HomeMy WebLinkAbout196-91 RESOLUTION1
RESOLUTION NO. 196-91
A RESOLUTION AUTHORIZING AN AGREEMENT WITH THE
ECONOMIC OPPORTUNITY AGENCY (EOA) TO CONDUCT
HOUSING DEVELOPMENT ACTIVITIES AS A CDBG
SUBRECIPIENT.
•
• 1 •
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the Mayor and City Clerk are hereby
authorized and directed to execute an agreement in the amount of
$50,000 with the Economic Opportunity Agency (EOA) to conduct
housing development activates as a CDBG subrecipient. A copy of
the agreement authorized for execution hereby is attached hereto
marked Exhibit "A" and made a part hereof.
PASSED AND APPROVED this 5th day of November , 1991.
ATTEST:
By
'IQ la At
:1
City Cl
eft er»y/u.4�
APPROVED:
Mayor Wita171-file
By:
•
AGREEMENT
THIS AGREEMENT entered into this 5th day of November
19 91 by and between the Economic Opportunity Agency of
Washington County, Inc. hereinafter called the Grantee, and the
City of Fayetteville, Arkansas through its Community Development
Division, hereinafter called the Grantor, WITNESSETH:
WHEREAS, the Grantee operates a program to promote and develop
housing principally for the benefit of low and moderate income
persons and offers this program to eligible residents who reside
within the city limits of Fayetteville; and
WHEREAS, the Grantor acknowledges the benefits of the
development of housing affordable to low land moderate income
persons (hereinafter referred to as affordable housing) and is
interested in providing these services to as many Fayetteville
citizens as possible.
NOW THEREFORE, in consideration of the benefits to be derived
by the citizens of Fayetteville from the development of affordable
housing, Grantor agrees to furnish Grantee budget authority in an
amount not to exceed $50,000 to be used as specified below.
Funding of this project- is -contingent upon award of Community
Development Block Grant (CDBG) to the Grantor from the U.S.
Department of Housing and Urban Development (HUD).
1
• .
4
1. STATEMENT OF WO K
Grantee shall use all funds (1) to acquire vacant real
estate lots or real estate lots having dilapidated
housing present; (2) to clear acquired lots of brush and
debris so as to be suitable for construction of housing;
and (3) pay costs associated with the disposition of
acquired lots.
2. TIME OF PERFORMANCE
Budget authority will be effective on the execution date
of this agreement and will end December 31, 1992.
3. BUDGET AND METHOD OF FUNDS DISBURSEMENT
Grantor shall provide to Grantee budget authority in the
total amount of $50,000; each activity shall have the
following limits:
Acquisition $35,000
Clearance $10,000
Disposition $ 5,000
Upon acceptance by Seller of Grantee's formal offer to
purchase subject property, a closing date will be
established. At that time, Grantor will deposit in
escrow sufficient funds to secure subject property.
4 RECORDS TO BE MAINTAINED
A. Prior to executing a formal acquisition offer,
Grantee shall provide Grantor:
(1) a description of each property to be acquired,
documentation indicating compliance with all regulations
governing acquisition and relocation;
2
•
•
(2) a statement of the total amount of funds to be
expended for the project including CDBG and non-CDBG
funds;
(3) evidence that it has the ability to construct
affordable housing such as confirmation of construction
financing by a lending institution or other reasonable
assurances acceptable to the Grantor.
5. BENEFIT TO LOW AND MODERATE INCOME PERSONS
Grantee certifies that housing developed with CDBG funds
will be affordable to low and moderate income persons and
that the marketing of such housing will be targeted to
low to moderate persons.
Note: The term "low to moderate income" is defined by
the U.S. Department of Housing and Urban Development
(HUD) and income limits are published annually by HUD for
the Fayetteville -Springdale Standard Metropolitan Area.
The most recent income limits are made a part of this
Agreement (see Attachment 1).
6. PROGRAM INCOME
A. Program income is defined as gross income received
by the Grantee directly generated from the use of CDBG
funds and includes proceeds from the disposition by sale
or long term lease of real property purchased or improved
with CDBG funds. When such income is generated by an
activity that is only partially assisted with CDBG funds,
the income shall be prorated to reflect the percentage of
3
l
CDBG funds used.
B. In the event program income is generated by eligible
activities described herein, such as future disposition
by sale or long term lease of real property, Grantee will
return the applicable amount to the Grantor.
7. UNIFORM ADMINISTRATIVE REOUIREMENTS
A. The Grantee will comply with the requirements and
standards of Office of Management and Budget (OMB)
Circular No. A-122, "Cost Principles for Nonprofit
Organizations," as applicable, attached to and made a
part of this Agreement.
B. Grantee will also comply with the requirements of
the following Attachments to OMB Circular No. A-110,
attached to and made a part of this Agreement:
Attachment A, "Cash Depositories," except paragraph 4;
Attachment C, "Retention and Custodial Requirements for
Records;"
Attachment F, "Standards for Financial Management Systems;"
Attachment H, "Monitoring and Reporting Program Performance,"
paragraph 2;
Attachment N, "Property Management Standards," except
paragraph 3;
Attachment 0, "Procurement Standards."
8. OTHER ADMINISTRATIVE REOUIREMENTS
A. The Community Development Program has been developed
to give maximum feasible priority to activities which
4
•
•
will benefit low and moderate income families as defined
by the U.S. Department of Housing and Urban Development
or aid in the prevention or elimination of slum or
blight.
B. Grantee will comply with Public Law 88-352 (Title VI
of the Civil Rights Act of 1964) which provides that no
person in the United Sates shall on the ground of race,
color, or national origin be excluded from participation
in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving
Federal financial assistance and will immediately take
any measures necessary to effectuate this assurance. If
any real property or structure thereon is provided or
improved with the aid of Federal financial assistance
extended to Grantee, this assurance shall obligate the
Grantee or, in the case of any transfer of such property,
any transferee, for the period during which the real
property or structure is used for a purpose for which the
Federal financial assistance is extended or for another
purpose involving the provision of similar services or
benefits.
C. Grantee will comply with Public Law 90-284 and
amendments thereof, which refers to Title VIII of the
Civil Rights Act of 1968 (42 U.S.C. 36091 et seq.),
popularly known as the Fair Housing Act, which provides
that it is the policy of the United States to provide,
5
•
e
•
1
•
within constitutional limitations, for fair housing
throughout the United States and prohibits any person
from discriminating in the sale or rental of housing, the
financing of housing, or the provision of brokerage
services, including otherwise making unavailable or
denying a dwelling to any person, because of race, color,
religion, sex, national origin, familial status, or
handicap. All activities administered under this
Agreement will be administered in a manner to
affirmatively further the policies of Title Viii.
D. Grantee agrees, in compliance with Executive Order
11063, as amended by Executive Order 12259, to take all
action necessary and appropriate to prevent
discrimination because of race, color,1,religion, sex,
national origin, familial status, or handicap in the
sale, leasing, rental, or other disposition of
residential property and related facilities including
land to be developed for residential use, or in the use
or occupancy thereof.
E. Grantee will comply with the requirements of the
Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970 in regard to the
acquisition of real property and to the displacement of
any family, individual, business, nonprofit organization
or farm that results from such acquisition.
F. Grantee will comply with the requirements of Section
•
401(b) of the Lead -Based Paint Poisoning Prevention Act
which prohibits the use of lead-based paint in
residential structures.
9. CONFLICT OF INTEREST
Using official positions for the purpose of private gain
is prohibited. This pertains to any person who is an
employee, elected agent, consultant, officer, or elected
or appointed official of the Grantor or Grantee. No
person who exercises or has exercised any functions or
responsibilities with respect to CDBG activities or who
is in a position to participate in a decision-making
process or gain inside information with regard to such
activities, may obtain a personal or financial interest
or benefit from a CDBG assisted activity, or have an
interest in any contract, subcontract or agreement with
respect thereto, or the proceeds thereunder, either for
themselves or those with whom they have family or
business ties, during their tenure or for one year
thereafter.
10. $USPENSION AND TERMINATION
In accordance with 24 CFR 85.43, suspension or
termination may occur if the Grantee materially fails to
comply with any term of this award and that the award may
be terminated for convenience in accordance with 24 CFR
85.44. Both 24 CFR 85.43 and 24 CFR 85.44 are attached
hereto and made a part of this agreement.
7
•
•
•
•
11. REVERSION OF ASSETS
Upon expiration of this agreement, the Grantee shall
transfer to the Grantor any CDBG funds on hand at the
time of expiration and any accounts receivable
attributable to the use of CDBG funds. In addition, any
real property under the Grantee's control that was
acquired or improved in whole or in part with CDBG funds
in excess of $25,000 is either:
A. Used to meet one of the national objectives of the
CDBG Program until five years after expiration of the
agreement; or
B. Is disposed of in a manner which results in the
Grantor being reimbursed in the amount of the current
fair market value of the property ldss any portion
thereof attributable to expenditures of non-CDBG funds
for acquisition of, or improvement to, the property.
Such reimbursement is not required after the period
specified above.
The United States shall be deemed to be a beneficiary of these
provisions both for and in its own right and also for the purpose
of protecting the interests of the community and other parties,
public or private, in whose favor or for whose benefit these
provisions have been provided and shall have the right, in the
event of any breach of these provisions, to maintain any actions or
suits at law or in equity or any other property proceedings to
enforce this Agreement.
8
•
•
•
•
•
•
IN WITNESS WHEREOF, the Grantor and the Grantee have executed
this Agreement on or as of the date first above written.
Attest:
City Clerk
Attest:
ijAskyall
CITY OF FAYETTEVILLE, ARKANSAS
MAYOR
ECONOMIC OPPORTUNITY AGENCY, INC.
ayrtitic
r
9
•
MEMORANDUM FOR:
U. S. Department of Housing and Urban Development
Washington. D.C. 20410
April 17, 1991
Regional Administrators
Regional Economists
Field Office Managers
Field Office Economists
SUBJECT: 1991 Income Limits for Low -Income and Very Low -
Income Families Under the Housing Act of 1937
This memorandum transmits revisions in the income limits
used to define the terms "Very Low -Income" and "Low -Income"
(formerly "Lower Income") in accordance with Section 3(b)(2) of
the United States Housing Act of 1937, as amended. These income
limits, which are listed by dollar amount and family size, are
available for each Metropolitan Statistical Area (MSA), Primary
Metropolitan Statistical Area (PMSA), and nonmetropolitan county
in the attached lists. They are primarily used to determine if
an applicant for the Public Housing, Section 8, or other program
subject to Section 3(b)(2) meets the relevant income eligibility
requirement for admission. The revised limits are effective as
of the date of this memorandum.
These income limits are based on the HUD estimates of median
family income for Fiscal Year 1991. As requ}red by statute, the
definition of "Very Low -Income" is tied to 50 percent of the
median income for the area, and the definition of "Low -Income" is
tied to 80 percent of the median income for the area. The term
"area" is defined such that the higher of the local median income
or the State nonmetropolitan median income is used in income
limit calculations. Using the appropriate median, a four -person
income limit is calculated, and adjustments then made for other
family sizes. Also, in accordance with the statute, adjustments
are made for areas with unusually high or low incomes or housing
costs.
The first step in calculating income limits is to calculate
what the income limit would be if there were no adjustments for
unusually high or low incomes or housing costs. Adjustments are
4gmade only if the resulting income limits are outside of formula
constraints. More specifically, the Very Low -Income limit for a
four -person family normally is set as the higher of:
50 percent of the area median family income; or,
50 percent of the State nonmetropolitan median family
income for the State in which all or most of the area
is located; or,
1.
•
3
•
The family size adjustment factors required by statute are
intended to provide higher income limits for larger families and
lower income limits for smaller families. The factors used are
as follows:
Number of Persons in Family and Percentage Adjustments
1 2 3 4 5 6 7 8
70% 80% 90% Base 108% 116% 124% 1322
Prior to this year, Low -Income limits were calculated with
slightly smaller adjustments for families of five or more
persons. The previously noted concerns about the affect of the
income limit categories added by the Cranston -Gonzalez Act led to
use of the Very Low -Income intervals for all HUD income limits.
Income limits for families with more than eight persons are
not included in the printed lists because of space limitations.
For each person in excess of eight, 8 percent of the four -person
base should be added to the eight -person income limit. (E.g.,
the nine -person limit equals 140 percent [132 + 8] of the
relevant four -person income limit.) All limits are rounded to
the nearest $50 to reduce administrative burden.
For purposes of HUD programs, income limits approved for
Indian Trust Lands remain in effect unless superseded by higher
FY 1990 income limits.
•
HUD Field Offices are responsible for maintaining complete
and up-to-date records of all current income limits established
for areas within their jurisdiction. Notice of all income limit
revisions should be promptly distributed to program participants,
and Field Offices should be prepared to make income limits
available to the public upon request.
Requests from the public for sets of national or regional
income limits may be referred to HUD USER, whose toll-free number
is 1-800-245-2691 (301-251-5154 in the Washington, DC area).
1.
•
• • • J 0 000 O ON 00 OO 88 OO- 00 0O 00
C w F8 mm fN o NO f mm ON Nr
-O -O coo -f'1 r- c0 00 NN 00
0. -fl MO mN NM NM -N NM -N ^N —N ^N
0
z
N N
80 0000 0it SO 88 OO
C m^ O r N OM O mss OM
0. MW
rm ON ON rr O- mm NN
0. - N mei NM NO - N - N ^ N mei
N
O00 00 00 00 00 88 0O 00
N OC Nm . ^0 ON 0 0 Nm
C cool ON m co- O0 010 mol N^
W 010 010 00 00 00 mol NQ mm
Cl. -N -N -N -N -N -N -N -N
W
N
OZ
00
✓ 0 1• 000 00
CC to 0 mm
ZW NO on
o. - N ^ N
✓ 0
J
O0 00 00 00
WO 100^ OM
Ar
NW NW ON NN
- N NM - N - N
O 0
00
N N
• N
^
NN
OO 0
mN O
0 m
N
Be
O 0
O 0 00 00 88
O 0 OM NM MM -
ON mm NO ON m
- N ^ N - N NN n
O 00 00 80 0N NN W
MN WN ON MN
- N ^N -N -N
0000 o0
NO 00 ON 000NM MS N^ fft-
NN
0O NO O0 N^ NO
N ^ N ^ N - N - N
O • 00. QUO 00 00 00 00 00 O 00 0 88
WN OO 88 N N 0 NC ON OS NO NS OO
fY N N N r Our N r on O N O ON NM NW ON
2w O N O N WO Wo Med WO N -O ry NM O N N O N O
a - N - N mei - N mel - N - N - - - - -
0
O
0 Q- • 88 00 00088 00p So0 88 pN01
✓ 0N000 un 0O m mN
C 00 0O MN mO Nm f- N
w NO NO fN ON NO we, NO NrN O no
a -N ^N -N -N - ^N -N
- -
N
O 00 00
00
C 0 NN
-
W m m
V O
00 00 00 00 00 88 OO
MO NN ' O 0n OW Os ion
NO Or- m 010 0 MO MIC
N O 88 p
O • 00 00 00 00 0$ 80 00 00
N NO N N 0 00 N 0 ON
ft N 00 NN ON WC N OO 00 AA
w Om 00 -m -co O0 -m 00 ON mN
a - -_ - - -- - - -
00 OO OO
NM WS Wer
W W W W _ _ WW_ W W W W W W
2 2 Z 2 2 2 2 Z 2
o 0 0 0 0 0V 0 0 0 0 0 0 o 0
O 0 0- _• W r W -• w11 _ _W W_ r W r W_ ? W "• w - W -• w -• w
12 12 II 17 ix p1
30 30 30 30 30 30 30
U 303 30
0
3 0
2 00 00 OU 00 00 OJ2 0 09
J$ J2 J2 J2 J2
a .JZ JZ J2 JZ J2
C r r
✓ se r
O a 1 ▪ >; > i a 1 ▪ Y I T1 T 1 Y 1 - Y 4 ▪ ) 1 ▪ > 1 ▪ Y.
O C3 C3 C3 C3 C3 C3 C3 C3 C3 C3 C3 C3
m WO WO ICWO wo WO wo wo WO wo wo WO WO
a >.J >4 4›.1 > J ,...1 > J >...1 > J >-.1 >..1 >.1 ›.1
M
m
lo) s
OIJ J
LC 0a
Qr..
- o 040 aa?
-0, •r0
01 ^ON CON
01 -w sw
C-
I I
n mE
201 --..
4 sena.' 0 W
X 0011 -TI
C >-O L-0
CO 0 0 0 0
W LL>Z waZ
••a' c c
W a
oC
C
C 04 N
Na 2 2
0
u
m
c
c
m
-T s > ss s s > s s s
JJ J J LJ NJ J_
J J NJ
• 0 r 0 r T 2 C r 0 2 W
CZ - NI S 0I 01 W2 WI 02 WZ 0Z2
< 14 < 04 Za Ja a Za 2a04
L 4 LL LL )LL 44 0 N w XO < LL Q W 0 0 0 C LL LL LL p
ZZO0
420 <ZO XZO 420 420 0120 IL20 0120 0120
'CO 1 410 4111 ra^ C0 aQ <0 a- 410 cm
Yrf 2-N *maim red C'W Cr0 C^N Cr0 C'O C -N
O O N TON O N •oN Q o N Atom Q O N a W N a W N < O N
Cr •I CI CI I I I Z I I
• ^.. -• -.. m-.. Y• -.. ..
.-mw COw mW LOW OW MW AW MW mW MW
4.1012 0.017 0012 0011 012 MI MI 012 MI 012
^^O E-0 C0-0 X-04,-0 -O -o O -O ^O
_
V 0 0 - L1 0 0 0 0 0 0 0 0
Js2 I>Z a»Z _>Z s2 >2 s2 s2 T>
LL r LL r we -6 - r >l- s ass T LL r > a r T w r > LL r
Z
4 7 0
0 4 0 00 0 0 0 0
I I 2 Z 0 0 0 0 0
2'1
0
•
1
•
''1109 Office of Manage
Celia OF MAMAOEMENTAND
BUDGET
Circular A-122. "Coat PrNrel0011 for
Nonprofit Organizations"
AGENCY: Office of Management and
Budget.
ACTlote: Final Policy.
ment and Budget Circular
local or fedeestiyteadland Slant 6. Requests for esaepttars. The Office
lune 27.1900
To The Heads of Executive
Departments and Establishments
Subject. Cost principles for nonprofit
organizations.
1. Purpose. This Circular establishes
principles for determining costs of
grants. contracts and other agreements
with nonprofit organizations. it does not
apply to colleges and universities which
are covered by Circular A-211 State.
local, arid federally recognized Indian
tribal governments which are covered
by Circular 74-4: or hospitals. The
principles are designed to provide that
the Federal Government bear its fair
share of costs except where restricted oe
prohibited by law. The principles do not
attempt to prescribe4the extent of cost
sharing or matching omgrants, contracts,
or other agreements. However. such cost
sharing or matching shall not be
accomplished through arbitrary
limitations on individual cost elements
by Federal agencies. Provision for profit
or other increment above cost is outside
the scope of this Circular.
2. Supersession. This Circular
supersedes cost principles Issued by
individual agencies for nonprofit
organization.
3. Applicability. a. These principles
shall be used by all Federal agencies in
determining the costs of work performer
by nonprofit organizations under grants,
cooperative agreements. cost
reimbursement contracts. and other
contracts in which costs are used in
pricing. administration. or settlement.
All of these instruments are hereafter
referred to as awards. The principles do
not apply to awards under which an
organization is not required to account
to the Government for actual costs
Incurred.
b. All cost reimbursement subawards
(subgrants. subcontracts. etc.) are
subject to those Federal cost principles
applicable to the particular organization
concerned. Thus. if a subaward is to a
nonprofit organization. this Circular
shall apply; if a subaward is to a
commercial organization. the cost
principles applicable to commercial
concerns shall apply: if a subaward is to
• college or university. Circular A-21
shall apply: if a subaward Is to a State,
Thompson Publishing Group, Inc
•
A-122 (6/27/80)
47109
tribal government. Circular 74-1 arta of Management end Budget any gnat
appIY•
4. Definitions. a. "Nonprofit
organization" means any corporation.
trust. naociation, cooperative. or other
organization which (1) is operated
pnmarily for scientific, educational.
service, charitable. or similar purposes
in the public interest; (2) is not
organized primanly for profit and (3)
uses its net proceeds.to maintain.
improve, and/or expand its operations.
For this purpose. the term "nonprofit
organization" excludes (1) colleges and
universities; (ii) hospitals; (Hi) State.
local. and federally recognized Indian
tribal governments; and (iv) those
nonprofit organizations which are
excluded from coverage of this Circular
In accordance with paragraph 5 below.
b. 'Prior approval" means securing
the awarding agency's permission in
advance to incur cost for those items
that are designated as requiring prior
approval by the Circular. Generally this
permission will be in writing. Where an
'tem of cost requiring prior approval is
specified in the budget of an sward.
approval of the budget constitutes
approval of that cost.
5. Exclusion of some nonprofit
organizations. Some nonprofit
organizations. because of their size and
nature of operations. can be considered
to be similar to commerciabconcems for
purpose of applicability of tont
principles. Such nonprofit organizations
shall operate under Federal cost
principles applicable to commercial
concerns. A listing of these
organisations is ae.YlPsd Ins
Attachment C. Other organizaYms nay
be added ben ems to times
a Rapsasibilties. Agaeiw
responsible br admidsterffl pepama
that involve awards to nonprofit
organizations shell implement the
provisions d this CLesfar. Upas t. General
request. 4111114 nrbg fntniCtbn rdia11 2. Simpkfiedalloauon method
be [wools to the Oar, d 3. Will* allocation ban method
Mntgement and &S 4. Agencies shall 4. Mel afoesftvu Method
dolomite abide= official to mere es 5. Spacial tadtriet eon raps
the *gooey represents/be ea matters E. Negotiation and Approval of bnfirett Cost
relating to the Impiemeatatbn of this Rates
Circular. The name fed Ede of each 1. Definitions
representative shall be furnished to the 2. Negotiations and aprovalat nes
Office of Mm semen n d Budget (Ciralar No. A-122)
within 3o days of the dem d this
Cheater. Atlaei ant A
P. ANorhmenis. The principles and Gsastsi Principles
policy guides ate apo forth In the
following Attachment A. Basic Considerations.
Attachment A-GenmflPrinciples 1.CoapaationofsWSoasis motoed oci r
Attachment 5—Selected Inma of Cost of an awmrd s the aunt d the alMwite
Attsrimfnt C—Nceprset direct and noble Indimet aisle any
Orgaleetions Not Bubjest to 71is applicable audita.
Circler 2. Panora affecting ailowtffy ate
exceptions to Hut requirements of Nis
Circular when permissible under
existing law. However. in the Interpol of
achieving maximum uniformity.
exceptions will be permitted only in
highly unusual circwmstances.
9. Effective Dote. The provisions of
this Circular are effective immediately.
Implementation shall be phased m by
incorporating ibe provisions into nrw
awards made after t a start of the
organization's next fiscal year. For
existing awards the new principles may
be applied if an organization and tie
cognizant Federal agency apes. Earlier
implementation, ora delay in
implementation of individual mervisies
is also permitted by mutual agreement
between an organisation and the
cognizant Federal agency.
10. Inquiries. Further Information
concerning this Circular may be
obtained by contacting the Financial
Management Branch Budget Review
Division. Office of Management and
Budget. Washington. D.C. 20603.
telephone (201 3S$-4Mt.
lames T. Mdatyre.1
Director.
(Circular No. A-1221
Anehnwm, A
GensmlPrtdples
Table of Contents
A. Basic Corsidanuona
1. Composleoo of total asst
2. Factors 'fleeting siloweiie d mus
3. Reasonable costs
4. Allocable costs
5. Applicable credits
0. Advance umdamtaodlep
B. Direct Costs
C. Indirect Cone
D. Allocation of indirect Gaeta Md
Determination of indirect CosIbto
February 1985
Tab 1100 • Page 143
• .11t09
To he allowable under en emeriti. costs most
meet the following general criteria:
a. Be reasonable for the performance of the
award and be allocable thereto under these
principles.
b. Conform to any limitations or exclusions
set forth in these principles or in the tweed
as to types or amount of cost name
c. Be consistent with policies and
procedures that apply uniformly to both
federally financed and other activities of the
organization.
d. Be accorded consistent treatment.
e. Be determined in accordance wt h
generally accepted accounting principles.
f. Not be included as a cost or used to meet
cost sharing or matching requfremsats of any
other federally fina0ced program an either the
current or prior period
g Be adequately documented.
3 Rrusunuble costs. A cost is reasonable
if. in its nature or amount. if does not exceed
Mai which would be Incurred by a prudent
person under the circumstances prevailing at
the time ibe decision was trade to incur the
toss. The question of the reasonableness of
speafic costs must be scrutinized with
particular care in connection with
organizations or separate divisions thereof
which receive the preponderance of their
support from awards made by Federal
agencies. In determining the reasonableness
of a given cost, consideration shall be given
10
a Whether the cost .s of a type generally
recognized as ordinary and necessary for the
operation of :he organization or the
performance of the award.
b The restrains or requirements imposed
by stat h tactors as generally accepted sound
business practices. arms length bargaining.
Fele el and State laws and regulations. and
terms and conditions of the award.
c Whether the indivtdaals concerned acted
+i:h prudence in the circumstances.
cons:denng then responsibilities to the
organization. as members. employees. sad
thrills. the public al large. and the
Government
d Significant deviations from the
esidblished practices of the orginization
which may unjustifiably increase the award
costs.
4 A,.'ocabie cons.
d A cost is allocable to a particular cosi
ober hie. such as a grant. protect. service. or
other activity. in accordance with the relative
benefits received. A cost is allocable to a
Government award if it is treated
consistently with other toss incurred for the
same purpose in like circumstances and if it;
11I Is incurred specifically for the sward.
rot Benefits both the award and other work
and can be distributed :n reasonable
proportion to the benefits received.
;J! Is necessary to the overall operation of
the organization. although a direct
relationship to any particular cost objective
cannot be shown.
b Any cost allocable to a particular award
or other cost obteujve under thea pnnnples
may not be shifted to other Federal awards 10
overcome funding deficiencies. or to avoid
restrrctions imposed by law or by the terms
of the award.
Page 144 • Tab 1100
5. Applicable credits.
a. The tern applicable credits refers to
those receipts. or reduction of expeodtturea
which operate to offset or reduce expanses
item that ere allocable to swards as direct
ur indirect costa. Typical examples of such
transactions are: purchase discounts. rebates
or allowances, recovenes or indemnities on
losses. insurance refunds. and adjustments of
overpayments or erroneous charges. To the
extent that suits credits accruing or received
by the organization relate to allowable cost
they shall be credited to the Government
ether as a con reduction or cash refund es
appropriate.
b. In some instances. the amounts received
form the Federal Government to finance
organizational ethernet or service operations
should be treated as applicable credits.
Sprnfically, the concept of netting such
credit items against related expenditures
should be applied by the organizaton in
deierming the rates or amounts to be
organization in determining the rates or
arnaounts lobe charged to Federal awards
for sero ices rendered whenever the facilities
ur other resources used in providing such
services have been financed directly. in
whole or in pan. by Federal (ands.
alc) For rules centring program income
fi e_ gross income earned from federally
supported activities) see Attachment D of
OMB Circular A-110.
6 Advance and understandings. Under any
given award the reasonableness and
allocabihty of certain items of costs may be
difficult to determine. This particularly true in
emuecuen with orgtzatioes that receive a
preponderance of their support from Federal
agencies. In order to avoid subsequent
disallowance or dispute based on
unreasonableaess or nonallocability. it Is
often desirable to seek a written agreement
with the cognizant or awarding agency in
advance of the incurrence of special or
unusal costs. The absence of an advance
agreement on any element of cost will not. in
itselLaffect the reasonableness. or
allocabihty of that element.
3. Direct Costs
1. Direct costs are those that can be
identified specifically wnh a particular final
cost rbjecttve: i.e.. a particular award.
protect. service. or other direct activity of an
roe 'aeration. However. • cost may not be
assigned to en award as ■ direct cost if any
oilier cost incurred for the same purpose. in
!.ice circumstance. has been allocated to an
rr.sard Si an indirect cost. Cosi identified
s,<:: ;hcally with awards are direct cost of the
a rvlots and are to be assigned directly
the •tte Cost Identified specifically with other
t al cost objectives of the organization are
(Dred casts of those cost obleatves and are
r it to be assigned to other awards directly or
'rrleer,l ly.
2 a.ny direct cost of a minor amount may
he treated as an indirect cost ofor reasnns of
praco a!ity where the account Treatment for
such cost is consistently trolled to all final
cost objectives.
3 The cost of certain activities are not
allowable as charges to Federal awards (see.
tar os ample. fund nts:ng costs in paragraph
February 1985
21 of Attachment B1 However. even though
these costs are unallowable for purposes of
computing charges lo Federal awards. they
nonetheless must be treated se direct cost for
purposes of determining indirect cost rates
and be allocated their share of the
organization's indirect costs if they represent
activities which II) include the salaries of
personnel. (2) occupy space. and 131 benefit
from the organizations indirect costs.
4. The costs of activities preformed
primarily as • service to members. dents. or
the general public when significant and
necessary to the organization's mission muss
be treated as direct costs when or not
allowable and be allocated an equitable
share of indirect coats. Some examples of
these types of activities include:
a. Maintenance of membership rolls.
subscnptions. publications. and related
functions.
b. Providing services and information In
members. legislative or administrative
bodies, or the public.
c. Promotion. lobbying. and other fortis of
pubic relations.
d. Meetings and conferences except those
held to conduct the genera: administration of
the organization.
A aintenacne. protection. and investment
u! •oecial funds not used in operation of the
Organization.
f. Administration of group benefits on
behelf of members of clients including life
and hospital insurance. annuity or retirement
plans. (Manual aid. etc.
Indirect Cost.
t. Indirect costs are those that have been
mc..rrcd for common or joint olgectnes and
cannot be readily. identified with a particular
4n d a.: o!gecfve Direct cosi of minor
arr•i ve:4 may he treated as Indirect costs
uncle: the conditions described in paragraph
8?. alio. e. After direct costs have been
deo-ironed sad assigned arrectly to swards
ei oY.ter work as apprupnate. indirect costs
are .hose remdmmg to be allocated to
benrfn.ng coal oblectives. A cost may not he
allotted to ID award as as indirect cosI d
rev What cosi incurred ler the Oa purpose.
I•I I:1 a circumstances. has been 'relined ned to
an ..ward as a direct cost.
z Because of the diverse charm teristies
rid accounting practices of nonprofit
c gaoizations. it is not possible to specify the
ty pis of cost which may be classified ss
m•nrrct con in all situation. However. typical
e .dimples of indirect cost for many nonprofit
u ionizations may include depreciation or
Lse allowances or buildings and equipment.
eie costa of operating and maintaining
facilities. and general admioistrenon and
g _e•.r: expenses. such as the serene, and
e...enaes of executive officers. personnel
adnt iistrauon. end accounting.
O .Allocation of Indirect Cort and
L••'crn,•nut,nn of!nJrrc: Cost Rur•'s
1 (l neral.
a. Where a nonprofit organization has only
u:.e raior functiun. or nSr:e ail os m:gor
I. Introns benefit hum its indirect costs to
approximately the sante degree. the
allocation of indirect cows and the
Single Audit Information Service
1
•
computation d sit indirect an noway M
accomplished through simplified alloeatloe
procedures as deaaibsd in paragraph 2
below.
b. Where an organisation ha several staler
functions whncb basefrl from its indirect cats
in varying degrees. elloc.atloa e[ riidizect
costs may regmre the accumulation of such
costs into separate cost groupings which then
are allocated individually to benefiting
functions by means of • base which best
measures the relative degree of benefit. Tha
indirect corns allocated to each function are
then distributed to individual awards and
other activities included in that dunction by
means of an indirect cat ratefs).
c. The detennmatmn of what constitutes an
orgamzarion's major functions wall depend on
its purpose in being; the types of services it
renders to the public. its cheats. and is
members. and the amount of effort it devotes
to such acovities as fund reain& public
information and membership activities.
d. Specific methods for allocating indirect
toss and computmg indirect cost rata along
with the conditions under which each method
should be used are described w paragraphs 2
Through 5 below.
e. The base period for the allocation of
indireci costa is the penod in which such
coos are incurred and accumulated for
allocation wo work performed in that penod
The base period normally should coincide
with the organization's fiscal year, but in any
cunt. shell be so selected as to avoid
inequities on the allocation of the costs.
2. Simplified allocution method.
a. Where an organizations motor functions
benefit from its Indirect costs to
approximately the same degre. the allocation
of indirect costs may be accomplished by p)
separating the organisation's total costs for
the base penod as either direct or indirect.
and lid dividing the total allowable Indirect
costs (net of applicable credits! by an
equitable distribution base. The result of this
process u an indirect cost rate which is used
to distribute indirect costs to individual
awards. The ns should be expressed as the
percentage which the total amount of
allowable indirect costs bears to the base
selected. Thum method ehbuld aloe be used
where an organizathm has only one major
function encompassing a number of
individual projects or actio noes. and may be
used where the level of Federal awards to an
organization is relatively small.
b. both the direct costa end the indirect
costs ahali exclude capital expenditures and
unallowable costs. However. unallowable
costs which represent activities must be
included in the direct costa under the
conditions described in paragraph B.J. above.
c. The distribution base may be total direct
costs (excluding capital expenditures and
other distorting nems. such as major
subcontracts or subgrents). direct salaries
and wages. or other base which results in an
equitable distribution The distribution base
shall generally exclude participant suport
costs as defined in paragraph 29 of
Attachment a
d. Except where a special retell') is
required in accordance with paragraph 0.5
below. the indirect cat rare developed ender
the above principles is applicable to all
awards at the organisation. U a specaal
rate's) s required appropnale modifications
shall be made in order to develop the special
rate(s).
2. Afulhple allocubun base ulr:hud.
a. Where an organization s indirect cons
benefit its major functions un varying degrees.
such cats shall be accumulated Into separate
cost groupings. Foch grouping shall then be
allocated udnvidually to benefiting functrorn
by means of a base which best measures the
relative benefits.
b. The groupings shall be established so as
to permit the allocation of each grouping on
the bans 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
measure the relative benefits providd 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
desired.
c. Actual conditions must be taken into
account in selecting the base to be used in
allocating the expenses in each grouping to
benefiting functions. When an allocation can
be made by assignment of • cost grouping
directly to the function benefited. the
allocation shall be made in that manner.
When the expenses m a grouping are more
general in nature. the allocation should le
made through the use of a selected base
which produces results that are equitable) to
both the Government and the organization. In
general. any cost element or cost related
actor associated with the organization's
work is potentially adaptable for use as an
allocation base provided III it can readily be
expressed in terms of dollars or other
quentitauve measures (total direct costs.
direct salaries end wages. staff hours applied
square feet used hours of ovate. number of
documents processed. population served, and
the Irks) and pre it is common to the
benefiting functions during the base period.
d. Except where a apex's! indirect cost
cartels) is required in accordance with
paragraph D.S. below. the separate groupings
of indirect coats allocated to each major
function shall be agregated and treated as a
common pool for that function. The costs in
the common pool shall then be distributed to
indtvisual awars included in that function by
use of a single indirect cost rate.
e. The distribution base used in computing
tie indirect cost rate for each function may
be total direct costs (excluding capital
.penditures and other distorting items such
tie major subcontracts and subgrantsl. direct
=elartes and wages. or other ase which
results in en equitable distribution. The
distribution base shall generally exclude
participant support costs as defined in
paragraph 29, Attachment B. An indirect cost
rate should be developed fir each separate
indirect cost pool developed. The rate in each
case should be stated as the percentage
which the amount of the particular indirect
cost pool is of the distribution base Identified
Thompson Publishing Group, Inc. February 1985
!1109
with that pool.
4. Direct allocation merhod.
e. Some nonprofit organizations, treat all
coats as direct coos expect general
administration and general expense. These
urgnnizatinns generally separate their can
into thre basic categon re II) General
administration and general expenses. pi)
fund raising. and (ill other direct functions
(including projects performed under Federal
award.. joint costs. such as depreciation.
rental costs. operation and maintenance of
facilities. telephone expenses. and the like
are prorated rndivisually as direct cost to
each category end to each 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 award or other activity. The bases must
be established in accordance with resonable
cntena. 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
eclusively of general administration and
general expenses. In all other respects. the
orgamzation s indirect cost ratess shat be
computed in the same manner as that
described in paragraph D 2 above.
5. Special indirect cost rotes. In some
instances. a single indirect cost rate for all
activities of an organization or for each major
function of the organization ay 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. For this purpose. a particular segment
of work may be that performed under a single
award or it may consist of work under a
group of awards performed in a common
environment. the factors may include the
physical location of the work. the level of
administrative support required. the nature of
the facilities or order 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 en
environment which appears to generate a
significantly different level of indirect costs.
provisions should be made for a separate
ndirect cost pool applicable to such work.
The separate indirect cost pool should be
developed during the course of the regular
allocation process. and the separate indirect
cost re e resulting therefrom should be used
provided it is determined that (i) the ram
differs significantly from that which would
have been obtained under paragraph D.2.2.
and 4 above. and (ii) the volume of work to
which the rate would apply is material.
E. Negotiation and Approval of Indirect Cost
Rates.
Tab 1100 • Page 145
!1109
1. Definitions. As used in this section. the
following terms have the meanings set forth
below:
a. "Cognlzanl agency" means the Federal
agency responsible for negotiating and
approving 'ndirsct cost rales fora nonprofit
organization on behalf of all Federal
agencies.
b. "Predetermined rate" means an indirect
cost rate. applicable to ■ specified current or
future period usually the organization's fiscal
year. The rate U based on an estimate of the
costs to be incurred during the pend A
predetermined rate is not subject to
adjustment.
c. "Fixed ate" means an indirect cost rate
which has the same characteristics as a
predetermined rote, except that the difference
between the estimated costs and the actual
costs of the period covered by the rate la
cried forward as an adluatment to the rate
computation of • subsequent penod.
d. "Final rale" means an indirect cost rate
applicable to a specified past period which is
based on the actual costs of the period. A
find rate is not subject to adjustment
e. "Provisional rate" or billing rate mens a
temporary indirect cost rate applicable to a
specified period which is used for funding,
interim reimbursement. and reporting indirect
costs on awards pending the establishment of
a rate for the period
f. "Indirect coat 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. grant. or
other work unit for which cost data are
desired and for which provision is made to
accumulate and measure the cost of
pr . projects. jobs and capitalized
projects.
2. Negotiation and approval of rotes.
a. Unless different arrangements are
agreed to by the agencies concerned the
Federal agency with the largest dollar value
of awards with en organization will be
designated as the cognizant agency for the
negotiation and approval of indirect cost
rates and. when necessary. other rates such
as fringe benefit and computer charge -out
Hies. Once an agency is assigned cognizance
fora parocular noncredit organization the
assignment will not be changed unless then
1a a major long-term shift In the dollar volumes
of the Federal awards to the orpnisadon. All
concerned Federal agencies shall be glen the
opportunity to participate in the negotiation
process. but after a rate Ms been agreed
upon It will be accepted by ail Federal
agencies. When a Federal agency has reason
to believe that special opening factors
affecting its awards necessitate special
indirect cost rates in accordance with
paragraph D.3 above. it will, prior to the time
the rotes an negotiated notify the cognizant
agency.
b. A nonprofit organization which has not
previously established an indirect cost rate
with a Federal agency shall after the
organization is advised that an award will be
Page 146 • Tab 1100
made and. m no event. laser than three
months after the effective date of the award.
c. Orgeruzalions that have previously
established Indirect cost rates must submit a
new indirect coal proposal to the cognizant
agency within six months after the clow of
each fiscal year.
d A predetermined rate may be negotiated
for use on awards when than is reasonable
assurance. based an peat experience and
reliable projection of the ogenuation'e costs.
that the rate is not likely to exceed a rote
based on the oganintlon'a actual costs.
e. Fixed rales may be negotiated where
predetermined rates are not considered
appropriate. A fixed ate. however. shall not
be negotiated if (i) all or a substantial portion
of the organization's awards are expected to
expire before the carryforward adjustment
can be made: (ii) the mix of Government and
non.govenment work at the organization is
loo erratic to permit en equitable carry-
forward
arryforward ad ustmenk or Oil the organization's
operations fluctuate significantly from year to
year.
f. Provisional and final rates shall be
negotiated when neither predetermined nor
fixed rates are appropriate.
g. The results of each negoWlion shall be
formalized in a written agreement between
the cognisant agency and the nonprofit
organization The cognizant agency shall
distribute copies of the agreement to all
concerned Federal agendas.
h. U a dispute arises In a negotiation of an
indirect cast nu between the cognizant
agency and the nonprofit organization. the
dispute shall be resolved In accordance with
the appeals procedures of the cognizant
agency.
i. To the extent that problems are
encountered among the Federal agenda in
connection with the negotiation and approval
process. the Office of Management and
Budget will lead assistance as required to
resolve such problems in • timely manner.
jCircular No. A-1221
Attachment S
Selected Items of Cod
Table of Contents
1. Advertising costa
2. Bad debts
3. Bid and proposal casts (reserved)
4. Bonding costs
S. Communication costa
b. Compenesbon for personal services
7. Contingency provisions
S Contributions
9. Depredation and use allowances
10. Donations
11. Employee morale. health and welfare
costs and aadits
12. Entertainment cots
13. Equipment and other capital expenditures
14. Fines and penalties
16. Fringe benefits
16. Idle facilities and Idle apathy
17. Independent rears.& and development
(reserved)
1g. Insurance and indeemification
19. Interest. fundraising. and investment
management costa
W. Labor relations cosy
February 1985
•
•
21 Losses on whet awards
22. Maintenance and repair costs
23 Materials Yid eupptirs
24 Meetings. conferences
ZS. Memberships. subscriptions. and
professional activity costs
26. Organization cons
27. Overtime. extra -pay shift. and multishifl
premiums
25. Page charges in professional journals
29. Participant support costs
30. Patent costa
31. Pension plans
32. Plant security costs
33. Preaward costs
34. Professional service costs
36. Profits end losses on disposition of
depreciable property or other capital
assets
36. Public inforn atloo service costs
37. Publication and pnnting costs
38. Rearrangement and dteraron costs
39. Reconversion costs
40. Recruiting coals
41. Relocation costs
42. Rental costs
43. Royalties and other costs for use of
patents and copyrights
44. Severance pay
45. Specialized service facilities
46 Taxes
47. Termination costs
411. Training and education costs
49. Transportation costs
50. Travel coats
;Circular No. A-1221
Attach rad
Selected In of Cam
Paragraphs 1 through 50 provide principles
to be applied in establishing the alowubility
of certain items of cosi Then principles
apply whether a mat is treated as direct or
indirect. Failure to mention a particular item
of mon is not intended to imply that It is
unallowable: rather determination as to
allowability in each can should be based on
the treatment or principles provided for
similar or related items of cost -
1. Advertising costs.
a. Advertising costs mean the costs of
media services and associated costs. Media
advertising includes magazines. newspaper
radio and television programs. direct mad
exhibits. and the like.
b. The only advertising cots allowable an
Nose which are solely for (i) the recruitment
of personnel when considered in conjunction
with all other recruitment costs. ea set forth
in paragraph 4R4iil the promramnt of goods
and services: (111) the disposal of surplus
materials acquired in the performance of the
award except wham organizations are
reimbursed for disponls ata predetermined
amount in accordance with Attachment N of
OMB Circular A -110:k or (Iv) specific
requitement, of 1M award
2. Bad debts. Bad debts. including losses
(whether actual a ntlmated) arising horn
uncollectible accounts and other claims.
related collection costs, and related eget
costa are unallowable.
3. Bid and proposal costs. (reserved)
4. Bonding costs
Sings Audit In/amatron Service
i
•
•
•
•
a. Bonding costs angle when the
..ovemment requires assurance against
financial lose to irsell ce others by reason of
the act nr default of the organization. They
arise also in Instances where the organization
requires similar neurones. Included are such
bonds as bid. performance. payment.
ads encs payment. infringement and fidelity
bonds
b. Costs of bonding required pursuant to
the terms of the award an allowable.
c. Costs of bonding required by the
organization in the generel conduct of its
operations are allowable to the extent that
such bonding is in accordance with sound
business practice and the rates and premiums
are redsonable under the circumstances.
5. Communication costs. Costa incurred for
telephone services. local and long distance
telephone calls. telegrams. raduogrems,
postage and the like. are allowable.
8. Compensation for personal services.
a Definition. Compensation for personal
services includes all compensation paid
currently or accrued by the organization for
services of employees rer.dered during.the
period of the award(except as otherwise
provided in paragraph g. below). It includes.
but is not limited to. =lanes. wages.
director's and executive committee member's
fees. incentive awards. fringe benefits.
pension plan costs. allowances for off-site
pay. incentive pay. location allowances.
hardship pay. and cost of living differennals.
b. A/lowobrbty. Except as otherwve
specifically provided m this paragraph the
costs of such compensation are allowable to
the extent that:
(t) Total compensation to individual
employees is reasonable for the services
rendered and conforms to the established
policy of the organization consistently
applied to both Government and non -
Government activities: and
(21 Charges to awards whether treated as
direct or indirect costs are determined and
supported ai required in this paragraph.
c. Reasoncbleness.
111 When the organization is predominantly
engaged in activities other than those
sponsored by the Government compensation
for employes on Governmeateponsored
work will be considered reasonable to the
extent that it is consistent with that paid for
similar work in the orgamzabon's other
acts vibes.
(21 When the organization is predominantly
engaged in Government-sponsored activities
end in cases when the kind of employees
required for the Coveromeat sanitise are
not found in the organ' Uoo's other
activities. compensation for employee on
Covernment-sponsored work will be
considered reasonable to the extent that it is
comparable to this paid for similar work in
the labor markets in which the organization
competes for the kind of employees involved.
d. Special considerations in determining
allowability. Certain conditions require
special consideration and possible limitations
In determining costs under Federal awards
where amounts or types of compensation
appear unreasonable. Among such conditions
are the following
(t ) Compensation to member of nonprofit
Thompson Publishing Group. Inc.
oreanrza bons trustees. directors. associates.
officers. or the immediate families thereof.
Determination should be made that such
compensation ts reasonable for the actual
personal services rendered rather than s
distribution of earnings in excess of costs.
121 Any change In an organization'
compensation policy resulting in a
substantial increase in the organization's
level of compensation. particularly when it
was concurrent with an increase in the ratio
of Government awards to other activities of
the organization or any change in the
treatment of allowability of specific type of
compensation due to changes In Government
policy
e. Unallowable costs. Costs which are
unallowable under other paragraphs of this
Attachment shall not be allowable under this
paragraph solely on the basis that they
constitute personal compensation.
F. Fringe benefits.
(1) Fringe benefits in the form of regular
compensation paid to employees during
periods of authorized absences from the job.
such as vacation leave. sick leave. military
leave. and the like. are allowable provided
such costs are absorbed by all organization
activities in proportion to the relative amount
of time or effort actually devoted to each.
121 Fringe benefits In the form of employer
contributions or expenses for social security.
employee Insurance. workmen's
compensation insurance. pension plan costs
(see paragraph g. below). and the like. are
allowable provided such benefits are granted
in accordance with established written '
organization policies. Such benefits whether
treated as indium costs or as direct costa.
shall be distributed to particular awards and
other activities in • manner consistent with
the pattern of benefits accruing to the
Individuals or group of employees whose
salaries and wages are chargeable to such
awards and other activities.
(3)(a) Provisions for a reserve under a self -
Insurance program for unemployment
compensation or workmen's compensation
are allowable to the extent that the
provisions represent reasonable estimate of
the Liabilities for such compensation. and the
types of coverage. extant of coverage. and
rates and premiums would have been
allowable had insurance been purchased to
cover the asks. However. provisions for self-
insured liabilities which do not become
payable for mon than one year after the
provision is made shall not exceed the
present value of the liability.
(b) When an organization follows a
consistent polcy of expensing actual
payments to. er as baba)[ of. employee or
former employees for unemployment
compensation or workmen's compensation.
such payments are allowable in the year of
payment with the prior approval of the
awarding agency provided they are allocated
to an activities of the organization.
(4) Cass of Insurance on the lives of
trustees. officers. or other employees holding
positions of similar responsibility ate
allowable only to the extent that the
insurance represents additional
compensation. The costs of such insurance
when the organization is named as
February 1985
•
11109
•
beneficiary are unallowable.
g. Pension plan costs.
111 Coats of the organization's pension plan
which are incurred in accordance with the
established policies of the organization are
allowable. provided:
(a) Such policies meet the test of
reasonableness:
(b) The methods of cost allocation are not
discriminatory:
(c) The cost assigned to each fiscal year is
determined in accordance with generally
accepted accounting principles 11 prescribed
in Accounting Pnncipin Board Opinion No. 8
issued by the American Institute of Certified
Public Accountants: and
(d) The costs assigned to a given fiscal year
are funded for all plan participants within six
months after the end of that year. However.
increase to normal and past service pension
coats caused by a delay in funding the
actuarial liability beyond 30 days Our each
quarter of the year to which such costs are
assignable are unallowable.
(2) Pension plan termination insurance
premiums paid pursuant to the Employee
Retirement income Security Act o11974 (Pub.
L 93-406) are allowable. Late payment
charges on such premiums are unallowable.
(3) Excise taxes on accumulated funding
deficiencies and other penalties Imposed
under the Employee Retirement Income
Security Act are unallowable.
h. Incentive compensation. Incentive
compensation to employee based on cost
reduction. or efficient performance.
suggestion awards. safety awards. etc.. are
allowable to the extent that the overall
compensation is determined to be reasonable
end such costs are paid or accrued pursuant
to an agreement entered into In good faith
between the organization and the employees
before the services were rendered or
pursuant to en established plan followed by
the organization so consistently as to Imply,
in effect an agreement to make such
payment.
i. Overtime. extra pay shift. and multishuft
premiums. See paragraph 27.
j. Severance pay. See paragraph 44.
k. Training and education costs. See
paragraph 48.
1. Support of so/onn and wages.
(1) Charges to awards for salaries and
wages, whether treated as direct costs or
indirect costa will be based on documented
payrolls approved by responsible officals)
of the organization. The distribution of
=lanes and wages to awards must be
supported by personnel activity reports as
prescribed in subparagraph (2) below, except
when a substitute system has bean approved
1n writing by the the cognizant agency. (Bee
paragraph E.2 of Attachment A)
(2) Reposes reflecting the distribution of
activity of each employes must be
maintained for all staff members
(professionals and nonprofessionals) whose
compensation hi changed. In whole or in part
directly 10 awards. In addition. in order to
support the allocation of Indirect costs. such
reports must also be maintained for other
employee whose work involve two or mon
funcitona or activities if • distribution of their
compensation between such functions or
activities ie needed in the determination of
Tab 1100 • Page 147
the nrgnn,ea tiuu s Indirect case ratc(al (e g..
en tinpi.ivee engaged pan -time in indirect
COV activities and part-time In a direct
function). Reports maintained by nonprofit
organizations to satisfy thea requirements
must meet ,he following standards:
Lt I I he reports must reflect an a/terthe•
in, t delcrmmauun of the actual activity of
each employee. Budget estimates (i.e..
estimates determined before the services are
performed) do not qualify as support for
charges to awards.
(til
F.ach report must account for the total
activity for which employees are
compensated and whish is required in
fulfillment of their obligations to the
organization.
Ir I The reports must be signed by the
individual employee. or by a responsible
supervisory official having first hand
knowledge of the activities performed by the
employee. that the distribution of activity
represents a reasonable est mate of the
actual work performed by the employee
during the penoda covered by the reports.
Id) The reports muss be prepared el least
monthly and must coincide with one or more
pay periods.
ill Charges for the salaries and wages of
nonprofessional employees. in addition to the
supporting documentation described in
subparagraphs (1) and (2) above. must also
be supported by records indicating the total
number of hours worked each day
mamlaioed in conformance with Department
of Labor regulations implementing the Fair
Labor Standards Act (29 CFR Per 518). For
this purpose. the term "nonprofessional
employee" shall have the same meaning as
"nonexempt employee:" under the Fair Labor
Standards Act.
(4) Salaries and wages of employees used
igmeeting cost sharing or matching
requirements on awards must be supported in
the same manner as salaries and wages
claimed for reimbursement from awarding
agencies.
7 Contingency provisions. Contributions to
a contingency reserve or any similar
provision made for events the occurrence of
which cannot be foretold with certainty as to
time. intensity. or with an assurance of their
happening. are unallowable. The term
"contingency reserve" excludes self-
insurance reserves (see paragraph 8.1(3) and
18 a.(2)(d)): pension funds (sea paragraph
e.(gll: and reserves for normal severance pay
(see paragraph 44.(b)(1).
8. Contributions. Contributions and
donations by the organization to others an
unallowable.
9. Depreciation and use allowances.
a. Compensation for the use of buildings.
other capital improvements. and equipment
on hand may be made through use
allowances or depreciation. However. except
as provided in paragraph f. below a
combination of the two methods may not be
used in connection with • single class of
fixed assets (e.g.. buildings. office equipment.
computer equipment etc.).
b. The computation of use allowances or
depreciation shall be based on the
acquisition cost of the assets involved. The
acquisition cost of an asset donated to the
Page 148 • Tab 1100
orvanize,n.n by a third party shall be ,Is fair
market value at the lime of the donation.
r. The computation of use alluwances or
depreciation will exclude.
IIIThe noel of land:
(2) Any portion of the cosi of buildings and
equipment borne by or donated by the
Federal Goveniment irrespective i -f where
title was originally vested or where ,t
presently resides; and
(3) Any portion of the cost of buildings and
equipment contributed by or for the
unionization in satisfaction of a statutory
matching retirement.
d. Where the use allowance method is
followed. the use allowance for buildings and
improvement (including land improvements
such as paved parking areas. fences. and
sidewalks( will be computed at an annual
rate not exceeding two percent of acquisition
cost. The use allowance for equipment will
be computed at an annual rate not exceeding
six and two-thirds percent of acquisition cost.
When the use allowance method is used for
buildings. the entire building must be treated
as a single asset: the buildings components
(e.g. plumbing system. heating and air
conditioning. etc.) cannot be segregated from
the building's shell. The two percent
limitation. however. need not be applied to
equipment which is merely attached or
fastened to the building but not permanently
fixed to it and which is used as furnishings or
decorations or tor specialized purposes (e.g.
dentist chain and dental treatment units.
counters, laboratory benches bolted to the
fluor. dishwasher. carpeting. etc.). Such
equipment will be considered as not being
permanently fixed to the building if it can be
removed without the need for costly or
extensive alterations or repairs to the
building or the equipment. Equipment that
meets these criteria will be abject to the six
and two-thirds percent equipment use
allowance limitation.
e. Where depreciation method is followed.
the period of useful service (useful life)
established in each case for usable capital
assets must take into consideration such
factors as type of construction, nature of the
equipment used technological developments
in the particular program area, and the
renewal and replacement policies followed
for the the individual items or cl of
assets involved. The method of depreciation
used to assign the cost of an asset (or group
of assets) to accounting periods shall reflect
the patten of consumption of the asset
dunng its useful life. In the absence of clear
evidence indicating that the expected
consumption of the asset will be significancy
greater or laser in the early portions of its
useful life than in the later portions. the
straight-line method shall be presumed to be
the appropriate method Depreciation
methods once used shall not be changed
unless approved in advance by the cognisant
Federal agency. When the depreciation
method is introduced for application to assets
previously subject to a use allowance. the
combination of use allowances and
depreciation applicable to such assets must
not exceed the total acquisition cost of the
assets. When the depreciation method is used
for buiidinas. a butldin's shell may be
February 1985
.,qr, w,n,•d frum each building component
(k• g plumbing system. heating, and air
un,dn,oning system. etc.) and each item
depreciated over its estimated useful lift or
Itis inure budding be_. the shell and all
i, unpuuentsl may be treated as • single aunt
cold depreciated over • single useful life.
f When the depreciation method to used
lir a particular class of assets. no
drrpreaation may be allowed on any such
as:.eIs that. under paragraph e. above. would
be viewed as fully depreciated. However. a
n•asonable use allowance may be negotiated
fur such assets tf warranted after taking into
consideration the amount of depreciation
previously charged to the Government. the
estimated useful life remaining at time of
negotiation. the effect of any increased
maintenance charges or decreased efficiency
due to age. and any other factors pertinent to
the utilization of the asset for the purpose
contemplated.
g. Charges for use allowances or
depredation must be supported by adequate
property records and physical inventones
must be taken at least once every two yeast
(a statistical sampling basis is acceptable) to
ensure that assets exist and are usable and
needed. When the depreciation method is
followed. adequate depreciation records
indicating the amount of depreciation taken
each period must siso be maintained
10. Donations
a. Services received.
(1) Donated or volunteer services may be
furnished to an organization by profees'onal
land technical personnel. consultants, and
other skilled and unskilled labor. The value
of these services is not reimbursable either as
a direct or indirect cost.
(2) The value of donated services utilized•
in the performance of a direct cost activity
shall be considered in the determination of
the organization's indirect cost rates) and
accordingly. shall be allocated s
proportionate share of applicable indirect
costs when the following circumstances exist:
(a) The aggregate value of the services is
material:
(b) The services are supported by a
significant amount of the indirect costs
incurred by the organization:
Ic) The direct cost activity is not pursued
primarily for the benefit of the Federal
Government.
(3) In those instances where there is no
basis for determining the fair market value of
the services rendered the recipient and the
cognizant agency shall negotiate an
appropriate allocation of indirect cost to the
services.
(4) Where donated services directly benefit
a project supported by an award. the indirect
costs allocated to the service will be
considered as a part of the total costa of the
project. Such indirect costa may be
reimbursed under the award or used to mast
cost sharing or matching requirements.
(5) The value of the donated service may
be used to meet cost sharing or matching
requirements under conditions described In
Attachment E. OMB Circular No. A-110.
When donated services ars treated aa
Indirect costs. indirect cost rtes will
separate the value of the donations so that
Single Audit Information Service
i
4
11
•
•
reimbursement will not be made.
(61 Fair market value of donated services
shall be computed as follows:
(al dates for volunteer services. Rates for
volunteers shall be consistent with those
regular rates paid for similar work in other
activities of the organization. In cases where
the kinds of skills involved are not found m
the other activities of the organization. the
rates used shall be consistent with those paid
for similar work in the labor market in which
the organization competes for such skills.
(b) Services donated by other
organizations. When an employer donates
the services of an employee. these services
shall be valued at the employee's regular rate
of pay (exclusive of fringe benefits and
indirect costs) provided the services are in
the same skill for which the employee is
normally paid. 0 the services are not in the
same skill for which the employee is normally
paid. fair market value shall be computed in
accordance with subparagraph (a) above.
b. Goods and space.
(1) Donated goods. I.e.. expendable
personal property/supplies. and donated use
of space may be furnished to an organization.
The value of the goods and space is not
reimbursable either as a direct or indirect
cost.
(2) The value of the donations may be used
to meet cost sharing or matching share
requirements under the conditions described
In Attachment E. OMB Circular No. A-110.
The value of the donations shall be
determined to accordance with Attachment
E. Where donations are treated as indirect
costs. indirect cost rates will separate the
value of the donations so that reimbursement
will not be made.
11. Employee morale. health. and welfare.
costs and credits. The costs of house
publications. health or fiat -aid clinics. and/
or infirmaries. recreational activities.
employees' counseling services. and other
expenses incurred in accordance with the
organization's established practice or custom
for the improvement of working conditions.
employer-employee relations. employee
morale. and employee performance are
allowable. Such costs will be equitably
apportioned to all activities of the
organization. Income generated from any of
these activities will be credited to the cost
thereof unless such income has been
irrevocably set over to employee welfare
organize tions.
12. Entertainment costs. Costs of
amusement. diversion. social activities.
ceremonials. and costa relating theretn such
as meals. lodging. rentals. transportation. and
gratuities are unallowable (but see
paragraphs 11 and 25).
13. Equipment and other capital
aipenchtures.
a. As used in this paragraph. the following
tsamshave the meanings set forth below:
(1) "Equipment" means an article of
nonexpendable tangible personal property
having a useful life of more than two years
and an acquisition cost of $500 or more per
unit. An organization may use its own
definition provided that it at least includes all
nonexpendable tangible personal property as
defined herein.
<. Thompson Publishing Group. Inc
121 " Acqutliition cost" means the net
invoice unit puce of an item of equipment.
including the cost of any modifications.
attachments. accessories. or auxiliary
apparatus necessary to make it usable for the
purpose for which it is acquired. Ancillary
charges. such as taxes. duty. protective in -
transit insurance. freight. and installation
shall be included in or excluded from
acquisition cost in accordance with the
organization's regular written accounting
practices.
(31 "Special purpose equipment" means
equipment which is usable only for research.
medical. scienttfic. or technica activities.
Examples of special purpose equipment
include microscopes. x-ray machines. surgical
instruments. and spectrometers.
(4) "General purpose equipment" means
equipment which is usable for other than
research. medical, scientific. or technical
activities. whether or not special
modifications are needed to make them
suitable for a particular purpose. Examples of
general purpose equipment include office
equipment and furnishings. air conditioning
equipment. reproduction and printing
equipment. motor vehicles. and automatic
data processing equipment.
b. (1) Capital expenditures for general
purpose equipment are unallowable as a
direct cost except with the prior approval of
the awarding agency.
(2) Capital expenditures for special purpose
equipment are allowable as direct costs
provided that items with a unit cost of $1000
or more have the prior approval of the 1
awarding agency.
c. Capital expenditures for land or
buildings are unallowable as a direct cost
except with the prior approval of the
awarding agency.
d. Capital expenditures for improvements
to land. buildings. or equipment which
matenally increase their value or useful life
are unallowable as a direct cost except with
the prior approval of the awarding agency.
e. Equipment and other capital
expenditures are unallowable as indirect
costa. However, see paragraph 9 for
allowability of use allowances or
depreciation an buildings, capital
improvements. and equipment. Also. see
paragraph 42 for allowability of rental costs
for land. buildings. and equipment.
14. Fines and penalties. Costs of fines and
penalties resulting from violations of. or
failure of the organization to comply with
Fred -Mel. State, and local laws and regulations
are unallowable except when incurred as a
result of compliance with specific provisions
of an award or instructions in writing from
the awarding agency.
15. Fringe benefits. See paragraph 6. f.
16. Idle facilities and idle capacity.
a. As used in this paragraph the following
terms have the meanings set forth below:
(1l "Facilities" means land and buildings or
any portion thereof. equipment individually
or collectively. or any other tangible capital
asset. wherever located and whether owned
or leased by the organization.
(2) "idle facilities" means completely
unuaed facilities that are excess to the
organization's current needs.
(3) 'Idle capacity" means the unused
February 1985
.11109 •
capacity of partially need facilities. It t the
difference between that whtdt a facility
could achieve under 100 per cent operating
time on a one -shift basis less operating
interruptions resulting from time lost for
repairs. setups. uasaCefactory materials. and
other normal delays. mad the extent to which
the facility was actoafly used to meet
demands during the accounting period. A
multtshift basis may be used J it can be
shown that this amount of usage could
normally be expected for the type of facility
involved.
(4) "Costs of idle facilities or idle capacity'
means costa such as maintenance. repair.
housing. rent. and other related costa 54.
property taxes. insuranm and depreciation
or use allowances.
b. The costs of idle facilities are
unallowable except to the extent that.
Ill They are unnecessary to rent
fluctuations in worklaade or
(2) Although not necessary to meet
fluctuations in workload they wen
necessary when acquired and are sow idle
because d cheeses in program rectweemea to
efforts to achieve mon economical
operation& reorganisation. termination. or
other causes which coed not have been
reasonably foreseen. Under the exception
stated in this satesengreph. coals of idle
facilities are allowable for a reasonable
period of time. ordinarily not to exceed one
year. depending upon the initiabn taken to
use. lean. or dil ave of such facilities (bat
see paragrepha 47.b. and d.).
c. The cosei of idle capacity are aortal
costs of doing business and ere a factor in S
normal fluctuations of usage or iainect cast
rates from period to period Such oasts we
allowable. provided time capacity is
reasonably anticipated to be necasery r
was cetgioelly rsonablet sada object In
reduction or alleitontien by enlwtmg.
renting. Of cal& m accordant orfs sound
business aon®ra rseer" practice&
Widespread idle capacity throughout an
entire facility or mom a group d swab
having sablsnnagy thy sone bisaton may
be idle facilities
17. I^ilap.. ndent research and devebpnsw
(Resent dl.
16. lnswraner and isa4mnilioaaa
a. Insurance scJudn incomes whirl the
organization is required to carry. or width is
approved. under the tares of the award eel
any other Sondem which the areanaatfee
maintains in connection with thepmeral
conduct et to operations. This paragraph
does not apply to internee which represents
fringe benefits for employees (see paragraph
6 f. and 6.g.(2)).
(i) Costs of in; trance required or
approved. and maintained pursuant to the
award are allowable.
(2) Costs of other insurance maintained by
the organisation in connection with the
general conduct of its operations are
allowable subject to the following limitation&
(a) Types and extent of courage shell be
in accordance with sound business panics
and the rates and premiums rill be
reasonable ender the ehaunstences.
(b) Coats anted for bwkrew brterreptlon
or other stmdsr insurenal shall be limited to
Tab 1100 • Page 149
.,1109
exclude coverage of management fres.
(r) Coats of insurance or of any arevisiuna
fur a reserve covering the nak of loss or
damage to Government property are
allowable only to the extent that the
organization is liable for such lou or damage.
(d) Provisions fora reserve under a self-
insurance program are allowable to the
extent that types of coverage. extent of
coverage, rate. and premiums would have
been allowed had insurance been purchased
to cover the risks. However, provision for
known or reasonably estimated self.insured
liabilities, which do not become payable for
more than one year after the provision is
made shall not exceed the present value of
the liability.
(el Costs of insurance on the lives of
castes. officers, or other employees holding
positions of similar responsibilities are
allowable only to the extent that the
insurance represents additional
compensation (see paragraph 91. The cost of
such insurance when the organization is
Identified as the beneficiary is unallowable.
(31 Actual losses which could have been
covered by permissible insurance (through
the purchase of insurance ora self-msursnce
program) are unallowable unless expressly
provided for in the award, except:
la) Costs incurred because of losses not
covered under nominal deductible insurance
coverage provided In keeping with sound
business practice are allowable.
Ib) Minor losses not covered by insurance.
such as spoilage. breakage. and
u.sappearance of supplies. which occur in the
ordinary course of operations. are allowable.
b. Indemnification includes securing the
organization against liabilities to third
persons and any other loss or damage, not
compensated by insurance or otherwise. The
Government is obligated to Indemnify the
organization only to the extent expressly
provided in the award.
19. interest. funis reis.rg, and in: estrum':
mr..agcment costs.
a. Caste incurred for interest on burrowed
capital or temporary use of endowment
funds. however represented. are unallowable.
b. Costs of organized fund raising.
including financial campaigns. ••n.towment
droves. solicitation of gifts and t 1y,I„sts,and
similar expenses incurred aolrly to raise
capital or obtain contribution are
unallowable.
c. Costa of'nvcstment .:nuns -I and staff
and similar expenses incurred -.Arty to
enhance income frum .nvi t.cents are
unallowable.
d. Fund r,'.sirg and III'. 1••tniant ar•Ivn:e.s
shall be alcaa'rd ac ai prr.prate i.-+ 01
indirect costs under :re .,or I :.ons described
In paragraph P of Alt'. hr... nt A
20. Labor rei.u.. •s dos,oc..: xd in
tum'..inine s. usfact.: r a;.ons bel%•. eon
the orgaa'zatIun and oa om, i,:yees..r..:coir.
ccs's of labor ma:. I„ c'acnl ..nmL.: n••rs.
employee publicatrons. and . 1 ...? re.ated
acivmes are allowable.
. • 21. Losses on other awards. Any excess of
costs over income on any award is
unallowable as ■ cost of any other award
This includes. but is not limited to. the
organization's conmbutrd porion by reason
of cosi sharing agreements or any
underecovenes through negotiamnn of lump
autos fur. or ceilings on. Indirect coals.
• 22. Maintenance and repair cosi^. Casts
"incurred for necessary maintenance. rpair.
or upkeep of buildings and equipment
(including Goverment property unless
otherwise provided for) which neither add to
the permanent value of the property nor
appreciably prolong its intended life. but
keep it in an efficient operating condition. are
allowable. Costa incurred for impmvements
which add to the permanent value of the
buildings and equipment or appreciably
prolong their intended life shall be treated as
capital expenditures (see paragraph 13).
• 23. Materials and supplies. The costs of
materials and supplies necessary to carry out
an award are allowable. Such costs should be
charged al their actual poen after deducting
all cash discounts. trade discounts. rebates.
and allowances received by the orgamznuon.
Withdrawals from general stores or
stockrooms should be charged at cast under
any recognized method of pricing
consistently applied. Incoming transrnnation
charges may be a proper part of material
cos:. Materials and suppler, charged as s
direct cost should include only the materials
and supplies actually used for the
performance of the contract or grant. and due
credit should be given for any excess
materials or supplies retained. or returned to
vendors.
• 24. Meetings. conferences.
a. Crab associated with the conduct of
meetings. and conferences. and include the
cost of renting facilities. meals. speakers'
fees. and the like. But see paragraph 12.
Entertainment costs. and paragraph a
Participant support costs.
h. To the extent that these costs are
identifiable with a particular cost objective.
they should be charged to that objective (See
paragraph B. of Attachment A.) These crests
ate allowable provided that they meet she
generul tests of allowable. shown in
Attachment A tc this Circular.
c. Costs of meetings and conferences held
to conduct the general administration of the
organization are allowable.
• 25. Memberships. subscriptions, and
professional activity casts.
a. Costs of the organizations membership
in civic. business. technical and professional
organizations are allowable.
b. Costs of the organization's subs notions
to civic. businasa.•professional. and technical
periodicals are allowable.
c Costs of attendance a' meetings and
conferences. sponsored by others when the
prrnary p,irpose is the d: •semini:ion sf
'^•4..iical inform&ton. are sllowal.le T:. .
In !•,Jas casts of meals. era +sporta'n.n. and
other 'tams mc:dental to such aitendd•.ce.
• nrxornzaaon cos(s. Experdi I . Stich
as urrorpera'ton fees. broil; ri it's. (res 1n
pi.:mrters. oreasaers or maaagc.c,•n:
cunsoltants, attorneys. aceouc!:`n•; .'r
in. '.,anent Luuns^irr•cob'ler cr n t
ear; Ioy;. s of the organization. in rnnnrruon
will, ast..hlishmenl or reorganization of an
ory nizatior.. are unallowable except with
prior - 4.:nval of the awardi.ig agency.
• 2o tri : rr.n•c. Bare pay sl.: ft. and
♦, 1. 1, � _ y111 _ I I .1 e..u. .iJ,l:d 1 _ n11. 1 1111 1.'1
I'll .� 1pn 1,11111k% •,I J11. ,..1.1.11111.11.11 I,.,"1u_ .u,r_1.1ph -'I 0n14 _^ .4
Page 150 • Tab 1100
.t. I`. _. 1
February 1985
•
17:1d•1•ti, PI on 'mens Premiums for asrrhmr.
t'II .1 way shJis. pull atultiahift work ore
o L.+w.ddr •poly with the prier dppru,.d of the
avid -ding agency cxt.epl:
a. When accessary to cope with
cr.ic encses. such as (hose trsultmg frum
m . o .'s, natural disasters. breakdowns of
meinTcnd or occasional operational
h.+t'Ic^rL!.s of a sporadic nature.
h When employees are performing ouhretu
ft.nctiona such as administration.
maintenance, or accounting.
c. In the performance of tests. Iabiratury
procedures. or other similar operations which
are coi,I.nuous in nature and cannot
reaacridLiy be snterrapled or uthcrw,sr
d Whir. !owes overall cost lis the
Co•ierc:nrnt will result.
• 28. Puy c harycs in professional lourna's
Page charges for professional journal
publications are allowable as a necessary
part of research costs where:
a. the res,. sruh papers report work
sayported say the Cos cement: and
b. Ilse 3.a,ges are levied impartially on all
restart k papers published by the journal.
whe:het rat nal by Governmenl.sponscred
dulhnrs.
• 29. Pcrtk fount rapport costs Pas: icipant
support costs are direct costs for items such
as stipends or subsistence allowances. travel
allowances and registration fees paid to or
on behalf of participants or trainees (but not
employees) in connection with meetings,
conferences. symposia. or training projects.
these costs are allowable with the prior
approval of the awarding agency.
• 30. t'u:..: t costs.
a. (cats c: (t) preparing disclosures.
reports. and other documents required by the
• ..rd awl of searching the art to the extend
nes--..etsiry to make such disclosures. (ii)
prep.Iring documents and any nther patent
cots in connection with the filing and
prosecution of a United states patent
app'irst.rn where title or royalty -free license
.s required by the Government to be
con.eyed to the Government. and (iii) general
c.cr.a!i.., services relating to patent and
ci,s ngbl nasi Ilea. such as advice on picot
ar.l 'spa -.eht laws. regulations. clauses. and
en'pr yrs agreen.erts are allowshle (hid ere
p 34).
t; Cost of me -paring dile ',nitres repo-ts.
.n,d other documents and of searching the art
• t1..• e.revl necessary to make di•rlosbres.
• nut iry..:red by the award. are
n.1Jowahle. Costs in connection with 01
and pruscuiting 1ny foreign patent
•rp„ h..ation. or (ii; any United Stats I•a'rnl
5. ,!:c. ti -a, where the awa:d dors not
Ivy ...0 cun.tyng title ars royally free
' the Go: erntert. are unallnwa'' ;
1c.' ice paragraph 431,
• 71 Pension pines. See paragraph a g
• 32 Mart sr. criIy rose. Necessary
e'r:'nses incurred to comply with
Gc.er.,nent security requirements or for
facilases pioteclion. including wages.
cI .Sa rns. and equipment ::f personnel are
u::..,...bk
• 33. Prenwnrd carts. Preaward costs are
those Inc_red prior to the effective dale of
the award directly pursuant to the
Single Audit Information Service
1
•
•
neeotiebon end in anticipation of the award
where such costs as necessary to comply with
;he proposed delivery schedule or period of
performance. Such cosonly
to :he extent that they would have been
ailowable if incurred after the date of the
ewerd and only with the written approval of
the awarding agency.
• Ja Professional service costs.
a Costs of professional and consultant
ser vices rendered by persons who are
numbers of a particular profession or possess
a special skill. and who are not officer or
employees of the organization, are allowable.
cabled to b. en and d. of this paragraph when
reasonable in relation to the services
rendered and when not contingent upon
recovery of the costs from the Government.
b (n determine the allowability of costs in
a particular case. nu single factor or any
special combination of factors is necessarily
determinative. However. the following
factors are relevant:
11) the nature and scope of the service
muttered in relation to the service required.
(21 The necessity of contracting for the
service. considenng the organization's
capability in the particular area.
(:q The past pattern of such costs.
particularly in the year' prior to Government
awards.
14) The impact of Government awards on
the organization's business (i.e.. what new
problems have arisen).
(51 Whether the proportion of Government
work to the organization's total business is
such as to influence the organization in favor
of incurring the cost. particularly where the
services tendered are not of a continuing
nature and have little relationship :o work
under Government grants and contracts.
(8) Whether the service can be performed
more economically by direct employment
lather than contracting.
(7; The qualifications of the individual or
concern rendering the service and the
custmmary fens charged. especially an run-
Covemment awards.
(Bi Adegaary of the conte ctual agreement
for the service Ie g.. devil -moon of the service.
estimate of time required. rate of
compensation. and termination provisions)
c In addition to the factors in paragraph b
abare reamer fees to the allowable must be
srppnred by evidence of bona fide services
,.s a:14V.• or rendered.
Cosi d I.gal. a,;counting. and consulting
I. es and related costs incurred in
or ...m with defense of antitrust auril
aial the pru-eoution of claims against the
C, . wire r..i. are ,ua1'owable. Costs u( legal.
a, inning e7.1 run i,,:mg set v,rc% end
re6ded . usts incar ed ni conr,•rJion with
pe'., o r . g•mc nt ':hgn:ion. o -gin: za tion
.t.1.! r:.o. gr•'td lion are unallowable unless
pr,•v,ded for In :he award (hut see
1 • •
.
. Iph 77.,)
.75 1'..f'v and asses on drrpasrfnm'.t
,!spa's Utile erc"er'y ter .Flier capitol.:.:,eri al.,;wable. Special arrangement and
a. (1) (:ams and luau••':0 sale. retirement ..: a'ion costs incurred specifically for the
or eh(' of J ;,rt..: able property pr.gert are allowable with the prior approval
.hi:ll ir irrb?ed in Ilia y.'ar Inv h.ch they o; the awarding agency
e_..,r ,s . red'.'.a or charges to cost a ouping(91 • iv. Reconversion costs. Costs incurred in
in which the depreciation applicable to such the restoration or rehabilitation of the
property was included. The amount of the organization's facilities to approximately the
h' ..i n, a 1 11101‘111... p.i . .qa :1 ..n 4 11 1.. P.,_,
gain or loo to be included as a credit or
charge to the appropriate cost grouping(s)
shall be the difference between the amount
realized on the property and the
undepreciated basis of the property.
(2; Gains and losses on the disposition of
depreciable property shall not be recognized
as a separate credit or charge under the
fnilowing conditions.
ia) The gain or loss is processed through a
depreciation reserve account and is reflected
is the depreciation allowable under
paragraph 9.
(b) The property is given in exchange as
part of the purchase price of a similar item
and the gain or loss is taken into account in
determining the depreciation cost basis of the
new item.
(c) A on result' from the failure to
maintain permissible insurance. except as
otherwise provided in paragraph 18.a.(3).
(dl Compensation for the use of the
property was provided through use
allowances in lieu of depreciation in
accordance with paragraph 9.
(e) Gains and losses arising from mass or
extraordinary sales. retirements. or other
dispositions shall be considered on a case.
by -care basis.
h. Gams or losses of any nature arising
from the sale or exchange of property other
than the property covered in paragraph a.
above shall be excluded in computing award'
costa.
• 78. Public information service costs.
a. Public information service costs includle
the cost associated with pamphlets. news ,
releases. and other forms of information
services. Such costs are normally incurred to:
(1) Infirm or instruct individuals. groups. or
the general public.
(21 Interest individuals or groups in
perticipating in a ser. ice program of the
oixanization.
(3) Disseminate the results of sponsored
arid nonsponsored activities.
h. Public information service costs are
allowable as direct costs with the prior
approval of the awarding agency. Such costs
are s:nallowable as indirect costs,
• 17. Publirotion and pr ming costs.
a. Publication costs include the costs of
printing (including the processes of
composition. plate -making, press work.
binding, end the end products produced by
much processes). distribution. promotion.
;neimq. and general handling.
1, *'herr casts are not ,dentifiable with a
r 1rir ,dor c.,41 obtw: t. ve th.' y should be
allocated as ird'rect rases to all benefiting
a .tirIt' s of the organization.
c. Pu bliranun and printing costs are
urailowabie as direct costs extent with the
p: i.'r approval of the awarding agency.
d Thr cosi of p:ig• cl srges in journals is
addressed paragraph 28.
• 38 Reurrongement and olterotion costs.
t. sIs •r. urred for ordinary or normal
rearrangement and alteration of facilities are
c Thompson Publishing Group. Inc.
February 1985
•1109
same condition existing Immediately pnor to
commencement of Government swards. fair
wear and tear excepted. are allowable.
• 40. Recruiting costa. The following
recruiting costs an allowable: east of "help
wanted" advertising. operating costs of an
employment office. casts of operating an
educational testing progrsm. travel expense,
including food and lodging of employees
while engaged in recruiting personnel. travel
costs of applicants for interviews for
prospective employment. and relocation costs
incurred incident to recruitment of new
employees (see psngra ph 41c). Where the
organization uses employment agencies.
costs not in excess of standard commercial
rates for such servlcas are allowable.
• 41. Refocntion costs.
a. Relocation con are costs incident to the
permanent change of duty assignment (for an
indefinite period or for • stated penod of not
less than 12 months) of an existing employee
or upon recruitment of a new employee.
Relocation costs art allowsble. subject to the
limitation described in paragraphs b. c. and d.
below. provided that:
(1) The move is for the benefit of the
employer.
(2) Reimbursement to the employee is in
accordance with an established written
policy consistently followed by the employer.
(])Tete reimbursement does not exceed the
employee's actual (or reasonably estimated )
expenses.
b. Allowable relocation costs for current
employees are limited to the following:
(1) The costs of transportation of the
employee, members of his immediate family
and S household. and personal effects to the
new location.
(2) The costs of finding a new home. such
as advance trips by employees and spouses
to locale living quarters and temporary
lodging during the transition period, up to ■
maximum period of 30 days. including
advance trip time.
(3) Closing costs, such as brokerage. legal.
and appraisal fees. incident to the dispos tion
of the employee's former home. These costs.
together with those deiaibed in Is) below,
are limned to per cent of the sales price of
the eaiployce'a former home.
(4) The continuing costs of ownership of
the vacant former home after the settlement
or lease date of the employee's new
permanent home. such as maintenance of
buildings and grounds (exclusive of fixing up
expenses). utilities. taxes. and property
insurance.
(5) Other necessary and reasonable
expenses normally incident to relocation.
such as the costs of cancelling an unexpired
lease. disconnecting and reinstalling
household appliances. and purchasing
insurunce against lou of or damages to
personal property. The cost of cancelling an
unexpired lease is limited to three times the
monthly rental.
c. Allowable relocation costs for new
employees are limited to those described in
(1) and (2) of paragraph b. above. When
relocation costs incurred incident to the
recruitment of new employees have been
allowed either u a direct or indirect cost and
the employee resigns for reasons within his
Tab 1100 • Page 151
41109
control within 12 months after hire. the
organization shall refund or credit the
Government for us share of the cost.
I luwever. the costs of travel to an overseas
lunation shall be considered travel costa to
accordance wiih paragraph 50 and not
relocation costs for the purpose of this
paragraph if dependents are not permitted at
the location for any reason and the costs do
not ,dude coats of transporting household
goods.
d. The following cuts related to relocation
are unallowable:
(1) Feu and other costs associated with
acquiring a new home.
(21 A loss on the sale of a former home.
131 Co. t:nuing mortgage principal and
.merest payments on a home being sold.
(4) Income taxes pad by an employee
related to reimbursed relocation costs.
' 42. Renal costs.
a. Subject to the limitations described in
p.irnigraphs b. through d. of this paragraph.
rental casts are aliowable to the extent that
the rates are reasonable in light of such
factuis as: rental costs of comparable
property. if arty: market conditions in the
area: alternatives available: and the type. life
expectancy. condition and value of the
property leased.
b. Rental costs under sale and leaseback
arrangements are allowable only up to the
amount that would be allowed had the
organization continued to own the property.
c. Rental costs under lass -than -length
leases are allowable only up to the amount
that would be allowed had title to the
property vested in the organization. For thio
purpose. a less -than -arms -length lease is one
under which one party !o the lease agreement
is able to c.aitrol or substantially influence
the actions of the other. Such leases include.
but are not Limited to those between (i)
divisions of an organization: (ii) organize tions
under common control through common
mficers. directors. or members: and (iii) an
organization and a director. trustee. officer.
or key employee of the nrganization or his
immediate family either directly or through
corporations. trusts. or similar arrangements
in which they hold a controlling interest.
d. Rental casts under leases which create ■
material equity in the leased property are
stowable only up to the eine,:: that would
he allowed had the organization put chased
the property on the date the lease agreement
was executed: e.g.. depreciation or use
allowances, maintenance. taxes. insurance
but excluding interest expense and other
unallowable costs. For this purpose. ■
material equity in the property exists if the
lease in noncancelable or is cancelable only
upon the occurrence of some remote
contingency and has one or more of the
following characteristics:
(t) The organization has the right to
purchase the property for a price which at the
beg'nnmg of the lease appears to be
substantially less than the probable fair
market value at the time it us permitted to
purchase the property (commonly called a
lease with a bargain purchase option):
(21 Title to the property passes to tha
organization el some time during or after the
lease period:
131 The term of the lease (initial term plus
I'.i.._ .I,.. meo. t.d du, i„ aJ.hu, n, ..I n.v.
Page 152 • Tab 1100
periods covered by bargain renewal options.
if any) is equal to 75 per cent or more of the
economic life of the leased property: i e.. the
pr Lod the property is expected to be
et onumically usable by one or more users.
•43. Royalties and other costs for use of
parents and copyrights.
a. Royalties on a patent or copyright or
amortization of the cost of acquiring by
purchase a copyright. patent. or rights
(hereto. necessary for the proper performance
of the award are allowable unless:
(11 The Government has a license or the
right to free use of the patent or copyright.
(21 The patent or copyright has been
adjudicated to be invalid. or has been
administratively determined to be invalid.
(3) The patent or copyright is considered to
he unenforceable.
[4) The patent or copyright is expired.
b. Special care should be exercised in
determining reasonableness where the
royalties may have been arrived at as a result
of less then arm's length bargaining e.g.:
(11 Royalties paid to persons, including
corporations. affiliated with the organization.
(21 Royalties paid to unaffiliated parties.
including corpo!ations, under an agreement
entered into in contemplation that a
Government award would be made.
(3) Royalties paid under an agreement
entered into after an award is made to an
organization.
c. In any case involving a patent or
copyright formerly owned by the
organization. the amount of royalty allowed
should not exceed the cost which would have
been allowed had the organization retained
title thereto.
• 44. Severance pay.
a. Severance pay. also commonly referred
to as dismissal wages. is a payment in
addition to regular salaries and wages. by
organizations to workers whose employment
is being terminated. Costs of severance pay
are allowable only to the extent that in each
case. it is required by (i) law, (ii) employer-
employee agreement, lid) established policy
that constitutes. in effect. an implied
agreement on the organization's part. or (iv)
circumstances of the particular employment.
b. Costs of severance payments are divided
into two categories as follows:
(1) Actual normal trunover severance
payments shall be allocated to all activities:
or. where the organization provides for a
reserve for norpial severances such method
will be acceptable if the charge to current
operations is reasonable in light of payments
actually made fur normal severances over a
representative past period. and if amounts
charged are allocated to all activities of the
organization.
(2) Abnormal or mass severance pay is of
such a conjectural nature that measurement
of costs by means of an accrual will not
achieve equity to both parties. Thus. accruals
for this purpose ere not allowable. However.
the Government recognizes its obligation to
participate to the extent of Its fair share. in
any specific payment. Thus. allowability will
be considered on a case-by-case basis in the
event of occurrence.
• 45. Specialized service facilities.
a. The costs of services provided by highly
.1110\ute p.u,i_i.gdi
11111 » 1.. h.1[. ISS
February 1985
1
complex or specialized facilities operated by
the organization. such as electronic
computers and wind tunnels. are allowable
provided the charges for the services meet
the conditions of either b. or c. of this
paragraph and. in addition. take into account
any nems of income or Federal financing that
mollify as applicable credits under paragraph
A 5. of Attachment A.
b. The coals of such services. when
material. must be charged directly to
applicable awards based un actual usage of
the services on the basis of a schedule of
rates or established methodology that (i) does
not discriminate against federally supported
ai.tivrties of the organization. including usage
by the organization for internal purposes. and
fill is designed to recover only the aggregate
costs of the services. The costs of each
service shall consist normally of both its
direct costs and its allocable share of all
indirect costs. Advance agreements pursuant
to paragraph A.8. of Attachment A are
particularly important in this situation.
c. Where the cost. incurred for a service
are not material. they may be allocated as
Indirect costs.
• 46. Twits.
a. In general. taxes which the organiedtion
s required to pay and whi::h are paid or
accrued to accordance with generally
accepted accounting principles. and
payments made to local governments in lieu
of taxes which are commensurate with the
local government services received are
allowable. except for (i) taxes from which
exemptions are available to the organizatior
directly or which are available to the
organization based on an exemption afforded
the Government and in the latter case when
the awarding agency makes available the
necessary exemption certificates. (it) special
assessments on land which represent capital
improvements, and (iii) Federal income taxes.
b. Any refund of taxes. and any payment to
the organization of Interest thereon. which
were allowed as award costs. wt be
credited either as a cost reduction or cash
refund, as appropriate. to the Government.
• 47. Termination costs. Termination of
awards generally give rise to the incurrence
of costs. or the need for special treatment or
coats. which would not have arisen had the
award not been terminated. Cost print pies
covering these items are set forth below.
They are to be used in conjunction with the
other provisions of this Circular in
termination situations.
a. Common items. The cost of items
reasonably usable on the organization' other
work shall not be allowable unless the
organization submits evidence that it would
not retain such items al cost without
sustaining a loss. In deciding whether such
items are reasonably usable on other work of
the organization. the awarding agency should
consider the organization' plans and orders
for current and scheduled activity.
Contemporaneous purchases of common
items by the organization shall be regarded
as evidence that such items are reasonably
usable on the organization's other work. Any
acceptance of common items as allocable to
the terminated portion of the award shall be
limited to the extent that the quantities of
Single Audit Information Service
•
•
•
4
•
such items on hand. in transit. and on order
are in excess of the reasonable quantitative
regwrements of other work
b. Casts continuing after termination If in
a particular use. despite all reasonable
efforts by the organsaboa. certain costs
cannot be discontinued immediately after the
effective due of termtaabon. such costs are
generally allowable with= the Limitations set
forth in this Circular. except that any such
costs continuum atter taemmatian dna to the
negligent or willful faslun of the organization
to discontinue such costs shall be
unallowable.
C. Loss of useful value. Lose of useful value
of speaal tooling. machinery and Wwpment
we -h was not charged to the award as a
ca_ :al expenditure is generally allowable if.
Such speaal tooling, machinery. or
eq .‘ment is not reasonably capable of use in
th -ler work of the orgamzanaa.
The merest of the Government is
pr •'ted by transfer of title orrt-y other
rev 15 deemed appropnate by the awarding
e.. .0
.1 Rental costs. Rental costs under
ter <ptred leases are generally allowable
w ire clearly shown to have been
✓ sonably necessary for the performance of
- terminated award less the residual vale
• vuch :eases. if til the amount of such rental
t:aimed don not exceed the reasonable use
va;.e o' the property leased for the period of
th.• aw. rd and such bother period as may be
re : L .ble, and lid the organization makes
ad reasonable efforts to teraunate. assign.
saute. or otherwise reduce the cost of such
leas. Then also may be includd the cost of
alterations of such leased property. provided
such alterations were necessary for the
performance of the award and of reasonable
renor:non regwred by the provisions of the
lease.
e. Settlement expenses. Settlement
expenses including the following an
generally allowable:
(11 Accounting. legal dental. and similar
costs reasonably necessary for
lal The preparation and prennutian to
awarding agency of settlement claims and
supportsng data with respect to the
terminated porion of the award unless the
termination a for default ;See paragraph 4.a
of Attachment L. OMB Circular No. A—tiR
and
!b) The termination and settlement of
subawaada.
(2) Reasonable coats for the storage.
transportation. protection. and disposition of
property provided by the Government or
acquired or produced for the avant except
when grantees an nsmbuned for disposals
at • predetermined amount in accordance
with Attachment N of OMB Circular A-110.
(3) Indirect costs rested to salaries and
wages incurred as settlement expenses in
subparagraphs (1) and (2) of this paragraph.
Normally. such udinct costs shall be tinned
to fnnge benefits. occupancy cost and
immediate supervision.
L Claims under subawatds. Claims under
subawards. including the allocable portion of
claims which an common to the award and
to other work of the organisation are
pneraUy allowable. An appropriate shah of
Thompson Publishing Group, Inc
•
the organization's indirect expense may be
allocated to the amount of settlements with
subcontnctorlsubgnnteem provided that the
amount allocated is otherwise consistent
with the basic guidelines contained in
Attachment A. The indirect expense so
allocated shall exclude the same and similar
costs claimed directly or indirectly as
settlement expenses.
• ae. Training and education costa
a. Coats of pnparauon and maintenance of
a program of instruction including but riot
Umsted to os.-tha-job. classroom. and
apprmtlraehip trumng. designed to increase
the vocational effectiveness of employee&
including training materials textbooks
Wanes or wages of trainers including
overtime compensation which aught arise
therefrom). and til salanes of the director of
training and staff when the training program
is conducted by the organuaboo: or (Li)
tuition and fees when the training ia in an
institution not opened by the orpmxauoo.
are allowable.
b. Coats of pan -elms education. at an
undergraduate or postgraduate cadegs level
including that provided at the oz nszatloni s
own facilities. are allowable only when the
coupe or degree pursued is relative to the
field to which the employes is now working
or may reasonably be expected to work. and
are Limited to:
(1) Training material&
(2) Textbooks
131 Fees chops by the educational 1
institution.
(4) Tuition charged by the educational
institution. or in lieu of tuition. instructors'
salaries and the related share of indirect
costa of the dursnonal institution to the
extent that the sum thereof ia not in excess of
the tuition which would have ben paid to the
participating educational institution.
(51 Saianes and related costs of instructors
who are employees of the organsrauaa
(6) Straight -oma compensation of each
employee for time spent attending classes
during working hours not in excess of 150
hours per year and only to the extent that
circumstances do not permit the operation of
classes or attendance at classes after regular
working hours: atheneum such compensation
is unallowable.
c. Cuss of tuition. fee& training materials.
and textbooks (but not subsistence, salary. or
any other emoluments) in canaecaco with
full -tame ducama including that provided at
the organization's awn facilities. at a
postgraduate (but not undergraduate) college
level. are allowable only when the wane or
degree pursued is relaid to the field in which
the employe as now working or may
reasonably be expected to work and only
when the costs receive the poor approval of
the awarding agency. Such costa are Umitd
to the costs attnbutabte to a total pend not
to exceed one school year for each employee
so trained In unusual cases the pend may
be extended
d. Coats of attendance of up to le weekth
per employe per year at specialized
programa specifically designed to enhance
the effectiveness of executives or manages
or to prepare employees for such pinions
an allowable. Such costs include enrollment
February 1985
• '11105
fen. tnwng matenal& textbooku and
related charge& employees salaries.
subsistence. and travel. Costa allowable
under thus paragraph do not iarlude those for
courses that are pen of a dapeeonentd
cunn.lunt which an allowable only to the
extent set forth in b. and c. above.
e. Maintenance expense. and normal
depreciation or fav natal on facilities
owned or leased by the organization for
taming purposes are allowable to the extent
set forth in paragraphs 9. 22. and at
1. Contnbutlona or donations to
educational or truant madmtlona. including
he donation of faallbei or other propene&
s 1d scholarships or fellowships. are
unallowable.
g. Training and education costa in excess of
those otherwise allowable under paragraphs
b and e. of this pangnph may be allowed
w:th pnor approval of the awarding agency.
To be considered for approval. the
organization must dmmonatnte that such
costs are consistently incurred pursuant to an
established training and eduunon progress
and that the coupe or degree pursued is
relative to the field in which the employee is
now working or may reasonably be expected
to work.
• 49. Transportation costa Transportation
costs include freight expos& cartage. and
postage chargee relating either to goods
p'trchawd. in process. or delivered. lose
costa us allowable. When such coin can
readily be identified with the items involved.
they may be directly charged as
tnnsportadoa costs or added to the can el
such items (see paragraph 23). When
Identification with the materials received
cannot readily be made. transportation costs
may be charged to the appropriate indirect
cost accounts if the organization follows a
consistent equitable procedure in this
respect.
• 50. Frani costs.
a. Travel costs an the expenses for
transportation. Wpm. subsistence. and
related items incurred by employees who an
in travel sta:ua on official business of the
organization. Travel cons are allowable
subject to paragraphs b. through e. below.
when they an directly attributable to specific
work under an award or are Incurred in the
normal course of adminutndon of the
organization.
b. Such costs may be charged on an acetal
basis. on a per diem or mileage basis in Ura
of actual costs incurred or on a combination
of the two. provided the method used multi
in charges consistent with those normally
allowed by the organization in its regular
operetlons.
c. The difference in cost between first-class
air accommededons and less then first-class
air accommodatlau is unallowable except
when lees than first-ciasn air
accoounodatWoa are not reasonably
available to meet necessary mission
requirements. such em when lase than Best•
class accommodations would (i) require
circuitous routing. (II) require travel during
unreasonable San. (IU) greatly increase the
duration of the fight (iv) mult is additional
costs which would offset the transportation
saving& or (v) oflw acnommodadoaa which
Tab Tab 1100 • Pagr 153
*1109
are not reasonably adequate foe the medical
needs of the traveler.
d. Necessary and reasonable costa 01
family movements and personnel movemaah
of a special or moo nature an allowable.
pursuant to paragraphs 40 and 41. subjsa to
allocation on the basis of work or time period
ber.efited when appropnate. Advanta
agreements are particularly important
e Dtrect charges for foreign travel costs are
atiowabie only when the travel has received
pnor approval of the awarding agency Each
separate foreign trip must be approved -For
purposes of has provision. foreign travel is
defined as any travel outside of Canada and
the United States and its temtones and
possessions. However. for an orrnizauon
located in foreign countries. tha term "foreign
!ravel" means travel outside that country.
(Circular No. A-1221
Attachment C
Nonprofit Organizations not Subject to this
C:mdar
Aerospace Corporation El Segundo.
California
Argonne Universities Association. Chicago.
Illmou
Associated Universities. Incorporated
Washington. D.0
Associated Uruvernties for Research and
Astronomy. Tucson .Arizona
Atomic Casualty Commission. Washington.
0.0
Baitelle Memorial Institute. Headquartered In
Columbus. Ohio
Brookhaven National Laboratory. Upton.
New York
Center for Enenry and Environmental
Research iCEER). (Umvenity of Puerto
Rica)
Carnmoowesith of Puerto Rico. Charles Stark
Draper Laboratory. Incorporated
Cambndge. Massachusetts. Comparanve
Animal Research Laboratory (CARL)
(Unit envy of Tennessee). Oakridge.
Tennessee
Environmental Institute of Michigan Ann
A, tar Michigan
Harford Environmental Health Foundation.
Richland. Washington
UT Research (nsntute. Chicago. Illinois
Institute for Defense Analysis. Arlington
Virginia
Institute of Cam Technology. Chicago. Illinois
Midwest Research Institute. Headquartered
m Kansas City. Missoun
Mitre Corporation. Bedford Massachusetts
Montana Energy Research and Development
Institute. Inc.. (MEADI). Butte. Montana
National Radiological Astronomy
Observatory. Crean Bank West Virginia
Oakridge Assooated Universities. Oakridge.
Tennessee
Protect Management Corporation. Oakridge
Tennessee
Rand Corporation. Santa Monica. California
Research Triangle Institute. Research
Tnangle Park North Carolina
Riverside Research Institute. New York. New
York
Sandia Corporation. Albuquerque. New
Mexico
Page 154 • Tab 1100
Southern Research Institute. Birmingham
Alabama
Southwest Reeeatrh Institute. Sc Anti:Ct.
Taxan
SRI Internadonai Menlo Park. California
Syracuse Research Corporation. Syncuses
Nam York
Uwvernbes Research Association.
Incorporated (National Acceiendoa Lab).
Argonne. Illinois
Universities Corporation for Atmospheric
Research Boulder. Colorado
Nonprofit Insurance Companies such as Blue
Cross and Blue Shield Organwtions
Other nonprofit organizations as negotiated
with awarding agencies.
int ase sacra nue 7 -7 -la Lit ani
eaaata COM 3It 4t- r
Editorial Corrections to
OMB A-122
OFFICE OF MANAGEMENT AND
B UDGET
Circular A-122, Cost Prh cipin for
Nonprofit Orga izations' ; Correction
AGENCY: Office of Management and
Budget.
AC'O/e Final policy correction.
SUMMARY This notice corrects errors in
the printing of cost principles for
nonprofit organizations. (45 FR 46022.
July 8. 1980).
FOR FURTHER INFORMATION CONTACT.
Palmer Marcantonio. Financial
Management Branch, Office of
Management and Budget. Washington.
D C. 20503. (202) 395-47'3
• Page 46022. column 2 the second
Paragraph 1. change Paragraph 5
"Compensation for Personnel Serviced"
to Paragraph 6.
• Page 46022. column 1 the second
Paragraph 2. change Paragraph 6
'-Contingencies' to Paragraph 7.
• Page 46022. column 3:
Paragraph 4. change Paragraph 31.
"Equipment and Other Capital
Expenditufes" to Paragraph 13.
• Paragraph 5. change Paragraph 26
"Meetings" to Paragraph 24.
• Paragraph 6. change Paragraph Z7.
"Organization Costs" to Paragraph 26.
• Paragraph 7. change Paragraph 30
"Page charges in Professional Journals"
to Paragraph 28.
• Paragraph 8. change paragraph 37
"Public Information Service Costs" to
Paragraph 36.
• Paragraph 9. change Paragraph 43
"Rental Costs" to Paraa`ph 42.
• Paragraph 9a: in t fourth line. add
"up" between the wprds "only" and
"to": in the sixth line change "they" to
1r'
• Paregra¢h 10. change Paragraph 51
"Travel CSsts" to Paragraph 50.
February 1985
• 1'ugr 46024. n,tuniu .1 Paragr.iph
41x1(21 after "benefits receicid' add ".
• Page 46025. column 1 Paragraph B3.
change the reference "Paragraph 21 of
Attachment B" to "Paragraph 19 of
Attachment B."
• Page 46026. column 1 Paragraph
4a in. in the sixth Zine. change "direct
cost.' to "direct costs."
• Page 46026. column 2 Paragraph
Ele. change "establishment of rate to
establishment of a final rate."
• Page 46026. column 3 Paragraph
E2b. in the third line add the following
after "a Federal agency shall" -"submit
its initial indirect cost proposal
immediately "
• Page 462" ro/umn J Pa flier.. ph
(3)(a). change -*workmen s
compensation" to "wurkerv.
compensation."
• Page 46028. column 1 Paragraph
6f3(b). (the second line of column tl
change "Workmen's compensation to
workers' compensation.'
• Page 460.70 column 3. paragraph
24h.. the sixth line. change "allowable"
to "allowability".
Daniel F. Mann,
Budget and Management Officer
1 IFR Da. lir Flied 3-16-01 au •tut
RLLMm CODE rt i.e,-d
Circular A-122, "Cost Principles for
Nonprofit Organizations"
CI rrec11Qn
In FR Doc. 81-20270. appearing et
page 46022 in the issue of Tuesday July
a. 1980. the following changes should be
made:
1. On page 46024. column three. the
second sentence in paragraph A.5.b.
should reed. "Specifically. the concept
of netting such credit items against
related expenditures should be applied
by the organization in determining the
rates or amounts to be charged to
Federal awards for services rendered
whenever the facilities or other
resources used in providing such
services have been financed directly. in
whole or to part. by Federal funds."
2. On page 46024. column three. the
second complete sentence in paragraph
A.8. should read. 'This is particularly
true in connection with organizations
that receive a preponderance of their
support from Federal agencies."
3. On page 46025. column one.
paragraph 8.2. should read. "2. Any
direct cost of a minor amount may be
treated as an indirect cost for reasons of
practicality where the accounting
treatment for such cost is consistently
applied to all final cost objectives."
Single Audit Information Service
1
•
•
4. On page 46025. column one.
paragraph B.4.f. should reed. " f.
Administration of group benefits on
behalf of members or clients including
life and hospital insurance. annuity or
retirement plans. financial aid. etc."
5. On page 46025. column two. the first
sentence in paragraph D.1.e. should
read. 'Tire base penod 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."
6. On page 443026. column one. the
second sentence in paragraph D.3.d
should reed. The costs in the common
pool shall then be distributed to
individual awards included in that
function by use of a single indirect cost
rate."
7. On page 46026. column one. the first
sentence in paragraph D.3.e. should
read.' The distribution based used in
computing the indirect cost rate for each
function may be total direct costs
(excluding capital expenditures and
other distorting items such as major
subcontracts and subgrants). direct
salaries and wages. or other base which
results in an equitable distribution."
8. On page 46026 column one. the first
and second sentences in paragraph
D.4.a. should read. "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: • •
9. On page 48026, the last sentence in
column one (extending to column two,.
in paragraph D.5. should read. "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 scientific disciplines or
technical skills involved. the
organizational arrangements used. or
any combination thereof."
10. On page 46026. column three.
paragraph E.2.i. should read, "1. To the
extent that problems are encountered
among the Federal agencies 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."
11. On page 46030. column one. the
introductory text of paragraph 16.b. and
paragraph to.b.(1) should read. "b. The
costs of idle facilities are unallowable
except to the extent that: (1) They are
necessary to meet fluctuations in
workloads: or".
12. On page 46030. column one. the
second sentence in paragraph 18.c.
•
should read.' Such costs are allowable.
provided the capacity is reasonably
anticipated to be necessary or was
originally reasonable and is not subject
to reduction or elimination by subletting,
renting. or sale. in accordance with
sound business. economics or security
practices."
13. Ort page 48031. second column.
paragraph 34.c. should read. "In addition
to the factors m paragraph b. above.
retainer fees 10 be allowable must be
supported by evidence of bone fide
services available or rendered."
saurw 000! 1105 -0r -d
*New Paragraph 821 —
"Lobbying• issued
April 27, 1984
1. Insert a new paragraph in
attachment B. as follows: "821
Lobbying'
a. Notwithstanding other provisions of
this Circular, costs associated with the
following activities are unallowable:
a.(1) Attempts to influence the
outcomes of any Federal. State, or local
election. referendum. initiative, or
similar procedure, through in kind or
cash contributions, endorsements,
publicity. or similar activity,
a.(2) Establishing. administering. 1
contributing to. or paying the expenses
of a political party. campaign. political
action committee, or other organization
established for the purpose of
influencing the outcomes of elections:
■.(3) Any attempt to influence (i) The
introduction of Federal or state
legislation or (ii) the enactment or
modification of any pending Federal or
state legislation through communication
with any member or employee of the
Congress or state legislature (including
efforts to influence State or local
officials to engage in simile lobbying
activity). or with any government
official or employee in connection with
• decision to sign or veto enrolled
legislation:
.a.(4) Any attempt to influence: (1) The
introduction of Federal or state
legislation: or (ii) the enactment or
modification of any pending Federal or
state legislation by preparing.
distributing or using publicity or
propaganda. or by urging members of
the general public or any segment
thereof to contribute to or participate in
any mass demonstration. march, rally,
fundraising drive. lobbying campaign or
letter writing or telephone campaign: or
a.(5) Legislative liaison activities.
including attendance at legislative
sessions or committee hearings,
gathering information regarding
legislation. and analyzing the effect of
• Revised paragraph c.(4) issued May 27, 1987. See Page 156.
b Thompson Publishing Group, Inc. August 1989
•
• 11109 •
legislation. when such activities are
carried on in support of or in knowing
preparation for an effort to engage in
unallowable lobbying.
b. The following activities are
excepted from the coverage of
subparagraph a:
b.(1) Providing a technical and factual
presentation of information on a topic
directly related to the performance of a
grant. contract or other agreement
through hearing testimony. statements
or letters to the Congress or a state
legislature, or subdivision, member. or
cognizant staff member thereof. in
response to a documented request
(including a Congressional Record
notice requesting testimony or
statements for the record at a regularly
scheduled hearing) made by the
recipient member. legislative body or
subdivision. ora cognizant staff member
thereof; provided such information is
readily obtainable and can be readily
put in deliverable form; and further
provided that costs under this section
for tnwL lodging or meals are
unallowable unless incurred to offer
testimony at a regularly scheduled
Congressional hearing pursuant to a
written request for such presentation
made by the Chairman or Ranking
Minority Member of the Committee or
Subcommittee conducting such hearing.
b.(2) Any lobbying made unallowable
by section a.(3) to influence State
legislation in order to directly reduce the
cost. or to avoid material impairment of
the organization's authority to perform
the grant. contract, or other agreement
b.(3) Any activity specifically
authorized by statute to be undertaken
with funds from the grant, contract. or
other agreement.
c.(1) When an organization seeks
reimbursement for indirect costs. total
lobbying costs shall be separately
identified in the indirect cost me
proposal. and thereafter treated as other
unallowable activity costs in
accordance with the procedures of
paragraph 83 of Attachment A.
c.(2) Organizations shall submit es
part of their annual indirect cost rate
proposal • certification that the
requirements and standards of this
paragraph have been complied with.
c.(3) Organizations shall maintain
adequate records to demonstrate that
the determination of costs as being
allowable or unallowable pursuant to
paragraph 821 complies w th the
requirements of this Circular.
• c.(4) Time logs, calendars. or similar
records documenting the portion of an
employee's time that is treated as an
indirect cost shall not be required for the
purposes of complying with
subparagraph c. and the absence of such
Tab 1100 • Page 155
•
11109
records which are not kept pursuant to
the discretion of the grantee or
contractor, will not serve as a basis for
disallowing claims of allowable costs by
contesting estimates of unallowable
lobbying time spent by employees
during any calendar month unless: (i)
The employee engages in lobbying. as
defined in subparagraphs a and b. more
than 25% of his compensated hours of
employment during that calendar month:
or (ii) the organization has materially
misstated allowable or unallowable
costs within the preceding five year
period.
c.(5) Agencies shall establish
procedures for resolving in advance. in
consultation with OMB, any significant
questions or disagreements concerning
the interpretation or application of
paragraph B21. Any such advance
resolution shall be binding in any
subsequent settlements. audits or
investigations with respect to that grant
or contract for purposes of
interpretation of this Circular, provided.
however. that this shall not be construed
to prevent a contractor or grantee from
contesting the lawfulness of such a
determination.
2. Renumber subsequent paragraphs
of Attachment B.
l}s bolt 46-IfLtrS ViK ILO nil
Revision to Paragraph 821 —
"Lobbyirtg," Issued
May 27, 1987
In attachment B. section B21.
"Lobbying," paragraph e(4) is revised as
follows:
c(4) Time logs, calendar, or similar
records shall not be required to be
created for purposes of complying with
this section during any particular
calendar month when (1) the employee
engages in lobbying (as defined in
paragraphs (a) and (b) above) 25 percent
or less of the employee's compensated
hours of employment during that
calendar month. and (2) within the
preceding five-year period. the
organization has not materially
misstated allowable or unallowable
costs of any nature. Including legislative
lobbying costs. When conditions (1) and
(2) above are met. organizations are not
required to establish records to support
the allowability of claimed costs in
addition to records already required or
maintained. Also, when conditions (1)
and (2) above are met, the absence of
time logs. calendars. or similar records
will not serve as a basis for disallowing
Page 156 • Tab 1100
costs by contesting estimates of
lobbying time spent by employees
during a calendar month.
lames C. Miller IR.
Director.
LFR Doc. 87-11883 Filed 5-26-87; 8.45 am)
1
•
•
August 1989 Single Audit Information Service
1
•
•
•
BOOK 2 OF 2 BOOKS
FRIDAY, JULY 30, 1976
PART 11:
•
OFFICE OF
MANAGEMENT
AND BUDGET
in
•
GRANTS AND
AGREEMENTS WITH
INSTITUTIONS OF HIGHER
EDUCATION, HOSPITALS,
AND OTHER NONPROFIT
ORGANIZATIONS
Uniform Administrative Requirements
,l2016
•
• OFFItE'OF MANAGEMENT AND
BUDGET
ICueular No. A-l)el
GRANTS AND AGREEMENTS WITH INSTI-
TUTIONS OF HIGHER EDUCATION,
HOSPITALS, AND OTHER NONPROFIT
ORGANIZATIONS
Uniform Administrative Requirements
Jute 1. 1976.
To the heads of executive departments
and establishments.
Subject: Uniform administrative re-
quirements for Brants and other agree-
ments with institutions of higher edu-
cation. hospitals. and other nonprofit
organizations
1. Purpose.—This Circular promul-
gates standards for obtaining consisten-
cy and uniformity among Federal agen-
cies in the administration of grants to.
and other agreements with. public and
private Institution of higher education.
public and private hospitals. and other
quasi -public and private nonprofit or-
ganizations. This Circular don not apply
to grants, contracts. or other agreements
between the Federal Government and
units of State or local governments
covered by Federal Management Cir-
cular 74-7.
2. effective date.—The standards in
the attachments to this Circular will be
applied as soon as practicable but not
later than January 1, 1977.
3. Supersession.—This Circular res-
cinds and replaces parts D2 and IV of
the Appendix W Federal Management
Circular 73-7, Administration of college
and university research grants.
4. Policy intent.—The uniform stand-
ards and requirements Included In tete
attachments W this Circular replace the
varying and often conflicting require-
ments that have been imposed by Fed-
eral agencies as conditions of grants and
other agreements with recipients.
5. Applicability and scope.—lixcept a
provided below. the standards promul-
gated by this Circular are applicable W
all Federal agencies. If any state ex -
primly prescribes policies or specific re-
quirements that differ from the stand-
ards provided herein. the provision of
the statute shall govern.
The provisions of the attachments of
this Circular shall be spelled to subre-
ciplents performing substantive work
under grants that are passed through or
awarded by the primary rectplemt If such
subreclplents are cganint ns de-
scribed in Paragrspb 1.
6. Definitions.
a. The term "grant" mans money or
Property provided in lieu of money paid
or furnished by the Federal Government
to recipients under programs that pro.
vide financial assistance or that provide
support or stimulation W accomplish a
publle purpose. The term "other agree-
ments" does not include contracts which
aro required W be entered into and ad-
ministered under procurement laws and
regulating. Grants end otter agree-
ments ncJude ter) technical Ydstanea
Programs. which provide services instead
of money, tib) assistance In the form of
NOTICES
general revenue sharing, )acne, loan
guarantees. or insurance,. and (e) direct
payments 01 any kind to Individuals.
b. The term "recipient" Includes the
following types of nonprofit organisa-
tions that are receiving Pedenl funds
from a Federal agency or through a
State or local government:
Public and private institutions of high-
er education: public and private hos-
Pltais; and other quasi -Public and Pri-
vate nonprofit organisations such as (bus
not limited to) community action agen-
cies. research institutes, educational se-
soclatlons. and health centers.
The term does not include foreign or
international organisations (such as
agencies of the United Nations) and
Government-owned contractor operated
faculties or research centers providing
continued support for m±aIan-oriented,
large scale Programs that are Govern-
ment-owned or controlled, or an de-
signed as federally -funded research and
development centers.
7. Requests /or exceptions.—The Omcs
of Management and Budget may grant
exceptions from the requirements of this
Circular when inceptions are not pro-
hibited under existing lawn
However. in the Interest of maximi®
uniformity, exceptions from the re-
quirements of the Circular will be per-
mitted only in unusual casae. Agencies
may apply more restrictive requirements
W a class of recipients whim approved by
the Office of Management and Budget.
S. Attachments.—The Maadai s pro-
mulgated by this Circular are set forthl
In the Attachments, which are:
Attseament A ash depositories.
Attachment H Sending and tsnnace.
Attachment C lsentr and custodial re-
quirements for records.
Attachment D Program imams.
Attachment 1 Ones sharing and matching.
Attachment T etenderds Ior financial mem
egentent systems
Attachment 0 Pmmaelel remnant require -
Matt
Attachment ft Mcnlarmg and reporting
Program pertormase.
Attachment I Payment rmqulnmenta
Attachment J Ldma et taafmh plate
Attachment S Carnett presdurut
Attachment L tlaepams and mrmrnaLen
Attachment M asadaro form for applying
for federal esesnaos.
Attachment 14 Property mmm-mrent sisnd-
ernt
Attachment 0 Premmant d eadirsa
9. Zaettdw<s for create recipients,—
Notwittstandl ng the peovWdos of pus -
graph 7 11 en applitant/rerlpimt has a
history of poor performance, is not fi-
nancially stable. or its management 3m -
tam dos not meet the standards pre-
scribed in the Circular. Federal agencies
may impose additional rents as
needed provided that such applicant/
recipient is notified In writing as to:
a. Why the additional standards are
ben, imposed:
b. what corrective action Is leaded.
Copus of such notifications shall be
sat to the Office of Management and
Budget and other agencies funding that
recipient at the same time the recipient
is notified.
10. RnPonsibtUttes—Agencies respon-
sible for administering programs that in -
mire Stunts and other agreements with
recipients shall Issue the apPraprlate
regulations necessary to implement the
Provision of this Circular. All portions
of such regulations that invnlve record-
keeping and/or reporting requirements
gut/Sect W the provisions of the Federal
RePorts Act and OMB Circular A-40
must be submitted W OMB for clearance
bdgre being Introduced into use. Upon
request all regulations and instruction_
implementing this Circular shall be
furnished W the Office of Management
and Budget. Agencies shall also dews.
nate an official W serve as the agency
representative on matters relating to the
implementation of this Circular. The
name and title of such representative
shall be furnished to the OMce of Man-
agement and Budget not later than Au-
gust 30. 1976.
11. fetgetries.—Further information
concerning this Circular may be obtained
by contracting the Financial Manage-
ment Branch. Budget Review Division.
Office of Management and Budget.
Wsshingtan, D.C. 70503. telephone 395 -
UN.
Jaen T. Lyme.
Director.
Airamtan A.—Caevtu No. A-110
sun enoaiwm
1. This attachment seta forth mandarin
gemmung the use of banks and otatr in -
moutons as dspsltarts of funds advanced
Wider grants and other agreemeate
a. kept for sltuatios dasalbed In pare-
nipes 3. 4. sed s, no Fedora sponsoring
amen shell:
a. Sequin physical segregation of uses de-
pamtorls for (vada which are provided to e
+es Ora
b. btmblIsh any Wpbulty requitement.
at cash dspsltcress for funds which ars pro-
dded ta a nmpsnt.
t A upsste baa account shall s rapine
wase sppleabte letter -of -credit agnemrnt
pewee that drawdown will be made when
the nmptas's sheen ars patented w the
bent for payment.
4. Any moneys advanced to a recipient
which as abject to We control or ngule-
tr est the United Stales or any of its omeen_
rums at employees' (public moneys es du-
rum In human amulet No. 170. 1e
alsndel) must be &psttad In a bent with
!edam Deposit Inurams Corporation
(FDIC) lamas coverage and the balance
sawn the C coverage must be cos•
leetrallyalittre&
S. Osmsawns with the atonal gosi Of
egaernag no opportunities for minority
buena arta '—plata sad sub•
nielpienI ta(a bentshell swhencouraged
to leha wnedsits Iasi
Paean by Minority group asmnen) .
arenmmn t—Cac as No. A-110
amletne mem IWSVYnf:a
1. This attachment w form bonding me
lawman regwnemena for grana sad Otter
epusaeaa with recipients. No other mod'
leg end Inessace requtnmsnta shall be tee-
the eb
parenceat. s n
oraae thea there required m
2. beep u otherwise ngwnd by Isw s
pant or other anent that moats the
aaUntar (or swhnntractag) for csn•
swuama or fhenity Improvements shall Ps"
Me tar the remplent to follow Its own m
AOerAL eraigres, VOL 41. MO. lea- AWAT. AiX 30. 1976
giiinm.ata tenon to bel ga ante. ow.
• tie feemaaafl boade. tad payment COOP was
� construction contract or sithearase n
tees 5100.000. 1v Saar cans at sa-
coetinet. efa..alog t10o.000, as Faits
spear mal aoe.Ot the bending pony em
rganaam et the grantee penal the
adorer naey hes mads • a.seeml0atlea
nee the Ooasnmas'a area is adequate*
protects& If such • detenaesns We not
been tad& the anima tqua.ments she
b• es touows:
s. A by !aerates free edea Older Man.
Wet to nnit jaw of Me bet prise.—
Ta 'in guarantee" sail acmes of $ ens
commttmeat tach es a bid bad, eartiAM
cheat. or other neotiate ant se-
cmpatring • ba as assurance that the en-
der all. upon aonptaacs at his oid. nate
tush contractual documents a m1 be n-
qutnd within the um. spscsO.t1.
0. A P.r/orndnes boa on Me pint of tM
eoatrector for 100 pennon of tea contract
price.—A ' �perforamates hoed' n one mead
ed
in connection with a contrast to .mum tal-
allmnt of all the contractors oblptma•
under such contract.
a. A pgteanf Mad on the pert o/ as boa.
erector for 100 preen of a. ot•en.t
pine.. A 'payment boar la one sand n
connection nth a contra m are pay-
ment as required by raw of all peen sup-
plying labor and material In the antra 01
the wont provided tor In the contra.
3. Whine the Federal Oanroment guaran-
tee or metasa the represent at qday
borrowed
at Ito by
the nmat the lad* e
dhiernion. m7 ream ado
gusto bonding and serrates 11 the bona
sad Insurances requirements at the ralplas
are not deemed adequate to protest Use In-
terest of the Fara/ Oawrnasot
4. The learn yanaertng spay may no
quire aqua met* bond ansage waws
the nspsat hM no comae a the be lo
needed do protect the Ooweramash renins.
0. When bins are attired n the altds-
tfons described above, the bonds she 0. ah-
tana from ompaaa bolding raraleam of
'Jit) authority a mha ..ptasums (31 CPU
Arrectimn C.—Carr"- Mo. A -I10
*onus
f. Sampans agarmaiens and to se-
tOessaW bit the Veda.l aps.ermg ages*.
• if they so desne, to -__ _ts Warm
espies to as at origin* rasOtYa.
0. The Federal spsnsesmp spa all re-
quest arms, of certain estate to as aa-
tody fres r aplmt apaaatm ea 1t
daterWaa that the reads pates long-
term retention value. Won in at to
aced duplicate tarn -haying, • Fan
spaaesalg agency may make .raagmmse
with nenlpiat organ atter sin retain an
meads tete are continuously meal tar
Joint use
T. The heed of the !Wesal yaassring sgn-
q and the Comptroller Gaon of the Wilted
testa ter say el thea duly sutbarlpM npn-
alsatiwea. she have sass to a7 gnat
boon documents. papers, and nerds ot the
natps.nst orpaaatioa and their mune-
alas to mane audits. mantas, se-
eapta and tian.enpts.
S. anlaas Dana required In W. a
Federal sponsoring agency nen re -
sanctions p
asalainnsthat utsi
limn public axes a the rads al ralprat
wf*ataas as an pertinent a a prat
or agreement apt when the Meq ten
demonstrate that such nerds mum be kept
esamensW em wan Inn ked serepeed
nam dlsaesun pant to the Ream et
Iatormatson Aet (t USC. eat) 11 the rads
had banged 4 the Fara apeman
Won
ATrionen r D. masa *0. M10
silents bream
1. Federal mematelag mama all apply
the its it see forth is thlo sasesas a
Ngarng Tsergieas tepamaam to arms
a pa.na Mae rested Is para
anemia in was or n pen Wath Pled
fames. *ngma Int fepessnm pa la-
ma earned by the raps Meat the ted -
ally supported sollniet asiti sans ns a-
dude interest astral sa leases W aq
lana Mit will net be ailed a noss
t nm aeras der, We et esmahaOlr, hmgr
ter rant* des, and fy*taa a pale ama
a2. *tan rifted on minas of federal
toads shall M nait.d to the Fara Mmq
mays tar lama nasi a Seam r
lila or mess massatles ot• tale a pia•
ad by the latergovenainal Omp mita
An of 1111113 (Parra w tFIff).
S. awe nus the We at real .a Der-
Oea •
propertymow l Other peoaaby the fa.
paschal m wase to It
pan with FWwa has, Malt be Mead n
aamrdses with Altan as lI to aim Or -
maim pertain to property maaseseat
4. Mae the egaesmeat pada ather-
wlas. aealpeats mai haws no obligation a
the Federal Oo,wamaat rets Feel a
royalties real M • cart of eyyrlpts c
palate pease under the gnat or other
spas (see paragraph 1. Astammat N).
IL other program Inane earned
the prof ct period shall bMan by the
nClplat and, in sero d.nae nth the pts
or other epeamsas, mall W:
so Adel to funds coamltted 4 the prof.
on by the Federal spoaasrmg sgeac7 and
rdmpredt orgaslsstioa sad be tel to blither
sable program objectives:
b. Wed to credos the non -Federal she
a the pnnaet man approved by the Pedal
sponsoring Mae*: or
e. Deducted from the total project oats
a determining the nes ate on which the
Federal share of aam a be Mand.
Arratann =—Ca_rn a Ito. A-110
don earns tee naICapse
1. Teti attenuant arae term af:tesa am
aaetwerow tin Cernow. sNOsosa- rod
Mow
I. 'lea attasmnt sets tont leserd rets.
lien requirements for grans and other ape..
Lasts with nmpaats. Peal aptaesng
ag social all on braes any reseed na-
tion
those data beth pants Omer than
F. tercel for pragnpp 1. Ma esteramat
ea applies te tameatp.pn as Masa a
in paragraph . of the been. cbeanr.
3. Financial roaea, supporting deromeae~
.mawttcal roans and all other nesse perm.
bat to an Mr.m.nt shalt be retuned for a
period of three pea, with the allowing
quallAcatlasr
a. it a* tltgatan, mala or audit is started
berm the eapratlon ot the II -year peril, the
bads shall clans audit a
ending involving e retained until all nidal ds
1a
ban been resolved.
0. Reads for aon..p.odaba property ac-
quired with Federal runt .hail be retained
tor 3 *earn atter its anal Manta.
c When recons ,. trannerrad to or mala.
toned by the Federal spasming agency, the
buyear retention requirementIsnot applies.
to
apiece
4. The retention paled smarts lin the
data of the .ubmloton of the anal ay.a*.
tun repr or. for greats .ad other Mise.
mats that are mewed annually. trees is
date at the aabat cion of the oast
abaneal .tats ruse
poaaduree tor the allowaOWty of an end
a -tone COotffhuttmt made by natplanta or
aeaeecipants lee nfnaed•4 la paragraph
of the base circular), or Wed patties in at -
ening am snaring and m*e01ad require -
neon et Fan epmrag agencies. This
•staehmaat •lee esa*ahM criteria for the
evaluation Of la -kind oatributlads an by
tea parties. and to guidanceen festa Pedenaas snt
rcular
• _ wish resat to ain sewing a fuer•
W-spoasosed resaant.
2. The barn dedaimons appy for the
papa of Oils aitacta at:
a. Prefect Coen.—reelect alum an au al -
bonnie costs les est forth In the applicable
lbdeni east prnciplaI Incurred by • apt.
e at and the valne of the la-Ynd canna u -
as made by the renpi.ot Or third pati.e
in aoampllsang the objectpes of the gnat
or other fat period. It
Mang the protectorpro -
p. Cert sharing and sawMlap.—in general.
nest sane, and matching tegmen taat
Ponta of porect or armee Gomm not borne
by the Federal Ooaefaaent
a Cask eswin0.tfoat—Caah antnbutloas
represent the ncplat'a eek ata*, laud -
Mg the anti* of nmey contributed to the
nailed{ by hm.Rdesal thin .arta.
d.
ha -bled GaaMbntlsa.—l-*ad
takes mamas a mete of mean aa-
traaulap panda by the rafpleht and
son -Federal thU4 pestle Only wase au-
armed
a0a with Foal ale a
y proper*
ptsconsedered
M the rasplan n -cal eawtmenes. Ins.
kms aambutna may teem the to of
arm tor nal property W namenand-
sed pennon property. W eb value of
teas W .as army 4aettng aha
g eSSaly taaeta*r. le the palest or
rmillon
t Oman gaasillaas ter esgoaog el*
Mang c mann an se Mem
et:
Ota mann ter aaWwaist
ag aq
(1) Clean retried by W respect M
sst7t eel& (Met all sharps require eat
by the renal dung M propose
pane: eagles en dyeesatla W tan
sass far baSWhp as equipment)
(ted FaJaa Imre Sanaa ea rah m-
issies nr dusted ata teas by other
aa•FOY* petite aphales sad mammas,
W paaa orpaacime W leashes.
eat
(3) Papa eau npaataa by was
ant mei and penal af. or we them-
dsaata aha-1FWaal mac
Monera W Ihatinaba sin plate arcs-
aaaale and imaidan
b. an emlabluaa , bath amok and ae
ad. all be 'espied es tart al the am -
e ra cess Martin am satabag whin art
e latabutlaae mea all of the tarn
eal rls:
(1) Are mane from the tMyleets
Heads:
(1) An net luded as amtrnutnas tae
any other fedaay.usasa nab
(b) An assay and masa for fl-
ee and eat -®spleens of pones
a►Jeasnes;
(4) M typos of Mapes that would be al-
lowable under the applicable ea plmlple :
paid by the Pedant Odrat-
aunt under another menus gresaent
(tier the agresnent Is authorised by Fed-
e ral raw 4 M used ter cost Mang or mach-
fel
ach•(
when ratanratanb7 the Faint
.4 when, aaa
(7) Conform to other pf•valoet if Sita
attachmat.
4- Vales for twlplat Wald osnalbu-
tame wui be established n neadanae with
the sppllsDle cess anciplet
S. Irma pwaedune far the nspatts n
ea•mmhng the Na w lima satnbu•
N09A1 M IMI, VOL 41, NO. 14a—.ftIDAT. JUL? 30. 1174