The URL can be used to link to this page

Home My WebLink About58-94 RESOLUTION1 • • RESOLUTION NO. „.18_-_9_4_ A RESOLUTION AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT WITH THE COUNCIL ON AGING, INC. TO GOVERN THE ADMINISTRATION OF A GRANT AWARD TO THE BUILD A SENIOR/COMMUNITY CENTER. BE IT RFSOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1 That the Mayor and City Clerk are hereby authorized to execute an agreement with the Council on Aging, Inc. to govern the administration of a grant award in the amount of $375,000 to build a semor/commimity center. A copy of the agreement is attached hereto marked Exhibit "A" and made a part hereof. PASSED AND APPROVED this 17th day of May 1994. ATTEST: By• • -}1 S-144-) Sherry Thomas, City Clerk APPROVED: By: Ted Hanna, Mayor 1 AGREEMENT THIS AGREEMENT entered into this Met day of 19 Tr , by and between the COUNCIL ON AGING, INC.,'hereinafter called the Grantee and the CITY OF FAYETTEVILLE, through its Community Development Division, hereinafter called the City; WHEREAS, the Grantee is a non-profit corporation that provides services and programs designed to allow persons over 50 years of age to live independently and to enhance overall quality of life and offers these services and programs to all eligible persons who reside within the city limits of Fayetteville; and WHEREAS, the Grantee and the City are interested in expanding programs and services to all citizens of Fayetteville, particularly persons over 50 years of age, by providing public facilities for the purposes described herein; NOW THEREFORE, in consideration of the benefits to be derived by the citizens of Fayetteville from programs and services described herein, the City agrees to provide funds to the Grantee for development and construction of a Community/Senior Center. I. GRANT CONDITIONS a. It is expressly agreed and understood that the total amount to be paid to the Grantee under this Agreement shall not exceed $375,000.00. Disbursement of grant funds will follow the guidelines specified in Section II of this Agreement. b. Funding under this Agreement is contingent upon award of Community Development Block Grant funds to the City by the U.S. Department of Housing and Urban Development (HUD). c. Grantee agrees to construct the Community/Senior Center on real property which the City owns, that is commonly described as 901 South College and more particularly described as: Lots 1, 2, 3, 8, and 9 in Block E and Lots 17 through 21 in Block F of the Archibald Yell Subdivision to the City of Fayetteville, Arkansas and including a 50 foot drive that appears as Henry Walker Drive on the recorded plat thereof. a. Grant funds will be used for planning, design, development, and construction of a Community/Senior Center as follows: 1. Grant funds will be used to secure the services of a licensed architect who will complete a Design Study. The Study will include a conceptual design of the building, parking requirements, related site improvements, and a preliminary cost estimate. The Design Study will include representations of the conceptual design through drawings and at least one scale model. 2. The development and construction of the building will be undertaken only when sufficient funding is secured to complete the project, in addition to the grant funds awarded herein. Grant funds will be expended for eligible activities in amounts that represent a proportionate share of the costs in relation to other project funds. 3 The City will have the right to review the plans and specifications and will provide written approval of plans and specifications prior to commencement of the bidding process. e. The Community/Senior Center will conform to the requirements described in a statement of "Initial Requirements for Walker Park Senior Center" dated November 30, 1992 attached as Exhibit 1 and made a part of this Agreement. Any changes to these initial requirements must be approved by the City through the Community Development Coordinator. f. It is agreed by both parties that legal title to the Community/Senior Center will vest with the City when construction is complete. g• It is agreed by both parties that services and programs currently offered at the Sang Avenue Senior Center, excluding preparation of meals for the Nutrition Program, will be transferred to the Community/Senior Center. At that time, a lease will be negotiated for use of the Community/Senior Center with the agency that is responsible for the provision of services and programs at the Sang Avenue Senior Center. • 4 • II. TIME OF PERFORMANCE a Activities in conjunction with this Agreement will commence on the day of 19 and will continue until the construction of the Senior Activity Center is completed in a condition that is acceptable to the City or until December 31, 1995 whichever is earlier. This Agreement may be extended later than December 31, 1995 upon mutual consent of both parties. II. PAYMENT Disbursement of grant funds will follow these guidelines: 1. Payment of grant funds will be made directly to Grantee for eligible costs in conjunction with the project. 2. The Grantee will submit invoices, progress payment requests, statements and other requests for payment to the Community Development Coordinator. Invoices and other requests for payment shall include documentation in sufficient detail to determine that the request is reasonable and pertains to the project. 3. Each invoice or other request for payment shall include a signed statement by the designated responsible party of the Grantee that (1) all goods and services have been received, (2) that payment to the vendor or supplier is due, and (3) that materials and services were used for eligible activities as described in this Agreement. III. GENERAL CONDITIONS a. General Compliance Grantee agrees that funds provided by and through the CDBG Program are used in accordance with all requirements set forth in 24 CFR Part 570 which is the regulatory document for the CDBG Program. b. Accounting and Contract Administration Requirements As a non-profit corporation, the Grantee agrees to follow the Uniform Administrative Standards found in OMB Circular No. A-122 attached as Exhibit 2 and hereby made a part of this Agreement. 3 • I L I i t 1 a Grantee agrees to follow requirements of applicable Attachments to OMB Circular A-110 in performance of the following activities: Cash Depositories - Attachment A (except paragraph 4) Bonding and Insurance - Attachment B Recording Keeping Requirements - Attachment C Financial Management Standards - Attachments F and G Reporting Requirements - Attachment H Property Management Standards - Attachment N The applicable attachments to OMB Circular A-110 are attached as Exhibit 3 and are hereby made a part of this Agreement. c. Procurement The Grantee agrees to comply with the adopted policies and procedures of the City and with the requirements contained in OMB Circular A-110, Attachment 0 (see Exhibit 3) regarding procurement of services, goods, and materials insofar as these policies, procedures, and regulations apply to the performance of this Agreement and contracts entered into as a result of this grant award. d. Audits Grantee agrees to have audits conducted in accordance with OMB Circular A-133 attached as Exhibit 4 and hereby made a part of this Agreement. e. Access to Records The Grantee shall furnish all information and reports required hereunder and will permit access to its books, records, and accounts by the City. HUD or its agent, or other authorized Federal officials for purposes of investigation to ascertain compliance with the rules, regulations and provisions stated herein. f. Nondiscrimination The Grantee agrees to comply with Title VI of the Civil Rights Act of 1974 and Section 109 of Title I of the Housing and Community Development Act of 1974, as amended, which state that no person will, on the basis of race, color, national origin, sex, age or religion be subjected to discrimination, be excluded from participation in, or be denied the benefits of any programs or activity funded in whole or in part with Community Development funds. • g• a • Section 504/Americans with Disabilities Act The Grantee agrees to comply with any Federal regulations issued pursuant to compliance with Section 504 of the Rehabilitation Act of 1973 which states that no otherwise qualified individual with handicaps in the United States shall, solely by reason of his or her handicap, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. The Grantee agrees to comply with requirements of the Americans with Disabilities Act of 1990 which prohibits discrimination on the basis of disability and assures equality of opportunity and full participation in, among other things, public accommodations. The City will provide the Grantee with any guidelines necessary for compliance with these regulations during the term of this Agreement. h. Labor Standards The Grantee agrees to comply with the requirements of the Davis -Bacon Act, as amended and the Copeland "Anti - Kickback" Act and all other applicable Federal, state and local laws and regulations pertaining to labor standards insofar as those acts apply to the performance of this Agreement and contracts entered into as a result of this grant award. is Assignability/Subcontracts The Grantee shall not assign or transfer any interest in this contract without the prior written consent of the City. The Grantee shall not enter into any subcontracts with any agency or individual in the performance of this contract without the written consent of the City prior to the execution of such agreement. i• Conflict of Interest The Grantee agrees to abide by the provisions of 24 CFR 570.611 with respect to conflicts of interest; and covenants that it presently has no financial interest and shall not acquire any financial interest, direct or indirect, which would conflict in any manner of degree with the performance of services required under this Agreement. These conflict of interest provisions apply to any person who is an employee, agent, consultant, officer, or elected official or appointed official of the City, the Grantee, or of any designated public agencies 5 • • or subrecipients which are receiving funds under the CDBG Entitlement program. k. Amendments The City or the Grantee may amend this Agreement at any time provided that such amendments make specific reference to this Agreement and are executed in writing, signed by a duly authorized representative of both organizations, and approved by the City's governing body. Such amendments shall not invalidate this Agreement nor relieve or release the City or the Grantee from its obligations under this Agreement. The City may, in its discretion, amend this Agreement to conform with Federal, state or local governmental guidelines, policies and or for other reasons. If such amendments result in a change in the funding or scope of work as described herein to be undertaken as part of this Agreement, such modifications will be incorporated only by written amendment signed by both parties to this Agreement. 1. Suspension or Termination If the City determines that the funds will not or cannot be used for the purpose described herein, Grantee agrees that all funds or portions thereof, in the case of funds remaining after approved disbursements, shall be forfeited to the City. Grantee further acknowledges no further interest, right, or claim in regards to any proceeds so returned. The City may suspend or terminate this Agreement, in whole or in part, if the Grantee materially fails to comply with any tern of this Agreement, or with any of the rules, regulations or provisions referred to herein. Grantee understands that should it not meet the requirements of the CDBG Program or the terms of this Agreement while this Agreement is in force, Grantor shall take any action or remedies furnished under 24 CFR Part 570 to ensure regulatory compliance including but not limited to requiring Grantee to repay grant funds. In the event of any termination, all finished or unfinished documents, data, studies, surveys, maps, models, photographs, reports or other materials prepared by the Grantee under this Agreement shall, at the option of the City, become the property of the City. 1 6 6 m. Hold Harmless Clause Grantee shall indemnify and hold harmless the City, its officers, boards, commissions, agents and employees against and from any and all claims, demand, causes of actions, actions, suits, proceedings, damages (including but not limited to damages to City property), cost of liabilities including the cost of liabilities of the Grantee with respect to its employees and cost of defending any and all such actions and proceedings as set forth herein, of every kind and nature whatsoever and regardless of the merit of any of the same arising out or pertaining to the services as herein agreed by the Grantee. This clause shall not be construed in any form or manner to waive that tort immunity set forth under Arkansas law. IN WITNESS WHEREOF, the City and the Grantee have executed this Agreement on or as of the date first above written. Attest: CITY OF FAYETTEVILLE, ARKANSAS 7 MAYOR COUNCIL ON AGING, INC. 4 COUNCIL ON AGING, INC. ELDERLY SERVICES AND NUTRITION PROGRAM 818 NORTH SANG AVENUE FAYETTEVILLE, ARKANSAS 72701 Phone: 521-6960 November 30, 1992 INITIAL REQUIREMENTS FOR WALKER PARK SENIOR CENTER I. POSSIBLE USES acOR EXIST:NG HOUSE A. MAN FLOOR 1. Library & Msic Room 2. Lcurge, TV & Radio Room 3. Table Games Room for 4 or 5 tables (TV/Radio not compatable) 4. Crcices cr Storage 5. Restrooms 6. Garage for storage of grounds upNeeping ecuipment. B. ..PPER LEVEL 1. Offices (1Cx12 min.) a. Director b. Admir. Assistant c. Secretary d. Activities Director e. Accountirg Clerk 2. Office Supplies and Records S o -age 3. Staff Restrocirs :I. NEA SENIOR CENTER BUILDING A. ACTIVITIES SECTION 3. Man Hall/Dirirg Room Area (33'6" x 75'9") Seating for 180 people at 30 round tables, 54 -inches Dia. (5 -rows staggared) w/ 15 -Ft stage area across frort. (Piano, etc could sit in tnis area as well). Pust pe adjacent to kitchen arc food serving area ard have sheltered entranceway to outside parkirg areas. 2. Arts and Craft Class/Work Room (205 x 40') with locKable supply storage caninets under and above a counter -top across ore erc cc t.P-e room. 3. Arts and Cracts Class/Work Room (2C' x 20') with lockable storage cabirets as above. 4. Kiln Room (9' x 12') acjacert to larger 4&C Room kith Utility SinK (contairirg a mud & lint trap), open shelving and a vert 4ar for removing Kiln "eat. 5. Pool Table Room for two tables (20' x 28') • • • 6. Exercise Equipment Room Aith space fo- a Shuffel Board Table, Dart Board, etc. (20' x 28') 7. Vestibule/Aai ing Room at Entrance ;10 x 10') 8. T1.0,o Onices (10' x 12') oath near main entrance (to observe traffic ir and o -,t of the center) 9. Ccat Room (near office at entrance) (10' x 10') 10. 2-Restrocrs (10' x :6') eacn Storage Room fo- all tables and chairs in main dining nall (12' x 16'). 12. Utility arc Janitorial Storage Room (10' x 12') B. KITCHEN 1. WM-K Area w/ Serving Bar (24' x 30') 2. Kitchen Equipmert 1 4-Burrer Commercial Cook Stove w/ Over 1 Vent Hood 'ICY Stove w/ Fire Protectior 1 20 -Tray Holding Oven 1 Commercial 2 -Door Refrigerator 1 Conmercial 2 -Door r-eeze- 1 lce Making rachine 1 3-Conpartmert Sink ,AJ/ Drain Boards 1 Handwash Lavatory 1 Commercial Dishwashing Machine vi/ Sink ard Gardage Disposal Unit 50 -Gal Hot Water Heaters 1 8 -Station Steam Table to,/ Sreeze Cover 1 8 -Case Milk Cooler 1 3C' x 5' Accessories Table/Cabirert 1 Trash Dumpster Dish/Tray Storage Cabinets ard Racks Parking/Loading Area 'or Fooc Vars and Volunteer Meal Drivers at Kitcnen Entrance (6 -Spaces) III. PAVED PARKING AREA (5-Handicadoed and SO -Regular) all easily accessible to elderly drivers IV. TCTAL SOJARE FEET IN NEto. BUILDING = 6,600 • • • 41109 Office of Management and Budget Circular A-1 OFROE OF MANAGEMENT AND local. or federatty tea:wizen g BUDGET tnbal government. Circular 74-4 IIIdU aroular A-122, "Coat Principles foi Nonprofit Organizations" AGENCY: Office of Management and Budget. ACTION: Final Policy lune 27.1990 To The Heads of Executive Departments and Establishments S.thject: Cost pnnciples for nonprofit organizations. 1. Purpose. This Circular establishes principles for determining coats of grants contracts and other agreements with nonprofit rganizations. It does not apply to colleges ard universities which are covered by Circular A-211 State. local. and federally recognized Indian tribal governments which are covered by Circular 74-4: or hospitals The principles are des gned to provide that the Federal Government bear its fair share of costs except where restricted or prohibited by law. The principles do not attempt to prescribellhe extent of cost shanng cr matching orrgrants, contracts, or other agreemer.ts. Hcwever. such cost sharing or matching shall not be accomplished through artunary !Imitations or. individual cost elements by Federal agencies. Provision for profit or other increment above cost is outside the scope of this Circular. 2. Supersessior. This Circular supersedes cos: principles Issued by individual agencies for nonprofit organization. 3. Applicabihty. a. 'Pliese principles shall be used by all Federal agencies In determining the coati of work performed by nonprofit organization' under grants, cooperative agreements. cost reimbursement contracts. and other contracts in which costs are used m 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 lo account to the Government for actual costs Incurred. b. All cost rei:nbursement subawards (subgrants, subcontracts. etc.) are sublet' 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 a college or university. Circular A-21 shall apply if a subaward is to • Stale. mormscr Publishing Gitlin 1^c apply. 6. Definitions. a "Nonprofit organization" means any corporation. trust, nsociation cooperative. or other organization width (1) is operated pnmenly for scientific, educationaL service, chentable, or similar purposes in the public interest; 121 is not organized primarily for profit: and 13) uses its net proceeds.to maintain, improve. and/or expand its operations. For this purpose. the term "nonprofit organization" excludes (i) colleges and universities: (ii) hospitals: (iii) 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 ut advance to incur cost for those items ihat are designated as requiring pnor approval by the Circular. Generally this pernumion will be m writing. Where an item of cosl requinng pnor approval is specified .n the budget of an award. approval of the budget constitutes approval of that cast. 5 Exclasion of some nonprofit organizations. Some nonprofil organizations. because crf their size and natcre of operations can be considered to he similar to commermakconcerns for purpose of applicability of toot principles. Such nonprofit organizatior.s shell operate under Federal cost principles applicable to commercial concerns. A listing of these organizations is oestained is Attachment C. Other organizations may be addedbee Nine to lime. & Respossibilitiee. Aseeeies responstisis ior administering programs that involve swarth to nonprofli organizations shell trapiainent the provisions of this Circular. Upon request, baplementing instruction ehall be furnished to the Office of Management and Budget Aseacies abitfl designee a liaison official fa serve as the 'peaty representative en Matters relaling to the Implementation of this Circular. The name and title of sera representative shall be furnished to the Office of Maaariment and Budget within 30 days of the dale el this Circtilar. Atiochatenle. The principles and related poky guides are sat forth In the following Attachments Attachment A--Generel Principles Attachment B—Selected hems of Cost Attachment C.--Nceipeollt Onpunzatiess Not Subjeci In This Circular • 22 (6/27/80) & Rarest: for excepts° Re. The Office of Mans gement aad Budget may grant exceptions to the requiremests of this Circular when permiasible under exiling law. However. in the Interest af achieving maximum umformity. exceptions will be permitted only 111 Itghly unusual circuallitanCee. 9. Effective Dale. The provisions of this Circular are effective immediately. Implementation shall be phased m by incorporating the provisions into new awards made after the abut of the organization's next fiscal year. For exisling awards the new principles may be applied if an organization and Gel cognizant Federal agency agree. Eviler implementatiot or a delay m implementation of individual previsioni is also permitted by mutual agreement between an organization and the cognizant Federal agency. 10. Inquiries. Further indonnation concerning this Circular may be obtained by contacting the Financial Management Branch, Budget Review Division. Office of Management mid Budget, Washington, D.C. 335034 telephone (2021 3415-4773. lames T. hilchityre. fi.. Director. 'Circular No. A-1221 Attachment A General Principles Table of Contents A. Basic Considerations 1. Composition of total cede 2. Factors affecting allowebellf af lea 3. lismonable oasis 1. Allocable cosis 5. Applicable credits &Advance underatandlaga B. Direct Goers C Indirect Costa 13 Allocation of indirect Costa mid Determination of Indirect Cad Bate 1. General 2. Simplified allocation method 3. MeV* aflocatton base siaboa 4. Diihci allocation alethod 5. Special indirbet eon raise E. Negotiation and Approval of tndirect Cost Rates 1. Definitions 2. Negotiations and approval.of rates ;Cunslar No A-1.221 Aryan's! A General Principles A. Basic CoasnienItioaa 1..Compontion of total on. Th. luta soil of an award he the aura of the allimeable direct and allocable :naval coos Ian any applicable credits. 2. Factors affecting afirnrobillry of oasts February 1995 '1109 Tab 110C • Page 143 To he eflowante under an award cons MOO Inerl rhf following general cnteria- 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 ui the sward as to types or amount of cost dew. c Be amsistent with policies and procedures that apply uniformly to both federally Enanced and ether activities of the orgarazation. d Be accorded consistent t-eatment. e Be determined in accorddrice wtth generally accepted accounting pnnaples. f Not be .ncluded as a cost or used lo meet cost sharing or matclung requimmente of any other federally financed program in either the current or a prior period. g Be adequately documented. Arosono/Ple costs A LOW limier eke if n its natre or amount..fdoes not exceed that which would be Incureed hy e pnident pi non under :he circumstances prevail ng at the lima ibe decision was made to incur the costs The question of the reasonabkness of specific costs must be scrutinized with parlicu.ar care in connection with organize:ions or separate divisions thereof wh ch reci•ive the prepcuderance of their support :rom awards made by Federdl age,: es :n ceterm ning •he reason •hl-ness cf • gven cn,I. CgrSIderal on ithal be given a K hether the ccs i. af a type generally retool zed as ordinary ard necessary for the opera i:.in of :he orgunaation or the perlurrnarue of Me a wale,. o ; he retar..inis or reindremerds imposed bybIL h tattirs as se In -ally accepted socnd business pra-iicrs. arms length bargaining. Federal and State laws and regclations. end terns ane conditions ot the award c Whether the Indic/1(1mila concerned acted h prudence n the croutslantes. cors.der ng tried responsibilities to the orea•az.lion. its members. employees. and cli',s the nubile al large, ar.d the g Sieniiii ant .Jr. alians from the esiahl shed a-artices of the eelAm:alion whidh riqy un ustifiably increase the award C nis 4 A cons a A cost is allocable :o a part.tular cost ob et ,i. sach as a grant protect. service. or nun r aitodi). .n accordance with the restive henrids receis ed. A cost li a.locable to a Line -linen' award if .1.s 'reeled consistently w•th other costs .ncurred for the same purpose in ake circumstances and if ,11 k .nr °nod specifically for the award. .2' Brreles no:h the award and oiher worit and car. be dtrbued .n reasonable proocrtion t,j he benefits received 5 Is necessary to :he overall opera lion of the organization al.hough a d red reladouship to any particular cost obtectiv• carroi be shown • Ar3 zosi a:tenable to a particular award or juir cost obiective under :hese principles may not be shifted ic ether Federal awards to cvercane funding deficiencies. or to avoid res'r dions 'reposed by law or by the terms el he award Page 444 • Tab 1430 5 Applacobie creciaLs • The term applicable credits refers to those rreripie al reduction of exprod:ii.MPI MOM h operate to offset or reduce expanses tierce that err, allocable to awards as direct or indirect costs. Typical examples of such transact.oru arc purchase discounts. rebates ur alkwances. recevenes or indemnities on losses, insurance refunds. end sdivatainns of overpayments or erroneous charges. To the extent that such crediis accruing or received by the organtzation relate lo adowable cost they shall be credited to the Government enher as a con reduction or cash refund as appropriate. • itt some instances. the amounts received rm the Federal Government to finance organizational actinties or strobe operations sliatild be treated as applicable credits. Specifically. the concept of netting such ci edit items against reJated expenditures senuld be in:plied by We orgaruzaton in Ccterra ng the rates or amounts to be crganization in determining the rates or armour:Is tc be charged to Federal awards fur services rendered whenever the 'endives Air other resources used in provid.ng such services have been financed 1 rectly. tn %lite or in part. by Federal funds. evil For ruies covering program income ft e. gross income earned Irons federally suppt.ned al -bogies: see Attachment D of OMS Circular A-110 6 4dvo1,ce and unclersiondifigs. Under any g ven award :he reasonableness and al oraluhly of certain 'tents of costs may be odlicuit to determine 'This particalarly true in connection velth orgizalioni that receive a preponderance of their support from Federal agencies In order to !IVO d subsequent •fisallowance or Minute based or. urreasonablenna o: nonallocabiltiy. 11is clien desirable to seek a wrIlen agreement with the cognizant or awarding agency in ads dna, of the incurrence of special or ur csal costs The absence of an advance agreement on arty element of cost will nol. in :self. affect the reascnableness or alkcabil•ly of that element. Mired Casts 1 Duect costs are those :ha' can be ident.fied specified:lc w th • partict.lar fial cosi rbiective 1 e.. • panicu:ar award. priceci. service. or other cured act.vity of ar wiselion. However. • cost may no: be asseared to an award as. direct cust if ary oi"r• cost inc.ored kr the same purpose. in ice ti-tumstance. has ben allocated to an nerd as an indirect cosi Cost identified s; diecully with awards re direct cost of the a ',arils and are to be an gned directly EN, Cost identified spear:rally with other • al Lest ob!ectives of the organization are 11 ant rosts of those cost obie.:11.es and ere • ic be assigned :o cther awards directly or ti) 2 3r1 direct cost ora minor a -,on' may te treated as an indirect ccsi caw reasons If p -az' eality w here the arrtaird treatment fur su,:h cost is consistently erpliet to 311 rmi cost objectives 3 The cost of certain ant/dies are not allowable as charges to FeUel al awards lite f ir el amp e. furd rais.ng costs n paragraph February 1985 21 of Attachment Bl. Itnwever even though these cons are unallliweble for purposes of computing charges to Federal awards. they nonetheless must he treated e• direct unit for purpling; of determining indirect cost rules aril be allocated their share ol the organization's indirect ensis if they represent activities which (II include the salines of personnel, (21 occupy acne. and 13] benefit frcm the organization's indirect C0313. 4. The Wail of activities performed pnmanly as a service to enembes. clients or the general public when significant and necessary to the organization's minion must be treated as direct costa when or not allowable and be .alor.ated an equi:ahle share of indirect coals Some examples of these types of actinhes include e. Mdin lens nce of membership rolls subscriptions. publications. and related funCions b Providing services and information tn members. legislative or administrative bud.es. or the public c Promotion. lobbying and. other :ens of put or re.ations. d Meetings and conferences except thove Lw d to conduct the genera: adrnin strdliun of the orgsnization. 3 Maintenanne. prolccnon. and investment if sandal funds not used in operation of the crionizelion. f Administration of group benefits on behe:f of members of clients .ncludirg life end hospital insurance. annuity ar -enrement clans. Finar.cjs aid. etc C trittrect Cost 1 Wren costs are dune that have been inc. :ter' for cem nun or mai; ohm- des and canadt be readily idertified with a particular fa. 1 CA • ol.lect•Ile Deem cosi of mini ir ▪ •11.•.:• sildy be tree led as indirect cos is Linde: the cned.tions descnhed in paragraph B ? otiose Afie: direct costs ndve oeen d'•-1 -iiied and ass•gned directly to awards tr 0.cer work as apprupnate. indirect costs • .hnse remain.ng to be 1,:kcateil to lteriefii•ng cost objectives. A cosi may not he dUk ited to am award as an indirect and if Olin coat incurred kw the same purpose r e circumstances hes been aaR.rd to ar award as • direct con. z Because of the diverse charei terix:ice • accounting practices of nonprofit • .Thir mations. is not possible to specify the t)o. s d cost which may be classified as indi-ect cosi en all situation. Howei. et., typical examples or indirect cost for many nonpruk • Raman:ions may include depreciation or t.se aeowances or buildings and equipment. cd.s's of operunng and maintaining far:bites. and general administration and g .e•cl. expenses such ao the salaries and es..enses of executive officers personnel adir....inration. and accounting Alli.cotiot of Indireci Cori ond tir't ni,nolann of inchwv-r Cosi Rufrs 1 Griner& a Inhere a nonprofit organization has cnly ode n noir ftrirtion, or is 'IP:! ail gs ma:nr I..nroons benefit from its milrer 1 Lolls to app--waniately the same degree the llocni on of indi: ed cows •nd the Single Auait lnlormanc.r. Service 1 computation ohm wanted wit rale may be accomplished through simplified allocation procedures as described in paragraph 2 below. b. Where an orsamsallon has several major functions which benefit from its indirect r.osts in varyum demote ellocalloa el indirect costs may require Inc accumulation of such cos s into separaie cost groupoms which then are .Coated ndivduaIJy la benefiting functions by means of a base which best measures the relative degree of benefit. The indirect coals adocated to each function are then distributed to trenviclual award' and other activities included in that dunclion by means of an indirect cost rate's) c. The drier:matron of what conshtules an °restoration's minor functions wdi depend an 113 purpose m being. the types of serv.ces Lt renders to the pubac. lie clients. ar.d its membera. end the amount of ellort it devotes to 'loch activities as fund raising public information and membership activities. d Specific methods for allocating indirect coats and compuium indirect cost riles along with the conditions under which each method shou:d be used are described m paragraphs 2 through 5 be:ow e The bdse period for the allocation of indirect costs the penad in wnich such costs are incurred end sccmumwared for allocation wo work performed us that period. The base period normally should comrade wdh the orgenizabon's fiscal year. but in any mint. shall be so selected as. to svoid ir eccities in the allocation a the costs. 2. Simpafred of locanon method a. Where an organizationa maior functions benefit from as cos:s approxima.ely 'he same dere. Ihr &Jonah°, of indirect costs may be accomposhed by [1] aeparating the organization $ Iola. coals for the base perod as either direct or indirect. and lul dividing the total allowable indirect costs (nel of applicable credits) by ar. equitable distribution base. The result of :las process la an indirect coat rate which is used to cbsinoute indeed costs to individual awards The rate should be expressed as the pereentege which the total amoun: of allowabie indirect costs bears to the base selected Thia method shbu.d slog be used where an organization has only one ma,or 'unction encompassing a number of •nd.vicuial protects or activities. anc may be used where the lave: of Federal awards to an organize ikan .s relatively smalL b. both the d rent casts and the indirect cosi• shall each:de capital expenditures and unallowable costa liowever. unallowable costa which represent activities must be in:aided in the dire..1 costa under the condit.ons described in paragraph 83 above. c The distrbutior base may be total direct cos's lexcladiag capital; expenditures •nd other disiorLum items. such as maior subccnuacts or sulagranta). dues:salaries and wages. cr other base which results .n an equitable distribu'ion. The distribut.on base shall generally exclude participant import coats as defkned m paragraph 29 at Attachment a d Eaapi where a special :steal is requemed in accordanc.e with paragraph 05 -horroson Putlish ng Grout.. Inc below the Indirect cam rate devalopecl ander the above principles vs appluaLle to all aweede al the organization. If a special raIejs 5 requaed. appropriate modalicitions shall be made n cedes lo develop the spacial rains). 3 Mu ft,pia allocution Law sn..:hact • Where an °Plana:anon s inthruct costs benefit its minor functions kn varying degrees. such costs shaa be accumulated .nto separate cost groupings Each grouping shall then be a.lccated mduividually to benef Ung functional bv means of a base which best measures the relative benefits. b The groupings shall be established so •s to permit the ailocat.on of each groaping cn the bays of benefits provided to the major (uncaring. Ear.h grouping should constitute • pool or expenses that ere of like charac:er in terms of the functions they benefit and in terms of the &location base which best me '<Lis :he relative beneftla providd to each function The number of separate groupings should be held within praciic.al limits. taking mac consideration the materiaidy of the b mounts involved and the degree of prems.on desired. c Actual conditions must be taken into account in selecting the base to be used .n ailocating the expenses in each group.ng to benefiting functions When an allocation can he made by assignment of a lost grouping directly to the function benefited, the alincation alien be made in that manner. la her the expenses in a grouping are more general in natore the aliocation should be trade :hrough the use of a selected base which prodaces results that are equitable to both the Government and the organization In gercral. any cost element or cosi related 'actor associeted with me organization work is potent.ally adaptable for use as an a:II-cation base provided II) it can readily be expressed .n terms of dollars ar oiher quaradahae measkues :total direct costs. dew' sa.anes and ft ages slaff hours applied. sqaare feet used hours of abage number of documents processed papuld hon served and the !nits] and lid LI .1 ccrirron to the bi nefit.ng fanchuns daring iae base per od. d. Except where a special inairec: cast rah:18)13 required in aucordance with praeraph 0 5 below. the separate groupings of indirect coils ellocaied lo each major funoton shad be agregmed ard t-ealed as a commen poal for that fanchon. The costs .n the common pool shall tarn be distribaled to indiv.sual swats included in she' fancaor. by Lae cf a s.ngle indirect cosi -sie. e. The d st-ibui on base used in computing I! P Ind.rect ccst ra IP for each furor on may be tole. di-ect costs (earr ud:ra capital .pend tures and other distcrting items such as maior subcontracts ard smthgrants]. direct calcines and wages. or other ase wh.ch results •n ar eqadahme d stribdi•on. The d stribation base ,hal: genera'ly exclude art °pant support costs as defined in paragraph 29. Attachment B An indirect cost rale shoald be developed fir each separate nil rect cast pool de % eloped DIP rale in each c.• se should be slated es the percentage whica the amount cf the particalar indirect cost poo. is or the d sir but:or base identified February 1985 41109 with that pool. 4. Threcf allocation meiotic() a Some nonprofit orginizani. nu. treat all cnium aa timed rusts expect general adnunialrelion and general expenses These nrgnn.sahnns gcnenilly separate their coils ii1113 thre basic cal ractir rs .1 Geer 3111 .11.1111.11111:rblicri and general expense, hind raising, and 111 other direct funct sins (including protects performed ander Federal awards). laini costs. such as depreciation. rental coals. cperalion and main:enence cf faci:ities. telephone expenses. and the like are prorated inclivaueLy as d.rect cost to each category and to each award. cr other activity using a base most apPrcpriate to the pa -1 rule: real being prorated. b. This method a acceptable proviced each joint cost is prcraled usng a base which accurately measures the benefits provided to each award or other act wily. The base' nit he established ir accordance with retainable criena. and be skippered by current dame. This method is ccripatible wPh the Standards of Account ng ard Finana al Reporting for Voiun•ary Health and Welfare Organ:eat:tins issued ;airily by ihe Naacral Health Council. Inc. the Nal anal Asserr.b.y cf Voluntary Hea ih ard Social Welfare 0-gani2ations. and the Lmied Way of Amenca. c Undar this method. indirect costs consist eclusive y nf gametal administration and ger.eral expenses In all other respects. the organ.zation s indirect cost Wens shal be computed in the same manner es that descnbed •n paragraph D 2 above 5 Special Indirect cost rotes. In some .nslances. it single indirect cost rale fcr all activities or an o-ganizatIon or for each major function of the arganizafion ay no• be appropr.ale. s rice .1 wimi:d not take .nto accoant those different factors which may sanstanlially affect the ind•rect costs applicable to a particu'ar seven' cf wcrk. Fer this purpose a part eclat segment of work For this purpose a particular sem-sent of work may be that performed umier a singe sward cr .1 may consist of work ander a group of awards perthrmed n a currrnan env.ronment. the factors may inc id e the cthysical locaticn cf the wok. the level of adm nisira:ive sappo-t requ red. the namure of the fealties or alter resources emp:oyed. the toenail° disciplaes or technical sic ills involved :he organizational arrangements used. or any comb.nat•on thereof. When a cartled:Ae segment of work is perfo-med in an environment which appears to genera'e a significantly d.fferent avel of 17117111 ed CO3'3. provision' should be made for a separate indirect cosi pool applicable In such work. The separate indirect rest pool should be developed danag the mine of the regu.ar allocation process and the separate .ndireca ccst rale resulting therefrom should be used proilded i: is determined that the rate tillers significantly from thal which would have been obtained under paragraph 13.2. 3. and 4 above and ; the volume of work to which the rate would apply is materia.. E Negobotion and .4poroval frd:recl Cost Rotes, Tab 1100 • Page 145 411609 1. Def.ritcons As used in dile section. the following terms have the meanings se: forth below a. "Cognizant agency" means the Federal agency responsible for negotiating and approving indirect cost rates for a nonprofit organization on behalf of all Federal agencies. b. "Predetermined rate mean' an indirect coat rate, applicable to a specified current or future period. usually the organization s fiscal yeer. The rate is based on an estimate of the costs to be incurred during the period. A predetermined rale is not subject to adjustment. c. "Fixed rale means an indirect cost rate which has the same charactenstics as a predelermuied rale. except that the difference between the estimated costs and the actual costs of the period covered by the rate Is earned forward as an adjustment to the rate computation of a subsequent penod d. "Final rate means an indirect cost rale applicable to a specified past period which is based on the actual costs of the period A final rate is not subject to adjustment e 'Provisional rate" or billing rate means a temporary Indirect cosi rate applicable to a spec.fied penod which ia used for funding. interim reimbursement and reporting indirect costs on awards pending the establishment of a rale for the period. f. "indirect cost proposal" means the documentation prepared by an organization to substantiate its claim for the reimbursement of indirect coals. This proposal provides the basis for the review and negotiation leading to the estabiishmer.1 of an organization's indirect cost rate. g. "Cosi objective" means a fluiction, organizational subdivision. contract. grant. or other work unit for which cosi data are desired and for which provisior. i. rnade to accumulate and measure the oast of protease.. projects. jobs and cap.talized projects. 2. Negotiation and opprovol of rates. a. Unless different arrangements are agreed to by the agencies concerned. the Federal agency with the largest dollar value of awards with an organization wi:1 be designated es the cognizant agency for the negotiation and approval of indirect cost rates and. where necessary. other rates such so fringe bere fit and computer charge -out rates Once an agency is aseigned cognizance for a particular nonprofit organization. the assignment will not be changed unless there le a major bang -term shift in the dollar volume of the Federal awards to the organisation. All concerned Federal agencies 'hall be given the opportunity to participate In the negotiation process but after a rale has been agreed upon it will be accepted by all Federal agencies. When a Federal agency has reason to believe that special operating factors affecting its awards necessitate special indirect cost rates in accordance with paragraph 0.5 above, it will. pnor to the time lhe rates are negotiated, notify the cognizant agency. b. A nonprofit organization which has not previously estabbshed 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. in no event, leter than three months after the effective date of the award. c Organizations that have previously established indirect cost rates must submit • new indirect cost proposal to the cognizant •gency within six months after the dose of each fiscal year. d A predetermined rate may be negotiated for use on awards where there'. reasonable assurance. based on peal experience and ratable projection of the organization a costs. that the rate is not likely to exceed a rate based on the organization's actual outs. e. Fixed rates may be negotiated where predetermined rates are not considered appropnate. A fixed rate. however. shall not be negotiated 11 (1) all or a Juba tantial portion of :he arganiution's awards are expected to expire before the carry -forward adjustment can be made. (ti) the nux of Government and non government work al the organization is too erratic o permit an equitable carry- forward ad ustmenb or (iii) the organization's operations fluctuate lignificant:y from year to year f. Provisiona: and final rates shall be negotiated where neither predetermined nor fixed rates are rippropna le. g The results of each negotiation shall be formalized in a wntlen agreement between the cogn.zant agency and the nonprefil organization. The cognizant agency shall distribute copies of the agreement to all concerned Federal agencies. h. 0i dispute arises in a negotiation of an indirect cost rate between the cognizant agency and the nonprofit organization. the d.spute shall be resolved in accordance with the appeals procedures of the cognizant ager cy. i. To the extent that problems are encoLntered among the Federal agencies in connection with the negotiation and approval process. the Office of Management and Budge will lead assistance as required lo resolve such problems in a timely manner. ICircui a r No. A-12.21 Attachment 13 Selected Items of Cal Table of Contents 1 Advertising costs 2 Bad debts 3 Bid and proposal costa 'reserved) 4 lior.dink costs 5. Communication costs Compensation for personal services 7. Contingency provisions 8. Contributions 9. Depreciation and use allowances 10 Dona Items 11 Employee morale. health and welfare costs and credits 12 F.niertehunent cuts 13 Equipment and other capital expenditure+ 14. Fines and penalties 15 Fringe benefits 18. Idle !actinism and idle capacity 17. Independent research and development (reserved) 111 Insurance and indemnification 19. Interest. fundwinsing. and investment management costs 20. Labor relations costs Fern-ary 1985 21. Losses an oi he; awards 22. Ma:nli nance and rt.pait coots 23 Malerolls tknd kupplier 24 Meeting% confinen/ as 26. Memberolopi. buliscopliont and professional activity custa 28 Organization coma 27. Overtime. extra -pay shill. and mut:1511M premiums 28 Page charges in professional hairnets 29. Partoipant support costs 30 Patent costs 31. Pension p:ans 32. Plan! security costs 33. Preaward coals $4. Professional lervice costs 36. Profits and losses on disposition of deprecsable propery or other capital a51:1:5 38 Kinfomtatioo service costs 37 Publication and printing costs 38. Rearrangement and alteration r.nsts 39 Reconversion costs 40 Recruiting costs 41 Relocation coes 42- Rental costs 43 Royalties and other costa for use of patenta and copyright. 44 Severance pay 45 Specialized service facilites 46 Taxes 47 Termination costs 48 Training and education costs 49 Transportation costs 50 Travel costs !Circular No. A -122j Attachment 9 Selected Items of Cost Paragraphs 1 through 50 provtde principles to be applied in establishing the allowstillty of certain items of nastily'. prinmpies apply whether a cost is treated as direct or Indirect, Failure to mention • particular item of coin is not intended to imply that Ili. unallowable: rather determine bon as to allowability in each came should be based on the treatment or principles provided for similar or related items of coat 1. Advergairry; cora a. Advertising costs mean the costs of media 'services and associated coma. Medie advertising includes magazines. newipapers radio and television programs. direct mad. exhibits. and the like b. The only advertising costa •Ilowabla are those which are solely for lil the recruitment of personnel when considered in conjunction with all other recruitment costa, as set forth In paragraph 40:the procurement of goods and services: (lit) the disposal of surplus ma tenets acquired in the performance of the award except when orgeruzations are reimbursed for enematas at a predetermined amount an accordance with Attachment N of OMB Circular A-110: or (Iv) specific requirements of the award. 2- Bad debts. Bad debtt including losses (whether actual or estilinaledl arising (ram un collectible accounts and other claims. related collection costa and related legal costs. are unallowable. 3. Bid end proposal oosts. (reserved) 4 Bonding anti Single ALM; information Service • Bonding cots n-ise when the ..-sovremment requires assuranm against financial lose to aural' or others by minion of the act or default of the organization. They arise also in Instances where the organizsion requires similar assuranne Included are such bonds as bid. perfonre noe. payment. an ante payment, infnngement and fthei ly bonds b Costs of bonding required pursuant lo the tern, of the swam are a.lowanle c Costs of banning requtrad by the organizelion in the general conduct of its operations are allowable th the extent that such bonding Is in accordance with sound bus ness pracbce and the rates ano premiums are reasonable wider the circumatances. 5 Communication oasts. Costs incurred for telephone 'emcee. Local and long distance telechnne calla telegrams. radmgrams. Postage rir.d the like. are allowable. 8 Compensation for personal service& a fief:moon Compensa bon for personal services includes all compensation paid urrer.ily or accrued br IF., argvnizatiOn for se -vices of employees renderec during.the penod of the "ward 'except as othenmse proviced in paragraph a. below]. 11 •ncludes. bui a not limited to aslant's. ;varies. director's and executive corr.rnittee member s fees. incentive award., fringe benefits. person plan costs. allowances for off-erte pay, uncentive pay position allowances. herdrhip pay. and cost of livirg differennals. b Allowability Except as otherwise soecific.ally provided in this paragraph the costs of such compensat on are allowable lo the extent that: HI Total compensation to individual employees 1 reasonabie far the services rendered and conforms to the established pol.cy of the organizat on consistently applied to both Government and non. Goverr.ment activities: and (21 Charges to sward' whether treated as dtrect or indirect costs are deternuned and supported a required in this paragraph. c Reasonableness ill When the organaation 15 predommant'y engaged in 'cumber. other than those sponsored by the Govenunent ccrapensaiion for emp.oyees on Government-sponsored work will be considered reasonable to the extent that It is consistent with that paid for similar work .n the organize bon a other az:nines. (21 When the organization is ',redo:Innen:lir engaged n Covernmeriaponsored activities and Ir. cases when the kind of employees required for the Coverrument activities ore not found in the organization's other activities. compensation for employees on Govenurientapor.sored work writ be considered reasonable to the extent that it 1.. comparable to that paid for similar work m ihe :abet markets In which the organtzetwn competes for the kind of employees uwoved. d. Special considerations m determining allowability Certain condition' require special consideration and poesible limitations in drier/m=1z costs under Federal awards where amount' or typea of compensation appear unreasonable. Among such conditions are .he foilowing- 11) Compensation to members of nonprofit Thompson Poclisn ng Grout-. Inc ort iniz..nnes it...sleet directors. associates. ofl ers. or the immediate families thereof Delormination should lie made that such compensation is reasonable for the actual preona. Servirpt rendered rather than • di‘trit ution of earnings in excess of costa. (2: Any change in an o-gan.zation compersaton policy resulting in a sulistarlia: increase in the organization's ;eve! of compersaton. particularly when it was concurreni with an increase in the ratio Governmer I award' to other activities of 'he organizaticr or any change in !he free -sett of ailewati'ity of specific types of compensation due to changes in Government po'icy e Unallowable costs. Coals which are unallowable ur der ether paragraphs of this Attachment shall not be allowable under this pa-ag-aph sole'y on the basis thal they constithie personal compensation. f Fringe benefits 11 Fringe berefits In the form of regular ccmoenaation paid lo employees daring periods of authorized absences from the job. szch as vacation leave. sick leave. military leave. aid :he like, are allowable prov.ded sat.li costs are absorbed by all organization act.vt ties .n proportion lo the relative amount cf •irie cr effort actually devoted to each. 1:.] Fringe benef.ts in the form of employer contricutions or expenses for iocial security. env oyee insurance. workmen's co:npenaation insurance. pension pan costs isee paragraph g. ttelowl. and the like. are al'owable provtded such benefits are granted in accordance with established written organization policies Such benefits whether treated as indirect ants or a• direct costa shad be cistnbuted to particuler awards and other act' dies use manner consistent wth the pattern of benefits accruing lo the .ndiv.duals or group of employees whose salanes and wages are chargeable to such awards ard other activities. (3).:al Provisions for a reserve under a self- nsurance progsm far unemployment compenuaton or workmen, compensation are allowable to the extent that the prOvisier s represent reasonable esumates of the 1 ablices for such compensation. and the Fyne, of coverage. extent of coverage. and rates and premium' would have been allowable had insurance been pueclused to cover the nits. Howeverproviiions for se'f. insurec liabillues which do not become payable for more than one year after the p-ov ism a made shall not exceed the present value of the liability. (b) Where an organisation follow' a consistent polcy of expensing acid.] paymenta to, er cm behall of. employees or forrner employees for unemployment compensation or woriunens companaalion. such payments are ellowable in the year of payment with the prior approval of the awarding agency provided they are allocated to all activities of the organnatton. (4) Costs of Insurance on the lives of trustees, officers. or other employees holding positions of irntilarrempansibtlity are allowable only to the extent that the insurance represents additional compensation. The costs of such tnsurance when the organtzation is r.amed as Feo-ary 1955 11109 beneficiary are unalowable g Pension plan costs. :1 Celts of he organization s pension plan which are incurred in accordarce wiih the established policies of the organ.zation are allowable provided: ;al Such policies meet the test of reasonableness :b) The methods of coat allocaton ere nal discriminatory: (c; The cost assigned to each faced year is determined in accore.ance wth generaly accepted accounting pnncip:m as prescribed in Accounting Pnnciples Board Opinion No 8 'bead by the American Institute of Certified Public Accountants: and Id] The costs assigned to a given fiscal year ere funded for a.1 p.an participants witiun six months after the end of that year. However. increases to normal and past service pensron cot la caused by a delay in funding the actuanal liability beyond 30 days 'Per each qaarter of the year to which such costs are assignable are unallowable. (21 Pension plan termir.aticr. insurance premiums paid pursuant to the Employee Retirement income Security Acl of 1974 (Pub. 93-408) are a.lcwable Late payment charges on ouch premiums are unallowable. (31Excise taxes on accumulated funding deficiencies and other penalties Imposed under the Employee Retirement income Secunly Act are unallowable. h. Incentive compensation. Lr.centive compensation. to employees based on cost reduction. or efficient performar.ce. suggestion awards. safety awards, etc.. are allowable to the extent that the overall compensation is determined to be reasonable and such cosi are paid or accrued pursuant to an agreement entered into in good faith bei omen the organization and the employee' before the services were rendered or purauant to an eatahlished plan followed by the organization so consistently as to imply, in effect. an agreement to make such payment . Overtime, 821ra pay shift ond mull:shift premiums. See paragraph 27. ,. Severance pay See paragrsph 44. k. Training and education costs. Sea paragraph 48. 1. Support of solanes and wages (1) Charges lc awards for salaries and wages. whether treated.. direct coati or indirect costs, will be based on documented payrolls approved by • responsible officialful of the mean:cation The distribution vi salaries and wages to awards must be supported by personnel activity report' as prescribed in subparagraph (2] below. except when a substitute system ham been approved In writing by the the cognizant agency. (Sett paragraph E.2 of Attachment A) (21Reporti reflecting the datribution of activity of each employee must be maintained for all staff member. 'professionals and nonprofessionals] whose compensation A charged. In whole or in part. directly to sward". In addition, in order to support the allocation of indirect costs, ouch reports must also be maintained for other employees whine work involves two or more funcitone or 'olivine' if a distribution of their compensation behveen such functions or activ:lies le needed in the determination of Tab 110C • Page 147 tie rgariia nd Teti cost ra.e(slie g.. 89 I engaged pan time al indirect ciait activities; and partatmeM a d.rect fu ictier... Reports maintained by nurprofit naniainions to satisfy these requirements :r oat meet the following standards: (i rhe reports must reflect en after- the 1.1 t c(iermira tun of the actual activity of eaca ento.oyee Budget estimates lie.. es'intates determined before the services are performed) do rol qualify as supperi for charges ta awards ihl Each report must account for the Iota) activity for which employees are compensated and which A required in f ; fulment at their obligations to the arganizelion (r) The reports must he eigned by the indivic.ual employee. or by a responsible supervisory official having first hand Know euge of the activities performed by the employee. that he distribution of activity represents a reasonable estimate of :he actual work performed by the employee daring the periods covered by the reports. IJ) The reports must be prepared al least monthly and must coincide with or.e or more Pay pelted:1. (1) Charges for the salaries end wages of norprofessional employees. in addition to the supno-tng documentation described in subparagraphs (1) and (2) above. must alsa be Supported by records indicating the total number of hours worked each day ma.ntained in conformance with Department of Labor regulations implementing the Fair Ldbir Standarcs Act (29 CFR Part 5181. For this purpose. the term "nonprofessional eriplov ee" shall have the same mewling as ' nonexempt employee," under the Fair Labor Standards Act. 141 Salaries and wages cf emplcyees used ir,nweting cosi shar ng or Matching reqa.rements an awards must be supported in :he same manner as Balance and wages claimed far reimbursement from awarding agencies. 7 C.critingency provisions Contributions to a coiffingency reserve or any sim lar provisicr. made for events the occurrence of h ch cannot be foreto.d with certainty as to [.me intensity, or vnth an assurance of their happening are unallowable. The term coatrigency reserve ' excludes se:f- insurance reserves (see paragraph ti(3] and 18 a.12):c1)): pension funds (see paragraph e (g)). and reserves for norrnat severance pay (see paragraph 44.(b)(1). 8 Cortriburions. Contnbations and donations by the organization to other' are unallcwahle. 9 Depreciation and use allowances. a Compenaation for the use of buildings. other capital mprovements. and equipment in hand may be made through use a It:wan:es or depreciation However. except as provided in paragraph f. below a LO.Tbination of the two methods may nct be tried in connection with a single class of f xed assets (e.g . buildingsoffice equipment. computer equipment etc.). h. The ccmpatation of use allowances or depreciation shall be based on the acquieition cost of the assets involved. The acquisition cosi or an asset donated to the Page 48 • Tab 00 ant 1 n liy a thrd pan sh 1 i its fair nia• 1" .001U1: at the ame uf :he J,.r.uisn. i Pie , reiputalina o use elate. ar res or ti.t n11418)11 wi'l exclude. 11' The lib' of lar it 2. Any pallidly of ite :mei of Lt itilings and P14' tIi' I lio-ne by or donated by the F latent. Cavern:nen: inspect, e 1 where lit e was 0 lg,r ally vcslird or eine.e it preaently resides. and (J1 Any portion cf :he cosi of lualffings and equipment co itrhuied hy cr for 'he organ zatian n satsfaL ion of a s a,u'ory matcaing reitrement d. Where the use allowance method A :o.lownl tie Lee cllowence for ba kings and .mprovement I including land impraLements auch as paved perk:ng areas. fences. and sidewalksi: wil. he computed al ar annual rate not exceeding two percent of acgaisition cost The use allawance for equipment will be computed at an annual rate no: exceeding 91)C ann two-thirds percent rif acquisition cost. INnen the use allowance method is used for bcild.ngs, the entire herding trust be treated as a single asset the building's components (e g plumb.ng system. heating and air conditioning, etc.) Cdnncl be segregated from the building s shell. The Iwo percent limitation. however. need not be applied to equipment which is merely attached or fas:ened In the bailding but not permanently fixed ,o ti and which is used as furnishings or decorations or tor special.zed parpcses (e.g.. dentist chairs end dental treatment units. counters. laboratory benches bolted to the flant, disawashers, carpeting. etc Such equipment will Pe considered as not being pet manently fixed to the building if it can be removed wahnul the need for costly or extensive alterations or repairs to the building or :he equipment Equipment that meets these critere wili be twiner.: to the six a ad two-thirds percent equipment ase adowance limitation. e. Where depreciation method IS foilowed, the period of useful service (useful l le) established in each case for usable capital assets must take into consideration such factors as type of construction. nature of the equipment used. techno.ogical developments in the particular program area, and the renewaand replacement poltmes !allowed for he the individual items or classes of assets involved. The method of depreciation used lo assign the cosi of an asset lor group el assets] to accouzling pericds shall reflect the panem of consumption of the asset daring is useful life. In the absence of clear e‘idence indicating that :he expected consampt on of the asset will be significantly greater or lesaer in the early portions of its Lsefui life than in the later portions. he straight line method shad be presumed to be the appropriate method. Depreciation methods once used shall nol be changed unless epproved ffi advance by the cognizant Federal ager.cy. When the depreciation rr.ethod is introduced for application to assets previously aubiect lo a use allowance. the combination of use allowances end depreciation applicable to such assets Mull not exceed ffie total acquisition cost of the assets- When the depreciation method is used for buildings. a huildffia'a shell may be ‘ehroary 1965 • • rl 1z 1tot.1 from eaca hu.loing component g plantains system heating. and air 'woo -unit system etc.) end each item 4. 1irilt1Jled Over ite estimated aseful life: or the I'll; re huildicg itt'. Hie shell and aa MO 184 ryd.,,t1 di 8 single asset • 1„i ijoa-eL kited over a SOW& usefu: lite f When 'he depreciatioa method is used fi a a particular chose of assets nc ;:e.aa lion may be allowed cr any such aa..els that, under paragraph e. above. would Ii a viewed es fully depreciated However. a ri•asonahle use allowance may be negotiated )iir sach aasets if warranted after taking into conaidera lion the amount cf depreciation preously charged to the Government. the estimated useful ll'e remaining a: time of negotiationthe effect of any increased mdinienance charges or deceased efficiency de la ago. and any other factors pertinent to :he ultlizaton of the asset for the purpose contemplated g. Charges for use ellowancea or depreciation must be supported by adequate property records and physics. inventories mast be taken at least once every two years (a staiislival sampling bas.s is acceptable) lo ersare that assets ex.st and are usable and n, Hied When the oepreetation method la fctuw ed. adequate dewed:a licn records indicating the amount of depreciation taken each period must luso be maintained. 10 Donations a Services received. :fiDonated or volunteer services may be furnished to an organization by professional and technical persorinel. consultants, and other skilled and unskilled labcr The value or these services is not reimbursable either aa a direct or indirect cosi. (2) The va.ue of oonated services ittitzed :n the performance of e direct cosi activity shi'l be ccnsidered in the determination of ffie organ 2dtion $ indirect cost ratels: and. accordingly, shall be allocated a proportionate share of appl.cable itdirect cos's vy hen the following circa:I:stances exist. tit The aggregate value ol the services is matenat :a) The Services are supportec by a signfficant amount of the indirect costs incurred by the organization. lc) The d.rect cost activity .s not ponied primanly or the benefit of the Federal Government. 131:n those instances where ihere no basis for rietermin.ng ihe fair market vaiue of the seniors rendered the recipient and the cognizant agency sha.I negotiate an appropriate allocation of indirect cost to the services 41 Where donated services directly benefit a crated supperied by an award, the indirect costs al:ocaied to the services wt..] be considered as a part at the total costa of the protect. Such indirect costs may be reimbursed under the award or used to meet cost sharing or matching requirements. (5) The value of the donated services may be timed to meal cost sharing or matching recaurements under conditions described In Attachment FL OMB Circular No A—t10. Where donated services are treated as inclateci casts. indirect cosi rate, will separate the value of the donations so that Single Audit litorrnatior. —cevice 1 • reimbursement will net be made. NI Fair market value of donated servicei sha;I be compuied as follows (a; Rotes for volunteer services Rates for vela -neer' shall be consistent woh those retuar rates paid for sunder work n other act.vities of the onaarizanon In cases where the kinds of skals involved are not found in the other activities of the organization. the rates used shall be consistent with those paid for similar work in the labo- market in which the o-gan zation competes for such exills lb)Servtces donated Ly other orgoP.zotions When an employer donate, the seri ices of an employee these services shah be valued at the employee 1 regular rate of pay 'exclusive of fringe benefits and indirect costs) provided the 'emcee are in the same skill for which the employee norrnally paid. If the services are not in the same skill for which the err.pleyee is nermaEy paid. fair market va:ue sha.1 be computed in acccrdance with sub pa ra gra ph la) ace. E. Goods ond spoce. 111 Donated goads; e.. expendable personal propertyisupp:ies. and donated use of space :nay be furn.shed to an organization. The va.ue of the goods and space a no! renbursatile either as a direct or nd.rect cost. (21 The valae of the donations Tay be used to meet cost sharing or match.ng share tequ.rements under the cond lions descr.bed in Attachment E. OMB Circular No. A-110. The value of the donations shall be delerrined Lo accordance with Allathment E. Where donat.ons are treaied as indirect costs. rdirect cost rates w.II separate the value of the aerations so that reimbursement wit. net be Old de n Employee morale. health. and wertere, costs and cn dits The costs of house publicatiers health o: first-aid clinics. and/ cr .nfirmaries recreational activines eniVoyees' counseling services, and ether expenses .rmicrred in accordance w th the orgariraticn'e established practice or CIAO= for the improvement of working condinonsi employer ernpinvee relations. emp'oyee morale. and envidi)ep cerformarce are allowab:e. Such costs w .11 be eqarabiy apporconed to all thin -hies cf ,he organizat on :ncome generated from any of these ectvities will be credited io tne coat thereof units. such income has been irrevocably set over to employee welfare orga nizations Egferfornmen costs. Costs of aTusement, diversion. 'coal activities. ceremonies". an costs relatine the-eto. such as meals. lodging. rentaa transportation. and gratuities are unallowable but see paragraphs 11 and 25) 13 Equtornent once other copttal sotpendttares. a As used in this paragraph. the foilow.ng loans have the meanings set forth below: (11 "Equipment" means an article of nonexpendable tangible personal property having a useful ;de of -nore thar. two yea -13 and en acquisition cost of WO er :core per unit. Ar. organization may use its own definitien provided that it at least includes rt)1 nonexpendable tangible personal properly as defined herein. F. Thompson Punishing Omni), Inc 121Acqu.iition cost" means the net invoice ani t pnce cf an item of equip-nent. inriuding the cost of any modifications, attachments accessories. or auxil ary apparatus necessary to make it usable fo• the purpose for which it iu acquired. Ant:Baty charges. sucn as taxes. duty. protective in - hens': insurance. freight, and irsiallation shall be included n ar excluded from acquisition cost in accordance with the organizal ons regular written accounting practices 12) "Special purpose equipment" means equipment which is usable ()ilia( for research med.cal scent fit. or technical Examples of special purpose equipment include microscopes. x-ray machines. surgical Instruments. and spectrometers 14; "Genera; purpose eqcipment" means equipment which .s u.sable fcr other than research. medical. scientific. or technical activities, whether or not special modifications are needed to make them suitable for a particular parpcse. Examples of gene -al purpose equipment mclude office equipment and furnishings. air conditioning equipment. reproduction anc printing equipment. motor vehicles. and aatomatic data processing equipment. b ;I: Capital expenditures for general purpose equipment are unallowable as a direct cost except w.lh the pnor approval of the awarding agency. ;2) Capra] expenditure' for special purpose equipment are ailcwable as direct costs prov dad lhal .lems with a unit cost of MOO or more have the prier appreval of the awarding agency. c. Capital expend:lures for :and or bu lings are unallawabie as a direct cast except with the prior approval of the awardirg agency. d. Capita: expenditure" for improvements lo land timid:cgs. or equipment which rnater.ally increase the.r value cr awful lite ere unallowable an a cirect cost except with p-ior approval ef the award.ng agency. e Equipment and other capita. expend.lu-es are unanowable as indirect costs However see paragraph 9 for allowab of lige allowances or depreciation on buildings capital improvements and equ.pment Also. see paragraph 42 for al.owability of rental cons for land. build.ngs and equipment 14. Ftres cod peca;lies Costs of fines and penalties -esulting from vio.ations of. or failure of the organization to comply with Fedenn. State. and local laws anis rep:ahone are unallowable except wher Incurred as a result cf compliance with specific provisions of an award or instructions in writing from the awarding agency. 15. Frtage benefits. See paragraph 6. f. 16. Idle fortilt.es end capcclly. a As used in this paragraph :he following terms have the meanings se: forth below: (1) "Facilities" means lar.d and buildings or any portion thereof, equipment individuaby or collective:3h or any other fangjble capital asset wherever located. and whether owned or .easad by the organization. (2) lee facilities Tear.s ccrtp.etely unused facilines !hal are excess to !he °Nam/snore" current needs. Di "Idle capacity" means the unused Fetroary 1985 41109 capacity of partially used facilities. It Is tbe difference betweei that which i facility could achieve wider TOO per cent operating time nn a ene-shift basis less ope-ating interruptions resulting from time lost for repturs, setups asisattafactory materials. and inner normal delays. and Lhe extent to w'tch 'he facility was scantily used to meet de-nands durina the accounting penod A reultishift bus may be used if it can be shown that this amount of usage could norma ly be expected for the type of facCity .nvo.vee (4) "Costs of idle faullfties or fee capacity' means costs such as maintenance, repair. hoasing rent. and other telated costs e4. property taxes, insurance. and depreciation or use allowances. b. The costa of idle facalicies are unallowable except to the extant that. (1) They are unnecessary to meet Suctuat oris in woridoack or (21 Although not neceuary to meet fluctuatona Lfl woraJoa4 they went necessary when somatic and are DOW idle because of changes in program requarerseaAa efforts lo achieve MOCIII economical ope-ations, reorganization. termination. or o!her causes which conk' not have heee reasonably foreseen. Under the exception 6 ta ied in this imbparegraph, costs of idle facilities are alioweble for a reasonable uenod of time. ord.nanly not to eueed one ;ear. depending upon the autiahve taken to ase. lease, or dispose of such facilites flxit see paragraphs 47 b. end d.). c. The costs of idle capacity are normal toxls of doing bus.ness and area factor in the ncrmal fluchationis of War IlidilICt COSI Eales 1mm period to period. Suck oasts aro atowable provided the capacity is reasonably antic:paled to be recision or was ongmaily reasonable and is raped la recuclion or summatiese by subiertmg. re c1114 Or sale. in scar Sete with sound business. LICOOOCTICIL Or security practices. Widespread idle r.apaal y throughout an err:, facility or among a group of egrets having substantially the num Lacli on may he Ida- iicilines 1.. ',cm research crd development IReser.f c' 18. Insurance ond feetemnilicotoa a Insurance mollifies torn. which Sus orgaruzahon is required to carry, or arch is approved. under the tern of the awed awl any other insursike which the esmanisatton ma in tains .11 CENTnericn with the general ionduct of its operations. This paragraph does not apply to insurance which represents Fringe benefits for employees (set peregreph 6' and 6 12)) 0) Costs of nsi:rance •eq kneed or approved. and Taw iamed pursuant to the award are allowab.e. (21 Costs of other ins•urarce maintained by the organization in connection vinth the general conduct of its operations are ahewable srublect lo the following limitation.. (a) Types and extent of coverage sheH be Ir. accordance with sound business practice and the rates and premiums shell be teaser,under the otrointistancei. lb) Costs sficyfed for buriness interruption or other similar in/unmet shell be Innited to Tat 1100 • Page 149 exclude (-average of -nanagement fret Fri Coos of insurunce or of •ny provendre For a reserve covenng the risk of loss or demage to Government property are aicwable on:y to the extent that the organization is liable for such loss or damage (d) Provisions for a reserve ur.der a +elf- aiscrance program are allowabie to the extent that types of coverage. extent of coverage. rates. arid premiums wculd Nave beer. allowed had insurance been purchased to cover the nuke However, provision for known cr reasonably esemated self-insured liabilities. which do not become payable for mcre than one year after the ironic,: al made shall :at exceed the present value of :he Lability. (e) Costs of insurance on the lives of it:islets. officers, or other employees holding positions of similar responeibibties re allooable only lo the extent that the MALI d ice represents additional compensation :see paragraph 6). The cost of such ineurance when the oraanization is .denttfied as the beneficiary is unallowable. (3) Adual losses which codicil have been cos ered by permissible insurance (through the purchase of insurance or a self nsurance program) are unallawable unless exprassly provided fcr in the award. except: (al Cos:s inctsred beracse of losses not covered under nominal deductible insurance euveraae provided in Ka •Iping with sound business practice are allowable. lb) Minor losses not covered by sauh as spo•lage. breakage, and ..sappearance of supplies. whit): occur ir the ordinary course of operations, are a Icwahle b. Indemeification ncludes secunng the organization against 'minlines to third persons and any other loss or darner. not compensated by ineurence or otherwise. The Government is obligated to indemnify the oNanizaticn or.ly to the e Nlent expressly provided in the award. 13 Intere.a. fund rcis.rg. rid :P. estme.it Iret....ige-,ent costs a Costs incurred for irlerest cn burrow ed capita: er lempora-y use of endowment lard!. however repreaented. are uralloviable. b Coats of organized ft.nd inz.uding finannal carrp-iens ail law aisint droves aolicairnon of gifts and !it. es la a -id s.mhar expenses incurred vilely Iij (ase capital or obtain zonInba: L :a 9:e unailowable c. Cos:s of investment ours-1 dr.d s'aff and similar expenses incurred gaiety lo enhance income Burl .evaie.nents ,Gke unalowab:P. &rand riosirg and ie., eint-nr a. ehell be cloaleit al ai prepr aie 5' i ./ LF nitirec. costs under oil- .-11-.11 ors lesi nheil in 1arig-aph ft of Ara. hr. -nt A .:0 Labc• rd•t, n ma its., 0 PS S.. IS.JLi.a '1. a. nrie bei.• Cot a-gaortali..n ankl 1 c.eas of tabor M3 7.( CI elm ...toes, employ eP pcbacal.ans a -.I :r ed dC'el ties are allowable • 21 losses an other awards Any excess -if cess over income on sny award Is cna towable as a cost of any other award Thi• incicdes. but is not 11mited lo. the organ zation's contnbuted portion by reason maarenee. III • I .k1 1" 1.41.1..1 11 10„ .11.t 1(1.11 • I • 1. Page 150 • Tab 1100 011 nil sharing agreements or any unJerrecovenes through negotiation al Limp son, for. or ceilings on. indirect costs • 22 Mumte.nance and repast i asr.. Casts incurred for necessary maintenance. i• pair. 31' upkeep cf buildings and equrpreeri ; neluding Government property unless otherwise prorded fort which neither atlit to the pennanent value of the pmperty nor appreciably prolong its .ntended life but keep it in an efficient operating conditien. are alaneable Costs marred for improvements wa.ch add to the permanent value el the bwIdings and equipment or appreciably prolong their intended :ife shall be treated as capita. expenditures (see paragraph 131. • 22. Mater:cis and nappies. The costs of natenals and supplies necessary to carry oul en award are allowable. Such cows should be harged at their actual pnces after dedccting it II cash discounts. trade discounts. rebates and allowances received by the crgarrzaron. Withdrawals front general stcres or stockrooms should be charged at cnat eerier any recognized method of pricing C011Stslerlly applied. Incormng transreriation charges may be a proper part cf material coat. Matena'S and supp:Ees charger) ail a di-Pc1 cost should include nnly the materels and suppaes actually used for the performance cf the contract or grant. and due credit should be given for any tare,' matenats or supp.ies retailed. or returned to vendors. • 24. Meetings ronfererr es. a Costs associated with the conduct of meetings. and conferences and in, Iude the cast of rentirg facilities. meals. speakees' fees. and the .ike But See paragraph 12, Frtertarnment =Sit and paragraph 29 Port ittpant ',wart casts. To the extent that thesP Cf3AIS are idertif able with a particular cost ob:er Pive. ihey shou d be charged to that obterlive :See paraaraph 13 of Attachirent A }neer cc•is a:e al owable provided that they meet F,P ger ert I tests of allo-reable. shown n Attachment A te this Circular c Costs of meetings and conferencal held to concuct S. general gam inislraticn of the o-ganizalion are allowable, • 25 Membersbips. subset:pions nrd prrlessionni Pit pity costs. a reins of the organizaticies membership 11 civ c. business. nich.nical and p-ofeiesional arganizaticns are allowab.e. b Costa of 'he organization s subs:77,114:ns civ.c. business professioral. and iethiical pp-Id:dials are al:owable. c Can of attendanae a mee.lines and mak-once, •ponsored by albe-s wien taTl nary pemose :a the tsemmailoa el cal irk:mania 1. are Antleea'ie r: " tin enlist af meals. Ire isetrita la n d ether IP:ns nr dtnial to sarn a Prid a. e • :r• age; 2r.,,Or 1,..v:,,e-1-1,1 . qua] • Arccrs len fees, bt01. °S. './ S. fp. i n pliant:ten o-eali2er3 or manakter. cur.s . Ian's. att.:mays Ift 'Tient ..01.115,Hrd. V.; 1: r ..D. s or the organizetide.. in innia. don said. es: OT recoganizaticn of WI ore, r at•on. are unit:lore dile except with pr lir - 2: re. d, of ilie aweeliag agency. • 27 ("it .-t.,r c. erfra pcy st .ft. and 1,1.1)1 ' 1 .• •• ‘•-• Feb-aary 1985 ne•/"../i•it of—Peens Pri•mitans ler extia iiity sli,fe KI wok •i•i• 1.1. 1"••I J11 "1•;) the peen aupro, al uf tee agenuy excepe. • When necessary lc cope willt unic•eeni ies. such as :apse tesulling burr •. s. calla al disaslers. breakcowns o' istiipment. or occasional operalizral I API( ^Pt I•3 f u spored c notice b ¼' 'C 1 1 mpioy:1•3 are per fur.... nitre.; furctioas s a as admin.straLion. maintenance. or accuant.ng. c. In the perfortraiire of iests. leLitratury pro i edures. ur other simi:ar operations as hhei ere calit.iaous ia nalcre and cannot nitsur ale .„ be irlern.pled or otherwise COI d owe: overall cos: la the Uo.erninant w 11 result. • 211. Pug( ',urges An profess.ona! Tait -no 's Page c barges for professional (Liana: publications are allowable as a necessa-y part nf research costs. where • a 1 he rcsi erch papers reporl wark suaporied ..,y the Cos ernment and b. Tbe ct eiges are levied Impart's ly on I restart' k Jeers published by the journet whi the' ot not by Gcvernment gponscrerl '20 nor:avoid sapport crsts Pa.t lard Al support costs are dine oasts for items such as stipend, o subs.slence allowar.ces, travel ailowarwes and registratioa fees psid to or un behalf a partinpants or treaters (bat not eTplOyeesl n conneitiOn with MeelingS, :inferences. symposia. or training prong ts These costa ce allowable with the prior approval cf the awarding agency * 30. t a Lusts t p-eparing illsclasures, reperts. dad other documents required by the a» .rd and af searrhing the art to the extend n e, essa re lc make such d.scloscrcs. (a) draments and any other peter.' costs in runnection with the filing and prosecchon of a 'Jelled slates pe lent aerie -citing where lit e or royally free license ,s leciu ;ed by the Government to be cp.:4E33-A the Government, ar.d (id) generp I strvices relatir.g to pater.' arid ClIl :1811: that:p.a. such AS ad% lee re. ridicnt a-, • 1; , iyht laws regnielions. clauses to.d en 11 ji d erect -Lents are eloveable gee r oil- 34) f, of pinee:ins d.9, oseres rcein-ts. other ,:ocumenas sad of %I arching 'he Jr1 °I. tle^I reeericry In Make 4.P -10M.^1-3 •1 nu ''r.1• :red 53 hip &ode ri ore ;,,waHr Cos's in rormecton lit ,ia prcsuttaing any fore.gr patent 1,41101 Of id any United Stairs poiret / tate. 1 %%herd the eweed do -s POI • •P CU'it.e)",g ti It Of 3 rayalty free • si • the Gelern:nett are urellawa',1: s • • ler • 31 or lb 'on s Sec paragreph S g • 12 nor/ se. i..-•ty tosts Necessary f' •nst.s attuned ccniply with Geier r.1 security requirements or for misled:on. including w ages. i.• "a, ins. and etiLiomerlef pent:Avail ale U: • PI-CnWrid COSOI Preaward costs are thrle IrC ;Uri prinr IC he effei five date af the evt.ird 11 rectly pursuant lo the Sopa Audet Informataon Sendice • negotiation and in &mac:patine. of the Award where such costs is necessary to comply with lhe proposed deavery schedule or period of performance. Such costs are aawatle only to he ex:ern that they would have been allowable if incaned after the date of the 2wa-.1 end only with the wntler. approval of the avard lig agency. • 34 Pra,lesronal serrate costs. a Costs or professional and corsair ant seraices rendered by persons who are nieinLers ol a partictbar prof easier. or possess a spec.al skill. ar.d who are nol officers or tor Voyees of the orgarazt.iion, are allowable. seticia to b. c. and d. of this paragraph when reantable in re.atice to the services renderd and when not contingent upon recovery cl the costs from the Government. b Ir. deter:rang the ability of 'osis in • particular case. no single factor or any specie] combination of factors 111 necessanly dete-miraiive However. the follcw.ng factors are relevant: (1) 1 he nature and scope of the serves rendered in relation to the service required 121 The necessity of connecting for the service. cnnsidenng the orgar izatiores capelility in the particular area. ;al The past palterr. of Bach COOS, pencularly in the years pnor to Government a *Ards. (4) The impact af Government awards on tee organization's business e.. what new prcblems have amen). (91 Whether the proportion of Gcsemment writ to the organizaton s total Lowness is au.h as to Influence the organizaticr. in favor of alcurrng the cosi. particularly where the services rendered are rol of a continuing na:ure and have little relationship to work under Goverment grants and contracts (6) Wheiber :he serv:ce can be performed :nnre econamical'y by direct employment lather than coniracting. r; The qualificaticns of the irdividuel or cancer zendenng the nervier and the rus:orrary fees d:hdrged, especiely nn;ton- Government ass a -ds. Adeg-ary ef 'he coatrartaal agreement ler the len g • desrre,r. z.f the service. est -mete o tare rega.rnd rale of onmeensetem. aed eerminanan provisions, c addinor. t thc fez:ors in paragrapn b ▪ I. recliner fres tc hedilowdble must be ap-r1ed esiern( e n; bona fide services • rilue' • i -r •endered 1 Cos f hg. d ceontine. arid consatng s• .ki 05 tird flabi.Pd CO.'S esurred in nr ••• eon c1.21 -rose ol p.a. •1.. C:la gic-0:-.1 len of cld aFa;rist the ,er.iii••.1131... . )wo:)le Corals el leg a. Udi I g ' rune ng sets- el. and •elo:rd ,..,s's incor ed 11 connc t ice. A•11` cdtv.'t • r•• Sn'Ill CO 1 tc*.'irc 0^131V7dt1011 .c'12 c• •11* nn d:d• firullnwab.e ran d • IA %a" p- shied fru In it'e award •to•P r • )V11 Co! 1.n •, and :rsses eq.] d epos th ri ei 0-1y CV leb:er cault„a 1 "a V.) (In Ii elld 1.13•441-1 51,e. rehrerheni ei nbi1 est,' it el C properly •.1 :led in 3 ,ar n rh they e- sent. 13 or 4.1111114" 10 CkiSi arnuping(s1 in en hr..% the derreciatiun wettable to such properly was incliened The amount of :he gain or loss to be included as a crede or charge to the appropnaie cost groupings', sha I be the difference between the amount real.zed on the property and the undepreciated basis of :he property. (21; Gans ar.d losses on ihe disposition of derecrable property that. not be recognized as a separate credit or charge under the following conditicts. la) TFe gain or loss is processed through a deprec.ation reserve ascount and is :elected ril the deprec:ation allowaole urder i.clragrapli 9. (b) The property is g. en in exchange as per if the purchase price of a s.milar item and the gen- or loss is taken into account in de'creenaig the aepreciation cost bas.s of the new dem (ci A loss reeules :rot the huitthe to maintain penrassible insurance. except as ante -wise plavided in paragraph 18 a.(3). (di Compensation for the use of the properly was provided through use allowances in lieu of depreciation in accordant.' with paragraph 9. :el :Aetna and losses arising from mass or extraordinary sales. retirements or other ti sposhans shall be considered on a case - by cuthe basis h Gd ar losses of any nature arising froen the sale ,jr exchange of property other than the properly covered in paragraph a above sha'l be exr..uded in computing award -- Jets • 38. Putaa: ,".,rrctkjq sen n essfs a Public .nfeirrnation sercke costs include the cost associated with pamphlets, news releases, and other forms of inforrnalioe services SLIM costs are normally incurred to (1) Infirm or instruct groups. or the geaeral (1) Interest indiv.duals or group! in prrticipating in a ser. ice p-ograrn of the .3114 inzaticn. 17..I bseminate the reschs or sponsored : rid nunspunsored acevoies. h Pulate infomeation service casts are illowab:e as direct costs with the prior aeamv al of the a W erding aecr cy Si ch Costs .1,13 k renewable as indroci costs • 37 PhlArat,or snd p•Ir rests a Pultication costs irelorle the costs af printaig ;a -eluding the mix nsses cov posit on pthie mak ng press work. biro:seg. and the erC produrls prorth..cd by sorb prooessesi. d sinbaton. pro:notion. retthee rine p nerd Fancling et.pria curaia are nf:1•den111 ab.e w•th „ •iI c.••• Air; Ire they ra1 odd be elbzdved as ircireci ris•s :n at. henehting ji 111'1,•CS iF.e ereganua ecr. t. lemblirairon anel r,nI ne costs are s...'ess able aS ti 1PC I 1 oats excen1 w ib LIP -1)Jdn‘ al of the ow arcirg aeerty. el 1 Fe tnst of p3g0 ct 'ages la iturnals tS adaresec.1 pPragraph 2e • ys pearl anAle-r;eef 0...d a ire retinn OS'S. s s re cited 'In arcarary cr ntrmal -earra-,gement a'reration of :entries ?tic Special arrangement and aeon costs Incurred speci:thaily for the • a -e abowabie with the prior aporrval the warding agency • to Recce. YaSscri eases Costs incurred n ▪ it rristorat on or rehabilitation of the crganization's facilities to approximately the s. Tnernesoe Punt sting Gepop. Inc Feroary 1985 111109 Name =anon existing irnmedistely pror to commencement of Government awards. fair wear and tsar exceptedare allowable. • 40 Recreants amts. The foLlowmg recruiting costs are allowable: cost of 'help wanted" &dyer:lung. operate4 coats of 171 employment office. costa of operating an educational testing program, heave: expenses including food and lodging of employees while engaged in recnuting personnel travel costs of applicants for interviews for prcspective employment end relocaton costs incurred ir.cident to recrwirrient of new employees (see paragraph 41c) Where the organization uses employment agencies, costs not in excess of standard commercial rales for such services are allowale.e. •41. Bean:ion cons. a Relocation costs are cos" ir cident to the permanent change of duty assignment (For an indefinite period or fcr • stated enod of nct less than 12 months) of an ex.steng employee or upon recruitment of a new empioyee. Relocation costa are alioweble, subject to the limitation described in paragraphs b. c. and d. below. provided that 11) The Men Is for the bdnent Or the employer. 121 Reimbursement In the employee is in accordance with an esiablashed written policy consistently followed by the employer. (3) The reimbursement does no: exceed the employee's actual or reasonably esnmated ) expenses. b. &towable relocation costs for current employees are limited to the fotiowing (1) The costs of U ansportelion of the employee. members of his .mmechaie family and his household. and personal effects' to the new location. 12) The costs of finding a new home. such as advance trips by employees and spouses tc locale living quarters end temporary lodging during the trans:lion period. up to a maximum penod o130 days, including edvance trip time. 131 Closing caste. such as breilterage. legal. and appraisal fees, tncident to the d spcsoion of the employees former home. These costs. together with those described in [4] below. are amiien 1t/ 8 per cent of the sales price or the employ Le's former home. (4) The centinumg costs of ownership of the vacant former home after the settlement or lease date of the employees new permanent home. such as maintenance of bui,dings and grounds lexclasive of fixing up expenses), utilities. taxes and property .nscrance. (5) Other necessary and reasonable expenses normally incident to relocaimn. such as the costs of cancelling an unexp:red lease. discornecting end reinstall.ng household appliances. and purchasing insarance against loss of ar damages to personal property The cost of cancelling an unexpired lease is lima ted to three limes the mon:hly rental. c Allowable relocation costs for new employees are limited io those described in Oland (21 of paragraph b above. When relocation coals incurred inciden: to the recruitment of r.ew employeei have been allowed either as a direct or indirect cost and the employee resigns for reascne with.n hie Tab 1400 • Page 151 • (1109 control within 12 months after him, the crganizabon Rhea refund or credit the Government for its share of :he cost. 1 lueyever. the coals of travel to an oversees lasstion ahall be considered !Cabel coats in accarcunce with paragiaph SG and not relocation costs for the purpose of this paragraph :f dependents are not permitted at the location For any reason and the costs do nat ruclude costs of transporting household goods. d. The Following costs retated to relocation are unallcwable: ill ker.' and other costs associeted with iirquirang a new home. ,2) A Ices on the sale of a former home. ,3; Coannuing mortgage principal and .r se-cs1 payments on e home being gold 41 Income taxes pa d by an employee related to reimbursed relocation costs • 42. Recto] costs. a SL.leect ic the limitations described in agraphs b. through d. of th:s paragraph. renta costs are allowable lo the extent that the rates ace reasonable in light of such favors Is: rental emits crf comparable properly, if ary: market conditions in the area. alternatives availalde: and the type :de expectancy, condition and value of the property leased b Rental casts under sale and leaseback arrangements are allowable only up lc the armant that wouid be a.lowed had the rigger tzaton continaed lo own the property. Rental costs under less -than -length Ie iscs are allowable only tip to the amount that would be allowed had line to the prone-ty vested in :he organization. For this purpose. a less-thaniarrnei.ength lease is one :ender which one parly to the .ease agreement s ah.e to c trot or sulastantially influence the acnone of the other. Such leases inclade but are not limited to those between ii) diL.sions cr an organization: tit) organizat.ons ancer enTiv011 control through corrimcct officers. directors, or members: and (in) an organization and a director. trustee. officer, e r Ice% employee of the nrganization cr his immediate famtiv either tiredly or through ccrpiara' tons. musts, or similar arrangements ir which they held a controlling interest. d Rental casts under leases which create a -raieria. equity in the leased n•coerly are • h.:Wahle only up IG the DITIOUC: hd: vni4 ne allowed had the organization put chased - the property on the date the lease agreement v.e s executed: e g.. depreciation or use al:owances, maintenance, taxes, insurance 1•Li exclucing interest expense and other urailowable coats For this purpose, a material equity in the poverty exists if the lease :n noncancelable or is cancelable oily upon the occurrence of some remote ccr trigency and has one or more of the following charactensticei 111 The organization has the right to pa -chase the properly for a pr.ce whicih el the beginning of the lease appears to be stbstanually less than the probable fair market value al the time a is permitted to purchase the property icommomy called a lease with a bargain purchase option). 12) Title to the property passes to the organization at some time during or after the lease permit ;3) The term of the lease (Initial term plus 1 1 1 111 111111 %. I, •I .11 0 . ,1.1.111.1 1.• II% O. Page 152 • -an :100 periods covered by bargain renewal apucrs if any) is equal to 75 per cent or more of the economic life of :he leased property:le . the re•toti the property is experted to be mariem Lally Liable by one or more users ▪ 43. Royalties and other costs for use al peter ts and copy -This Rityailie4 cr a paten: cr copyright or anwrinancn el the cost of acquiring by purchase a copyrghl, paterl. cr naive therelo. necessary for the preen performance of the award are allowable un r ss: (11The Government has a I.Lerse or the right to free use e the paten: or ccpyright (2) The patent or copright has been adjudicated to be invalid or has been admmistraevely deternieee to be invalid. (3) The oven: cr copynght Is constricted to be unenforceable. (4) The paten: cr copyright is expired. b. Special care shoald be exerc.sed determinirg reasonableness where the reveilles may have been armed al as 8 result cf less then arm's length bargaitung: es II) Royalties paid to persons, including cnrporations. airlifted with the organ.zation. 12) Roya.lies paid m unr.ffillated parties iniuding comet aliens under an agreement petered into in contemplation that a Government award would be made. :3' Royalties paid ancer an agreement entered into efier an award is made lc an nrgenization en In any case involvais a patent or copyright formerly owned by the organization. the amount of royalty allowed should nol exceed the cost which woual have been allowed had the organization retained title thereto. • 44 Severarce pay a Severance pay. also corn.nonty referred to as dismissal wages..e a payment in eddition to regular saleries and wases. by organizations to workers whose empaoyment is being terminated. Costs of severance pay are adowable only to the extent !hal in each cese. it is required by ::; ise., 11) employe: - employee agreement, (ia) establ.shed policy that consIdates. in effect, an implied agreement cr. the organization a part, nr (iv) urn:inter:ices of the particular emp nyment. ri Costs of severe -me payments are divided into two categones as follows: :11 Actual normal tranover severance payrnente shall be allocated to a'l Wei lies: or. where the organization provides fo• a reserve for normal severanc es such method wi.1 be acceptable if the charge to curent nperatinns is reasonaale in aght of payments aril -ally made for normal severances over a releesentative past period. and if emeurts cha-;ed are al.oceled to a:.1 activeies cf 'he organize:ten (2) Abnormal or mass severance pay is of euch a ron.ectural nature that measurement af costs by means of an accrual wi.I not achieve equity to bcth parties. Thus accruals for :h:s purpose are not allewable Hcwever. the Government recognizes .'s obligat on to participate to the extent of its fair share in any specific payment. Thus. allowability will be considered on a case-by-case basis .n the event of occarrence. 45. Spec,clized sertace tacilibes. a The coley of services provided by highly -lei!: ea . . I f:ebruary 1985 complex or specialtzed facilites opemoiti by the crganizat or.. sach as electronic computers and wind tunnels. am allowable provided the charges for the services meet the conditions of either b or c. of this Pitragraph and, in addaion. take into acaoant any :terns of income or Federal finanring that rel fy as applicable credits anther paregraph S uf Attachment A h. The costs of each services. when material must be charged directly to applic..b.e awards based on aVuti. usage of ibie serv tees nn the basis of a schedule of rates cr established methodology that 01 COP rot discriminate against fedenaly step's:red act vines of the organization, including usage Ly the organize:ler. for internal parposes. and ;al .s designed to recover only the aggregate costs of the services. The costs of each servile shall consist normally of both its direct costs imd as allocable snare of all tridirect c is's Advance agreements pursuant tc paragraph A 8 e Attachment A are particularly important in this situation. c. Where the cost, incurred for a service arc nol malenal. they may be allocated as Indirect costs. ' 46 Tosrs. a En general. taxes whoch the organization t. :veered to pay and which are paid or ac seed in accordance with generally accepted accounting or:maples. and payments made to local goverrments in lieu c I :axes wluch are commensurate wtth the local government stemma received are allowable. except for li) taxes From wh.ch exi!inetions are available to the organization directly or which are available to the organ:zation based on an eaempt on effcrded 'he Government and in :he laner case when the awarding agency makes available the necessary exemption certificates. (ii) special assessments on land which represent cipIal :roprovements. ard :di) Federal income taxes. b. Any refund of faxes and any payment to the organization of interest thereon. wh:ch were allowed as award costs wt be credited either as a ccsi reduction or cash refund. as appropriate, to the Government. • 47. Term:notion costs. Te -m nation cf awards general.y give rise to the itcLrrenec uf costs. or the need for spec... treat:reel or ream, which would not ha. e arisen had the award not been termirated Cost rota roles reverirg :hese items are set forth below. They are to be used in conantaion with the other provisions of this Circular ir termination situations. 0 Cerh/TOr rteinS 11.e Cus: a items reasonaUly usable on the creanizaticn's ether work shall not be clowab.e artless the o-ganizetion submits evidence that it would lot ream such items at eclat without sustaining a lost In deciding whether suds 'ems are reasonably usable on other wcrk of the organ:zaton. the award-rg agency should consider the organization's plans and orders for current and scheduled activity. Contemporaneous purchases of common items by the organization shal: be regarded as evider ce that such items are reasonably usable on the erganization's other work Any acceptance cf common items as ancient le to the terminated portion of the award shal be limited to the extent that the qoannties of Seigle Audit Informaeon Service a '1109 such items on hand in transit. and on orher are .n excess of the reasonable quantitative regmrements of other work b. Cosa conunwag after rerrnaauam If in a particular case. despite all esssonabie efforts by the orgamsanoa certain costs cannot be discontinued immedately after the effective date of'ermmsnon. such costs an generally allowable within the iimita@ons set forth m this Circular. except that any such costs continuing after termmadon due to the negligent or wulfnl failure of the orgenizadon to discontinue such costs shall be unallowable. a Loss of useful value. Loss of useful value of special toalmg, machinery and equipment wi, -h was not charged to the award as a ca_ at expenditure is generally allowable th. Such special tooling mac.rrrery. or eq : ment is not reasonably capable Muse in tb ,.her won of the organrzauoa The wlerest of the Government is ;r -tea by transfer of title or I y other nir is deeded appropnale by the awarding a., icy-. Rama! costs. Rental costs under urf•xpired .ease# are generally allowable s. ere clearly shown to have been t, sonabiy necessary for the performance of C - terminated award leas the residual value u: such teases. if (i) the amount of such rental corned do" not exceed the reasonable use va is c• :he property .eased for the period of it: aw-rd and such further period as may be r. ,sir the. and (ill the organisation makes aJ reasonable efforts to :erauna:e. assign. settle, or otherwise reduce the met of such .eaea. There also may be induded the met of Aiterauons of such leased property. provided such altrauons were necessary for the performance of the award. and of reenacsble restoration required by the provlaioaa of the :ease. e. Se:d'ement expenses. Settlement expenses including the (oikwmg at. generally ':towable: 11 Accounting legal clencal. and sugar costs reasonably necessary for la) The preparation and presentancn to awarding agency of settlement claims and supportng data with respect to the lendmaled portion of the award. unaess the terwrnauon is for default t5ee paragraph 4.a. of Attachment 1, ONO Circular Na. A-I1R and (b) The iermrnalran and settlement of subawarda. (2) Reasonable costs for the storage. transportation. protection. And disposition of property provided by the Government or acquired or produced for the sward except when granite. Are reumbuned for dispasa:s at a predetermined amount in accordance with Attachment N of Oh® Circular A-:10. (31 Indirect costs related to salaries and wages incurred as setdernent expense in subpangrapha (1) and (2) of this paragraph. Nannal;y. such indirect costs shall be limited to fringe benafils. occupancy coal. And immediate supervision. f. Claims under subawards. Claims under subawarts. including the allocable portion of claims which are common to the award and to other work of the organ' lion an generally allowable. An appropriate sham of the organization a md:rect expense may be allocated to the amount of settlements with subcantnctorisubgranteet provided that the amount allocated is otherwise consistent with he basic guidelines contained in Attachment A. The indirect expense so allocated shall exclude the same and suralar mats claimed duectay or rndinctly as settlement expenses. '48. i rnrting and educotien wets. a. Costs of preparation and maintenance of a program of instructan wcuding but not lmited to on -ilia -job, classroom, and apprenticeship fining designed to inaeaa the vocational eAecuveness of empluyns. including training materials, textbooks. status or wages of trainees (excluding overtime compensation which Ought arise therefrom). and (I) salaries of the dueator of trauu g and staff when the training program is condi.cied by the organ za0on: or (ii] tuition and fees when the trauung is in an anatitutoo ant operated by the organization. am sJowabie. b. Costs of part -tin.. education, at an undergraduate or postgraduate co liege level. including that provided at the organizations own facilities, an atlowabis only when the course of degree pursued is relative to the f eld in winds the employee is now working or may reasonably he expected to work and are irmsned to: (1; Training materials. (2; Textbooks. 'f3; Fees charges by the educational institution. (4: Tmtlon charged by the educational insutuuaa or in lieu of tuition. matncton' salaries and the related sham of indind costs of the educational inatstuhon to the extent that the sum thereof is not in excess of the turron which would have ban pod to the partcwaimg educational insUtaton. :51 Salaries and related costs of instructors who are employees of the organuraUue. 61 Straight-ume compensation of each employee for time spent attending classee during working hours not in excess of 156 hour per year and only Io the extent that ci camstancn do not permit the operation of claims or atlendance at classes after regular working hours: otherwise such cmpeosanan is unaJowable. c Casts of twuan. fees, tninmg material., and textbooks ;but ml subsistence. salary. or any other emoluments) in connection with full-time education. including that provided at the organization a awn facilitiees, at a postgraduate (but not undergraduate) college level an Ailcwabie only when the coupe or degree pursued is related to the field in which the employee is now working or may reasonably be expected to work. And only where the costs receive the prior approval of the awarding agency- Such costs an limited to the costs attributable to a lots! period not to emceeone school year for each employee so trained In unusual uses the period may be extended. d. Costs of a rlendance of up to 16 weeks per employee per year at speaallzed programs specifically designed to enhance the effectveness of execuuvn or mamgen or to prepare employe" for such positions am .ilowable. Such costs include enrollment fees. training materials, textbooks and related charges. employees salaries. subsistence, and navel Costs allawebla under this paragraph co not melude those !ot courses that are pan of a degmecnented carncralam. which tie allowable only to the ,,cleric set forth in b. and d above e. Maintenance expense, and normal deprecation or fair radiah, an facilities owned or leased by the organ' don for training purposes are aJowable to the extent in forth in paragraphs 9, 22. and 42. f. Cantnbutlons or donations to educational or training institutions. mc:udlng tie donation of facilities or other properties. and scholarships or fellowships. are unallowable. g. Training and education mats in excess of thane otherwise allowable under paragraphs b and c. of this paragraph may be slowed with pr.or apomvai of the awarding agency To be considered for approval. the organ.zation must demonstra:e that such costs are consistently .recurred pursuant :o an estahi.ahed training and education preg7am, and that the coupe or degree pursued ,s relative to the Held in which the employee is now working or may reasonably be expected to want. 49. i mnsparrcuorr costs. Transponadon c.sts incude freight. express. cartage. and postage charges relating either to goods pnrohased. in process. or delivered. These costs are allowable. When such costs can readily be identified with the items involved. They may be directly charged as Innsporistion cost& or added to the cost of such items less pareg sph 2]). When Identfrcedoo with the materials received cannot readily be made. traasponatloa costs may be charged to the appropriate indirect toll accounts if the organization follows a consistent equitable procedure in this respet t. 5o Travel costs. a. Travel caste an the expenses for tranaportadan iodgmg subsistence, and re:a:ed items incurred by employees who an in navel eta:as on affidal business of the organisation. Travel costs are allowable subject to paragraphs b. through e. below. when they an directly attnbutabla to specific work under an award or an Incurred In the normal coupe of administration of the organization. b. Such casts may be charged on an actual basis, on ape diem or mileage basis in den of actual costs incurred or on a combination of the two, provided the method used results in charges consistent with those normally allowed by the organization in its regular operations c. The duffennca In met between first -clan air accommodations and has than Ent -dam our accommodations is unallowable except when less than first-class air accommodation axe not reasonably available to most necessary mission requirements, such as when less than Ent - class accommodations would (I) require circuitous routms (Ii) require travel during unreasonable Sun. (Lill greatly masase the duration of the flight ivl result In additional coals which would offset the transportedoa savings. or fv1 offer accommodations which Thompson Publishing Group. nc February 985 Tab Tab 1100 • Page 153 41109 am not reasonably adaquals for the medical :reeds of the traveler. d. Necessary and rea ccabls costa of family movements and personnel movamsnm of a spemu or mass name an allowable. pursuant to paragraphs 40 and 41. subiacf to s.locauor on the Oasis of work or ems period berefi'ed when appropriate. Advance agreements are particularly important r Direct charges for foreign travel costs an aLowabie on.y when the travel has received prior approval of the awarding agency. Each seoarate foreign utp must be approved For purposes of this ptovtsion. foreign travel is defied as any travel outside of Canada and the Unitec Slates and its territorial and possesalora. However far an arganiaauun located .n foreign counties. the term "foreign iravr." means travel outside that country ICucular No. A-1221 Altachm eat C Noopro6l Organizations not Stabled to this Circular Aerospace Corporation. El Segundo. Cat:fomla Argonne Cmvenn:es Association. Chicago, !Ilinols Assaca•ed Universities. Incorporated. W ash.ng!oa, C.C. Assuc.a'ed Universities for Research and Astronomy, Tucson. Arizona Atomic Casualty Commission. Waab.nglon. D C. Battelle Memona. Insti u:e. Headquartered in Columbus. Ohio B•ockSaven Nauanai Laboratory. Upton. New York Center for Energy and Environmental Research (CEEB), (University of Puerto R.cc' Cornmoowedith of Puerto Rico. Charles Stark Crdper Laboratory. Lncorporated Camhrdge. Sfaasachusetls. Comparative An.mal Research Laboratory (CARL) ftnnersity of Tennessee), Oakndge. Te :nrssee Environmen!s. institute of Michigan. Ann P.ocr Michigan Harford Environmental Health Foundation. R.chland. Washington LIT Research Institute. Chicago. Illinois In&titate for Defense Analysis. Arlington. Virginia Insh!are of Cas Technology. Chicago, Clinnis Midwest Research Losttute. Headquartered in Kansas City. Missouri Mire Corporation. Bedford Massachusetts Montana Energy Research and Development Institute, Inc. Tv1F.RD:I. Butte. Montana Nal.nnal Radiological Astronomy Observatory, Creen Bank. West V!rginia Oakndge Assomated Universities. Cakndge. Tennessee P -tied Management Corporation. Oakrldge. Tennessee Rand Corporabo@. Santa Monica. California Researcb Trartgle Inadtutr Research Triangle Para. North Carolina Ruvers.de Research babbitt. Now York. New York Sandia Corporation. A:buquerque. New Mexico Southern Rawarch Instituts, 84mtoghsne Alabama Southwest Research Inadtnte. San Antonio. Texas SRI lnteeaatfonaL Menlo Park. California Syracuse Research Corporation, Syracuse. Now York L'mvensties Research Association, Incorporated (National Acceleration Labi. Argonne. Illinois Umvenities Corporation for Atmospheric Research Boulder. Colorado Nonprofit :Dauraece Companies such as Blue Cross and Blue Shield Organizations Other nonprofit organizations as negotiated with awarding agencies. ffl Dm ee.t Filed 7 -ran L" awl alma Cane rata-elar Editorial Corrections to OMB A-122 OFFICE OF MANAGEMENT AND BUDGET Circular A-122, "Cost Prkicipin for Nonprofit Organizations'; Correction AGENCY: Office of Management and Budget ACTIort Final policy cor-ectlon. SUMMANr This notice correcis errors in the printing of coal princip:es for nonprofit organizations. 145 FR 46022. Lily 8. 19801 FOR FURTHER INFORMATION CONTACT. Palmer Marcantonjo. Financial Mandgemen: Branch, Office of Management and Budget. Washington. DC 20503. 12021 395-4773. • Pose 46022. coh,mn 2 the second Paragraph 1. change Paragraph 5 ' Compersalion for Personne: Services" lu Paragraph 6 • Page 46022. column 2 the second Paragraph 2. change Paragraph 6 "Corlingencies" to Paragraph 7. • Page 46022. column 3 Paragraph 4. change Paragraph 31. "Equ.pment and Other Capital Expenditures" to Paragraph 13 • Paragraph 5. change Paragraph 26 'Meetingsto Paragraph 24 • Paragraph B. change Paragraph 27. 'Organiza: or. Caste" to Paragraph 26. • Paragraph 7. change Paragraph 30 "Page charges in Professhona:Journal" to Paragraph 28. • Paragraphs, change paragraph 37 "Public Infomatron Service Costa" to Paragraph 38. • Paragraph 9, change Paragraph 43 ' Rental Costs" to Paraph 42. • Paragraph 9. in t fourth line. add ' up' between the wprds "only" and to". in the sixth line change "they' to ••It'' • Paragraph 10. change Paragraph 51 'Travei Costs' to Paragraph 50. • Pv ,' 46(1'4 ruP.Pdi 3 Paragraph 44 4(2I after ''benefits racer' rd" add or . • Pugr 46025. rahLn'n 1 Paragraph 03. change the refererce "FsragrapJ' :1 of Attachment B' to Paragraph 19.:f A'Idchment B ' • Page 46026. co/unin 1 Paragraph 4:1 Ill. in the sixth line change wirer I cost' to ' direct costs ' • Page 46026 co/umn2Paragrap}- Lic. change "eslahilshmcnl of d ra'L'' es:abl.shmenl of a final rate • Page 46026 colon n 3 Paragraph E21, in the third :ine add the following after' a Federa agency shall" -"suborn its initial indir,-ci Coll proposal unmedia rely • Page 4WC'r calumP J Paragr.ip'i ;3;(.n.). change 'workmen's compensation" to' worker," compersation." • Peg" 46028. column 1 Pdragraph alaiIthe second line of .:olumn 11 change "Work:ner.'s compensanun to workers' eompen,a:'an. • Pege 46030. column 3, paragraph 24h.. the sixth tine change "ailowdblr' to ' allowabli!y" Daniel F. Mann. Dare and Managenlen! Jrfi, er ;F1Dm n can old 3194: 545•m, •LUNG COOS 3 ,0 -Ii -a Circular A-122, "Cost Principles for Nonprofit Organizations" Correctmn In Flt Doc. 81-20270. appearing al page 46022 in the issue of Tuesday July 8 1980, the fo.lowmg changes should be made: I. On page 46024. column Three. The second sentence in paragraph A.5.h. should read, "Specdical:y the concept of netting such credit items against related expenditures should be appl.cd by the organization :n de!ermming the rates or amounts :o be charged to Federal awards for eerv-ces rendered whenever the facLities or other resources used in providing such services have been financed directly. n whole or in part. by Federal funds." 2. On page 48024. column three. the second complete sentence in paragraph AS. should read. "Th:s is parlicular.y true in connection with organizations that receive a preponderance or their support from Federal agencies.' 3 On page 46025, column one pdragraph 8.2 should read,"2 Any direct coal of a minor amour.: may be treated as an indirect cost for reasons of practicality where the accounting treatment for ouch cost is cone:ster.11y applied to all final cost objectives" Page 154 • Tar: 1100 Feb'..ary 198S S'ngae Audt In•ormanon Service 11109 4. On page 46025, column one, paragraph 84.1. should read. " 1 Administration of grcup benefits on behalf of members or clients including fife and hospital insurance. annuity or retirement plans. financial aid. etc." 5 On page 48025, column two the first sentence ir, paragraph Dl e. should read. "lie base period for the allocation of indirect costs is the period in which ouch costs are incurred and accumulated for allocation to work performed in that period " 6. On page 46026 column one, the second sentence in paragraph D 3d should reed. "The costs in the common pool shall then be disinbuied to individual awards included ir. that funcl.or. by use of a single indirect coal rate." 7 On page 46026, column one, the !•rsl sentence :n paragraph D 3.e, should read "The distrihulior based used in computing the indirect cost rate for each function may be total direct ousts (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 dis:nbuticn" 8. On page 46026 column one the first and second sentences in paragraph D.4 a should read. "Some nonprofit organizations :rea: all costs as direc: costs except general administration and general expenses. These organizations generally separate their costs into throe basic categories. ' • • " 9 On page 48026. the last sentence in column one :extending to column twol. in paragraph U.S. should read. "The factors may include the physical location of the work, the lever of administrative support required the nature of :he facilities or other resources employed. the scientific d1scipl nes or technical skills involved the organizational arangemenis used, or any combination thereof." 10. On page 46026. column three paragraph E.2.i. should read. "i To the exlert that problems are encountered among the Federal agencies ir. connection with the negotiation and approval process. the Office of Managemen! and Budget will lend assistance as required to resolve such problems in a timely manner " 11 Or. page 46030. column one, the introductory text of paragraph 16.6 and paragraph 16.4;1) should read.b The costs of idle facilities are unallowable except to the extent that: (1) They are necessary to meet fluc:uat;ons in workloads: or". 12. On page 46030. column one, the second sentence in paragraph 16 c. should read, "Such costs are allowable. provided the capacity is reasonably anticipated to be necessary or was originally reasonable and is not subject tc reduction or elimination by sublettin& renting. or sale. in accordance with sound business, economics o: security practices." 13 On page 4603t second column. paragraph 34 c shcu:d read. An addn:on to the factors an paragraph b above, retainer fees to be allowable must be supported by evidence of bona fide services availab.e or rendered." SIWN0 Cone i@@F-0I'M •New Paragraph 821 — "Lobbying" issued April 27, 1984 1. Insert a new paragraph In attachment B. as follows: "B21 Lobbying" a Notwithstanding other provisions of this Circular, costs associated with the following activities are unallowable' a.f1) 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, 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: a (3) Any attempt to influence: (i) The introduction of Federal or state legislation: or iii) the enactment or mod frcation of any pending Federal or state legislation through communication with any member or empioyee of the Congress or state legislature (including efforts to influence State or local officials to engage in similar lobbying activity), or with any government official or employee in connection with a decision to sign or veto enrolled legislation a.(4) Any attempt to influence: (1) The introduction of Federal or state legislation, or (n) the enactment or modification of any pending Federal or stale legislation by preparing. d:stnbuting 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 legislation, when such activities are famed 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 slate legislature, oriubd:vision. 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, or a 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 travel, 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 Slate legislation in order to directly reduce the cost, or to avoid material impairment of the orm.an:zation'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 rate proposal. and thereafter treated as other unallowable activity costs in accordance with the procedures of paragraph 83 of Attachment A. c.121 Organizations shall submit as part of their annual indirect cool rate proposal a certification that the requirements and standards of th.s aragraph have been complied with. c.(3) Organizations @hall maintain adequate records to demonstrate that the determination of costs as being allowable or unallowable pursuant to paragraph B21 complies with 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 coat shall not be required for the purposes of complying with subparagraph c, and the absence of such • Revised paragraph c.(4) issuec May 27, 1987 See Page 156 : Thompson Publishi-g Group .,; August '989 Tab 1' 00 • Page ' 55 1110§ 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: (1) The employee engages in lobbying. as defined in subparagraphs a and b, more than 25% of his compensated hours of employmept during that calendar month. or (ii) the organization has materially misstated allowable or unallowable costs within the preceding five year penod. c.15) Agencies shall establish procedures for resolving in advance. In consultation with OMB, any significant questions or disagreements concerning the interpretation or application of paragraph 821. 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. Jim U. a4nM r,,M 4-u-.. td f •AI Revision to Paragraph B21 — "Lobbying," Issued May 27, 1987 In attachment 8. section 821. "Lobbying." paragraph t(4) is revised as follows: c.(4) Time logs, calendars, 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 live -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 allowabilily of claimed costs in addition to records already required or mair.ta:ned. Also, when conditions (1) and (2) above are met, the absence of lame logs, calendars, or similar records wi:l not serve as a basis for disallowing costs by contesting estimates of lobbying time spent by employees during a calendar month. lame+ C. Miller 114 Director. [FR Doc 87-11883 Fled 5-7b87; 845 aml Page 156 • Tab '100 August '989 Sengfe Audit Inlormatior, Service 32016 NOTICES OFFICE OF MANAGEMENT AND BUDGET I Circular No. A-1101 GRANTS AND AGREEMENTS WITH INSTI. TUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NONPROFIT ORGANIZATIONS Uniform Administrative Requirements JULY 1, 1976. To the heads of executive departments and establishments. Subject: Uniform administrative re- quirements for grants 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 institutions of higher education. public and private hospitals, and other quasi-pubbc and private nonprofit or- ganizations. This Circular does 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. EDectfve date. —The standards in the attachments to this Circular will be applied as soon as practicable but not later than January 1, 1977. 3. Supersesafon.—This Circular res. cinds and replaces parts D7 and IV of the Appendix to Federal Management Circular 73.7, Administration of college and university research grants. 4. Policy intent. —The uniform stand- ards and requirements included in•the attachments to 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.—FStcept as provided below, the standards promul- gated by this Circular are applicable to an Federal agencies. If any statue ex- Prenly prescribes policies or specific re- quirements that differ from the stand- ards provided herein, the provisions of the statute shall govern. The Provisions of the attachments of this Circular shall be applied to subre- cipients performing substantive work under grants that are passed through or awarded by the primary recipient If such sub recipients are organizations de- scribed In paragraph 1. 6. Definitions. a The term "grant" means 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 to accomplish a Public purpose. The term "other agree- ments" does not include contracts which are required to be entered into and ad- ministered under procurement laws and regulations. Gnats and other agree- ments exclude (a) technical assistance Programs. which provide sevicn instead of money, (b) assistance in the form of Attachment A cash depositories. Attachment Bonding and insurance. Attachments Betentlon and custodial re- quiremeov for record.. Attachment D Program income. Attachment Z Cast sharing and matching. Attachment P standards for financial man- agement systems. Attachment a Financial reporting require- ments. Attachment H Monitoring and reporting program performance. Attachment I Payment requirements. Attachment J Revision of financial Plan Attachment H Closeout procedures. Attachment L Suspension and termination procedure. Attachment M Standard farm for applying for federal sestam Attachment N Property management stand - Attachment 0 Procurement standards. 9. Excepttdns for certain rectpients.— Notwithatanding the provisions of para- graph 7 It an applieant/reciplent has a history of poor performance, Is not fi- nanclal(v stable, or its management mys- tem don not meet the standards Pre- scribed in the Circular, Federal agencies may impose additional requirements as needed provided that such applicant/ recipient L notified in writing as to: a Why the additional standards are being Imposed: b. what corrective action is needed. Copies of such notifications shall be sent to the Once of Management and Budget and other agencies funding that recipient at the same time the recipient is notified. getierai revenue sharing, loans, loan guarantees, or Insurance,. and (c) direct payments of any kind to individuals. b. The term "recipient" includes the following types of nonprofit organlra- tions that are receiving Federal funds from a Federal agency or through a State or local government: Public and private institutions of high- er education: public and private hos- pitals: and other quasi -public and pri- vate nonprofit organizations such as (but not limited to) community action agen- cies, research institutes, educational as- sociations, and health centers. The term does not Include foreign or international organizations Isuch as agencies of the United Nations) and Government -owned contractor operated facilities or research centers providing continued support for mission -oriented, large scale programs that are Govern- ment -owned or controlled, or are de- signed as federally -funded research and development centers. 7. Requests for exceptions. —The of Management and Budget may grant exceptions from the requirements of this Circular when exceptions are not pro- hibited under existing laws. However, In the interest of maximum uniformity, exceptions from the re- quirements of the Circular will be per- mitted only In unusual cases. Agencies may apply more restrictive requirements to a class of recipients when approved by 1. Tote attachment sets forth standards the Office of Management and Budget. Inventing the use of banks and otter in. s. Attaehmenta.—The standards pro- etttutions As depositories of funds advanced mulgated by this Circular an met forth under grants and other agreement&. in the Attachm►nts, which are: x. Except for situations described In para- graphs a, 4, and 5, no Federal sponsoring agaoey shall: a. Sequin Physical segregation of cash dr- Patitorlos for funds which are provided to a reciwmt. h Latatluh any eligibility requlcrrcents for each depositories for funds which are pro vlded to a recipient. 3. A separata bank account shall be requite when applicable letter -of -credit agreements provide that drawdowns will be made when the reclp1ent'a checks are presented to the bank for payment. 4. Any moneys advanced to a recipient width ars subject to the control or reguls- tlon of the United States or any of its officers, ageeta or employee' 1publie moneys as de - need In 1Yeaeury Circular No. lie, fl amended) must be deposltad in a bank with Federal Deposit Insurance Corporation (FDIC) insurance Coverage and the balance esdeedmg the FDIC coverage most be lei. laterally Secured. 5. Can.S4at with the national gcei Of eapapdmg the n.p. recipients ie for minsnt) bwainae shalt bum, recipients and sob- Rcipents shall be encouraged to use mino-- Ity banks (a bank which s owned at 1ea+t be percent by minority group memben). 10. ResPonsibllfties.—Agencies respon- sible for administering programs that In- volve grants and other agreements with recipients shall issue the appropriate regulations necessary to implement the Provisions of this Circular. All Portions of such regulations that invilve record - keeping and/or reporting requirements subject to the provisions of the Federal Reports Act and OMB Circular A-49 must be submitted to OMB for clearance before being introduced iinto use. Upon request all regulations and instructions Implementing this Circular shall be furnished to the Office of Management and Budget. Agencies shall also des:g- nate an official to 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 Office of Man- agement and Budget not later than Au- gust 30, 1970. 11. Inquiries.— Further information, concerning this Circular may be obtained by contracting the Financial Manage- ment Branch, Budget Review Division. Office of Management and Budget. Washington, D.C. 20503, telephone 395• 8993. JAMES T. Lmx, Director Atraeaesxar A.—Cncot.0 No. A-110 CAIN DQUerroa® Arramotawr 8.— Lesvos No. A-1:0 aONDWO A" IN aOlsfc r.'1'hsattachmenteets forth bonding and insurance requirements for grants and other aposmens with recipients. No other bend - tug and Insurance requiremnQ mall be Inn' Posed other than those normally required by the redpieet. a ImeSpt as otherwise required by law. pant or other agreement that requires the emtrscUag (or subcontracting) for coo' etrmtim or faculty improvement& shall Pro - tilde for the reelphsnt to follow 1ts own re" FLORAL flotstn VOL 41, NO. 146-.RgAT, ART 2e, 1976 v, t An�aaw'r C.—Cmcbua No. 4-110 ssanrton An cm� asapaaaanta r a 1. This attachment sets torte record reten- tion requsrements for great@ and other ague. mend with reel plenU. Federal spoe.Ormg agencies &hall not Impose any remrd reten- Yon requirements upon redpanto other than those described below. 7. Zmeent for paragraph I. this sttacLment also applies to Aubredptents as referred to In Paragraph 6 of the basic etrmuar. 3. Prnanciai records cupDtrceng documents. atett.tleal records, and ail Other records pertl- nent to an agreement &bell be retained for a qu�allfic.sjoof ni Tares with the fallowing a. If any litigation. claim or audit I. started before the expiration of the 6 -year parade the tad records shall be retained unty all 11ti tans taints, Cr audit findings ttroleng the neory ate been resolved, b. Records for mnsxpendeble property ac- quired with Federal fund. shell be retamea for 3 Inn litter its final d1sposlYoa C. Whet. records w transferred to or ma:n- taied by the Federal 3 -year retention rquree to - bid to the recipient. applms. 4. The retention Period Atarb from the date of the submsstor. of the final cur. report or. for grants and other sgris. meat. that_ars nn.wed annually, from fie date of financial stasis.rereppoort e�� of the annual qulnmeab relating to bid guarantees, par- 6. Aeolplent arpnftftlbne should be au form■nn bonds, end Wrmant bonds unless thanked by the Tyyeal the cdnatruotlon contract or subcontract as- if they ac delis, to eubatl cooda 6100,000. For those contracts or sub- copies in Hanoi original records. contract. exceed'ng 4loo,000. the Federal 6. The Federal sponsoring agency shall agency may •tcept the bonding policy and quest transfer of certain t7omde to lb requuements of the grantee etermed the wady from recipient oe records ois when Federal agency hat m des ■ d3 aatdet.rmaa that the von e.order ant that the flovsrmm�nn Messier b adequately term retention value. However, In order protacted, If such s determination has not avoid duplicate rscorel_kNptng. a bebeetoll the mint 'um requlnmenb shall sponsoring agency may make errangemen with noslpLent organisation to retain an a. A bid gsaantes /root tads bidder sqsto- records that an continuously needed 2 sent to /fee p.riwnf of the bid preset.— Joint use. The "bid guarantee" thatl cooabt of a arm 7. The hand of the Federal sponsoring agen commitnesnt aucb a. a bid bond, oartmea ay and the Comptroller General of the vat chach, or other negotiable Matrument Sc- Stat a Or any of their duly authorised repre compsaying a bid as assurance that the bid- sentauyes, &hall hen tetra to any pertinent der will, upon acceptant. of his bid. eneute books, document., papers. and records of such contractual document. as may be m. recipient Organization and their subn- qured within the time specified. ciDt.nts to make audits. •sammatana, as - b. A performance bond on to a part o/ IM caret. add tranwepts. contractor Jar 100 percent of the contract 6. Unless otherwise required by law. no Drte.—A'pefornaacs bond" b one executed Federal sponsoring agency &hall place re- Ia connection with a coateacL to eeeure fur- atrletlons on recipient organlasttons that will Ailment of all the contractor's obligations limit public access to the under such contract. oeganinuons that are en to recipient pan e. A payment bond on theDen t es g a grant pare 0/ the ton- de on.u.te t that such When the tractor lass 100 portent o) the ooietract dsaronstreN such records must W kept price —A "Payment bond" t. one etecutad n Confidential and would have been accepted connection with a contact to assure pay. from dacasure pursuant to the Freedom at mint Be required by law of &IL persons sup. �ormauon Act 16 U.S.C. 667) Y the records Plying labor and material In the execution of had belonged to the Federal .po swag the work provided for to the tcatnot $(a@0• 6. Whore the Federal Government gugran- AVTacaaawr D. +.air No. Ml 10 in or inauree the repayment of money borrowed by the recipient. the Federal racossM woes agency, at It. discretion. may require sae. • Feds-_ andquatlnsure ing n ea d insuunnL of the recipient it the ding the standard, set In attaohmant n uwmofdee`ee FFeederraal rat o Protect the n- fooent.rrprogram imnmme related Prto ojects 4. The quire adequate Pen dalit bond eoyenp where asian me n- tea' Program n°°me rsprisen gores in- quire recipient has no comaag. and the bone e nay supported sotitn ee. Such eieml�dgef �- needed to protect the Government'. Internet. *rude miner .arses w 6. Wesre bonds &rat tmqu fired In the situ.- include, but will not be limited unto, laeome acne described above, the bonds shall be oh- from service fees, sea of opmmggyt'— urge authority holding certificates of or rental ten and royal ca on pabnte add 7761. acceptable sureties (31 CPS aoprlghta. 7. Interest earned on advemea of Pederef funds shsil be remitted to the Pedal agency accept far interest earned on aavences to saw or tmefrumanteuuN of a sate as pro- Tided by the Iatapoverameaal Coopeass Act of IM (Public W ea677). S. Proceed. from the able of real and per- .oa■I property either provided by the Fed - arm Goverdaent Cr purchased in whole or n part with Federal funds. shall be handled in accordance with Attachment N to ti, cir- cular Unlas I the agreement ing to property �asothO- visa, recipient shall hem. no obligation to the Federal OoranmsnL respect to royalties resolved as a result of copyright& or patent. produced under the grant or other agreement (w p•ragrspb S. Attachment N). 6. All other program income earned during the project period shall he retained by the recipient am, n accordance with the grant or other agreement, shay be: a.• Added to funds committed to the pmJ_ act by the Federal sponsoring agency an recipient orgenfttan and be used to fanner eligible program objectives; b. Used to finance the non-lhderal share of the protect when approved by the Federal sponsoring agency: or c. Deducted from the total project costs is determining the net costs on which the Pedenj abate of costs will be based. agency the ATnomat.T t—Corem.As No. A-110 Older sesanro Arras arsrcan o 1. The Attachment eats forth criteria and Procedures for the allomabutty or c.sh and n -kind contributions made by recipient. or aubceelplente la. nforr d to in paragraph 5 mimofil t Cl the basic circular), or third patties In sat. Islt'lag mat sharing and match lag requue- re- meat. of Federal sponsoring agencies. This sus- attachment also establishes crftera for the u evaluation of In -kind contributions made by third portion, and supplements the guidance to act forth n Federal Management Circular Fedent 73-3 with respect to cost sharing on feder- b 5117 -sponsored research. y 7. The following definitions apply for the or purpose of this mtachnu at: S. Prefect colt.. —project. costs arm all al- aw&ble cots Inc set forth in the spp:lmble tad Federal cost Prnciple&) Incurred by a recipi- ent and the value of the la -kind centribu• Yong made by the recipient or third pasties In aeeempll&hing the objective of the gone or other agreement during the project or pro- gram Period. b. Cost aksring sad matchlnp.—In general. Cost sharing and matching nprwnt that portion of project or program costs not borns by the Federal Covernment. C, Cash contributeoas.--Cash contributions rmpresent the recipient's cash outlay, Includ- ing the outlay Of nnney contributed to the recipient by non -Federal third parties. d. In -kind contfbutlov.—in-klm eonY1- butlons represent the value of aoncmh con - Unbutton. Playlded by the recipient and inn -Federal third parties. Only when su- thoeaad by Federal legislation, may property purchased with Federal funds be considered as the recipient's In -kind cootrlbuUon.. In - kind contributions may be In the form of .barges for real property and non-atpand- thls personal property, and the value of goods and a.relw directly benefiting and specifically ldent.lfiable to the project or Program. 6. oeaeral guidelines for computing can sharing or matching are m follows: efa Chat sharing or matching may coast (1) Charges incurred by the recipient as protect coats. (Not all charges require soh Outlays by the recipient during the project pared: examples are depreciation and use charges for bultdlnge and qupment.) 13) Project casts financed with cash con- trlhutad or donated to the recipient by other con -Federal public agencies and institutions. and private orgamastmns gad mdl.lduaa. (6I Project cots repreanted by eervlow and real anso pernal property, or use there- of,donated by other inn-Pedara public agencies and institutions, and private orge- nagtiona and individuals, b. Ali contributions, both comb and in - kind. than be accepted as part of the re:lpl- eat's oat abating and matching when such contributions meet all at the following criteria: (1) An vendable from the redplaot'. re orda; (3) Are not Included as aontrmutan. for any other fedeemlly-ausistld program: (3) Are necessary and reasonable for prop - or and efficient acoomplahmaat of project objective: (4) Are types of charges that would be .1 - losable under the appllcaht. cost principles; 16) An not paid by the Federal Goverd- ment under another assistance agreement (unless the agreement Is authorized by Fed- eral law to be used for coat sharing or match- ing); (6) Are Provided for In the approved budg- et when required by the Federal agency: and (7) Conform to other provision_s of this attachment. 4. Values for recipient In -kind aontribu. lion. will be established in aacocordanee with the applicable oast pnndplo. 6. specific procedure. for the recipients in establishing the value of in knd contribu- MORRAL twlmx, VOL al. No. 164— IDAT, JULY 70, 1976 32018 NOTICES • tions from non -Federal third parties are set forth below: a Valuation of aoiunteer services —Volun- teer services may be furnished by professional and technical personne:, consultants, and other skll:ed and unskilled labor. Volunteer services maw be counted as cost sharing or matching If the service is an integral and necessary part of an approved program. : ]) Rates for volunteer scrLYd—gates for volunteer, should be consistent with thou paid for blmllar work in the recipient's organization. In those instances in which the required skills are not found in the recipient organization. rates should be consistent with those paid for similar work In the labor mar- ket in whirh the recipient competes for the kind cf services Involved. (2) Volunteers employed by other organf- sotions —When an employer other than the recipient furnishes the services of an em- ployee, these services shall qa valued at the employees regular rate of pay (exclusive of fringe benefits and overhead costa) provided these services are in the game skill for which the employee is normally paid. b Valuation of donated, expendable per- sona! property —Donated, expendable per- sonal property includes such items As ex- pendable equipment, omen supplies, labora- tory supplies Or workshop and classroom supplies. Value assessed to expendable per- sonal property Included in the cwt or match- ing Share should be reasonable and should not exceed the market value of the property at the time of the donation. C. Valuation of donated, nonexpendabte personal property, buildings, and land or we thereof. (l) The method used for charging cost sharing or matching for donated nonas- Pendable personal property, buildings and land may differ according to the purpose of the grant or other agreement as follows. Ill If the purpose of the grant or other agreement is to waist the recipient in the acquisition of equipment, buildings or land. the total value of the donated property may be Cl►Imed as cost sharing or matching. (b) If the purpose of the agreement to to support activities that require the use of equipment, buildings or land, depreciation or use charges for equipment and buildings may be made. The full value of equfnmant or other capital assets and fair rental charges for :and may be allowed provided that the Federal agency has approved the Charges. (3) The value of donated property will be determined In accordance with the usual accounting policies of the recipient with the following qualifications. Is) Land and betldfaps—The value of donated land and buildings may oat, exceed its fair market value, at the time of donation to the recipient w established by an Inde- pendent appraiser (..g„ certified real prop- erty appraiser or GSA representatives) and Certified by a mryonalble Official of the recipient. (b) Nonexpendable personal property. ii — The value of donated nonexpendable personal b property shall not exceed the fair market 1 - value of equipment and property of the game age and condition at the time of donation. b IC) Use of space —The value of donated space shall not exceed the fair rental value of comparable space as established by an U Independent appraisal of comparable space S and facilities in a prlvatel y -owned building I in the same locality. (d) Loaned equipment —The value of :Caned equipment shall not eseeed its fair rental value. 6. The following a requirements pertain to in the recipient's supporting records for in kind contributions from non -Federal third tr parties. a. Volunteer services must be documented and to the extent feasible, supported by the same methods used by the recipient for its employees b The basis for determining the valuation for personal services, material, equipment. buildings and land must be documented. AnecnuzNr P.—Cacutas No. A-110 STANaasaS ran fNANCGL MANAGAL.NT SYSIZYS financial transactions, as weal as compliance with the terms and conditions of the Federal grants and other agreement. Such testa would include an appropriate sampling of Federal agreements. Examinations will be Conducted with reasonable frequency, on a Continuing basis or at schedu:ed Intervals. usually annually, but not less frequently than every two yeah The frequency of these ex- ammatlons shall depend upon the nature size aid the complexity of the acivilty. These I. This attachment prescribes standards for examinations do not relieve Federal agencies financial :management systems of recipients. Of their audit respon scope but may affect Federal aperoson rag agencies shall not impose the frequency and Scope of Such Audits. additional standards on recipients unionape- a I. aA ppropriate resolution ution of to amuse timely and emca:ly provided for in the applicable eta- recoppfoprlate resolution audit fintl In and Lutes (e.g.. the Joint Funding Simplification a. Primary recipient. Act, P.L. 93-510) or other attachments to this cip3. Primary mlpients shall require subre- circular. However. Federal sponsoring age' basic icnts iu defined In paragraph 5 of the cite are encouraged to make suggestions and circular) to adopt the standards in assist recipients in estbaiLahing or Improving Paragraph 3. above except for the require - assist management systems when much W. meat in subparagraph sa,method anregarding the use sistance Is needed or requested. of the letter -of -credit methotl and that part 2. Recipients' financial management gym- of subparagraph 2a, regarding reportingttac tome shall provide for: forms and frequencies prescribed in Attach a. Accurate, current and Complete diselo- went O to this circular. sure of the financial results of each federally ATracaurnrt O,—Ctsc°b,4 No A-110 sponsored project or program in accordance with the reporting requirements get forth in ypANCIL aas°erpa ■tgaraiftevto Attachment 0 to this circular. When a Fed- 1. This attachment prescribes uniform re- eral sponsoring agency requires exporting on porting procedures for recipients to sum - an accrual basis, the recipient shall not be nitrite expenmturo made and Federal fund, required to establish an accrual accounting unexpended for each award, report the status system but shall develop such accrual data of Federal each advanced, request advances for Its reports on the h an of an analyalm of and reimbursement when the letter-oftredlt the documentation t on hand, method is not used; and promulgate stand - b. Records that identify adequately the ash forma incident thereto. source and application of fund, for federally 2. The following definitions apply for pur- sporaored activities. Thos record, shall Coa- poses of this attachment: Lath Information pertaining to Federal a. Accrued ezpenditara--Accrued se- awards, a otion0. obligations, ' bli- POlrditurse are the charges Incurred by the gated balances. aees4. OULisn, and income. recipient during a given period requiring the C. Sffectln control ores, and aecountabillty Provision of funds for: II) goods and other for all funds, property and other last.. Es- tangible property received: 12) services per- clpienta .hall adequately safeguard all such formed by employees, contractor,. subrecipi- Agents and shall Immure that they are used sots, and other psyeas, and (3) other solely for authorized purpo es. d. Comparison of actual outlays with bud- amounts becoming owed under programs for get amounts for each grant or other which no current services or performance is meat. Whenever~ required. the Federal ■ appropriate agency, or required by b- Accrued mine. —Accrued income is the formation should be to financial osn- mum of f s earnings during ■ given period and unit cost date, pseformtnes Wit: and ( (ii) performed by the recipl- a. Procedures to minlmaan the time ell ( goods and other tangible between the uanafer Of funds from the us - amounts delivered to d t ohaeere and 12) Treasury and the disbursement by the recip- amounts becoming Owed to the recipient for lent, whenever fund& ate advanced by the rehlfib no current services or performance is Federal Oovernnant. When advances are , FFrequireed & e recipient. made by a letter -of -credit method, the recip- fund, authorized are the total amuds authorized mount rani shall make drawdO�I w close so pce- Federal fund, obligated by the Federal oov- albf. le to the time of makingth meats. ernment for use by the recipient. This able Procedure for determining the reason- amount may include any authorized rarry- In accordance lllo awlt�ty daaf�bDtty of Over of unobligated funds from prior fiscal pliable Federal Cost principles and the terms r when permitted by law or agency of the grant or other agfement re4. Inca. Con - g. Accounting records that an m d. ton. ar o e fused. In Atta a-kmd ca o » source doeumaatatlon. Supported tris circu are defined m ALtaehmant 8 to this circular. h. Rzammaums in tin farm of audits m a. ObUpatioeg.—oblagatams an the Uernel audits. Such audlta shall be made amounts of order, placed, contracts and y qualified Indirlduata who am snmclently grants awarded. services received, and alml- �dependent of those who authorW the ex. tar trsngactlons during a given period that penditure of federal fund,, to produce uo- will require payment by the recipient during taxed opinions. conclusions m Judgments the same or a future period. They shall meet the independence criteria f. Outlays. —Outlays or expenditures repre- along the line, of Chapter 3. Part 3 of the sent chargod made to the project or program. S General Accounting Office publication, They may be reported on a cash or accrual tandardi for Audit of Governnantal Organ- basis. For reports prepared an a cab beats. rations. Programs. Activities and Functions, outlays are the gum of actual cash disbwse- Thexe examinations are intended to Aecer- mints for direct charges for goods end serv- tain the effectiveness of the financial man- ices, the amount of Indirect expense charged. agement systems and Internal procedures, the value of in -kind contributions applied. that have been established to meet the terms and the amount of cash advances and pay - Id Conditions of the agreements. It is not menu made to subreeiprents. For reports pre- tended that each agreement awarded to the pared on an accrual baste outlays are the neipient be examined. Generally, examine- sum of actual cash disbursement. for direct oas should be conducted on an organise- charges for goods and Services, the amount )n-widebasis to test the fiscal Integrity of of indirect expense Incurred, the value of in- FIOfIAt IIOIsyfI, VOL 41, No. 14$ —FRIDAY. JULY 30, 1976 NOTICES 32019 kind contributions applied. and the net in- crease for decrewl in the amounts owed by the recipient for goods and other property received, for services performed by employ- ees. contractors. subrecipients and other payees and other amounts becoming owed under programs for which no current serv- Ica or performance Six required. ff. Program income. —Program income is defined In Attachment D of this circular. It may be reported on a cash or accrual barb, whichever in used for reporting outlays. h. Unobhpated balance. —Ties unomlgated balance is the portion of the funds author - lad by the Federal sponsoring agency that has not been obligated by the recipient and is determined by deducting the cumulative obligation from the cumulative funds •u- thorla d. I. Unliquldaied obUpatiou.—tor reports prepared on a cash buts. unllquldated obU- gatlom represent the amount of obligations Incurred by the recipient that has not been paid. For reports prepared on an see=ped as- pendlture tests, they represent the amount of obligations Incurred by the recipient for which en outlay has not been recorded. 3. Only the following forms will be an- thorlzed for obtaining financial Information from recipients, a. flnmncwl StagYa Report (ishlbft 1). (I) ) Bath Federal sponsoring agency shall require recipients to use the standardized Financial Status Report to report the status of funds for alt noncomtruction project& or Programs The Federal sponsoring agencies may. fawner. tun the option of not re- quiring the Financial Status Report when the Request fee Advance or Reimbureemsnt (paragraph Oat or Report of Federal Cash TSnnttion (paragraph 3b) is determined to provide adequate Information to meet their needs, except that a final Financial Status Report shall be required at the com- plellon of the project when the Request for Advance or Reimbursement foam Juno only for advanaaS. 11) The Federal sponsoring agasy @bail prescribe whether the report shall be on a cash or accrual basis. If the Federal Sponsor- ing agency requires accrual information and the reclplent-$ sxounting records are not normally kept on the accrual basis, the i's- clplent 'hall not be required to convert Its accounting system. but •ball develop such accrual Information through best estimates based on an analysis of the documentation on hand. t31 TTe Federal sponsoring agency shall determine the frequency of the Financial Status Report for each project or program considering the also and complexity of the particular project or program. Rowers; the report shall not be required more frequently than quarterly or less frequently than an- nually except as provided in subparagraph 3ai I) above A final report shall be required at the completion of the agreement. 141 Federal sponsoring agencies Shall re- quire recipients to submit the Financial Status Report (original and no more than two eopinl no later than 30 days after the end of each specified reporting period for quarterly and semi-annual reports, and 90 days for annual and final reports. Extensions to reporting due dates may be granted upon request of the recipient. b. Report of Federal CWA Transaction. :Exhibit 2) (1) When funds Sea advanced to recipients through letters of credit or with Treasury checks. the Federal sponsoring agencies shall require each recipient to sub- mit a Report of Federal Cash Transactions. The Federal sponsoring agency shall on this report to monitor cash advanced to recipients and to obtain disbursement information for each agreement from the recipients. (2) Federal sponsoring agencies may re- quire forecasts of Federal cash requirements In the' Remarks' Section of the report. (3) When practical and deemed necessary. the Federal sponsoring agencies may require receipts to report in the "Remarks" section the amount of cash adnoces in ewes of throe days' requirements In the hands of sub - recipients and to provide short nartative @x- plansuons of actions taken by the recipients to reduce the exesar balances. (4) Recipients shall be required to submit not mars than the original and two copies of the Report of Federal Cash Transactions 15 waning days following the and of each quarter. The Federal sponsoring agencies may require a monthly report from thou recipients receiving advances tousling 41 Million or more par year. (s.) Federal Sponsoring agencies may warn the requirement for submission of the Report of Federal Cash Transactions when monthly advances do not exceed 1110A00 Per recipient. provided that such advances an monitored through other forms contained In -Ibis at- ttchment, or It. In the Federal sponsoring agency-$ opinion, the recipients accounting controls are adequate to minlmise e:eeWn Federal advances. 4. Except as noted below only the follow- Ing forms will be authorized for the reclpl- anu in requesting advances and relmbura- ments. a, Asgusrt for Advance or RMmbursewsent (Exhibit 3). (1) flea Federal sponsoring agency shall adopt the Request for Advance ox Reimburse- ment as & standardized farm for all nsncon- struction programs when letters -of -credit or predetermined advance methods are not used. Federal sponsoring agencies, however, have the option of using this form for conatruc- Son programs in lieu of the Outlay Report and Request for Reimbursement for Con- struction Programs (subparagraph 4b). (T) Recipients shell be authorized to sub- mit requests for advances end relmburae- ments at least monthly when letters -of. credit Sea not used. Federal sponsoring agencies shall not require the submission of mote than the original and two copies of the Request for Advance or Balmbunemeat. b. Outlay report and request for relm. bursemeat for construction program. ;Ex- hlbft 4l 111 Each Federal Sponsoring agency shell adopt the Outlay Report and Request for Re- Imburwment for Construction Programs at the standardized format to be used for re- questing reimbursement for Construction programs. The Federal sponsorh:g agencies may, however. have the option of substitut- ing the Request for Advance or Reimburse- ment Farm subparagraph 4s.) when the Federal agencies determine that :t provides adequate Information to meet their needs (3) Recipients .ball be authorized to sub. mit requests for reimbursement at :cut monthly when letters -of -credit are not used Federal sponsoring agencies mall not require more than the original and two copies of the Outlay Report and Request for Reimburse- ment for Construction Programs. b. When the Federal sportsortng agencies need additional Information in using these forms or more frequent reports, the following shall be observed: a. When additional Information Is needed to comply with legislative requirements. Federal sponsoring agencies shall Issue In- structions to require recipients to submit such Information under the "Remarks' sea - tun of the reports. b. When necessary to meet specific pro- gram needs Federal sponsoring agencies $hall submit the proposed reporting requirements to the PIn— 1a1 Management Branch. Budget Review DlvWon, Cities of Management and Budget for approval prior to submission of the reports for clearance under the pro- visions of OMB Circular No. A-40. a. When a Federal sponsoring agency has determined that a recipient's accounting sys- tem does not meet the Standards for Fi- nancial Management contained in Attach- ment F to this circular, additional pertinent Information m further monitor grants and other agreements may be obtained upon written notice to the recipient until such time as the system is brought up to standard. d. The Federal sponsoring agency. In ob- taining information as in paragraphs I. b and c above. most comply with report clear- ance requirements of the Office of Marage- ment and Budget Clrcu:u No A-40. as re- vised. I. Federal sponsoring agencies have the option of shading out any line item an any report that Is unnecessary for decision -mak- ing purposes. 7: Federal Sponsoring spnclec should ac- cept the identical Information from the re- cipients in machine usable format or com- puter printouts in lieu of prescribed formats. a. Federal sponsoring agencies may Pro- vide computer outputs to recipients when it will expedite or contribute to the accuracy of reporting. 9. Federal sponsoring agencies are author- taed to reproduce these forms. The forms for reproduction purposes can be obtained from the Office of Management and Budget. PI0UAL twirl., VOt. 41. NO. 1411-rgiDAY, JULY 30, 1976 NOTICES V f ATTAczomR H.-Cucutsa No, A-110 MONflmJINO ANO avomNa etOOMM eO10RMANCx I. This attachment sets forth the proce- dune for monitoring and reporting program performance of recipients. 2. Recipients shall monitor the performance under grants and other agreements and, where appropriate, enure that time sched- ules are being met, projected work units by time periods an being accomplished, and other performance goals are being achieved. This review shall be made for each program, function, or activity of each agreement as set forth In the approved application or award document. 3. Recipients shall submit a performance report (technical report) for each agreement that briefly presents the folowing Informa- tion for each program, function, or activity involved as prescribed by the Federal spon- soring agency: a. A comparison of actual accomplishments with the gals established for the period. the findings of the Investigator, or both. If the output of programs or projects can be readily quantlted, such quantitative data should be related to cost data for computation of unit costa b. Reason why established goals were not met. O. Other pertinent Information Including, when appropriate, analysis and explanation of cost overruns or high unit coats. 4. Except as provided In a Md b below and in subparagraph 3a(1J, Attachment O. recipients shall submit the performance or technical reports to Federal sponsoring agen- cies and the Financial Statue Reports Cov- ering the lame period in the frequency estab- ll hed by Attachment Got this Circular and. when appropriate, a final technical or per. formance report after completion of the project on a date specified by the Federal sponsoring agency. The Federal sponsoring agency shall prescribe the frequency with which the perfornsace reports w1B be sub- mitted with the request for advance or rum- bunenent when that form Is used In lieu of the Financial Status Report. Steept sspro- vided for In paragraph 6 below, performance reports than not be required man frequently than quarterly or la frequently than an- nually. Federal sponsoring agencies may waive the requirement for recipients to sub- mit performance reports with the financial reports under the following circumstances: a When the recipient Is required to sub- mit a performance report with a continua- tion or renewal application, b. When the Federal Sponsoring agency de- termines that on -site technical Inspections and certified completion data will be .um- eient to evaluate construction projects. • C. When the Federal Sponsoring agency re- quests annual financial reports on a fiscal year basis but It is neearary to get annual prcgres reports on a calendar year basis 6. Between the required performance re- porting dates, events may occur that have significant impact upon the project or pro- gram In such Instances. the recipient shall Inform the Federal apcnsoring agency as soon as the following types of conditions become known: a. Problems, delays. or adverse conditions that will materially effect the ability to at- tain program objectives. prevent the meet- ing of time schedules and goats or precede the attainment of project work units by es- tablished time periods. This dlsclosure shall be accompanied by a statement of the acticn taken. or contemplated, and any Federal ii- eisance needed to resolve the situation b. Favorable developments or events that enable time schedules to be met sooner than anticipated or mote work units to be pro- duced than originally protected. 6. If any performance review conducted by the recipient discloses the need for change In the budget estimates In accordance with the criteria established in Attachment .1 Cc this Circular, the recipient shall submit a re- quest for budget revision. 7. The Federal sponsoring agency shall make site volts as frequently e. practicable to: a. Review program accomplishments and management control system., and b. Provide such technical assistance as may be required. 8. Federal sponsoring agencies Shall Submit Proposed technical and performance reports to the Office of Management and Budget for approval In accordance with the report clear- ance requirements of OMB Circular No. A-40 as revised. Anacnxarr I.—CnCDLSS No. A-110 fly .aNTZZQUn rntra 1. This attachment establishes the re- quired methods of making payments toreclp- lents. These methods will mintmlaa the time elapsing between the disbursement by these recipients and the transfer of fund. from the United States Treasury to these recipients whether aueh disbursement occurs prior to Or subsequent to the transfer of funds. 2. Payment& can be made to raelplents through a :etterof-cndlt, an advance by Treasury check, or a relmbunement by'Trans- sury check. The following definitions apply for the purpose of this attachment: a. Lens+-of-Crrdfe.—A letter -of -credit is an Instrument certified by an authors.' om- clal of a Federal Sponsoring agency that au- thoris a a recipient to draw funds when needed from the Treasury, through a Fed- eral Reserve bank and the recipient's com- marclal bank. In accordance with the prom slons of Treasury Circular No. 1076, as re- rleed. b. Advance by Treavury cheek, —An ad- vance by Treasury check in a payment made by a Treasury check to a recipient upon its request before outlays an made by the rec:pient. or through the use of predeter- mined payment schedules. - c. Relmbursamewr by rrecSrtry check. —A reimbursement by Treasury cheek Is a Treas- ury aback paid to a recipient upon request for reimbursement from the recipient. 3 Except for construction grants and other construction agreements for which op- tional payment methods are authorized, se described in paragraph 6, the letter -of -credit method shall be used by Federal sponsoring agencies if all of the following condition exist a. If then is or will be a continuing rela- tionship between a recipient and a Federal sponsoring agency for at least a 13 -month period and the total amount of advance pay- ment. expected to be received within that pe- riod from the Federal sponsoring agency is 1353 000 or mom, as prescribed by Treasury Circular No. 1075. Per joint funded projects the Treasury has authorized a dollar criteria of 1130.060. b. If the recipient has established or dem- onstrated to the Federal sponsoring agency the willingness and ability to mssntem pro. cedures that will minimize the time elaps- Ing between the transfer of funds and their disbursement by the recipient. C it the recipient's financial management aystem meets the standards for fund control and accountability prescribed in Attachment F to this Circular. "Standards for Financial Management Systems." 4. The method of advancing funds by treasury check shall be used, in accordance with the provisions of Treasury Circular No. 1075, when the recipient meet. all of the re- quirements specified In paragraph 3, above except those in subparagraph 3a 5. The reimbursement by Treasury check method shall be the preferred method if tin recipient does not meet the requirement• specified in subparagraphs 3b and 3c, above At the option of the Federal sponsnrlat agency, this method may also be used on an construction agreement, or if the major por- ticn of the program is accomplished throug't private market financing or Federal loans and the Federal assistance constitutes a minor portion of the program, When the re. imbursement method Is used, the Feder.,: sponsoring agency shall mase payment within thirty day. after receipt of the billing unless the billing is Improper. I. When the letter -of -credit procedure is Used. the recipient .hall be issued one con- solld►ted letter -of -credit whenever posstb;e to cover anticipated cash needs for all grants and other agreements awarded by the spon- soring agency. Likewise, to the extent possi- bie, when the advance by Treasury cheek method 1 used, advances should be con- aolldated (pooled) for III grants and othe- agreements made by the sponsoring agency to that recipient. 7. Unless otherwise required by law Fed- eral sponsoring agencies shall not withhold payments for proper charges made by recipi- ents at any time during the project or pro- gram period unless (a) a recipient has failed to comply with the program objectives. award condition., or Federal reporting require - menu: or Ib) the recipient Is Indebted to the United States, and collection of the Ir.- debtedna s will not impair accomplishment of the objectives of a project or program sponsored by the United States. Under such conditions, the sponsoring agency may, upon reasonable notice, Inform the recipient that payments will not be made for obligations Incurred after a .peemed date dntll the conditions are corrected or the tn- debtednees to the Federal Government is liquidated. Arracxnswr J.—Ctacutu No. A-110 mismw OF rmANCLS PLAN. 1. This attachment sets forth criteria and procedure. to be followed by Federal span - acting agencies In requiring recipients to re- port devisUons from f(tl.i1a1 plane and to request approvals for financial plan re- visions. 2. The financial plan Is the financial es- premon of the project or program as ap- proved during the application andFor award proem. It may include either the Federal and non -Federal chart, or only the Federal share. depending upon sponsoring agency require - menu. It should be related to performance for program evaluation purposes whenever appropriate and required by the Federal Sponsoring agency 3. For nonconstructlon awards, recipients shall Immediately request approvals from Federal sponsoring agencies when there Is reason to believe that within the next srven days a revision will be necessary for the following reasons: s. Changes in the scope or the objective of the project or program. b. The need for additional Federal fund- Ing. The transfer of amounts budgeted fen Indirect costs to absorb increases Indirect costs or vice verse. if approval Is required by the Federal sponsoring agency. d. The expenditures as require approval .n accordance with FMC 73-0, "Cwt Principles for Educational Institutions" For all other awards. approval requirements for other Items of expenditures may be imoosed If they an consistent with those in FMC 73-S. NO other requirements for specific items may to FIDf1AL 1EOI$TEg, VOL. 41, NO. 141--nrDAY, JULY 30, 1976 NOTICES 32035 Arrac.seaNv N.-.Ci p,, No. A-1 10 nO►ory NAwaoaarrr arANDAar. 1 This attachment prescribes unifor stardards governing management of pro erty furnished by the Federal Government whose Cost was charged to a project sit ported by a Federal grant or other agreemen Federal sponsoring agencies mail require clplenta to observe these standards and grants and other agreements and shall .mpose additional requirenants unless ape clllcally required by Pectoral law. The recipl ant may Use its own property managemen standards and procedures provided it observe the Provisions of this attachment, This at t►chment also applies to lubrecipients referred to In Paragraph 6 of the basic cr cular. 2. The following defnitlona apply for th purpose of this attachment: a. Real Property.—ltea property tin lard. Including land improvements, strait • Lures and appurtenangy thereto, but es eluding movable machinery and equipment b. Personal Property: personal propert of any kind except real property. It may tangible —having physical existence, or Ictan gible—having no physical existence, such patents, Inventions and ccpyrighta, C. Nonarpendabl, personal propeny_-Nort. expendable personal property means tangible personal property having a useful life mom than one year and an acquisition next of $300 or more per unit exempt that recip- ients subject to Cast Aeauuntipg standards Board regulation. may use the CASE atagd- erd of $400 per unit and useful life of two years. A recipient may use Its awn definition of nonexpendabl. Personal property provided that the definition would at lent Include all tangible personal property es defined above, 4. Zflend.blg able personal property ras a- nd- personai property other tangible than noaespsndahla property. I. Excess Props P. —ca Property means property under the control of any Pedenl agency that, se dotarmmed by the head thereof. 16 no longer sequined for Its needs or the discharge of its respagalbUttles. f. Acquisition cost of purchased nosex- pendableparentalPropaRy_AequiaiUn cost of an Item of purchased nanexpeadable per- wnai property means the net Invoice unit price of the property Including the cast of modifications, attaebmeat., aecerorles or auxiliary apparatus necessary to rocks the property Usably for the Purpose for which it was acquired. Other chart., such as the cast of InsWlatlon, transportation, Sean, duty or protective In -transit loearane,. mall be Included -or excluded from the unit acquisi- tion coat in awordanq with the recipient's regular accounting practices, g. Exempt property.-1iYempt property means tangible normal property acquired In whale or in put with Federal funds. and title to which Is vested In the recipient with- out further obligation to the Federal Govern- mer-t except as provided In subparagraph Ca below Such unconditional vesting of title will be pursuant to any Feder,; legislation that provides the Federal sponsoring agency with adequate authority. 3. Real property. —Bach Federal sponsoring agency shall prescribe requirements for re- clplenu concerning the use and d:epoxltion of real property acqufred partly or wholly t.nder grants or other agreements. Unless otherwise provided by statute, such reguire- ments, u a minimum, shall contain the fallowing. a Title to real property that) vest In the recipient subject to the condition that the recipient shall use the real property for the authorized purpose o: the project, se long as It Is needed. • b. The recipient shall obtain approval b the Federal sponsoring agency far the ur real property in other projects when the m m clpient determines that the property s no p- longer needed for the purpose of the original or project. Use In other projects shall be limited p• to those under other federWysponwtedpmJ- t. Bees (le. grants or other agreements) cr pro- ve- gram, that have purposes consistent with er those authorized far support by the Federal not sponsoring agency. C. When the real property Is an longer needed as provided In a and b above, the t recipient shall request dlspoaitj Inatmc- tlons from the Federal sponsoring agency or Its duwessor Federal sponsoring agency. The u Federal sponsoring agency &halt observe the following rules in the disposition Instruc- tions: e (1) The recipient may be permitted to re- tain title after it compensates the Federal aria Government in an amount computed by ap- plying the Federal percentage of participa- tion In the cost of the original project w the fair market value of the property. y (2) The recipient may be directed to sell be the property under guidelines provided by the Federal sponsoring agency and pay the u PYieral Government an amount Computed by applying the Federal percentage of par- ticipation In the cost of the original project to the proceeds from sale latter deducting of actual and reasonable selling and fl -up ex- actas, If any, from the sales proceeds). When the recipient s authorized or required to sou the property. proper ales procedures shall be established that provide for competi- tion to the extent practicable and result In the highest possible return. 13) The recipient may be directed to then.- fer title to the property to the Federal Gov- ernment provided that in such eases the recipient shall be entitled to compensation computed by applying the recipient, per- centage of participation in the cost of the program or project to the current fair market value of the property. 4. Federalg-cmaed aaaexpeadabls personal Pr0PrrtYrTitle to federally -owned property remain, vested In the Federal Government. Recipients shall submit annually an inven- tory Wing of federally -owned property in their custody to the Federal sponsoring agency Upon completion of the agreement or when the property 11 no longer needed, the recipient shall report the property to the Federal sponsoring agency for further agency utilization. If the Federal sponsoring agency has no further need for the Property, it mall be declared eater and reported to the General Services AdminlsLruOut. Appropriate dtspoat- Lon instructions will be Issued to the n- cipient after completion of the Federal agency review. b. Exempt property. —When statutory au- thority .slats, (e.g, P.L. 83-834, 42 OB.C. 1892) title to nonezpendable personal prop- erty acqu,red with project funds, shall be vested In the recipient upon acquisition Un- 1eax It s determined that to do to is not in furtherance of the objectives of the Federal sponsoring agency. When title is vents.1 in the recipient, the recipient shall have no other obligation. or accountability to the Federal Government for its use or disposi- ,Ion except as provided In ga below. d. Other nonezpendable property, —When other nonexpendab:e tangible personal prop- erty is acquired by a recipient with project funds, title shall not be taken by the Fed- eral Government but shalt vest in the n- clplen: subject to the following conditions: a. Right to trans/er title —For items of ronexpendable personal property having a unit acquisition cost of $1.000 or more, the Federal sponsoring agency may reserve the right to transfer the title to the Federal 1 Government or to a third petty named by of the federal Government when such third Party is otherwise eligible under existing statutes. Both reservation shall be subject to the following standards: i]) The property shall be appropriately Identlned in the grant or other agrren.er.t or otherwise trade known to the recipient In writing. 42) The Federal sponsoring agency abet: lieu. disposition instructions within 120 cal- endar days sitar the end of the Federal sup. Port of the project for which It was acquired If the Federal sponsoring agency falls to issue disposition Instructions within the 120 cal- endar day period, the recipient shall app:y the standards of subparagraphs 6b and 6c as appropriate. (3) When the Federal sponsoring agency exercises its right to take title, the personal Property shall be subject to the provisions for federally -owned nonexpendable property discussed In paragraph 4. above. (4) When title is transferred either to the Federal Government or to a third party the provisions of subparagraph 6c(2)b) should be followed. b. Use of other tangible nonexpendable property Jor which the recipient has title (1) The recipient shall use the property In the project or program for which it was acquired as long as needed, whether or not the protect or program continues to be sup - Ported by Federal funds. When no longer needed far the original project or program. the recipient aball use the property in con- nection with its other federally sponsored activities, in the following order of priority: (a) Activities, in the following order of priority: (b) Activities sponsored by other Federal agencies. (2) Shored see. —During the time that nonexempt nonezpendable personal proper- ty Is held for use on the project or program fee which It was acquired, the recipient shall mate It available to, use on other proj- sets Or programs It such other use will not Interfere with the work on the project or program for which the property was origl- naily acquired. First preference for such Other use .ball he given to other projects or program. sponsored by the Federal agency that financed the property: second prefer- ence shall be given to projects or program. Sponsored by other Federal agencies. If the Property is owned by the Federal Govern- ment, Use on other activities not sponsored by the Federal Government shall be Per- mianble if authorrrad by the Federal agency Our Charges should be considered if appro- priate, C. Disposition of other nanerperidable Property. —When She recipient no longer needs the property as provided In 6b above. the property may be used for other tctivi- tles in accordance with the following stand- ards: I1) Nonexpendable property with a unit aequtslt/on cost of less than $1,000. —The re- cipient may use the property for other activi- ties without reimbursement to the Feder,: Government or sell the property and re- tain the proceeds. (2) Nonexpendabfe personal property with 4 unit arquuct ion croft of $1.060 or more — The recipient may retain the property for other uses provided that compensation Is made to the original Federal sponsoring agency or Its successor. The amount of eom- pensatlen shall be computed by applying the percentage of Federal participation in the coat of the original project or program to the current fair market value of the property. If the recipient has no reed for the property and the property has further use value, the recipient shall request disposition instruc- tions from the original sponsoring agency. FEDERAL REGISTER, VOL 41, NO. 141--FRIOAy, JULY 30, 1976 I-• •sCc. Tb. Federal apcnSnng agency shall deter- mine whether the property can be used to facet the agency's requirements. If no re- gflrement exists within that agency the availability of the property shall be report. ed to the General Services Administration by the Federal agenry to determine whether a requirement for the properly estate In Other Federal agencies. The Federal sponsoring agency shall Issue Instruction to the recipi- ent no later than 120 days after the recipi- ent's request and the fcllowing procedures shall govern: IS) If SO instructed or If disposition In- structions are not issued within 130 calen- dar days after the recipient -s request. the recipient &hall Bell the property and reim- burse the Fedora: sponsoring agency an amount computed by applying to the saln proceeds the percentage of Federal perticl- patlon in the cost of the original project or program Howeverthe recipient shall be permitted to deduct and retain tram the Fed- eral share $100 or ten percent of the pro- ceeds. whichever Is greater, for the reclplent'e selling and handling expenen. Ib) If the recipient is Instructed to ship the property elsewhere, the recipient shall be reimbursed by the benefiting Federal agency with en amount which Is computed by applying the percentage of the recipients Participation in the cost of the original grant project or program to the current fair market value of the property, plus any reasonable shipping or Interim storage coats inceued. (C) If the recipient is instructed to other- wise dispo,. of the property, the recipient Phall be reimbursed by the Federal aponeor- ing agency for such costs Incurred in its disposition. d. Property management standards nonexpendabie /a P+ +fY•—The se. property management standards for no coaax- pendable personal property shall Include the following Procedural requiremens: (1) Property records ahall be maintained accurately and shall Include: la A description of the property, ID) Manufacturer', aerial number, modal numb", Federal stock number, national stock number, or other identlfcatlor sum. bar. (c) Source of the Property, Including gnat or other agreement number. Id) Whether title eau In the recipient or the Federal Government (0) Acquisition data lm data received, It the property was furnished by the Federal Government) and cost. (f) Percentage (at the end of the budget year) of Federal p rtfelpauon in the coat of the Pro;eet or program for which the prop- erty was acquired. ;Nat applicable to prop- erty furnished by the Federal Government.) (g) Location, use and condition of the property and the date the Information was reported. • Ib) Unit acquisition coal fi) Ultimate dispoutica data, Inc:uding date of disposal and sales price or the method used to determine current fair market value where a recipient compecaatn the Federal f sponsoring agency for its share 13) Property owned by the Federal Gov- f ernment must be marked to indicate Fed- s oral Ownership. 131 A physical inventory of property anal: p be taken and the result reconciled with the e Property records at least once every two years. Any differences betweer. quantities de- termined by the physical inspection and ci those Shown in the accounting records shall be Investigated to determine the causes of the difference The recipient shall, In connet- in tion with the inventory, verify the esstence, t current utilization and continued need for the property (4) A control system mall be In effect to so insure adequate safeguards to prevent lo. se , damegc,.or theft of the property. Any 1 damage, or theft of nonespendabie props shall be Investigated and fully documan If the property was owned by the Fed# Government, the recipient shall promptly tiny the Federal sponsoring agency. (61 Adequately maintenance procedu shall be Implemented to keep the pro In good condition. (6) Where the recipient Is authorized required to sell the property, proper sal Procedures shell be established which woe provide for competitlon to the extent prect cable and result in the highest paeslble turn, 7. Expendable personal property —Title expendable personal property shall vest the recipient upon acquisition. If there Is residual Inventory of such property exceedf $1,000 in total aggregate fair market watts upon termination or completion of the or other agreement, and the property is needed for any other federally aponso project or program the recipient shall retal the property for me on nontederslly $pon sored activities, of sell It. but must in tithe case. compenate the Federal Governmen for Its share. The amount of compenestto shall be computed in the came manner nonexpendable personal property. I. Intangible property. a, fnvemtfone and pafens —If any P Produces patentable items, patent rights Proeeeses, or Inventions, in the coure, work sponsored by the Federal Government such fact shall be promptly and fully report ed to the Federal sponsoring agency. Unlesu there s a prior agreement between the re- cipient and the Federal sponsoring agues an dlaposition of such Items, the Fad Sponsoring agency .half determine whether Protection on the invention or discovery shall be sought. The Federal sponsoring agency will also determine bow the rights In the In- vention or discovery —Including rights under any patent l+ued thereof—sha11 be allocated and administered in order to protect the pub - Ile Int.as6 consent with "Government Patent Policy" (President's alemmandum for Heads of fleentlee Department. and Agencies. August 33, 1071, and statement of Government Patent Policy as printed m 30 F.R. Ideas), b. Copyreyhtt.—Except zee otherwise pro- vided in the terms end conditions of the agreement, the author or the recipient argan- Iaatlon s free to copyright any books, Pub- icatlona, or other eopyrightable materials developed In the enure of or under a Fed - Ira) agreement, but the Federal sponsoring agency shall reserve a royalty -free, nons- eluelve and Irreroc.ble right to reproduce, publish, or otherwise use, and to authors. othen to use, the work for Government put - a. Arrsnnsa ve O.—Cnceua No. A-110 Faacnasaxr.r RSrraaaat I. This attachment Provides standards for use by recipients in atablfahng proceduas or the procurement of Supplies. equipment. constructon and other Serving with Federal ands. Thee Standards are furnished to en- ure that such materials and service, are ob- Lined In an effective manner and In com- llance with the provisions of applicable Fed - al law and executive orders. No additional rocurement standards or requirements shall be imposed by the Federal sponsoring agen- e upon recipients union specifically re - aired by Federal Statute or esecutive orders 3. The standards contained in this attach- ent do not relieve the refiplect of the con- tactual responsibilities arising under It. oat, trative Issues arising out of procurement fly entered Into, in Support of a grant of other fed: agreement. This Includes disputes. claim, 'al protes4 of award, source evaluation or other no- matters of a contractual nature Matters con- eerning violation of law are to be referred to era such local, State ar Federal authority aS may FIDIIAL 111611ft1, VOL. 41, MO. 14a—RIDAY. JULY 30, 1774 NOTICES � 1 , x bynrsable contracts, purchase orders, Ines. Uve contracts. Shall be determined by the recipient but must be appropriate for the partlmn:.r procurement and for promoting the best interest of the program Involved. 'The "cost- plus•'-percentage-ot-cost" meth - ad ::f contracting shall not be used. (51 Contracts ahal be made only with re- sponsible contractors who passer the po- tentlonal ability to perform sucoearfully under the terms Ind conditions of a pro- posed procurement Consideration shall be given to such matters as contractor Integrity, record of put performance, financial and technical resources or Accessibility to other neceesry resources. (6) All proposed sole source contracts or where only one bid or proposal is received In which the aggregate expenditure Is ex- pected to exceed 86.000 shall be subject to prior approval at the discretion of the Fed- eral sponsoring agency. (7) Scene form of price or cast analysis should be made In connection with every procurement action. Price analysis may be Accomplished in various ways, Including the comparison of price quotatIo ia submitted. market prices and similar Indicla, together with discounts Cast analysis Is the review and evaluation of each element of cost to determine ressonablenee. allocabillty and allowab111ty (8) Procurement record@ and film for pur- cr.ases in excess of $10,000 stall include the fol lowing (a) Beale for contractorselection, Ib) Justification for lack of competition when competitive bide or offers are not obtained: (C) Bass for award cost or price rg) A system for contract adminlstrtion shat: b. maintained to ensure contractor conformance with terms. conditions and specifications ct the contract, and to ensure adequate and timely followup of all pur- chaser. 4. The recipient 'hall include. In Addition to provslons to define a eouad and complete agreement, the following provsiors in all contract.. These provisions shall also be ap- plied to subcontracts. A. Contracts In excess of 810.000 shell con - Lin contractual provisions or conditions that wet: allow for administrative contrac- tual or. legal remedies In Instances to which contractors violate or breach co.ttraat terms, and provide for such remedial Ratio'As may be appropriate b Al: contracts in excess of 810.000 shall contan suitable provkdons for tertnieaticn tv the recipient including the manna by wh.rh termination will be effected and the basis for settlement. In addition, such con- tracts shall describe conditions under which the mnVect may be terminated tar default as wall as oonmtlons where the contract may be to minated because of owcumarnc" be- yond the control of the cobtractbr. c. In all contracts for construction or Ia- cIULy tmprovernant awarded far more than 8100,000. recipients shall obsa've the bond- ing requirements provided in Attachment B to this circular. d. An contracts Awarded by recipients and their contractors or subgsnter having a value of mote than $:0.000. Shall contain a provision requiring compliance with Execu- tive Order 11246, entitled 'Equal Employ- ment Opportunity." a. amended by Executive Order 11375. and as supplemented In Depart- ment of labor regulations (41 urn. Part 60). e. All contracts end eubgrants to exc of $2.000 far construction or repair awarded by recipients and subreciplents shall Include a provision for compliance with the Copeland "Anti -sick Back" Act (18 U.B.C. 674) as supplemented in Department of Labor regtlattois (29 CFR, Pan 3) This Act pro- vldes that each contractor or subgrantee shall be prohibited from Inducing, by any means, any person employed in the construe- tion completion, or repair of public work. to Rive up any part of the compensation to which 4e is otherwise entitled. The recipient shall report all suspected or reported viola- tions to the Federal sponsoring agency. f. When required by the Federal program legislation. all construction contracts awarded by the recipients and subrecipients of more than *2.000 shall include a provision for compliance with the Davis -Baron Act 140 C.S.C. 276a to a-7) Rod as supplemented by yleDatment of Labor regulations (29 CPR. Part 6). Under this Act contractors shall be required to pay wag" to laborers. And me- chanics at a rate not less than the minimum wag" specified ins wage determination made by the Secretary of Labor. In addition, con- tractors shall be required to pay wage not lees than ones a week. The recipient shall place a copy of the current prevailing wage determination Issued by the Departwent of Labor In each solicitation and the award of a contract abaLbe conditioned upon the acceptance of the wage determination. The recipient shall report all suspected or ;•- ported violations to the Federal sponsoring agency. g. Where applicable, all contracts awarded by recipients in excess of 82.000 for construc- tion contracts and in titan of 82300 for other contracts that involve the employment of mecban:cs or laborers, shall include a pro- vision for compliance with sections 103 and 107 of the Contract Work Noun and Safety Standards Act 140 USC 327,830) As sup- plemented by Department ci Labor regula- tlons (29 CPR, Part 6); Under section 103 of the Act, each contractor shall be re- quired to compute the wages of every me- chanic and laborer on the basis of a standard work day of 8 hours and a standard work week of 40 hours. Work in excess of the standard workday or workweek s perm(ssible provided that the worker Is compensated at a rate of not less than I yes times the basic rate of pay for all hours worked in excess of 8 hours in any calendar day or 40 hours In the workweek. Section 107 of the Ac: is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary hazardous or dangerous to his health and safety as de- termined under construction safety and health standards promulgated by the Secre- tary of Mbar These requirements do not apply to the purchases of supplies or mate- rials or articles ordinarily available on the open market, or contracts for transportation or transmission of lnylllgenra Is. Contractor or agreements. the principal purpose of, which Is to create, ds%elop or Im- prove products, processes or methods; or for exploration into fields that directly concern public health safety or welfare: or contracts in the field of science or terhno:ogy in which there has been little significant experience outside of work funded by Federal assist- ance, shall contain a notice to the effect that matters regarding rights to Inventions and materials generated under the contract or agreement are subject to the regulations is- sued by the Federal sponsoring agency and the recipient The contractor shall be ad- vised as to the source of additional Informa- tion regarding them matters. L AD negotiated contracts texcept those of 910,000 or less) awarded by recipients shall include a provision to the effect that the recipient, the Federal sponsoring agency. the Comptroller General of the United States. or any of shale duly authorised represents - tins, shall have access to any books, docu- ments. papers and records of the contractor which an directly pertinent to a specific pro- gram for the purpose of making audits. examinations. excerpts and tranarr)ptlors J. Contracts and subgrans of amounts in excess of $100,000 shall contain a provision that requires the recipient to agree to com- ply with all applicable standards, orders or regulations issued pursuant to the Clear Air Act of 1970 (42 U.S C. 1867 et seq.) and the Federal Water Pollution Control Act 133 U.S.C. 1281 et seq I As amended. Violations shall be reported to the Federal sponsoring agency and the Regional Office of the Fn- vlronmental Protection Agency. lPR Doc.76-219M Pled 7-29-76:8:45 Ann] R09At t4961Sft8, VOL. 41, NO. 146—igiDAY, JUltr 30, 1176 ¶1170 91170 Office of Management and Budget Circular A-133 (3/16190) OMB CIRCULAR NO. A-133 TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS SUBJECT: Audis of Inst.tutiors o: Higher Education and Other Nor Profl: Inst.tutions I. Purpose. Circular A-133 esiab:isnes audit requirements and defines federal responsibilities for implementing Lnd monitor.ng such requirements for .astiwtions of higher education are cihcr nun-prnfiinstitu:.)rs iece iving feurra: awards. 2. Authority. Circu'ar A-:33 -s issued under the authority of the Budget anc Accounting Act of 1921, as amended: the Budget and Accountng Procedures Act of 1950, as amender. Reorgan.za:.or. Plan Nc. 2 cf 1970; and ExecLt:ire Order No. 7154;. 3. Supersession C:rcutar A-133 superseees A:tachmen: F, subparagraph 2h, of Circular A-I:o. "IJnirnrm Acministrative Requ..ements fo: Granis and Other Agreemer.is with Irstitutiors o: Higher Education, Hospitals and Other Non -Profit Organization 4. Appl;rabifny The previsions of C,rcr.'ar A-133 apply to: a Feceral depar:mer.ts and agenc.es respcosib:e for adm:ms:ering prig -a-11 that mvo:ve giants, cost -type contracts and ether agreements with instituucns of hig:;er education and other non profit recipients. b Non -prof.: institution,, wiener they are recipients. receiving awards direc:.y from federal agerc:es, or are sutrecipients, receiving awards me:nc tiv through other -ecip:cnts. These p:rr.ciples. to the extent permit:ed by law. cor.stitu:e gitidarce :o be applied by agencies ccn:istent with and within the discretion, cortex:eJ by the slatutes governing agency acron. 5 Requirements and Resp&natbumes. The specific requirements and resoons;bilities of federal dept:tme3t, an agencies and institutors of nigher educatior and other non -prof.: ms:,:ution% are set forth in the attachn'ent. 6. Effectne Date. :he prov:s:cns of Circular A-133 are effective upor publication and shall app:y :o audit, of non-profit irstrtutions for fisca. years I hat begin on Cr after Jan. 1, 19990. Earlier implementation is encouraged. However. un-... this circular is Implemented, :he audit provisions of Attachment F to Circular A -I13 eh.: continue to be observed. n. Policy Review (Sunset) Date. Circular A-:33 w.:: have a po:icy review :nree years f-om the date of issuance. 8. inquiries. Further Informatics. concerr.ing Circt.:ar A-133 may be cb:a.ned by contac:.ng the Financial Management Civ:sion. Office of Management and Budget, Washington, DC. 2003, teleph::ne (2C2) 395-1993. Rich:.rd G Darnar. Duectcr OMB CIRCULAR A-133 AUDITS OF INSTITUT'ONS OF HIGHEP EDUCATION AND OTHER NON-PROFIT INSTITUTIONS ATTACHMENT 1. Defir,;ions. For the p'.roses n: ih.s circular, :he following definitions app:y a "Award" nears firanciai as•:starce anc lederal cos: -type conti acts used to buy services o: goods for the use o! the federal government Jr irc:udes awards received directly [torn the federal agencies n::ndirectly through recipients. Ii does not include procurement contracts :e vendors under grants or cortracts, used to buy goods or se:v;ces. Audits of such vendors shat: he covered by the terms anc conditions of I.e contract. b "Cognizant agency" mean, the fedccal agercy assigned by the Office of Mi tagenent and Budget to carry our the rest;onsicilines described in pa: agraph 3 cf this attacnnert. c. "Coordinated audit approach" -nears an aidit wherein the independent aad.tor, and other federal anc roc federal auditors consider each (ither's work. iv determining the nature, timing and extent of his or her own auditing procedures. A coordinated audit most be cord,icted in accordance wi:h Government Aadutrg Standards and meet the objectives and reporting :equrertents set forth ;n paragraph :2(b) anc 15, respective:y, u! this attacnner.l. The oheriive of the coordinated aacn approach is to minimize duplication of audit effort, but net to :.min the scope cf the audit work so as to preclide :he ndependen: auditor from meeting the nh;eciive> set form in paragraph 12(b) or ssumg :he reports required In paragraph 15 in a t:me..,y manner. d. "Federal agency" has the same meaning as the term agency' .n Section 551(1) of '.tle 5. Jn.ted States Code. e. "Federal Financial Assistance." (1) "Fedc-al f.narcial assistance means asstatarce provided by a federal agercy to a recipient or subrecipteet to carry out a program Such assistance may ;.e in the form of grants: — contracts. cooperative agreements; loans loan guarantees, — property; — interest subsid.es; — inturan;e, — d.rec: appr:,prrations; other non -cash assistarce. ;2) Such assistance does not include direct federal cash assistance to individuals (3) Such assistance includes award, iece:ved directly from federal agencies. or .ndirectly when subrec.pients receive funds identified as federal funds by tee: pier. is. (4) The gran::ng agency is respersinle for ,dedtify.ng :he source of funds awareed to recipients: the recip:en: is responsible for identifying the source of luncs awarded to subrecipie-its f "Generally accepted amounting principles" has :he meaning spec;f:ed ir. the Government Auditing Standard,, g "Independent auditor" means: (1; A federal, state or vocal government auditor w:io meets :he standards specified in :he Government Auditing Standards. or (2) A public accourtant who meets such standards. h. "Internal control structure" means the policies an procedures established to provide reasonable a,surance :ha: (1�) Resource use is consistent with .aws, regdations and award terms: (2) Resources are sategt.ardec against waste, :mss and m.suse; and (3) Reliable da:a are obtained, maintained and fairy disclosed in reports. i. "Major program" means an individual award or a number of awares in a category of federal assistance or support for which tonal expenditures are the larger of three percent of total fedora: funds expended or SIC0.000, on wh.ch the auditor will be required to express an opinion. as to whether :he major program :s being administered in comp:lance with laws and egulations Each of me following categor.es of federa: awards shall constitute a major program where total expenditures are the :arger of three percent of total federal finds expended or S100.000. — Research and Development. -- Student Financial A:d. — Individual awards not in the stt.dert a.d or research anc development category. j. "Management decision" means the evaluation by the management of ar. estab:ishmert of the findings and recommendations included in an audi: report and the issuance of a final decision by management concerning its response to such findings and recommendations, inn:tiding actions concluded to be necessary. K. "Non-profit institution" means any O Thompson P..blis"ing Group Inc Apri '790 Tab 1100 • Page 491 a 1117o. corporation, tru>t, association, cooJeralive or other organization which 1) is operated primarily for sciertif:c, educct.oral, service, cha:itab.e or similar purposes in the public interest, 2) is riot organized primarily for profit, and 3) uses its net proceeds to maintain. improve, and/or expand is ope!ations. The term "non-profit msti:itio.is" includes :ns:,:utiors of higher edacauon except these ,nsum:.ons :hat are aud.ted as par: of s ngle aadas .n accordance with Circular A-128 "Audits of State and Loca! Governments " The :crm dies not inclLde hospitals which are no: af!iliated with an ms:.tution of higner education, or state and local govemnen:s and :radian ir:bes covered ty CircL,a: A-:28 '•Audits of Stare ar.d Local Govemme-rts " I. "Oversight" agency means the rederal agency that prev.des :he predominant amCLnt of direct rindir t:: a recipient rot assigned a cogr:zan: agency unless no direc: funding s received. Where there :s ro direct funding, :he feceral agency wilt the predominant icdi:ect funding wilt a,.sLme the genera: oversight responsibilities The du::es of one over::g'tt agency a:e described in paragraph 4 of this attachment :n. "Recipient" means an vrgar,;zzl3otl receiving .fir.anc.a. ass.stance to carry out a program vuec:.y front federal agencies. n. "Research and development" includes a:: research activities. both basic and applied, and all development activities that are suppored at unive:sj:.es, colleges and other ncn- profit : nst: rations. "Research" s cef.ned as a systematic study directed towax fuller scientific knowledge or Lnderstanding of the subject studied. "Deve:opment" :s :he systematic: use of knowledge and understanding gained from research directed toward the procuctron of useful materia.s, dev.ces. systems or methods, including des;gr. and development of prototypes and processes. o. "Student Financial Aid" inc:udes those programs of general student assistance in which institutions participate, such as those authorizer. by Title IV of me Higher Education Ac: of 1965 which is administered by the U.S Department of Education and similar programs provided by Diner federa. agencies. It does not include programs wh ch provide feaowsh;ps or similar awards to students on a competitive basis, or for spec;fied studies or researcn. p "Subrecipienf• nears any person or government department, agency, establishment o: non-profit organizatior. that receives financial assistance to carry out a program 1h:ough a pr.mary rec•p,eit or ether suhrecinier.t, Out dies not inc uie ar ndiv dial.:nat s a beneficiary or such a prograrr.. A subrec.pient may a so he a direct recipient of federal awtt ds under othe- agreements q. "Vencnr" means ar organization providing a reap Cr.: r.: subs ecipien: *th generally recm-ec goods or services that are re:Lied to the admrn.stranvc 5LpZOl: of the federal assistance p cg:an. 2. Audu of N n: Pe;:; instil i t.ot, L. Rflu•renjenis Based on A.t ,ds Ree en ed (l, Nor -profit msti tduon> that -e,-rive SI00.000 or more a year in federal aw,.rds shell 'lave an ad::it made in ..ccote:.nee 'Alit the Crnv;s ois of this e:realar. lloweve:, nor prnri: ;nstitulicnc jeer vng SIC0.000 Cr more but Le:v.ne awa•vs under oils Cr.e program have :he o:.ticn of having ar, and : of the.:.institution prepared n accordance w th the previsions of the crcular or havirg ar. aud,: made o; the ore piogra,n Fcr fror or sutscgLen: years, when an ;csti:dticn has orly loan guarantees or ou:standing loans that were mace pie+L.:usly. ne .nsr.tu..nn may be required to conduct and is !or those pregrann..,I accordance with regulations Cf the fever:.. agencies provid rag those guarantees or loans. (2) Norprnri; irsu:arnns that -eei'e a: leas: 52`.000 bLt less than $l0C,000 a }ear in fe(es, awards sha.: have an a�'it made ii accordance with this c.jcalar ar have an and:: trade of each federal award, it accordance wi:n rederal :aws sic regu:d: ohs gcveramg the progra.s or which they participate. i3) Non-profit inatituaons roc eivng less tnac $25.•000 a year it. federal awards are exempt ,from federal audit requcenenrs. but records mist be available for review by appropriate nff.c:als of ;ie !ederal grantor agency nr suhgrancing er.tiiy b Overe.ght by Federal Agencies (f) To each of the larger anti -profit institutions the Office of Managemen: and Radget 'ONR) will assign a .rederal agency as the cognizant agency for monitoring audits and ensuring the resolution of aden frrd rags that affect tie programs of more than one agency. (2) Sma,;er instigations not assigned e. cognizant agency w.:] be under :he genera] oversight of one !edera: agency lha: provides them wAIl the most fLnds (3) Assignments to federal cogn.zan: agencies 1O- caryrng ode -esponsih::ities in. [iris section are set forth ;n a separate sapp ement :o ih.s cr.cular. (4) Federal gavc.nmen:-cwr.ed. ecctrac:or-operated facilities at ns: tu: ors or lasoictories operated pnnar•;v tot the government are no: ncluced in the cognizance assignments These will re-na.n the :esponsib.:.ty of the contracting agenc es. The listed ass.g'.mentc carver all of the functionin tt;s c.rcclar Ln.ess otherwise indicated the Oft.ce or Maiagenert aid Rdcgct w,.. coord.na:e changes in ..ger cv assignments. 3. Cogniaan; Ager•cv Resporsrbrtl;jer. A cognizanr agency snal. a. Ensure that ad is are nade and retorts are received in a timely mariner and .n accordance with the requirements o: thiciao la: b. Provive technical aev,ce and . aisor to institutions ale independent audj:o.s c Obtain or make qual.:y control reviews of selected audits Mace by r.: r- fecera. audit o-garizatioes, and provice :he results. when appropriate, to other m:e-es:ed crgaiiza:.ons. d. ?rnnp•.y info:n other affected fedei al agenc es and appropriate fedei a. law enforcement officials o: any reported ::; ;a, acts or .rregula Ines A cognizant agency shou:d ado it:crm stale or local law erforcener.t and cro>eavting aLthorities, ;f not advised ay the recipient of any vie lauun of law - with.n their jjrisdr:Con. C Advise the :ec:pient of add :5 that have been fodrd ro: to nave met the requirements set forth .n this cuLuldr In sac;. instances, the recipient will work win :he aud.ior to take corrective action If co:rective acuon :s not taker., the o:gniaarl agency shall notify the ecipient end federal cwarding agencies of the facts and make recommendations !ot follow-up action Ma•or ;na^equacies or repet:tive substaneard performance of mdependen: auditors shall he referred to appropriate professiona. bodies for d scipiulary action. f Coordinate, to the extent practcdhle, audits or reviews made for feceral agencies that are in addition to :he audits made pirsdact to this c;rcala., :o that the addi:;oval aLdite or reviews built Lpon audits performed in accordance with the c.rcilar. g. Ensure the resolution of audit f'ndings tha: affect the programs of more :han one agency h Seek the views of other interested agencies before completing a c' o-vinated program. i. Help coord.na:e the audit work and -eporurg responsibilities among .ndependent public accountants, slate auditors, and both resident and non- resident feeera. auditors to acnieve the most cost-effective audit 4. Oversight Agency Resporsibil;ties Ar oversight agency shall provide teci-nical advice and counsel to institutions and independent auditors when requested by the recipient. The oversight agency may assume ail or -one of the ;espersibilities rorma,ly performed by a cognizant agency. Page 492 • 'ao 4100 Acir 99C S.^gie Audit !n!ormae:or, Sen,ce r ¶1170 5. Recip.rnt Responsibilities. A recipient ilia: rece yes a federal aw.od and prov des $25,00C or more of it dar.ng its t.scal year to a eubrecipiert sha . -i. Ensure that Inc non-profit institu:wn sibrecipicr.is :mat receive $25,000 or more have fret the audit regLire:ner.ts of this ciicilar and 'hr: sib:etip.ents sub ect to OM13 Ci-calar A 128 have met the audit :equrren.en:s of that circular, b Ensure that apprcp:iate corrective ac1i:n :s :.i'cen wi:ur. six months .,.`ter -ecetp: of :he :uDrecip.e-n audit rear::r. ns:arces of nor.-eo-np!iarce w::h federal aws and regulat,ons: c. Consider whether subrec,pienl aegis r.ecessi:a•e ac us::nerl of ,he re: ipient's own -ecords; tnc Require each sub-ecip,e-it to . ern.❑ indeperde-it auc•io:s to hive access to the records and financial >taleme-its as neces. a:y for he rec.pten: to comp} with thi circular 6. Relation to Other Audit Regwiernerts. a An audit made ..i accordance with th s arcu: I. •ha!, be in lieu of any finarc•a: audit reqLired under •ndiv:dua: fedora. awards. To :he extent :hat :.n audit nude is accordance with this r!rculat pi uv'dct federal agencies •with the information and ;.sSLrarces they reed t:, car} nu: the:,- oyes!. re,pons bil.: es. irev shai, rely upon and use such infcrmation. However, a federal aeenry shalt make any additional aud::s or .cv.ews necessary to carry out -eseo-isr nilities under federal .aw and regulation Any additional federal audits or reviews s^all be planner and caned out u. such a way as to build upon wort performed by the indepencent aud.'o:. b. Audi; planring cy federal audit -gets es snould consider the extent to w hitch reliance can be placed upon wo-k performed cy other audi:crc. Such auditors include state, local. !edera! and o:'er :ndependen: auditors, are a recipient's :n:erral auditors. Re:.ance puce:: upon the wort of orner auditors should be documented and in accordance 'w i:h Gove-nmeni Auditing Staraa,ds. c. The provisions of th.s circular do not limit :he authority of federal one::c:es :c make cr contract for aLdi:s and zva:uatrcns cf federal awards. nor do :-rev urn -I the authority of any federal age ncy Inspector genera: or other federal attic::.. d. Tne provisions of this c:rcular do not ai r hen i ze anv institution or sub:ecip:ent :hereof :o tens::am federal agencies, :n any marner, from carrying out add :-oral aud,:s. evaluations or reviews. e A feceral agency that makes or contracts for audits. in addition to :he at,di:s mode 7y recipients pursian• I. Ili, circular s;Ial coil-: stert wall o:nei applicacle laws Lnd :egula:i:ns. arrange for fLndirg the cost of such add.uonal aLdi;s. Seen iddmonal audits o- reviews in hide fin - one a!, performance audits arc program evaluations. 7 Frequcncv pj AUall. ALdlts sha:. usually be pertcuced anruai:y but n:it less frequently than eve -y two yea:s 8 Sancrrirs. No aLdl: co,Is may he ,-iarged to federal awa:ts when audits rrgwred by th s r:rc alai have not been -na.le rr taus been in life but rot m ac. rda-ice w-th, this c.:a.Ilar Ir cases of cetunue.t irate ty or unwillingness to lave a :no; er aunt n acaadanre 'with tie c.rcular. lc eia: agencies mLst corsi:er apDro D;;atc sanc.'ors ,nc.udirg withhol.'irg a percentage of awards crul the auc:t-amp!c:cd satisfactorily; — wi:^.hnldirg or tii•a:how it overhead cosh: .. suscendi-ig feceral awatdc until tae audits :.lace. 9 Aadtt Coar The cost of aicns irLde 'n accordance with :he pro' isiGns of .his nit u.ar are allowable charges to federal awards The charges may be cons.dered a direct cos: or an a:locaied indirect cost. detern..i:ed in accordance with :e ,-.rovs'v'is of Circular A-2:, .,Cos: Price plea for Jn:versions' or ('.ocular A-12_2, "Cost rinciples for Non -P -of.: flrgan.za:.or.s, ' FAR-ubpari 31, or o:•ier appcable cost pi:nc.ple- Cr regulations. Auditor Seiecticr. In arranging for aLdi: serv.ces .nstilu:-ons sha.. Ioilow the procLrenle-it ctarda-.".s prescribed by Circular A ::0, "Uniform Regairemeris for Grants and Agree -re -its with Instittuons of : {ighe. EdLcattun, Hospitals and Other Non -Pros: 0-gamza;;ors. • 11. Small and Mir..or,:y Audi., Firms. a. Sma:: auto firms arc audi: firms cwred and contro..ed by social.y and economically disadvantaged individuals %hall have :he irax,mam prac•-rab e opportunity to oartinpate in contracts awarded to fu:.f..: the requirements of :ais circular. b. Recip.en:a of federal awards shall :axe :he following s:cs to further this guar (1) Ens'ire ;'tat small aid.t Iirms and .iutli firms wied and contro.:ed by soc.a..y and cconomicai.y disadvantaged .:L:ividuals are use: to the fu:rest extent practicab:c. (2) Make informal;on on forthcoming opportunities available and arrange i;meframes for the auda to encourage and facilitate ll rtic:pation by small audit :t:ms and a"J;t firms ow:ied ar,d controlled by soc,a;,y and economically disadvantaged ,ndiv.dcals: ) C.:nsieer ir the con::act process whether firms competing for large: audits intend :o sLbcontract with 'call aur!I firms anti aud.t firms owned and corirolled by socially and ecancirically disdvan:aged incividuals; (4) Encourage cortracung w th small audit firms or audit firms owned and controlled ty soc.al.y and economically t sadvar-laged .ndividuals which have trcdttirra.'y audited government programs, ar.d ir, cases where this is no: possib e, assure that :aese .tams are given consideration der audit subco:itrrct:ng opportum:.es; 15; Encourage cone:actirg with cznsoaiums of =trail aat.t Iirms as described in sector. (I). above. when a contract s too arge for an individual :malt audit Stn or audit firm owned and controlled by socially and eco-iom.cally disadvantaged Ir.d.vidLas. and (6; 1,'e the sere ices a: d ass,Ftance, as approp:iate. of such orgar.za:;ons as the Sma,. Business Admi-its:. ati Nn in the so:.c.:a:.or, ant util,zaticn of srraIl audit firms or aL.di: firms wred and corirollet by socially and econan.,cally disadvantage[ rr.drvLiLas. :2 Scope of Aud;i aura Atd,r Q .edives a. The audit sha.. be made by as Independent audiicr ir accordance w;:h Governnenl Auditing ciandards developed by the Comptroller General of the :,ni:ed States covering financ:a. audits. An aud.t under :his c rcular should be an orgarizauon-wire aLdr: cf the in%ilu:.on. However, there may ore instances where federal auditors are pe-fo:niing audits or aic planning to perform aud.is at con-profi: institutions. ]n these cases. to ni.nimize dcplicat on of aunt wcrk, a coordinated atdit approach nay be agreed upon betweer, the independent aue lo., the recipient and the cognizant agency or the oversight agency. -hose audtto:s who assume responsib::iiy for any or a.! of the reports called for by paragraph ,`. snouted follow guidance se: forth in Gcvernmenr Auditing Standards in using work performed by others. b. The auditor shall determine w.^.ether: (:) The f.nancial statements of the irstitution present fa.,, ly its f;narcial position and the results of its operations in accordance with genera.:y accepted accounting prircrpies: (2) The icsti:ution has an internal control s:n:cture to provide reasonable assurarce that :he institutor is managing federal awards in compliance wit:h appl;cab.e laws and regulators, and controls that ensure compliance with ;he laws and regulations that could have a material mpac: on the financial statements, and (3) The ms:,tit:.oc has complied with .aws ar:d regulatiors that may have a direc I and material effect on its flnanc'a] statement amoanis and on each major federal program. F Thompso- Pub tshing Grout, Inc Apnl 1993 Ta ' 700 • Page 493 , r e¶117G 13. Internal Controls Over Federal Awards: Compliance Reviews. a. General. The independent auc:tor star: determine and report on whether the rect:.ten: has an :nvernal con::ol s:ruc:are to provide reasonable assurance that it .s managing federal awards in compliance with applicable laws. regulations, and contract terms, and :hat t: safeguards federal fLnds In peiforning these reviews. independent auc:tors should re.y upon work performed by a recipiert's irtrnal auc ito:s to :he maxl:rlim exien: puss-b:e The exten: of such reaance should be based upon the Government Aud,;ng Sranaards. . Internal Carrrol Revi-w. :) :n order to provide :his assurance on :n:ernal coatro:s. the auditor must cb'an an understa riding of the ;rteinal control s:.Lctu:e and asses 3 levers cf internal control risk After cbtainirg an understanding of the con:-o:s, :he assessment must be made whether or not the auditor intends :o place :eliarce on the ;n:e.na! control stricture. (21 As part of this review, the au.'ito- s^.all: (a; Perfom: tests of cortrnls :o eva:uate the effectiveness of the design and opetaticn of (he pot c.es and pr)cecares in preventing or detecting mater: a: nor. cempiiance. Tests of controls w ': not be required fir those areas where the i-iterrai control structure pa;te:es and procedures are likely tc tc meffec:.ve in preventing or detecting ncn-compliance ii wh.ch case a reporta.^.le condition or a materia; weakness should be reported in accordance w.:h pa:agrcph .5 c(2) of this circular. (b) Review tae recipier.(s system for moniton.lg sLb-ecipicrts and obtaining and am:ng on sub-ecipiert audit reports (c) Determine whether controls are iii effect to ensure direct and irdirect Bests were conpated and b..:ed ;n accordance with the guidance provided in the general requirements section of the compliance supp'ement to th.s circular c Comp;iiance Review. (I) The auditor sha:: determine whether the recipient has complied with laws and regulations that may have a direct an.: materia] effect on any of its major federal programs. In addition. ::ansactions selected for ion -major programs sha.: he tested for compliance w.:h :ederal :aws and regulations that app.y :o such transactions. (2) in orde- to de:ermine which major programs are to be tested for compliance. recipients shad: identify, in their accounts, ail fecera. funds rece:vec and expended and tie progrars under which they were received This shall irc.ude turds received directly from federal agencies, through other state and local envem:rens Cr other recipients. 10 assist recipients it.. i.!en::fymg federal awards, federal agencies and prirr.ary recipients shat. provide the Caraiog of Federal Domestr Assistance (C}')A) 'ibmbers 10 the recipiena weer nakirg the awards ( 3) The review rLst .nclLde the selection o! au acegJate number of transac: ors f:m eac•1 major federal f.narcial assistance program so that the audit,, ob:a.as sift:cien: evidence :o support the ::p:n.on or, cnmpliar.Le cgalred by pa:agrcpn Sc (3) of th:s atta_hrrent The selection and :esurg of transactions shal: be based on the and.:ors' prnfe•sinna judgrren: :onsicerilg sazp lac::rs as the am3LLr of exile^c nu -es for the p:a:gram, the ew ness o: the program or tha-rges :n .:s ccrdi::crs, prior experience with the program par:cu.ar!y as revealed is aucits and ether evalLauo-ns 'e.g .i1-pec:.ors. prugr..m review,, or system rcv•ew, required ::y Fedora. AcgList:.o:1 RegLialions): the exter.t to watch tie p-cgra.'n .s carried 3Lt thrcug9 sjhrecipteris, the extent to which toe program contracts for goods or seen :es, the level :o which the program ;s alreaey sLljec: t:: program reviews o: ..tier forms of :ndependen: oversight. :le adequacy of :he controls fur eusLrng compliance, the expectation of adherence or larx of adhaeace to the applicable .aws and regu.atons. and the potential impact of adverse fincings. ;4) :'t malting the :ct cf transarticrs, the auditcr stall detemli-ie w,het'iec — the anu:Ln:s reported as experd.:ures were fur allowab.e serv;. es, and :he records show that those who received services or aenefi:s were eltgih:e to receive :hem. (5; Ir. aed:ron to Iransact;on :estir.g, the aac•to: shad determine whether- - matching requ.remer.is, ]eves of effo-t and earmarking ..m.:at.ons were :net, — federal financial reports and clams !cr advances and re:mbunemen: contain information that •s sLpported by hooks and records from wh.ch the ha-ic f.nanual staieneris have been prepared, and — amounts claimed or used for matching were deiern.nc :r ace. rdaice wita .) OMB Circular A-21, "Cost P.mcip:es for Fdnca:.or..al Institutions'; 2) match.ng or cos: snaring requirements in Circular A-] 10, "Uniform Requirements for G:arts and Agreements w.th :ns:.tutiers of Higher Ecuca:-on, Hospitals and Otner Nor.-Pro(it Orgarizations". 3) Circular A-122, "Cost Pr.nci:les for lion -Profit Crgar.izaticrs"; a) FAR subpart 3. cost pripciples. and 5) other applicable cost principles or regulations (6) The pr•ncipal compliarce :equ.remen:s of the largest federal programs may be ascertained by referr.ng to the a'Comaliance Suapiemenr for Single Audis or Educational lns:;turiens and tither .Von Profit Org-rnizatacrs," and :he "Compliance Supplement for Singe Auairs of State and Local Grter,ments," issued by OMB and ava. able fiom :he Goverment Pr:n:.ng Cffiice For those programs not covered in the comp ance supplements, the aLd for shoule asce-la,n compliance -equ.renients by reviewing the statLtes, -egL anons and ag-eemeris governing inc:vndual programs. (7) Trarsactions rela:ed to other award > that are se.ecied in :.onneciion witn examinations of firancia: state::rents ar.d evalLat.ons of .n:er-ial certrcls shall he tested fo- compliance w,:h .`edera: laws and regula:.oas that app.y :o sLLh trar.sactiors. l4 !!legal 'iris If. dung or in cor.nection with the audit ct a -dun-profit ns:.tution, the aedt:or ^ecomes aware of i regal acts, sucn acts shal. be repertec n accordance w.:h the prv.sions of the Government Auditing Standaids. 5. Audit Repairs a Audit reports must be p:epared at the comp!etioi of the audit. b. The aJd:t report sha.: state that tie aLdi: was made in accordance with the provisions of :nis circc.a,. c. The report stall be made up cif a• lea-st the following three parts Cl) The f:narcial statener.is and a schedu.e of feeera] awards and the asditor's report an the statements and :he schedule The schedule of federal awards shoL:d identify major programs and show tie total expenditares foi each p:og.arr.. Individual ma:or programs other than research an development and student aid should be listed by catal;:g number as idenuaed .n the Catalog of Federal Domestic Assistance. Bxper.ditires for federal programs other clan major programs shall be shown under the captor. "other federal assistance." Also, the value a: non -cast - assistance such as loan guarantees, food cn rr.modities cr donated surp.us propert;es or the outstanding balance of loans should ce disc.o,ed :n the schedu:e (2) A written report cf tie .ndepencent aJeiior's understanding of the internal coitro. structure and :he assessment of control risk the aLdi:or's report should inc.ude as a minimum I) the scope of the work in obtaining understanding of the .nterna: control structure acrd in assessing the control risk, 2) the not -profit institution's s:gnifcant lateral controls or control structure .including the controls estab!.shed to ensure compliance with laws and regu.attons that have a material Page 434 . Tab 1100 Acnl '990 Single Audit Information Service II :mpact on the financial aaiemeats and those that provide reasonable assurance that federal awards arc being maraged :n compliance w.th applicable laws and regulations, and 3) the reportable conditions, mclud ng the idenpfica:.or.::l material weaknesses, identified as a result of the auditor's work in understanding and assessirg the contra: r.ck if the auditor :im:ts his,^.:er u>asidera:inn of the in;er..al con;rcl struttare for any reason, the circumstances shot:d be disclosed :ii time rcoo t. (3) The aud.tor's : epo-t or, con-pl;ance contain ng - An opinion as Io whether each na,or federal piog:am was being acrninis:ered in compliarce with laws and revu:a:icns applicable to :he n.Ltier- descr:bed in paragraph ;2(o)(3; of this attachment, ,nclad:ng cempliam e with laws and regula:.ors :.erta:nirg to financial reports and claims for advances and : eiribursements: — A statement of poz.:rve assLrance on these -terns :oat were tested for compliance and negative assdrance on :nose items not tested, — Material fincmgs of ron- ccmpliance presented „i :Sat prcper :.erspec:rove: • the size cf the an.verse in .Lobel of dens and dolla:s, • the number ant dol:a: amount of trarsactions tested by the auditoi c. • the number and ccresponc:ng della; amcLnt of irstarces of ion-ctrr.p ,.nce, Where findings are specif.c to a partirt. ar fecerai award, an .dertif.•canon of total amounts gaesticned, if any. for each fecer al award, as a result of nnn- comp`ance and the auditor's reccmine^da:.ors for necessary correc:.ve acticn. c The Ih-ee parts or the zud:t report tray be born: into a single dccLmen:, or presente. at :he same : me as separate CocLmcats. d. Non -mater a: findinga reed not he cisclosed with :he compliance report bLI should be reported ir writing to the rec:prent in i separate ,tcm.mirication the rec.piert.:n tL::i, should fo:wa:c time findings to :ne fedCIL grantor agencies o: sLhgran:er sodrees. e A.. f:aaa or illegal acts or irdicaLons of soon ac:c, -nc;ud ng a.. tur,tioned costs fojrd as :ne -esul: of these acts that eudi:ors become aware of, may be covered in a separ are writter report submitted it.. acccrdarce w.th time !,osernmer: 4r.d.;.ng .Standards. : 1he auditor s repot shoLId cis: lase time status o: kucwr. f•u: LaCOrected s grif-c ant ma:er.a. f•ndirgs and recnm:ner.da:.ons f':n. pr.or auc.ls That affect the curent .noun eb:ec::ve as specified in the Gorsrnment Aadutns .Standards g In adiiti::r t, the and :t report, the :ecip:e nt she:] provi.'.e a report or comments on the findirgi and :ecomrnerda: cis in the repert, :neicdirg a plan for corective admen taken or :.lar-ne3 and c:nmr.enis on the stasis of cerrec:rove ac:.on :,.ker. :n p-i::r ftrd.ngs If ccre.aive actor] is rot necessary, a statement de -c robing the teaser, it :s not shoL:d accompany the audit ,-e-or: b Conies of the aLdi: repor. shall he submitted in accordance w.th the .-epn:ttr.g stancards for firancia. aud.is curtained in :he Government Audi;;ng .Standards. SLb:ecipient atdttors shall suonit ccp:es to recpients Ilia: provieec redera. awards. The repor; shall be due with -n 33 rays after :he completion o: the audit, but the audit shoed be completed and the repert submitted rot ¶1170 la:cr than :3 months after the end of the. :ecipien:'s fiscal year Lnless a :orger period -s agreed to with the cognizant or oversight agency. i. Recipients of ir.nre char $100 000 in federal awa:ds shall submit one copy of the audit report within 30 days after issuance to a cenira. clearinghouse to be designated by the Office of Management and Budget -The clearicghoase will keep completed audi repots on file. j. Recipients shall keep ajd.t reports, rrc:uding subrecipient reports, on file (or three years from :neir .ss4ance, 16. Ai.dit Resolution. a. As proviced in paragraph 3. the cognizant agency shall be responsible for ersr.r.ng the :esolution of audi: Endings that affec: the Drograna ct me:e :han- one fcdera: agercy Reso.ution of findings that ;ela:e to the p-og:ams o: a s.ngle federal agency w::: he the respons iCtlity of the recipient and :he agency. Alternate arrangements may be made on case -by -case bas:. by agreement amorg the agencies cnce:ned. b. A management decision shat. be made within six months after receipt of :rte report by :he fcdera. agencies :esponsible for audit reso'uticn Corective action should proceed as .apid:y as possitle. 1;. Ardis Workpapers and Reports Wcrkpapers and reports snail he seta ned fir a minimum of three years from the date of time audit repot. unless the auditor is r,otit:ed in writing by the cogn.zart agency to extend the reterncn period. Audit workpape:s shat: be made available upon recucst to the cognizant agency or its des:gnee or the Genera; Accoanung Office, at :he compleon of the auc:t. ©-hompso-: Oubl shing Group. Inc April 1990 -ab 1' CO • Page 495