(a) Costs and contributions acceptable. (1) Cost sharing or matching may consist of: (i) Charges incurred by the grantee as project costs. (Not all charges require cash outlays by the grantee during the project period: Examples are depreciation and use charges for building and equipment.) (ii) Project costs financed with cash contributed or donated to the grantee by other non-Federal public agencies and institutions, and private organizations and individuals, except as provided in (A) below:

(A) Generally, any funds provided for payment of salaries in excess of $15,000 shall not be counted as a nonFederal share contribution toward a Title II grant per Section 244(2) of the Economic Opportunity Act of 1964 as amended. However, these funds may be counted as a non-Federal share donation in those cases “*** (particularly in large metropolitan areas) where, because of the need for specialized or professional skills or prevailing local salary levels, application of the *** restriction would greatly impair program effectiveness or otherwise be inconsistent with the purposes sought to be achieved." Grantees who wish to request such an exception will submit data and written justification to the appropriate CSA Administering Office and the Administering Office's response shall be retained by the grantee for audit purposes.

(B) Project costs represented by services and real and personal property, or use thereof, donated by other non-Federal public agencies and insti

'Section 244(2) of the EOA of 1964, as amended.

tutions, and private organizations and individuals. 2

§ 1050.53 Qualifications.

(a) All contributions, both cash and in-kind, shall be accepted as part of the grantee's cost sharing and matching when such contributions meet all of the following criteria:

(1) Are verifiable from the grantee's records;

(2) Are not included as contributions for any other federally assisted program;

(3) Are necessary and reasonable for proper and efficient accomplishment of project objectives;

(4) Are types of charges that would be allowable under the applicable cost principles;

(5) Are not paid by the Federal Government under another assistance agreement unless the agreement is authorized by Federal law to be used for cost sharing or matching, e.g., General Revenue Sharing; Title I of the Housing and Community Development Act of 1974, Pub. L. 93-383;

(6) Are provided for in the approved budget when required by CSA; and

(7) Conform to other provisions of this subpart.

§ 1050.54 Valuation of grantee in-kind contributions.

Values for grantee in-kind contributions will be established in accordance with the applicable cost principles.

2This includes volunteer services of board members. However, to be counted these services must be other than those required of them in their capacities as board members. For example, time spent at board or committee meetings by a board member who is a doctor would not be acceptable but time spent by him/her working in a clinic would be accepted. This also allows volunteer services of staff to be counted as nonFederal share when such services are not required by the positions they hold. (Grantees are reminded that any work performed by staff members which is in line with the normal responsibilities of their positions and is in excess of the normal weekly working hours is covered by the CSA overtime regulations (see OEO Instruction 6900-01) and can not be considered as a non-Federal share contribution.)

§ 1050.55 Valuation of third-party in-kind

contributions.

(a) Valuation of volunteer services. Volunteer services may be furnished by professional and technical personnel, consultants, and other skilled and unskilled labor. Volunteer services may be counted as cost sharing or matching if the service is an integral and necessary part of an approved program.

(1) Rates for volunteer services. Rates for volunteers should be consistent with those paid for similar work in the grantee's organization or which those paid for similar work in the labor market in which the grantee competes for the kind of services involved.

(2) Volunteers employed by other organizations. When an employer other than the recipient furnishes the services of an employee, these services shall be valued at the employee's regular rate of pay (exclusive of fringe benefits and overhead costs) provided these services are in the same skill for which the employee is normally paid.

(b) Valuation of donated, expendable personal property. Donated, expendable personal property includes such items as expendable equipment, office supplies, laboratory supplies or workshop and classroom supplies. Value assessed to expendable personal property included in the cost or matching share should be reasonable and should not exceed the market value of the property at the time of the donation. (c) Valuation of donated, nonexpendable personal property, buildings, and land or use thereof. (1) The method used for charging cost sharing or matching for donated nonexpendable personal property, buildings and land may differ according to the purpose of the grant or other agreement as follows:

(i) If the purpose of the grant or other agreement is to assist the grantee in the acquisition of equipment, buildings or land, the total value of the donated property may be claimed as cost sharing or matching.

(ii) If the purpose of the agreement is to support activities that require the use of equipment, buildings cr land, depreciation or use charges for equipment and buildings may be made. The

full value of equipment or other capital assets and fair rental charges for land may be allowed provided that the Community Services Administration has approved the charges.

(2) The value of donated property will be determined in accordance with the usual accounting policies of the grantee with the following qualifications:

(i) Land and buildings. The value of donated land and buildings may not exceed its fair market value, at the time of donation to the grantee as established by an independent appraiser (e.g., certified real property appraiser or GSA representatives) and certified by a responsible official of the grant

ee.

(ii) Nonexpendable personal property. The value of donated nonexpenda ble personal property shall not exceed the fair market value of equipment and property of the same age and condition at the time of donation.

(iii) Use of space. The value of donated space shall not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality.

(iv) Loaned equipment. The value of loaned equipment shall not exceed its fair rental value.

§ 1050.56 Supporting records for in-kind contribution from non-Federal third parties.

(a) Volunteer services must be documented and, to the extent feasible, supported by the same methods used by the grantee for its employees. (See § 1050.57.)

(b) The basis for determining the valuation for personal services, material, equipment, buildings and land must be documented. (See § 1050.57.)

§ 1050.57 CSA implementing policies and procedures.

(a) CSA Legislative Non-Federal Share Requirements. Sections 225(c), 235(b), and 714 of the Economic Opportunity Act of 1964 as amended require the contribution of non-Federal share by grantees funded under Sections 221, 222(a), 235, and 712 of that

Act. In addition the Director of the Community Services Administration may administratively require a nonFederal share contribution from grantees funded under other sections of the Act if the grants are administered by Community Services Administration. Policies and procedures implementing the legislative requirements of the Economic Opportunity Act will be found in references (3) through (6) of this subpart.

(b) Accounting for the non-federal share. (1) The Statement of CSA Grant, Form 314, shows the minimum percentage of total program expenditures which non-Federal funds must constitute in the grant period. The grantee is expected to maintain the rate of contribution of the non-Federal share so that throughout the grant period Federal funds will not be used to pay for a substantially larger percentage of project costs than the Federal funds shown on the Statement of CSA Grant constitute.

(2) It is important to note that the Federal share may never exceed either the dollar amount shown on the Statement of CSA Grant or the maximum percentage of the total program expenditures that this constitutes. The grantee must provide only sufficient non-Federal contributions so that the Federal share remains at or below the maximum percentage; however, the grantee may choose to provide additional non-Federal share, to insure a margin of safety, in the event that annual audits disallow some contributions.

(3) The non-Federal share may be provided in one program account for the entire grant or it may be spread among several program accounts. (See reference (3) to this subpart.)

(4) Non-Federal share contributions of cash shall be recorded as they occur. It is not necessary to maintain separate ledger accounts for the expenditures of grantee cash.

(5) All in-kind contributions, including those applicable to delegate agencies, must be recorded in the ledger accounts, either in separate accounts or in separate columns, as grant costs when the in-kind services or goods are performed or received. Records, including required supporting documen

tation, on in-kind services or goods performed or received must be established and maintained on a current basis.

(6) The non-Federal share is subject to audit, as is the Federal share.

(c) Required documentation-Volunteered services. All volunteered services claimed as non-Federal share must be substantiated by time cards or records that are signed by both the volunteer and his supervisor as is required for all other employees. Such records must show the actual hours worked and the specific duties performed. They should also indicate the basis for determining the rate of volunteer's contribution and such documentation must be available for audit.

(d) Financial assistance of Title II of the Ecomomic Opportunity Act of 1964, as amended, may be used to provide the required 10% matching share of the wages of students employed under the College Work Study Program (CWSP) who work in Community Action Programs.

[42 FR 18034, Apr. 4, 1977, as amended at 44 FR 56549, Oct. 1, 1979]

Subpart G-Standards for Financial Management Systems (CSA Instruction 6800-7)

§ 1050.60 References.

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

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

(3) OEO Instruction 6710-02, Instruction for Defining Cost Categories.

(4) CSA Instruction 6710-7, Amending a Grant Under Title VII of the Community Services Act.

(5) CSA Instruction 6710-8, Preparing a Budget for a Title VII Grant Under the Community Services Act.

(6) CSA Instruction 6800-6, Cost Sharing and Matching (Uniform Federal Standard). (45 CFR 1050-50.)

(7) OEO Instruction 6801-1, Grantee Fiscal Responsibility and Auditing, and Changes 1 and 2 to that Instruction.

(8) OEO Instruction 6803-1a, Allowances and Reimbursements for Members of Policy Making Bodies.

(9) OEO Instruction 6803-2, Allowability of Costs Incurred to Borrow Funds.

(10) OEO Instruction 6806-01, Establishing and Maintaining Program Accounts.

(11) OEO Instruction 6806-04, Accounting for Delegated or Contracted Activities.

(12) OEO Instruction 6807-1, Limitation on CAA Administrative Costs.

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

(14) OEO Instruction 7570-1, Applying for a New Research or Demonstration Grant Under the Economic Opportunity Act.

(15) OEO Instruction 7570-2, Applying for Continuation of a Research or Demonstration Grant Under the Economic Opportunity Act.

§ 1050.61 Standards.

(a) Following are the standards for financial management systems for grantees. (References (3) through (15) contain CSA's detailed implementing policies and procedures.) CSA will impose no additional standards on grantees unless they are specifically provided for in applicable statutes. Grantees' financial management systems will provide for the following: (1) Accurate, current and complete disclosure of each CSA sponsored project or program in accordance with the financial reporting requirements set forth in § 1050.70 (CSA Instruction 6800-8).

(2) Records that identify adequately the source and application of funds for CSA sponsored projects. These records shall contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, outlays and income.

(3) Effective control over and accountability for all funds, property and other assets. Grantees shall adequately safeguard all such assets and shall assure that they are used solely for authorized purposes.

(4) Comparison of actual outlays with budget amounts for each grant or other agreement. Financial information should be related to performance and unit cost data.

(5) Procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement by the grantee, whenever funds are advanced by the Federal Government. When advances are made by a letter-of-credit method, the

grantee shall make drawdowns as close as possible to the time of making disbursement.

[See § 1050.90 (Instructions 6800-10) for letter-of-credit procedures.]

(6) Procedures for determining the reasonableness, allowability and allocability of costs in accordance with the provisions of the applicable Federal cost principles and the terms of the grant or other agreement.

(7) Accounting records that are supported by source documentation.

(8) Examinations in the form of audits or internal audits.1 Such audits shall be made by qualified individuals who are sufficiently independent of those who authorize the expenditure of Federal funds, to produce unbiased opinions, conclusions or judgments. They shall meet the independence criteria along the lines of Chapter 3, Part 3 of the U.S. General Accounting Office publication, Standards for Audit of Governmental Organizations, Programs, Activities and Functions. These examinations are intended to ascertain the effectiveness of the financial management systems, and internal procedures that have been established to meet the terms and conditions of the agreements.

It is not intended that each agreement awarded to the grantee be examined. Generally examinations should be conducted on an organization wide basis to test the fiscal integrity of financial transactions, as well as compliance with the terms and conditions of Federal grants and other agreements. Such tests will include an appropriate sampling of Federal agreements.2 Examination will be conducted with reasonable frequency on a continuing basis or at scheduled intervals but at least annually in accordance with ref

1Applicable to private grantees only.

2 Because Section 243 of the Economic Opportunity Act of 1964, as amended, requires more frequent audits, i.e., at least annually, than that prescribed for grants funded by most other Federal agencies, the independent auditor may be requested by the grantee to examine CSA agreements only. In those cases, of course, the audit would limit his/her examination to CSA agreements and would include a sampling of CSA agreements only.

erence (7) and Section 243 of the Economic Opportunity Act of 1964 as amended.

(9) Audits to be made by the grantee or at his direction to determine, at a minimum, the fiscal integrity of financial transactions and reports, and the compliance with laws, regulations, and administrative requirements. The grantee will schedule such audits annually in accordance with reference (7) and section 243 of the Economic Opportunity Act of 1964 as amended. 3 (10) A systematic method to assure timely and appropriate resolution of audit findings and recommendations.

3

(b) Delegate agencies. Grantees shall require delegate agencies to adopt the standards in § 1050.61(a) except for the requirement in (5), regarding the use of the letter-of-credit method and that part of (1) regarding reporting forms and frequencies prescribed in § 1050.70 (CSA Instruction 6800-8).

§ 1050.62 CSA implementing policies and procedures.

(See references (3) through (15) of this subpart for CSA's implementing policies and procedures as they relate to the standards set forth in this subpart.)

rent services or performance are required by the grantee.

(b) Accrued income, The earnings during a given period which is a source of funds resulting from (1) services performed by the grantee, (2) goods and other tangible property delivered to purchasers, and (3) amounts becoming owed to the grantee for which no current services or performance are required by the grantee.

(c) Disbursements. Payments in cash or check.

(d) Federal funds authorized. Represents the total amount of the Federal funds (in this case CSA funds) authorized for obligations as established in the grant document. This amount shall include any authorized carryover or unobligated funds from prior fiscal or program year.

(e) In-Kind contributions. Represent the value of noncash contributions provided by (1) the grantee, (2) other public agencies and institutions, and (3) private organizations and individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically inIdentifiable to the grant program. When authorized by Federal legislation property purchased with Federal funds may be considered as grantee's in-kind contribution.

(f) Obligations. The amounts of orders placed, contracts and grants awarded, services received, and similar transactions during a given period, which will require payment during the same or a future period.

(g) Outlays. Represent charges made to the grant project or program. Outlays can be reported on a cash or accrued expenditure basis.

(h) Program income. Represents earnings by the grantee realized from the grant-supported activities. Such earnings exclude interest income and may include, but will not be limited to, income from services fees, sale of commodities, usage or rental fees, sale of assets purchased with grant funds, and royalties on patents and copyrights. Program income can be reported on a cash or accrued income basis.

(i) Unobligated balance. The portion of the funds authorized by CSA which has not been obligated by the grantee