§ 1067.5-2 Purpose. (a) The purpose of this subpart is twofold: (1) To promulgate and forward revised General Conditions applicable to CSA grantees (see § 1067.4-1) which reflect the enactment of the Community Services Act of 1974 and the establishment of the Community Services Administration as the successor authority to OEO by changing all references to the Economic Opportunity Act as amended to read Community Services Act of 1974; changing all references to "OEO" in the General Conditions to read "CSA"; and adding item 15 which addresses the legal implications of the successor authority on current and future regulations, grant-making documents, special conditions, etc.; and (2) To publish for the first time as part of the issuance system an Addendum to the General Conditions for Grants Made Under section 712 of the Community Services Act of 1974. (Although not in the issuance system prior to this publication they have been attached to grants since January 1974.) (b) The General Conditions for Titles II, III-B, and VII remain substantively unchanged from those issued in January 1972. The Addendum to the General Conditions has been changed to reflect the legislation vis-a-vis assets acquired with grant funds (see item 13). § 1067.5-3 Policy. (a) The attached general conditions and the addendum to general conditions for section 712 grants are in effect for all current grant actions to which they apply as of July 28, 1975. These general conditions also will be attached to all future grants actions. However, grantees should note that even if general conditions are not attached, the program accounts in the grant action remain subject to the applicable general conditions in this subpart. (b) In accepting the grant, the authorized official of the grantee accepts on behalf of the grantee the limitations of the applicable general conditions. APPENDIX A GRANTS GENERAL CONDITIONS GOVERNING Program funds expended under authority of this funding action are subject to the provisions of the Community Services Act of 1974, the general conditions listed below, any attached special grant conditions, and Community Services Administration (CSA) directives. The grantee is expected to inform CSA promptly if it fails to receive, or has reason to believe it has failed to receive, all CSA applicable directives or any attachments to the Statement of OEO Grant. Many of those provisions do not represent invariable policies of the CSA and exceptions should be requested in cases in which compliance with one or more of them would cause unnecessary difficulties in carrying out the approved program. Requirements found in grant conditions or CSA directives may be waived only by a written notification signed by an authorized CSA official. Any such waiver must be explicit: no waiver may be inferred from the fact that the funding action is responsive to a grant funding request which may have contained material inconsistent with one or more of these conditions. 1. Definitions. As used in these conditions: (a) An "approved program" consists only of those activities described in the grant funding request for which funding is approved in the Statement of OEO Grant and its attachments (which may include modifications of proposed activities) or in CSA approved written amendments to the Statement of OEO Grant. (b) "Program account funding period" extends from the effective date of a new or refunding action through the termination date or expiration of planned number of months for which funding is provided. (c) "Total program funds" refers to all amounts approved for expenditure for the approved program as shown on the Statement of OEO Grant, whether such amounts are derived from Federal or non-Federal sources, or whether they are provided in cash or in kind. (d) "CSA directives" are statements of policy and procedure published in the CSA publications system. 2. Applicability of conditions to delegate agencies. These conditions are applicable both to the grantee and to any delegate agency or organization that, pursuant to an agreement with the grantee, undertakes responsibility for any part of the approved program. Such an agreement may be entered into only if (1) the intention to make such a delegation to the particular agency has been set forth in the funding request for this grant action or has otherwise been approved by CSA, and (2) the contract contains all of the provisions found in the approved "Standard Contract Form for Delegation of Program Accounts." 3. Limitations on expenditure of program funds. Expenses charged against program funds may not be incurred prior to the effective date of the grant or subsequent to the termination date unless written prior approval has been received from the CSA funding official and may be incurred only as necessary to carry out the purposes and activities of the approved program. Such expenditures may not exceed the maximum limits shown on the Statement of OEO Grant or those subsequently approved for that approved program, subject to allowable flexibility guidelines published by CSA. All expenses incurred for the approved program must be supported by approved contracts, purchase orders, requisitions, bills, or other evidence of liability consistent with the grantee or delegate agency's established purchasing procedures. Expenses charged against program funds must also be incurred in accordance with CSA directives. Liabilities of the grantee or its delegate agencies to third parties as a result of termination action which are costs of phasing out in accordance with CSA directives or are specifically approved shall be considered proper expenditures of program funds. CSA will determine the disposition of unexpended funds at the termination of the grant. 4. Limitations on expenditures of federal funds. Expenditures of funds derived from Federal grant funds must not exceed in any event the amount of the Federal grant shown in the Statement of OEO Grant, (Column 9, OEO Form 314). Moreover, if a minimum non-Federal percentage of program funds is shown in the Statement of OEO Grant (Column 10, OEO Form 314), the portion of the total expenditures of the approved program derived from non-Federal sources, valuated in accordance with CSA Instructions, must not be less than that minimum percentage of the total program funds for the approved program. This requirement must be met for each program account funding period, and should be substantially true for each financial reporting period. Deficiencies of non-Federal share in one program account may be supplied by an excess in other program accounts consistent with applicable CSA Instructions concerning the pooling of non-Federal share. Further, the amount of total program funds derived from Federal grant funds must not exceed the grantee's allowable costs for the approved program which have been or are to be paid in cash. 5. Property. No program funds may be expended or costs incurred for the purchase of real property except as in accordance with regulations on the acquisition, ownership, and disposition of personal property as set forth in CSA directives. 6. Discrimination prohibited. No person in the United States shall on the ground of race, color, religion, sex, age, or national origin, be excluded from participation in, be denied the proceeds of, or be subject to discrimination under the program approved as a result of this funding request. The grantee and its delegate agencies will comply with the regulations promulgated by the Director of CSA, pursuant to the Civil Rights Act of 1964, and pursuant to the Community Services Act of 1974. 7. Discrimination in employment prohibited. In all hiring or employment made possible by or resulting from this grant action, each employer (1) will not discriminate against any employee or applicant for employment because of race, color, religion, sex, age, or national origin, and (2) will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex, age, or national origin. This requirement shall apply to, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates or pay of other forms of compensation; and selection for training, including apprenticeship. The grantee and its delegate agencies shall comply with all applicable Statutes and Executive Orders on equal employment opportunity and this grant action shall be governed by the provisions of all such Statutes and Executive Orders, including enforcement provisions, as implemented by, but not limited to, CSA directives. 8. Religious institutions. The grantee and its delegate agencies shall ensure that any part of the approved program that is conducted by a church or church related institution is entirely non-sectarian in content and purpose, and that CSA directives on grants and delegations to churches or church related institutions are satisfied. 9. Labor standards. All laborers and mechanics employed by contractors or subcontractors in the construction, alteration or repair, including painting and decorating, of projects, buildings, and works which are federally assisted under this grant shall be paid wages at rates not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a to 276a-5). 10. Patents. Any discovery or invention arising out of or developed in the course of work aided by the grant shall be promptly and fully reported to the Director of CSA for determination as to whether patent protection on such invention or discovery shall be sought and how the rights in the invention or discovery, including rights under any patent issued thereon shall be disposed of and administered, in order to protect the public interest. 11. Copyrights. If the grant results in a book or other copyrightable material, the author is free to copyright the work, but CSA reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish or otherwise use, and to authorize others to use, all copyrighted material and any material which can be copyrighted resulting from the approved program. 12. Reports, records, and inspections. The grantee and its delegate agencies shall submit financial, program progress, evaluation, and other reports as required by CSA directives, and shall maintain such property, personnel, financial and other records and accounts as are deemed necessary by CSA to assure proper accounting for all program funds. The grantee and its delegate agencies and contractors shall permit onsite inspections by CSA representatives, and shall effectively require employees and board members to furnish such information as, in the judgment of the CSA representatives, may be relevant to a question of compliance with grant conditions and CSA directives, or the effectiveness, legality, and achievements of the program. All grant records will be made available to the authorized representatives of CSA or the Comptroller General of the United States, and will be retained for three years after the expiration of this grant unless permission to destroy them is granted by the Director of CSA. 13. Covenant against contingent fees. The grantee warrants that no person or selling agency or other organization has been employed or retained to solicit or secure this funding action upon an agreement or understanding for commission, percentage, brokerage, or contingent fee. For breach or violation of this warrant the government shall have the right to annul this funding action without liability or, in its discretion, to deduct from the grant or otherwise recover the full amount of such commission, percentage, brokerage, or contingent fee, or to seek such other remedies as may be legally available. 14. Suspension and termination. The Director of CSA may in accordance with published regulations, suspend or terminate this grant in whole or in part for cause, which shall include: (1) Failure or unwillingness of the grantee or its delegate agencies to comply with the approved program including attached conditions, with applicable statutes and Executive Orders, or with such CSA directives as may become generally applicable at anytime; (2) submission by the grantee or its delegate agencies to CSA of reports which are incorrect or incomplete in any material respect; (3) ineffective or improper use of Federal funds by the grantee or its delegate agencies; (4) making any change which significantly impairs the representative character of the grantee's policymaking body or the grantee's capacity to enlist community support; (5) failure of the grantee either to adequately monitor and evaluate program activities delegated to other agencies, or to provide effective guidance to such agencies in carrying out the purpose and activities of the portions of the approved program delegated to them. This grant may also be suspended or terminated in whole or in part in the event the grantee is a Community Action Agency and a new agency is recognized by CSA as the Community Action Agency for all or part of the area served by the grantee in accordance with CSA directives. In such event part of the grant funds and the grantee's or delegate agencies' functions, obligations, records (or copies), authority and property relating to assistance provided to the grantee or its delegate agencies under this funding shall be transferred by the grantee and its delegate agencies to such newly recognized agency. No suspension or termination will effect any expenditures or legally binding commitments made prior to receiving notice of the suspension or termination, provided such expenditures or commitments were made in good faith and not in anticipation of termination and are otherwise allowable. Funds shall not be treated as committed for this purpose solely by virtue of a grantee's contract or other commitment to a delegate agency. Upon suspension or termination, the disposition of unexpended Federal funds and property purchased with program funds will be subject to CSA direction. 15. Successor authority of Community Services Administration. By virtue of the Community Services Act of 1974 (P.L. 93644), the Community Services Administration (CSA) is, in all respects and for all purposes, the successor authority to the Office of Economic Opportunity (OEO). Pursuant to section 601(d)(2) of the Community Services Act of 1974, all references to the Office of Economic Opportunity, in official documents including but not limited to, grant documents and regulations, shall be deemed to refer to the Community Services Administration, as set forth in OEO Notice 6000-3 "Successor Authority to the Office of Economic Opportunity," dated January 15, 1975 and published in Volume 40 of the FEDERAL REGISTER at page 3213 (January 20, 1975). All references to "CSA Directives" or "CSA Instructions" in these general conditions, and special conditions attached hereto and the grant-making documents themselves shall be read so as to include all regulations issued by the Office of Econom ic Opportunity and any subsequent regulations issued by the Community Services Administration. Such regulations, whether referred to as "OEO" or "CSA" regulations, instructions or notice, remain in force and are deemed to be the policy statements of the Community Services Administration until superseded, rescinded, or changed. All references herein to "Statement of OEO Grant", or a portion thereof, are deemed to refer to the document, regardless of form or title, utilized by the Community Services Administration to make grants under the authority of the Community Services Act of 1974. All references to the Community Services Act of 1974 shall be read so as to include the Economic Opportunity Act of 1964 as amended. [40 FR 27031, June 26, 1975; 40 FR 44327, Sept. 26, 1975, as amended at 45 FR 64940, Oct. 1, 1980] APPENDIX B ADDENDUM TO GENERAL CONDITIONS FOR GRANTS MADE UNDER SECTION 712 OF THE ECONOMIC OPPORTUNITY ACT, AS AMENDED (INCLUDING AMENDMENTS MADE BY THE COMMUNITY SERVICES ACT OF 1974) These conditions are binding both on the grantee and on any delegate agency under this grant. As used in these conditions, the term delegate agency refers to any agency with which the grantee or the delegate agency enters into an agreement for performance of any portion of the grant program. Venture subsidiaries or agencies receiving only venture capital funds (cost category 2.5) are not considered delegate agencies. This grant action specifically recognizes the following delegate agencies: 1. Applicability of CSA directives. Any CSA directives applicable to grants made under Section 712 of the Community Services Act of 1974' (formerly section 151 of the Economic Opportunity Act) shall be binding on this grantee and any delegate agency until such time as they are specifically revised or superseded by directives applicable to grants made under section 712 of the Community Services Act. 2. Submission of reports. Any subsidiary and any individual or organization which receives grant funds or other financial assistance from the grantee or delegate agency shall submit financial, program, progress, evaluation, and other reports as required by CSA and the Office of Economic Develop 'All references to the Community Services Act of 1974 shall be read so as to include the Economic Opportunity Act of 1964, as amended. ment (OED) and shall maintain such property, personnel, financial, and other records deemed necessary by CSA to assure a proper accounting for all grant funds. Decisions made by the grantee or delegate agencies to invest in or to extend financial assistance to any project shall include an agreement between the grantee or delegate agencies and the other parties which effectively requires that the grantee, the appropriate deiegate agency, CSA or its successor, CSA contractors performing evaluations of the grant program, and the U.S. General Accounting Office, shall have access to records and information either in writing or through on site inspection as deemed necessary, in the judgment of CSA, for monitoring the effectiveness and legality of the financial assist ance. 3. Review of chief executive officer. Prior to hiring the Chief Executive Officer the grantee and/or delegate agency shall submit the name and resume of the candidate to OED. The selection of a proposed candidate will be subject to review and comment by OED prior to appointment. OED will have 30 days in which to review and comment on the proposed candidate. However, while seeking a permanent Chief Executive Officer, the grantee may hire, without OED's review, a qualified person on an interim basis for a period not to exceed four months. 4. Limitation on contracts. No contract or series of contracts for the performance of any specific task or general service which shall result in an expenditure totaling more than $5,000 in grant funds to any individual or firm in any fiscal year shall be entered into without the prior written approval of OED. Accordingly, the grantee shall submit the following information to OED: a. A review of the purpose of the proposed contract (or contracts); b. The time and manner specified for its performance; c. The breakdown, in the form of a budget, of its costs; d. A statement of the qualifications and experience of the principal consultants and contractors who will be responsible for its performance; e. The manner of selection of the consultant(s) or contractor(s) (e.g., sole source, competitive bid, etc.). 5. Employment contracts. Any employment contract regardless of cost to which the grantee or a delegate agency is to be a party and which involves the expenditure of grant funds, shall be submitted to OED for review prior to execution. The employment contract shall constitute the entire agreement between the parties; any subsequent amended agreement is also subject to OED review. 6. Use of grant funds for meals. No grant funds shall be expended for the cost of meals for employees or officers of the grantee or delegate agency, except when on travel status. 7. CSA approval of corporate documents. No funds shall be expended by the grantee, delegate agency, or subsidiaries until the articles of incorporation and by-laws of such entities have been submitted to OED and approved in writing. After initial approval and so long as there is a grant relationship between CSA and the grantee such articles and by-laws shall not be amended without OED's written concurrence. 8. Use of venture capital funds. a. No venture capital funds shall be shifted to other cost categories without prior written approval of OED. b. Funds for venture capital shall be used to provide financial and other assistance, either directly or indirectly, for the creation, acquisition, preservation and expansion of business ventures, subject to the following terms and conditions: (1) Except as otherwise provided for by the terms of the grant no venture capital funds shall be used without the prior approval of OED. (2) For each venture, to obtain the approval specified in paragraph (1), the grantee shall submit to OED a full description of the proposed use of financial or other assistance, including an explanation of how it will further grant purposes. Each description shall include: (a) Appropriate feasibility studies and cost analyses; (b) Certified balance sheets and profit and loss statements for the immediately preceding three years or from the commencement of its operation, whichever period is shorter, if funds will be used for the acquisition, preservation or expansion of an existing business venture; (c) Cash-flow projections and pro forma profit and loss statements and balance sheets estimated on a monthly basis for two years; (d) The estimated purchase price or annual rent for any proposed purchase or lease of real property, accompanied by an independent appraisal of the property establishing that the proposed purchase price or annual rent is reasonable. (For additional information required in the event real property is to be purchased, see Addendum General Conditions 13, 15, and 16). (e) Resumes of management team (f) Articles of Incorporation and By-Laws c. No grant funds shall be expended on any loan or capital investment project or program without evidence that such funds are not available from other private or public sources on terms that are reasonable and consistent with the goals of this grant. Such evidence shall be kept on file during the grant relationship and for at least three years thereafter. d. Decisions made by the grantee or delegate agencies to invest in or to extend financial assistance to any project shall include an agreement between the grantee or delegate agencies and the other parties which assures that the maximum feasible benefits shall accrue collectively to the poor residents of the target area. 9. Issuance of public securities. There shall be no public issuances of securities by a grantee, a delegate agency, or any project utilizing venture capital funds without the prior approval of OED or its successor. Copies of any registration statement or notification or prospectus or offering circular prepared in conjunction with a public issuance should be sent to OED. Copies of any other documents which the issuer is required to file in connection with any public issuance of securities, whether by Federal securities laws or by state blue sky laws, should also be sent to OED. 10. Accounting procedures and audit requirement for ventures. a. In order to ensure that the organization operating the venture has established or maintains a satisfactory accounting system, the grantee shall engage an independent certified public accountant to perform a survey to evaluate and review the adequacy of the accounting system, and shall submit to OED a complete copy of the survey report. This report shall be submitted prior to the expenditure of investment capital and the grantee shall keep a copy on file during the grant relationship and for at least three years thereafter. b. In each case in which the assurances described in paragraph a, above, are required, the grantee shall also ensure that within three (3) months of receipt of assistance by the venture a preliminary audit survey is made to evaluate and review the adequacy of such accounting system. A copy of such audit survey report shall be promptly submitted to CSA, and the grantee shall keep a copy on file during the grant relationship and for at least three (3) years thereafter. c. The grantee shall also ensure that within one (1) year of the receipt of assistance, and annually thereafter, an audit will be conducted for any venture which was assisted with grant funds. Where the grantee, directly or indirectly, exercises control over such ventures, it shall be responsible for taking the necessary steps to correct any deficiencies disclosed by such audit (including such action as CSA, based on its review of the audit reports, may direct). A copy of such audit report shall be promptly submitted to CSA and the grantee shall keep a copy on file during the grant relationship and for at least three (3) years thereafter. |