ukraine imposed by the United States government or the State of California. The Subrecipient and its Contractor are required to comply with the economic sanctions imposed in response to Russia’s actions in Ukraine, including with respect to, but not limited to, the federal executive orders identified in California Executive Order N-6-22, located at https://www.gov.ca.gov/wpcontent/uploads/2022/03/3.4.22-Russia-Ukraine-Executive-Order.pdf and the sanctions identified on the United States Department of the Treasury website (https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-countryinformation/ukraine-russia-related-sanctions). The Subrecipient and its Contractor are required to comply with all applicable reporting requirements regarding compliance with the economic sanctions, including, but not limited to, those reporting requirements set forth in California Executive Order N-6-22 for all parties with one or more agreements with the State of California, the County of Riverside, or any other local agency, with a value of Five Million Dollars ($5,000,000) or more. Notwithstanding any other provision in these documents, failure to
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Packet Pg. 416 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 27 comply with the economic sanctions and all applicable reporting requirements may result in disqualification or termination of the Construction Agreement, if awarded.
For parties and contractors with an agreement value of Five Million Dollars ($5,000,000) or more with the State of California, the County of Riverside, or any other local agency, reporting requirements include, but are not limited to, information related to steps taken in response to Russia’s actions in Ukraine, including but not limited to:
a. Desisting from making any new investments or engaging in financial transactions with Russian institutions or companies that are headquartered or have their principal place of business in Russia;
b. Not transferring technology to Russia or companies that are headquartered or have their principal place of business in Russia; and
c. Direct support to the government and people of Ukraine.
To comply with this requirement, please insert your name and Federal ID Number (if available) on the Certification Form attached hereto, execute by a duly authorized representative for the contractor and return to the County.
10. The Subrecipient shall require, and the specifications, bid and contract documents shall require all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such individuals or entities are engaged to perform work on the Infrastructure Project, to pay at least general prevailing wage rates to all workers employed in the execution of the contract, to post a copy of the general prevailing wage rates at the job-site in a conspicuous place available to all employees and applicants for employment, and to otherwise comply with applicable provisions of the California Labor Code and applicable laws relating to general prevailing wage rates.
11. Each contractor engaged to perform work on the Infrastructure Project shall be required to furnish (i) labor and material payment bonds, and (ii) contract performance bonds, each in an amount equal to 100% of the contract price naming the Subrecipient as obligee and issued by a California admitted surety which complies with the provisions of Section 995.660 of the California Code of Civil Procedure.
12. Provide County with written notice that Subrecipient has awarded a public works construction contract for each Infrastructure Project. The written notice shall include the Contractor's actual bid amounts for each Infrastructure Project, setting forth herein the lowest responsible bid contract amount.
13. Prior to commencing any Infrastructure Project construction, provide to County:
a. A construction schedule which shall show the order and dates in which Subrecipient or Subrecipient’s contractor proposes to carry on the various parts of work, including estimated start and completion dates, and
b. A confined space procedure specific to Infrastructure Project. The procedure shall comply with requirements contained in California Code of Regulations, Title 8, Section 5156 et seq. and County's Confined Space Procedures, SOM-18.
14. Require its construction contractor(s) to comply with all Cal/OSHA safety regulations including regulations concerning confined space and maintain a safe working
3.A.5.a
Packet Pg. 417 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 28 environment for all working on the site.
15. Order the relocation of all utilities within Subrecipient rights of way which conflict with the construction of Infrastructure Project and which must be relocated at the expense of who may have superior property rights.
16. Procure or caused to be procured insurance coverages during the term of this Agreement. Subrecipient shall require its Infrastructure Project construction contractor(s) to furnish original certificate(s) of insurance and original certified copies of endorsements and if requested, certified original policies of insurance including all endorsements and any and all other attachments. Prior to Subrecipient issuing a Notice to Proceed to its construction contractor(s) to begin construction of Infrastructure Project, an original certificate of insurance evidencing the required insurance coverage shall be provided to County. At minimum, the procured insurance coverages should adhere to the County’s required insurance provided in Attachment D to this Agreement.
17. Construct, or cause to be constructed, Infrastructure Project pursuant to a Subrecipient administered public works construction contract, in accordance with the Plans, and pay all costs associated therewith.
18. Inspect each Infrastructure Project construction or cause each Infrastructure Project's construction to be inspected by its construction manager and pay all costs associated therewith.
19. Provide County with a copy of the Subrecipient's recorded Notice of Completion.
20. Keep an accurate accounting of all Infrastructure Project cost and provide this accounting to County with Subrecipient’s Notice of Completion. The final accounting of construction cost shall include a detailed breakdown of all costs, including, but not limited to, payment vouchers, Subrecipient approved change orders and other such construction contract documents as may be necessary to establish the actual cost of construction for the PLANS.
Subrecipient shall be responsible to pay any amounts in excess of Award amount provided in this Agreement.
21. Refund to County, at the time of providing a Notice of Completion, any unexpended portions of Award amount within thirty (30) days of the Notice of Completion is filed for recordation.
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Packet Pg. 418 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) 29 COMPLIANCE WITH ECONOMIC SANCTIONS IN RESPONSE TO RUSSIA’S ACTIONS
IN UKRAINE
Prior to bidding on, submitting a proposal, or executing a contract, a party/contractor must certify: 1) it is not a target of economic sanctions and 2) in compliance with economic sanctions imposed by the U.S. government in response to Russia’s actions in Ukraine, as well as any requirements related to the Russian sanctions imposed by the California Governor’s Executive Order N-6-22 issued on March 4, 2022 and under state law, if any.
To comply with this requirement, please insert the party/contractor name and Federal ID Number (if available), complete the information described below and execute by an authorized representative of the contractor.
CERTIFICATION
I, the authorized representative for contractor named below, certify I am duly authorized to execute this certification on behalf of the contractor below, and the contractor identified below has conducted a good faith review of existing contracts. I attest that the contractor is not a target of economic sanctions, and that contractor is in compliance with the economic sanctions imposed by the U.S. government in response to Russia’s actions in Ukraine, as well as any requirements related to the Russian sanctions imposed by the California Governor’s Executive Order N-6-22 issued on March 4, 2022 and under state law, if any.
Party/Contractor Name (Printed) Federal ID Number (or n/a) By (Authorized Signature)
Printed Name and Title of Person Signing
Date
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Packet Pg. 419 Attachment: San Jacinto ARPA Infrastructure Funding Agreement (ARPA Agreement with Riverside County) April 2, 2024
TO: City Council
REQUESTED BY: Stuart McKibbin, City Engineer
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: 10-working day Road Closure on Esplanade Avenue RECOMMENDATION:
Staff recommends that the City Council approve the requested road closure along Esplanade Avenue between Cinnabar Avenue and Cawston Avenue, and Esplanade Avenue from Cawston Avenue to approximately 1300 feet west of Sanderson Avenue for a duration of 10 working days.
DISCUSSION:
Southern California Edison (SCE) has notified the City of necessary work to be accomplished in the City of Hemet that affects the city limits of San Jacinto.
Nine (9) SCE power poles require replacement, and two require servicing in the City of Hemet’s jurisdiction along the south side of Esplanade Avenue. At this location, the City of San Jacinto’s jurisdiction generally covers the north half of Esplanade Avenue.
For safety reasons, SCE crews are prohibited from setting up equipment directly beneath the powerlines. Coupled with the close proximity of the poles to the edge of the pavement, the limited right of way, and the narrowness of the existing pavement, the work would leave no room for traffic. Therefore, as part of their encroachment permit application, SCE is requesting a complete closure of Esplanade Avenue during pole replacement, and has furnished Engineering with the attached traffic control and detour plan.
Subject to weather conditions, SCE intends to start the work on April 15, 2024, and is projecting to be completed by the evening of April 26, 2024. The closure of Esplanade Avenue will be scheduled for Monday through Friday, from 8:30 am to 5:00 pm.
Electronic message boards will be strategically placed on Esplanade Avenue and the surrounding streets approaching the work area to provide motorists with advanced warning of the impending closure for 7 days prior to the start of construction.
Once construction begins, depending on which direction a motorist would approach the intersection, a detour will route motorists around the work area along Esplanade Avenue. SCE’s contractor will coordinate with property owners directly if there is a potential need for any driveway closures.
The contractor shall notify all emergency services, trash pickup companies, school district(s), and post offices prior to road closures. An encroachment permit from the City of Hemet also must be provided.
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Packet Pg. 420
Engineering recommends that the City Council approve the road closure.
FISCAL IMPACT:
There is no fiscal impact.
ATTACHMENTS:
Traffic Control and Detour Plan
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Packet Pg. 421
REV. # REVISION DATE FOR CITY USE ONLY: FILE NO. W.O. NO. ENG. SEAL ENGINEER'S INFORMATION ENG. NAME: RCE #: DATE: WILLIAM RAYMOND PROJECT: ADDRESS: TD/SAP NO. TCP NO. CONTACT CLIENT: SHEET 57580 DATE: 03.05.24 NICOLAS RAPTIS REV. 1 SO8THERN CALIFORNIA EDISON COMPAN< RELOCATE FACILITIES TD 2042492 TCP09PRO3240412 XX.XX.XXXX DESIGNED BY: PRO TRAFFIC SERVICES WBE CERTIFEID LIC. # 978979 CITY OF SAN JACINTO PUBLIC WORKS - TRAFFIC ENGINEERING DIVISION TEMPORARY TRAFFIC CONTROL PLANS W. ESPLANADE AVE. BETWEEN CINNABAR AVE. & N. SANDERSON AVE. C FLASHING ARROW SIGN TRAILER (TYP.) (FAS) (HLWD) HIGH LEVEL WARNING DEVICE TRAFFIC CONE POST TUBE (CMS) CHANGEABLE MESSAGE SIGN TRAILER (TYP.) TYPE II BARRICADE PERMIT NO. NOT TO SCALE 3.A.6.a Packet Pg. 422 Attachment: Traffic Control and Detour Plan (10-working day Road Closure on Esplanade Avenue) REV. # REVISION DATE FOR CITY USE ONLY: FILE NO. W.O. NO. ENG. SEAL ENGINEER'S INFORMATION ENG. NAME: RCE #: DATE: WILLIAM RAYMOND PROJECT: ADDRESS: TD/SAP NO. TCP NO. CONTACT CLIENT: SHEET 57580 DATE: 03.05.24 NICOLAS RAPTIS REV. 1 SO8THERN CALIFORNIA EDISON COMPAN< RELOCATE FACILITIES TD 2042492 TCP09PRO3240412 XX.XX.XXXX DESIGNED BY: PRO TRAFFIC SERVICES WBE CERTIFEID LIC. # 978979 CITY OF SAN JACINTO PUBLIC WORKS - TRAFFIC ENGINEERING DIVISION TEMPORARY TRAFFIC CONTROL PLANS W. ESPLANADE AVE. BETWEEN CINNABAR AVE. & N. SANDERSON AVE. CAWSTON AVE. N. 45 MPH CAWSTON AVE. N. 45 MPH W. ESPLANADE AVE. 50 MPH W. ESPLANADE AVE. 50 MPH 25SPEED LIMIT SPEED LIMIT 45 50SPEED LIMIT 55SPEED LIMIT ADDITIONAL NOTES: W. ESPLANADE AVE. 50 MPH W. ESPLANADE AVE. 50 MPH 1
MATCH LINE A MATCH LINE B
MATCH LINE A
MATCH LINE B
MATCH LINE C - SEE SHT 2
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Packet Pg. 423
Attachment: Traffic Control and Detour Plan (10-working day Road Closure on Esplanade Avenue) REV. # REVISION DATE FOR CITY USE ONLY: FILE NO. W.O. NO. ENG. SEAL ENGINEER'S INFORMATION ENG. NAME: RCE #: DATE: WILLIAM RAYMOND PROJECT: ADDRESS: TD/SAP NO. TCP NO. CONTACT CLIENT: SHEET 57580 DATE: 03.05.24 NICOLAS RAPTIS REV. 1 SO8THERN CALIFORNIA EDISON COMPAN< RELOCATE FACILITIES TD 2042492 TCP09PRO3240412 XX.XX.XXXX DESIGNED BY: PRO TRAFFIC SERVICES WBE CERTIFEID LIC. # 978979 CITY OF SAN JACINTO PUBLIC WORKS - TRAFFIC ENGINEERING DIVISION TEMPORARY TRAFFIC CONTROL PLANS W. ESPLANADE AVE. BETWEEN CINNABAR AVE. & N. SANDERSON AVE. WARREN RD. 55 MPH W. ESPLANADE AVE. 50 MPH WARREN RD. 55 MPH ALABASTER DR. 25 MPH CINNABAR AVE. 25 MPH 2 MATCH LINE C - SEE SHT 1 ADDITIONAL NOTES: 25SPEED LIMIT SPEED LIMIT 45 50SPEED LIMIT 55SPEED LIMIT 3.A.6.a Packet Pg. 424
Attachment: Traffic Control and Detour Plan (10-working day Road Closure on Esplanade Avenue) REV. # REVISION DATE FOR CITY USE ONLY: FILE NO. W.O. NO. ENG. SEAL ENGINEER'S INFORMATION ENG. NAME: RCE #: DATE: WILLIAM RAYMOND PROJECT: ADDRESS: TD/SAP NO. TCP NO. CONTACT CLIENT: SHEET 57580 DATE: 03.05.24 NICOLAS RAPTIS REV. 1 SO8THERN CALIFORNIA EDISON COMPAN< RELOCATE FACILITIES TD 2042492 TCP09PRO3240412 XX.XX.XXXX DESIGNED BY: PRO TRAFFIC SERVICES WBE CERTIFEID LIC. # 978979 CITY OF SAN JACINTO PUBLIC WORKS - TRAFFIC ENGINEERING DIVISION TEMPORARY TRAFFIC CONTROL PLANS W. ESPLANADE AVE. BETWEEN CINNABAR AVE. & N. SANDERSON AVE. CAWSTON AVE. N. 45 MPH W. ESPLANADE AVE. 50 MPH CAWSTON AVE. N. 45 MPH CAWSTON AVE. N. 45 MPH
3 MATCH LINE A MATCH LINE A
MATCH LINE B - SEE SHT 4 SPEED LIMIT 45 50SPEED LIMIT 55SPEED LIMIT ADDITIONAL NOTES:3.A.6.a Packet Pg. 425
Attachment: Traffic Control and Detour Plan (10-working day Road Closure on Esplanade Avenue) REV. # REVISION DATE FOR CITY USE ONLY: FILE NO. W.O. NO. ENG. SEAL ENGINEER'S INFORMATION ENG. NAME: RCE #: DATE: WILLIAM RAYMOND PROJECT: ADDRESS: TD/SAP NO. TCP NO. CONTACT CLIENT: SHEET 57580 DATE: 03.05.24 NICOLAS RAPTIS REV. 1 SO8THERN CALIFORNIA EDISON COMPAN< RELOCATE FACILITIES TD 2042492 TCP09PRO3240412 XX.XX.XXXX DESIGNED BY: PRO TRAFFIC SERVICES WBE CERTIFEID LIC. # 978979 CITY OF SAN JACINTO PUBLIC WORKS - TRAFFIC ENGINEERING DIVISION TEMPORARY TRAFFIC CONTROL PLANS W. ESPLANADE AVE. BETWEEN CINNABAR AVE. & N. SANDERSON AVE. N. SANDERSON AVE. 50 MPH N. SANDERSON AVE. 50 MPH W. ESPLANADE AVE. 50 MPH4 MATCH LINE B - SEE SHT 3 SPEED LIMIT 45 50SPEED LIMIT 55SPEED LIMIT ADDITIONAL NOTES: 3.A.6.a Packet Pg. 426
Attachment: Traffic Control and Detour Plan (10-working day Road Closure on Esplanade Avenue) April 2, 2024
TO: City Council
REQUESTED BY: Stuart McKibbin, City Engineer
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Tract Map No. 32955-F subdivision into 95 residential lots located on the south side of Seventh Stre
RECOMMENDATION:
Staff recommends the City Council take the following actions:
1. Approve Agreement for Completion of Public Improvements and Securities for Tract 32955-F as approved by the City Attorney;
2. Authorize the City Manager to execute agreements;
3. Approve Tract Map 32955-F; and
4. Authorize the Mayor to Sign the subdivision maps.
DISCUSSION:
Development Agreement 05-04 between the City and Warren & Esplanade LLC and Esplanade & Cawston LLC (“Owners”) was entered into October 2005 to facilitate the development of the Esplanade Specific Plan and Tract Map 32955, located at the northeast corner of Esplanade Avenue and Warren Road. Subsequent ownership, Warren & Esplanade LLC and Esplanade & Cawston LLLP requested to enter into Amendment No. 1 to Development Agreement No. 05-04 in order to extend the Development Agreement and Tentative Tract Map 32955 for an additional fifteen years to provide additional time to complete the project. The City Council approved Ordinance No. 15-09 on October 6, 2015.
The Final Subdivision Map complies in all respects with the provisions of the Subdivision Map Act and applicable municipal ordinances. All necessary conditions of approval have been satisfied and departmental clearances have been obtained to allow for the recordation of the tract map. The tract is substantially consistent with the Tentative Tract Map approved by the City Council on September 15, 2005. The City Engineer recommends approval of Tract No. 32955-F.
The current ownership, now LGI Homes - California, LLC, desires to enter into an Improvement Agreement to guarantee the construction of the required improvements and has submitted an Improvement Agreement, which has been approved by the City Attorney. All costs for improvements will be the responsibility of the developer.
The securities posted by Hartford Fire Insurance Company are as follows:
• Tract 32955-F $1,509,041.00 [Bond No. 08BSBIX9545] for the completion of road
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improvements, streetlights, storm drain, curb-inlet catch basins, sewer main and laterals, water main and services (“Public Improvements Onsite”). • Tract 32955-F $5,298,504 [Bond No. 08BSBIX9543] for the completion of offsite road improvements, streetlights, storm drain, curb-inlet catch basins, sewer main and laterals, water main and services (“Public Improvements Backbone”).
FISCAL IMPACT:
All costs associated with the completion of improvements are the responsibility of the developer.
ATTACHMENTS:
Agreement for Completion of Public Improvemnts Tract 32955-F
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Packet Pg. 429 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 430 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 431 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 432 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 433 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 434 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 435 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 436 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 437 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 438 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 439 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 440 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 441 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 442 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 443 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 444 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 445 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 446 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 447 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 448 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 449 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 450 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 451 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 452 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 453 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 454 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 455 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 456 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 457 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 458 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 459 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 460 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 461 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 462 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 463 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 464 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 465 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 466 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 467 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 468 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 469 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 470 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 471 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 472 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located
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Packet Pg. 473 Attachment: Agreement for Completion of Public Improvemnts Tract 32955-F (Tract Map No. 32955-F subdivision into 95 residential lots located April 2, 2024
TO: City Council
REQUESTED BY: Stuart McKibbin, City Engineer
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Tract Map No. 32955-5 subdivision into 110 residential lots, located on the south side of Seventh St
RECOMMENDATION:
Staff recommends the City Council take the following actions:
1. Approve the Agreement for Completion of Public Improvements and Securities for Tract 32955-5 as approved by the City Attorney;
2. Authorize the City Manager to execute the agreement;
3. Approve Tract Map 32955-5; and
4. Authorize the Mayor to Sign the subdivision map.
DISCUSSION:
Development Agreement 05-04 between the City and Warren & Esplanade LLC and Esplanade & Cawston LLC (“Owners”) was entered into October 2005 to facilitate the development of the Esplanade Specific Plan and Tract Map 32955, located at the northeast corner of Esplanade Avenue and Warren Road. Subsequent ownership, Warren & Esplanade LLC and Esplanade & Cawston LLLP requested to enter into Amendment No. 1 to Development Agreement No. 05-04 in order to extend the Development Agreement and Tentative Tract Map 32955 for an additional fifteen years to provide additional time to complete the project. The City Council approved Ordinance No. 15-09 on October 6, 2015.
The Final Subdivision Map complies in all respects with the provisions of the Subdivision Map Act and applicable municipal ordinances. All necessary conditions of approval have been satisfied and departmental clearances have been obtained to allow for the recordation of the tract map. The tract is substantially consistent with the Tentative Tract Map approved by the City Council on September 15, 2005. The City Engineer recommends approval of Tract No. 32955-5.
The current ownership, now LGI Homes - California, LLC, desires to enter into an Improvement Agreement to guarantee the construction of the required improvements and has submitted an Improvement Agreement, which has been approved by the City Attorney. All costs for improvements will be the responsibility of the developer.
The securities posted by Hartford Fire Insurance Company are as follows:
• Tract 32955-5 $1,754,350 [Bond No. 08BSBIX9544] for the completion of onsite road
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improvements, streetlights, storm drain, curb-inlet catch basins, sewer main and laterals, water main and services (“Public Improvements”).
FISCAL IMPACT:
All costs associated with the completion of improvements are the responsibility of the developer.
ATTACHMENTS:
Agreement for Completion of Public Improvements Tract No. 32955-5
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Packet Pg. 476 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 477 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 478 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 479 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 480 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 481 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 482 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 483 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 484 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 485 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 486 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 487 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 488 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 489 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 490 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 491 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 492 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 493 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 494 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 495 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 496 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 497 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 498 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 499 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 500 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 501 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 502 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 503 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 504 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 505 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 506 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 507 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 508 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 509 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 510 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 511 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 512 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots,
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Packet Pg. 513 Attachment: Agreement for Completion of Public Improvements Tract No. 32955-5 (Tract Map No. 32955-5 subdivision into 110 residential lots, April 2, 2024
TO: City Council
REQUESTED BY: Arthur Mullen, Chief of Public Utilities
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Resolution No. 4022 Authorizing EECBG Grant Application RECOMMENDATION:
Staff Recommends that the City Council adopt Resolution No. 4022, authorizing the City’s application for the Energy Efficiency Conservation Block Grant (EECBG).
DISCUSSION:
In recent years, both the federal government and the State of California have legislated increasingly strict standards designed to reduce the volume and impact of greenhouse gases (GHGs) in our environment through alternative energy uses and energy conservation. To aid with planning and implementation, the federal government provides a number of funding opportunities, including grants.
The Energy Efficiency and Conservation Block Grant (EECBG) is a non-competitive grant funded by the United States Department of Energy (DOE). The purpose of the EECBG Program is to assist eligible state local and tribal governments in implementing strategies to:
• Reduce fossil fuel emissions in a manner that is environmentally sustainable and, to the maximum extent practicable, maximizes benefits for local and regional communities • Reduce the total energy use of the eligible entities
• Improve energy efficiency in the transportation sector, the building sector, and other appropriate sectors
• Build a clean and equitable energy economy that prioritizes disadvantaged communities and promotes equity and inclusion in workforce opportunities and deployment activities, consistent with the Justice40 Initiative
The City has been allocated $112,830 in the current round of EECBG funding. The application deadline is April 30, 2024, and the funds will be available for two years after approval of the application unless an extension is approved by the DOE. Staff is prepared to submit the application, pending approval from the City Council, per the City’s Grant Management Fiscal Policy. The resolution will allow for the City to apply for the EECBG grant, as well as future grant applications (including competitive grants), based on the priorities identified below.
The EECBG authorizes fourteen broad categories of eligible projects:
• Strategy Development and Implementation
• Retaining Technical Consulting Services
• Residential and Commercial Building Audits
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• Financial Incentives for Energy Efficiency
• Energy Efficient Retrofit Grants for Government Agencies and Nonprofit Organizations • Energy Efficiency and Conservation Programs for Buildings and Facilities • Conservation of Transportation Energy
• Building Codes and Inspection Services
• Energy Distribution Technologies
• Material Conservation Programs
• Reduction, Capture, and Use of Landfill Gases
• Replacement of Traffic Signals and Street Lighting
• On-site Renewable Energy On or In a Government Building • Programs for Financing, Purchasing, and Installing Energy Efficiency, Renewable Energy, and Zero-emission Transportation (and associated infrastructure) Measures and Capital Investments, Projects, and Programs for Leveraging Public and Private Sector Funds
DOE has developed or identified resources to assist EECBG Program recipients with development of energy efficiency and conservation strategies and project implementation plans, including Blueprints and Technical Assistance available from the EECBG Program and other DOE programs. These resources are intended to supplement the award funding received through either a formula or competitive award from DOE.
Blueprints are step-by-step roadmaps of energy project and programs that guide EECBG Program entities to success. While not an exclusive list, the blueprints highlight a select number high-impact projects and programs based on proven practices that entities can choose to follow.
The City may use the EECBG Program funds for a wide array of energy-related activities. If the City chooses to spend EECBG Program funds exclusively on “key activities” listed in the blueprints, the City should expect a streamlined and expedited application review because these key activities fall within eligible uses of EECBG Program funds, and most of the blueprint activities are covered by the National Environmental Protection Act (NEPA) Statements of Work, negating the need for further environmental study.
Potential Projects
Staff has identified multiple projects that would benefit the City of San Jacinto, both in the short term and long term. Resolution 4022 authorizes the City Manager to submit the initial application and future funding applications based on following identified priorities:
• Baseline energy audit and development of comprehensive energy plan (Key Blueprint: 1 - Energy Planning)
• EV charging for fleet (Key Blueprint: 4a - Electric Vehicles and Fleet Electrification) • EV vehicle acquisition (Key Blueprint: 4a – Electric Vehicles and Fleet Electrification) • Energy efficiency audit and building upgrades at City facilities (Key Blueprint: 2a – Energy Efficiency)
• Installation of solar panels and battery backup at City facilities (Key Blueprint: 3a - Solar + Storage)
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Staff has identified the above projects as priority projects, though not necessarily in the order presented. Actual priority will be determined on an ongoing basis. In addition, staff notes that many of these projects may also benefit from other resources available through San Jacinto Power, Western Riverside Council of Governments (WRCOG), and the Inland Empire Regional Energy Network (I-REN). Staff recommended purpose of the EECBG is to provide the gap funding between the existing programs and future projects.
Summary of Blueprints
Energy Planning (Blueprint 1): Establish an energy use baseline and create a plan for future energy savings and electrification
Key Activities:
• Stakeholder engagement, education, and outreach
• Energy data collection to establish a baseline
• Develop an energy vision, goals, and strategies
Energy Efficiency – Audits and Building Upgrades (Blueprint 2a) Key Activities:
• Building energy assessments
• Energy audits
• Building upgrades including energy efficiency, grid interactivity, and electrification upgrades
Solar + Storage (Blueprint 3a)
Key Activities:
• Site assessment
• Project savings assessment
• Procurement & legal support
• Installation of solar panels and battery storage
Electric Vehicles and Fleet Electrification (Blueprint 4a) Key Activities:
• Develop fleet replacement plan, including stakeholder engagement and input
• Siting planning and preliminary assessments
• Develop utility data sharing agreement
• Develop charging plan including cost assessment of electric bill • Procurement, legal, and technical support to purchase EVs and charging stations
• Installation of charging infrastructure
As environmental energy policies continue to be adopted by the state and federal government, it is the responsibility of local jurisdictions to proactively plan for future developments and alternative energy requirements. These developments and priorities may be shaped in conjunction with local and regional partners, including San Jacinto Power (SJP), Western Riverside Council of Governments (WRCOG), and the Inland Regional Energy Network (I-Ren).
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FISCAL IMPACT:
Resolution No. 4022, authorizes the City to submit an application for EECBG funding in the amount of $112,830. There is no fiscal impact to the City as a result of this application.
If awarded, which is expected given the non-competitive nature of the grant, the City will receive $112,830 in Federal funding, which will be used for future expenditures authorized by the City Council and consistent with the requirements of the grant. There is no impact to the General Fund as a result of this Council action.
ATTACHMENTS:
Resolution No. 4022 - EECBG Grant Request
Blueprint 1
Blueprint 2a
Blueprint 3a
Blueprint 4a
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Resolution No. 4022