69. Economic Development-Planning Includes costs associated with economic development planning grants approved under the authority of Title VII, Part D of the EOA. 71. Evaluation-Type I (Title IX) Includes costs associated with national impact evaluation strategies approved under the authority of Title IX. 73. Evaluation-Type II (Title IX) Includes costs associated with determining the relative effects of different program strategies, intervention techniques and administrative processes employed to implement a national program approved under the authority of Title IX. 75. Evaluation—Type III (Title IX) Includes costs associated with assessing the effectiveness and efficiency of individual grantees and projects. 78. Evaluation-Other (Title IX) Includes costs associated with assessment projects not included under program accounts 71, 73, and 75. Examples might include short-term studies that respond to policy-related questions. 80. Energy-Emergency Energy Assistance (222(a)(5)) Includes costs associated with a special program to provide assistance to low-income households facing a crisis as a result of the rising cost of energy and severe weather conditions by paying fuel/utility bills, providing lines of credit, or providing services such as blankets, clothing, etc. 82. Research (Title I) and (232) Includes costs associated with basic research and related evaluation conducted to provide meaningful information for formulating new programs and policies affecting the poverty population in program areas not included elsewhere. Specifically excluded are nutrition (29, 39, 48) energy (50, 53, 58) rural housing (31, 32, 33, 34, 35, 36) economic development (67, 68) and Title IX (71, 73, 75, 78). 84. Demonstration (232) Includes costs associated with pilot or demonstration projects designed to test or assist in the development of new approaches or methods which will aid CSA's poverty population. 98. Program Administration Includes costs incurred by Federal employees for the overall direction, manage § 1067.42-3 Establishing and maintaining program accounts. (a) Each grantee shall maintain separate accounting records for each grant. The grantee shall establish a separate bank account for community action program funds, but need not establish a separate bank account for each grant, provided all transactions are clearly identified by grant in the accounting records. (b) The accounting records shall include all receipts that occur during the grant period, including Federal grants, non-Federal contributions in cash and in-kind, interest earned, and any income from fees charged to program beneficiaries. The financial records shall also include all expenditures from program funds; however, it is not necessary, and in many cases it may not be feasible, to distribute expenditures between Federal and non-Federal contributions. (c) CSA recognizes that the accounting system utilized in grantee organizations will vary from a pure cash receipt and expenditure system to a very extensive accrual system. CSA will not dictate the type and format of the system to be used, since the interest of the Federal Government is satisfied if a system is established which is adequate to account for program funds, which provides accurate and current information relating to program progress, and which may be audited without undo difficulty. (d) Such a system must meet the following criteria: (1) The accounting records shall provide the information needed to identify adequately the receipt and expenditure of all program funds separately for each grant. Expenditures shall be recorded by the component project and budget cost categories shown in the approved budget (CSA Form 325). (2) Each entry in the accounting records shall refer to the documentation which supports the entry and the documentation shall be filed in such a way that it can be readily located. (3) The accounting records shall provide accurate and current financial reporting information. (4) The accounting system shall possess an adequate means of internal control to safeguard the assets, check the accuracy and reliability of accounting data, promote operational efficiency, and encourage adherence to prescribed management policies. (e) It is permissible for the grantee to maintain the record of non-Federal contributions in its regular accounts, provided a complete series of reference memoranda or a summary list of nonFederal contributions is incorporated into the accounts quarterly. Subpart 1067.43-Accounting for Delegated or Contracted Activities (CSA Instruction 6806-04) SOURCE: 44 FR 56558, Oct. 1, 1979, unless otherwise noted. § 1067.43-1 Applicability. This subpart applies to all grantees financially assisted under Titles II, IV, VII, of the Economic Opportunity Act of 1964, as amended, if such assistance is administered by the Community Services Administration. § 1067.43-2 Effective date. May 10, 1971 (CSA Instruction 680604). § 1067.43-3 Accounting for delegated or contracted activities. (a) In every case where the conduct of all or part of the component is dele gated to another agency by the grantee, the grantee is held responsible for performance of the program, including proper accounting for expenditure of funds. The intention to make such a delegation must be set forth in the approved application for the grant or be subsequently approved by CSA, prior to the actual delegation. (b) The grantee organization shall require that fiscal records be kept by the delegate agencies with which it contracts in accordance with the following guidelines: (1) If the delegate agency is a public body, the grantee shall stipulate that program funds be disbursed through the chief financial officer of the public body, make certain that these financial instructions are known to the chief financial officer, and ensure that an appropriate reporting system is established so that the grantee can meet its obligation to CSA. Inclusion of the program expenditures of the delegate agency in the regular audit program of any public body which becomes a delegate agency should also be assured. (2) Where the delegate agency is a private organization, the grantee may pursue one of the following courses in order to assure proper fiscal accountability: (i) Require appropriate certification that the accounting system of the delegate agency is adequate to meet the requirements of the contract. (ii) Finance, as part of the contract, adequate accounting assistance commensurate with the size and complexity of the contract. OR (iii) Provide on the grantee's staff, on a full, part-time, or consultant basis as required, qualified persons to consult with the delegate agencies, keep essential accounts, perform such audits as are deemed necessary, and consolidate and prepare appropriate reports to CSA. Grantees dealing with small private organizations as delegate agencies may find it more economical and desirable to use this approach than to attempt to require the delegate agency to hire professional help and establish its own accounting system. (3) In the case of a contract or agreement with an individual, the service to be performed is the accountable item. tunity Act of 1964 will comply with the applicable sections of the Federal tax code by withholding taxes, filing the appropriate tax returns and remitting taxes to the designated Internal Revenue Service District Office. (b) Failure to comply with IRS requirements for reporting and remitting the withheld taxes will result in IRS notifying OEO to suspend further payments due the grantee and to refuse to refund, make supplements, or provide any other assistance, as prescribed in section 115 of the 1969 amendments to the Economic Opportunity Act of 1964, until adequate provisions have been made to satisfy tax obligations. (c) The use of funds withheld from employee's wages for taxes, for program purposes, even with the intent to later restore such funds from another source, is improper and is specifically prohibited. (d) Section 115 of the Economic Opportunity Act of 1964, as amended, provides: Upon notice from the Secretary of the Treasury or his delegate that any person otherwise entitled to receive a payment made pursuant to a grant, contract, agreement, loan or other assistance made or entered into under the Economic Opportunity Act of 1964 is delinquent in paying or depositing (1) the taxes imposed on such person under chapters 21 and 23 of the Internal Revenue Code of 1954, or (2) the taxes deducted and withheld by such person under chapters 21 and 24 of such Code, the Director of the Office of Economic Opportunity shall suspend such portion of such payment due to such person, which, if possible, is sufficient to satisfy such delinquency, and shall not make nor enter into any new grant, contract, agreement, loan or other assistance under such Act with such person until the Secretary of the Treasury or his delegate has notified him that such person is no longer delinquent in paying or depositing such tax or the Director of the Office of Economic Opportunity determines that adequate provision has been made for such payment * § 1068.6-4 General. (a) All OEO-funded organizations are required by IRS laws and regulations to withhold income taxes from their employees' wages. This includes those religious, educational or charitable organizations which are exempt from Federal income taxes by IRS ruling under section 501(c)(3) of the Internal Revenue Code. (1) All grantees, except those who qualify as a 501(c)(3) organization, must provide mandatory social security coverage for their employees. These grantees are liable for taxes imposed under the Federal Insurance Contributions Act. Those agencies who qualify as 501(c)(3) organizations, are exempt from social security taxes (Federal Insurance Contributions Act) unless they elect to provide social security coverage for their employees; however, if they do waive their exemption, they must also deduct the employees' share of FICA taxes from their wages. (2) Grantees should consult their local IRS Office in order to determine their particular responsibilities in regard to each of these tax liabilities. (b) All OEO grantees must, if they have not already done so, obtain Form SS-4, "Application for Employer Identification Number," and IRS Publication No. 15, Circular E, "Employer's Tax Guide," from the nearest IRS District Office. (c) Form SS-4 is to be completed by these organizations with the required information and returned to the appropriate IRS Office. The IRS Office will assign an "Employer Identification Number" and furnish the organization with reporting and deposit forms preinscribed with the address and identification number. The identification number is used by IRS to identify the organization's tax accounts and must be recorded on all reports, remittances and related correspondence. (d) Circular E provides the detailed definitions, instructions, guidelines, and sample forms related to obtaining an Employer Identification Number, tables for computing tax amounts to be withheld from employees' wages, and depositing and reporting Federal income and social security taxes. Attached to this subpart are the essential procedures and requirements contained in Circular E. (e) To avoid delay and insure timely processing of grant applications, all applicants, for OEO funds must record PROCEDURES FOR OBTAINING EMPLOYER IDENTIFICATION NUMBER AND DEPOSITING AND REPORTING WITHHELD FEDERAL INCOME AND SOCIAL SECURITY TAXES Employer identification number. Each employer shall obtain Form SS-4, "Application for Employer Identification Number," and Internal Revenue Service Circular E, "Employer's Tax Guide," The form and tax guide may be obtained from any office of the Internal Revenue Service or Social Security Administration. Instructions for completion are on the reverse side of Form SS4. Upon completion, the forms must be filed with the District Director of Internal Revenue with whom Federal tax returns are filed. A copy of the form will be returned with the assigned "Employer Identification Number" recorded thereon. This identification number should be shown on all forms and attachments, and in all correspondence with the Internal Revenue Service and the Social Security Administration. Payment of withheld income and social security taxes. In most cases, the employer is responsible not only for the employer's contribution of social security tax, but also for the employee tax and the income tax required to be withheld from the employee's wages. The amount of tax withheld by the employer becomes a special fund in trust for the United States. The employer is relieved of liability to any other person for such amount. In general, the withheld income and social security taxes must be deposited with an authorized commercial bank depository or a Federal Reserve Bank with a Federal Tax Deposit Form 501. Deposits are required to be made as follows. (a) Every employer who holds more than $100 in social security and withheld income taxes (reduced by any deposits for the quarter) must deposit these taxes on or before the last day of the month following the close of the quarter. Form 941 must be filed with the Internal Revenue Service Center for the IRS region in which the grantee or delegate agency is located as prescribed in Circular E. No more than one calendar quarter may be reported on one Form 941. Instructions for preparation of Form 941 are included on its reverse side. Preaddressed forms will be furnished for use by the grantee or delegate agency. Taxes not required to be deposited must be remitted with the return, or at the option of the employer, deposited on Form 501. Penalties. Both criminal and civil penalties are provided for the willful failure to make returns (Form 941) and payments (Form 501) of tax, or for willfully filing false or fraudulent returns (Form 941). A penalty is provided for failure, without reasonable cause, to make timely required deposits of taxes. How to make deposits of taxes. Preinscribed Forms 501 will automatically be furnished the employer after he applies for an identification number. The employer shall fill in a preinscribed Form 501, "Federal Tax Deposit," in accordance with the instructions printed on the reverse side of that form. Each Form 501, and a single remittance covering the amount of the taxes to be deposited, should be sent or taken to any commercial bank qualified as a depository for Federal taxes, or to a Federal Reserve Bank. The names of authorized commercial bank depositories may be ascertained at a local bank or Federal Reserve Bank. Checks or money orders covering deposits should be made payable to the bank to which the completed Form 501 is taken or sent. Quarterly return of income tax withheld and social security taxes. Every grantee or delegate agency required to withhold Federal income and social security taxes from wages must file a quarterly return on Form 941, "Employer's Quarterly Federal Tax |