§ 1050.12 FDIC insurance coverage.

Any monies advanced to a grantee which are subject to the control or regulation of the United States or any of its officers, agents or employees' (public monies as defined in Treasury Circular No. 176, as amended) must be deposited in a bank with Federal Deposit Insurance Corporation (FDIC) insurance coverage and the balance exceeding the FDIC coverage must be collaterally secured.

§ 1050.13 Minority-owned banks.

Consistent with the national goal of expanding the opportunities for minority business enterprises, grantees and delegate agencies are encouraged to use minority banks (a bank which is owned at least 50 percent by minority group members).

(1) OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations (Attachment B).

(2) FMC 74-7, Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments (Attachment B).

(3) CSA Instruction 6710-6, Applying for a grant under Title VII of the Community Services Act.

(4) CSA Instruction 6710-8, Preparing a Budget for a Title VII grant under the Community Services Act.

(5) CSA Instruction 6143-1a, Emergency Energy Conservation Program (45 CFR 1061.30).

(b) Construction and facility improvement. The recipient of a CSA grant which requires contracting or facility improvement (including any CSA grant which provides for alterations or renovations of real property) shall follow its own requirements and practices relating to bid guarantees, performance bonds, and payment bonds except for contracts exceeding $100,000. For contracts exceeding $100,000, CSA may determine that the grantee's bonding provisions adequately protect the Federal Government's interest; otherwise the minimum requirements shall be as follows:

(1) A bid guarantee from each bidder equivalent to five percent of the bid price. The bid guarantee shall consist of a firm commitment such as a bid bond, certified check or other negotiable instrument accompanying a bid as assurance that the bidder will upon acceptance of his bid, execute such contractual documents as may be required within the time specified.

(2) A performance bond on the part of the contractor for 100 percent of the contract price. A performance bond is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under the contract.

(3) A payment bond on the part of the contractor for 100 percent of the contract price. A payment bond is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract.

(c) Loan guarantees. Where in connection with a CSA grant, CSA also guarantees the payment of money borrowed by the grantee, CSA may, at its discretion, require adequate bonding and insurance if the bonding and insurance requirements of the grantee are not deemed adequate to protect the interests of the Federal Government.

(d) Fidelity bonds. If the grantee is a nongovernmental organization, CSA requires adequate fidelity bond coverage.

(e) Source of bonds. Any bonds obtained pursuant to (b)(1) through (3), (c) or (d) of this section shall be obtained from companies holding certifi

cates of authority as acceptable sureties (31 CFR 223).

§ 1050.17 CSA implementing policies and procedures.

(a) Policy. OMB Circular A-110 permits Federal agencies to require fidelity bond coverage of its nongovernmental grantees if the bonding and insurance requirements of the grantee are not deemed adequate to protect the interest of the Federal Government. Therefore, CSA will require evidence of appropriate bonding or assurance that arrangements have been made to obtain such coverage in line with the following policies and procedures.

(1) Bond coverage of officials—(i) Assurance of fidelity bond coverage. (A) Prior to the release of funds to any nongovernmental grantee for the first initial grant CSA must receive written assurance that the grantee has or has made arrangements for appropriate bonding of grantee officials. This assurance will take the form of a letter from a bonding company or agent stating the type of bond, amount and period of coverage, positions covered, and the annual cost of the bond that has been obtained.

(ii) Coverage. In all other situations, nongovernmental grantees must either have secured or must take steps to secure fidelity bond coverage in line with the following guides:

(A) Coverage should be secured in the aggregate amount of $25,000 for persons authorized to sign or countersign checks or to disburse sizeable amounts of cash (such as for payrolls). Persons who handle only petty cash need not be bonded. Nor is it necessary to bond officials who are authorized to sign Payment Vouchers, but who are not authorized to sign or countersign checks or to disburse cash.

(B) Grantees normally should obtain a 3 year bond, payable annually, with an option to cancel in the event the program terminates before three years. Such terms are available from mcst surety companies.

(iii) Responsibility vis-a-vis delegate agencies. Grantees-both public and private-are responsible for assuring that appropriate officials of nongovernmental delegate agencies

are

bonded. Coverage for officials of delegate agencies which are private organizations shall be equal to the average of funds to be expended each month (up to an aggregate amount of $25,000.) If a delegate agency will expend less than $1,000 per month in program funds, on the average, bond coverage is not required.

(b) Procedures. Copies of bonds secured by the grantee and by delegate agencies should be filed by the grantee and need not be submitted to CSA.

(c) Affect of this Subpart on other CSA Policies and Procedures. (1) OEO Instruction 7570-1, pp. 17 and 18, item 11. (3) Bonding: The three paragraphs are superseded and the sentence "See Instruction 6800-3 regarding applicability of bonding requirements and procedures." should be inserted.

(2) OEO Instruction 7570-2, p. 7, item 8.b: The period at the end of the sentence is deleted and the sentence "(See CSA Instruction 6800-3 regarding applicability of bonding requirements and procedures.)" should be inserted.

(1) OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations (Attachment C).

(2) FMC 74-7, Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments (Attachment C).

(3) CSA Instruction 6800-5, Program Income (Uniform Federal Standard) (45 CFR 1050.40).

(4) CSA Instruction 6800-15, Property Management Standards (Uniform Federal Standard) (45 CFR 1050.130).

(5) OEO Instruction 6801-1, Grantee Fiscal Responsibility and Auditing.

(6) OEO Instruction 6810-1, Grantee Compliance with IRS Requirements for Withheld Federal Income and Social Security Taxes.

(7) CSA Instruction 7050-1, General Con ditions Governing CSA Grants Funded Under Titles II, III-B and VII of the EOA of 1964 as amended (45 CFR 1067.5).

§ 1050.21 Documents affected.

Financial records, supporting documents, statistical records, and all other records pertinent to a grant are covered by the requirements in this subpart.

§ 1050.22 Length of retention period.

Except as provided in paragraphs (a) and (b) of this section and reference (6) (employer's tax records), records shall be retained for three years.

(a) If any litigation, claim or audit by or on behalf of the Federal Government involving the records has not been fully resolved before the expiration of the three-year period, the records shall be retained until resolution or until the end of the regular three-year period, whichever is later. In no case, however, will CSA require retention of records relating to any grant with respect to which actions by the United States to recover for diversion of money paid under the grant are barred by the statute of limitations in 28 U.S.C. 2415(b). That statute bars legal actions unless filed within six years after the right of action accrues. The six years excludes any periods in which the circumstances listed in 28 U.S.C. 2416 apply, e.g., material facts cannot be known, or a state of war exists.

(b) In order to avoid duplicate record-keeping, CSA may make special arrangements with grantees to retain any records which are continuously needed for joint use. CSA will request transfer of records to its custody from grantees when it determines that the records possess long-term retention value. When the records are transferred to or maintained by CSA, the three-year retention requirement is not applicable to the grantee.

§ 1050.23 Starting date of retention period.

(a) General. Except for records covered by paragraphs (a) (1) and (2) of this section, where CSA grant support is continued or renewed on an annual basis, the retention period for each year's records starts from the date of submission to CSA of the grantee's annual or last financial report for that year; in all other cases the retention period starts from the date of submis

sion to CSA of the grantee's final financial report.

(1) Records for non-expendable property. The retention period for records for non-expendable property required by reference (4) starts from the date of disposition of the property. However, for property that has been replaced pursuant to reference (4), the retention period starts from the disposition of the replacement property.

(2) Records pertaining to certain classes of income. For records that relate to classes of program income subject to reference (3), the three-year retention period starts from the date the income is earned.

§ 1050.24 Substitution of Microfilm. Microfilm copies may be substituted for the original records.

§ 1050.25 Access to records.

(a) CSA and the Comptroller General of the United States, or any of their authorized representatives, shall have the right of access to any books, documents, papers, or other records of the grantee which are pertinent to a specific CSA grant, in order to make audits, examinations, excerpts and transcripts.

(b) In case of a delegation under a CSA grant, CSA, the Comptroller General of the United States, the grantee, any intermediate delegate agency or any of their authorized representatives shall have the right of access, at any time prior to expiration of the retention period, to any books, documents, papers or other records of the ultimate delegate agency which any of them determines are pertinent to the CSA grant, in order to make audits, examinations, excerpts and transcripts.

(c) In the case of a contract (or subcontract) under a CSA grant, CSA, the Comptroller General of the United States, the grantee, any intermediate delegate agency, contractor, or subcontractor, or any of their authorized representatives shall have the right of access, at any time prior to expiration of the retention period, to any books, documents, papers or other records of the contractor or sub-contractor which any of them determines are pertinent

to the CSA grant, in order to make audits, examinations, excerpts and transcripts.

§ 1050.26 Restrictions on public access. (a) Private Grantees. Unless otherwise required by law, CSA will not place restrictions on grantees which will limit public access to records covered by this subpart except when CSA has determined that the records must be kept confidential and would have been excepted from disclosure pursuant to the Freedom of Information Act if the records had belonged to CSA.

(b) Public Grantees. Unless otherwise required by law, CSA will not place restrictions on State and local governments which will limit public access to the State and local governments' records except when records must remain confidential. Following are some of the reasons for withholding records:

(1) Prevent a clearly unwarranted invasion of personal privacy.

(2) Specifically required by statute or Executive Order to be kept secret.

(3) Commercial or financial information obtained from a person or a firm on a privileged or confidential basis.

§ 1050.27 CSA implementing policies and procedures.

(a) Changes to Existing CSA Policy Statements.

(1) Following are changes to be made to OEO Instruction 6801-1, page 10, item 6, second sentence: Everything appearing after the word "retained" is deleted and the following inserted:

for the time period and in the manner prescribed by CSA's policy on retention and custodial requirements for records. (See CSA Instruction 6800-4.)

(2) Following are changes to be made to CSA Instruction 7050-1, page 4, item 12, line 9: Everything appearing after the word "retained" is deleted and the following added:

for the time period and in the manner prescribed by CSA's policy on retention and custodial requirements for records. (See CSA Instruction 6800-4.)

(1) OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations. (Attachment D.)

(2) FMC 74-7, Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments (Att. E).

(3) CSA Instruction 6158-3, Small Business Programs Funded by CDCs (45 CFR 1076.20).

(4) CSA Instruction 6800-8, Financial Reporting Requirements (45 CFR 1050.70). (5) CSA Instruction 6800-15, Property Management Standards (45 CFR 1050.130). (6) OEO Guidance 6801-1, Grantee Financial Control Techniques.

(7) GSA Instruction 7050-1, General Conditions Governing CSA. Grants Under Titles II, III-B, and VII of the EOA of 1964 as amended (45 CFR § 1067.5).

(a) Interest. Interest earned on advances of Title II funds shall be remitted to the Community Services Administration except for interest earned on advances to States or instrumentalities of a State as provided by the Intergovernmental Cooperation Act of 1968 (Pub. L. 90-577).

(b) Program Income-(1) Sale of Real and Personal Property. Proceeds from the sale of real and personal property either provided by CSA or purchased in whole or in part with CSA funds shall be handled in accordance with § 1050.130 (CSA Instruction 6800-15).

(2) Royalties earned from copyrights or patents. (i) Unless the grant provides otherwise, grantees shall have no obligation to the Community Services Administration with respect to royalties as a result of copyrights or patents produced under the grant. (See references (5) and (7).)

(ii) However, in the case of public grantees, if after termination or completion of the grant, there is an excess of royalties of $200 or more earned annually by the Federal share these sums shall be returned to CSA in the absence of other specific agreements between CSA and the grantee.

(3) Other program income. All other program income earned during the project period shall be retained by the grantee and, in accordance with the grant, shall be:

(i) Added to funds committed to the project by the Community Services Administration and the grantee and be used to further eligible program objectives; or

(ii) Deducted from the total project cost in determining the net cost on which the Federal share of costs will be based.

§ 1050.43 CSA implementing policies and procedures.

(a) Policy-(1) Service fees. Under limited circumstances CSA may approve the charging of a fee to grantees of services supported with CSA funds. Such approval, however, does not allow the grantee to use Federal funds to produce income for the benefit of the grantee.

(b) Procedures-(1) Return of interest. Interest earned on the investment of CSA funds will be reported on SF272, item 13.a (see reference (4)) and a check payable to the Treasurer of the United States for the earned interest should be attached to the report and sent to the CSA office responsible for administering the grant.

(2) Return of royalties. Public grantees who have royalty fees which must be returned to CSA (see § 1050.42(b)(2)) shall do so by forwarding a check, payable to the Treasurer of the United States, to the CSA office which had been responsible for administering the grant.

(3) Other program income. The CSA office responsible for administering the grant will also be responsible for determining the manner and grant period in which income retained by grantees is used within the constraints of the Standard outlined in § 1050.42(b)(3).

(1) OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations (Attachment E).

(2) Federal Management Circular 74-7 (or OMB Circular A-102) Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments (Attachment F).

(3) CSA Instruction 6802-3, Non-Federal Share Requirements for Title II, sections 221, 222(a) and 231 Programs (45 CFR § 1068.20).

(4) CSA Instruction 6802-4, Additional Communities Eligible for Waivers of NonFederal Share Requirement (Puerto Rico, Trust Territories, the Virgin Islands, and Indian Tribes on Reservations (45 CFR § 1068.21).

(5) CSA Instruction 6802-5, Eligibility for Waiver of Increased Non-Federal Share Contribution (45 CFR 1068.22).

(6) OEO Instruction 7641, Waiver of NonFederal Share of Program Costs for Certain Title I-D Programs.

(a) Project costs. Project costs are all allowable costs (as set forth in the applicable Federal cost principles) in· curred by a grantee and the value of the in-kind contributions made by the grantee or third parties in accomplishing the objectives of the grant or other agreement during the project or program period.

(b) Cost sharing and matching. In general, cost sharing and matching represent that portion of project or program costs not borne by the Federal Government.

(c) Cash contributions. Cash contributions represent the grantee's cash outlay, including the outlay of money contributed to the grantee by nonFederal third parties.

(d) In-kind contributions. In-kind contributions represent the value of non-cash contributions provided by the grantee and non-Federal third par

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