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POST-AWARD REQUIREMENTS

Financial and Program Management $ 600.120 Purpose of financial and pro

gram management. Sections 600.121 through 600.128 prescribe standards for financial management systems, methods for making payments and rules for satisfying cost sharing and matching requirements, accounting for program income, budget revision approvals, making audits, determining allowability of cost, and establishing fund availability. 8600.121 Standards for financial man

agement systems. (a) Recipients shall relate financial data to performance data and develop unit cost information whenever practical. For awards that support research, it should be noted that it is generally not appropriate to develop unit cost information.

(b) Except for the provisions of 600.121(f) and 600.181, recipients' financial management systems shall provide for the following:

(1) Accurate, current and complete disclosure of the financial results of each federally-sponsored project or program in accordance with the reporting requirements set forth in $ 600.152. If a DOE award requires reporting on an accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient shall not be required to establish an accrual accounting system. These recipients may develop such accrual data for their reports on the basis of an analysis of the documentation on hand.

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

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

(4) Comparison of outlays with budget amounts for each award. Whenever

appropriate, financial information should be related to performance and unit cost data. As discussed in paragraph (a) of this section, unit cost data is generally not appropriate for awards that support research.

(5) Written procedures to minimize the time elapsing between the transfer of funds to the recipient from the U.S. Treasury and the issuance or redemption of checks, warrants or payments by other means for program purposes by the recipient. To the extent that the provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern, payment methods of State agencies, instrumentalities, and fiscal agents shall be consistent with CMIA Treasury-State Agreements the CMIA default procedures codified at 31 CFR part 205, “Withdrawal of Cash from the Treasury for Advances under Federal Grant and Other Programs."

(6) Written procedures for determining the reasonableness, allocability and allowability of costs in accordance with the provisions of the applicable Federal cost principles and the terms and conditions of the award.

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

(c) Where the Federal Government guarantees or insures the repayment of money borrowed by the recipient, the Contracting Officer, at his or her discretion, may require adequate bonding and insurance if the bonding and insurance requirements of the recipient are not deemed adequate to protect the interest of the Federal Government.

(d) The Contracting Officer may require adequate fidelity bond coverage where the recipient lacks sufficient coverage to protect the Federal Government's interest.

(e) Where bonds are required in the situations described in $8600.121 (c) and (d), the bonds shall be obtained from companies holding certificates of authority as acceptable sureties, as prescribed in 31 CFR part 223, "Surety Companies Doing Business with the United States."

(f) Individuals whose financial management systems do not meet the minimum standards of $600.121 (b) shall maintain a separate bank account for deposit of award or subaward funds.

Disbursements by the recipient or sub- authorized by OMB. This form is not to recipient from this account shall be be used when Treasury check advance supported by source documentation payments are made to the recipient such as canceled checks, paid bills, re automatically through the use of a preceipts, payrolls, etc.

determined payment schedule or if pre

cluded by special DOE instructions for $ 600.122 Payment.

electronic funds transfer. (a) Payment methods shall minimize (e) Reimbursement is the preferred the time elapsing between the transfer method when the requirements in paraof funds from the United States Treas- graph (b) of this section cannot be met. ury and the issuance or redemption of DOE may also use this method on any checks, warrants, or payment by other construction agreement, or if the means by the recipients. Payment major portion of the construction methods of State agencies or instru project is accomplished through primentalities shall be consistent with vate market financing or Federal Treasury-State CMIA agreements or loans, and the Federal assistance condefault procedures codified at 31 CFR stitutes a minor portion of the project. part 205.

(1) When the reimbursement method (b) Recipients will be paid in ad

is used, DOE shall make payment withvance, provided they maintain or dem

in 30 days after receipt of the billing, onstrate the willingness to maintain:

unless the billing is improper. (1) Written procedures that minimize

(2) Recipients are authorized to subthe time elapsing between the transfer

mit requests for reimbursement at of funds and disbursement by the re

least monthly when electronic funds cipient, and

transfers are not used. (2) Financial management systems that meet the standards for fund con

(f) If a recipient cannot meet the critrol and accountability as established

teria for advance payments and DOE

has determined that reimbursement is in $600.121. Cash advances to a recipient organization shall be limited to the

not feasible because the recipient lacks minimum amounts needed and be

sufficient working capital, DOE may timed to be in accordance with the ac

provide cash on a working capital adtual, immediate cash requirements of

vance basis. Under this procedure, DOE the recipient organization in carrying

advances cash to the recipient to cover out the purpose of the approved pro

its estimated disbursement needs for gram or project. The timing and

an initial period generally geared to amount of cash advances shall be as

the recipient's disbursing cycle. Thereclose as is administratively feasible to

after, DOE reimburses the recipient for the actual disbursements by the recipi

its actual cash disbursements. The ent organization for direct program or

working capital advance method of project costs and the proportionate

payment will not be used for recipients share of any allowable indirect costs. unwilling or unable to provide timely (c) Whenever possible, advances shall

advances to their subrecipient to meet be consolidated to cover anticipated

the subrecipient's actual cash disbursecash needs for all awards made by the

ments. DOE to the recipient.

(g) To the extent available, recipi(1) Advance payment mechanisms in ents shall disburse funds available from clude, but are not limited to, Treasury repayments to and interest earned on a check and electronic funds transfer. revolving fund, program income, re

(2) Advance payment mechanisms are bates, refunds, contract settlements, subject to 31 CFR part 205.

audit recoveries and interest earned on (3) Recipients may submit requests such funds before requesting additional for advances and reimbursements at cash payments. least monthly when electronic fund (h) Unless otherwise required by stattransfers are not used.

ute, DOE will not withhold payments (d) Requests for Treasury check ad for proper charges made by recipients vance payment shall be submitted on at any time during the project period SF-270, "Request for Advance or Reim unless paragraph (h)(1) or (h)(2) of this bursement," or other forms as may be section apply.

(1) A recipient has failed to comply with the project objectives, the terms and conditions of the award, or DOE reporting requirements.

(2) The recipient or subrecipient is delinquent in a debt to the United States. Under such conditions, the Federal awarding agency may, upon reasonable notice, inform the recipient that payments shall not be made for obligations incurred after a specified date until the conditions are corrected or the indebtedness to the Federal Government is liquidated. Before withholding any payment, DOE shall notify the recipient that payments shall not be made for obligations incurred after a specified date, which shall ordinarily be no sooner than 30 days from the date of the notice, until the recipient corrects the noncompliance or pays the indebtedness to the Federal government.

(i) Standards governing the use of banks and other institutions as depositories of funds advanced under awards are as follows.

(1) Except for situations described in paragraph (i)(2) of this section, DOE shall not require separate depository accounts for funds provided to a recipient or establish any eligibility requirements for depositories for funds provided to a recipient. However, recipients must be able to account for the receipt, obligation and expenditure of funds.

(2) Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible.

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

(k) Recipients shall maintain advances of Federal funds in interest bearing accounts, unless paragraph (k) (1), (2) or (3) of this section apply.

(1) The recipient receives less than $120,000 in Federal awards per year.

(2) The best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances.

(3) The depository would require an average or minimum balance so high

that it would not be feasible within the expected Federal and non-Federal cash resources.

(1) For those entities where CMIA and its implementing regulations do not apply, interest earned on Federal advances deposited in interest bearing accounts shall be remitted annually to the HHS Payment Management System through an electronic medium such as the FEDWIRE Deposit system. Recipients which do not have this capability should use a check. The address is the Department of Health and Human ServicesPayment Management System, P.O. Box 6021, Rockville, MD 20852. Interest amounts up to $250 per year may be retained by the recipient for administrative expense. State universities and hospitals shall comply with CMIA, as it pertains to interest. If an entity subject to CMIA uses its own funds to pay pre-award costs for discretionary awards without prior written approval from the Federal awarding agency, it waives its right to recover the interest under CMIA.

(m) Except as noted elsewhere in this subpart, only the following forms shall be authorized for the recipients in requesting advances and reimbursements. Federal agencies shall not require more than an original and two copies of these forms.

(1) SF-270, Request for Advance or Reimbursement. Each Federal awarding agency shall adopt the SF-270 as a standard form for all nonconstruction programs when electronic funds transfer or predetermined advance methods are not used. Federal awarding agencies, however, have the option of using this form for construction programs in lieu of the SF-271, "Outlay Report and Request for Reimbursement for Construction Programs.”

(2) SF-271, Outlay Report and Request for Reimbursement for Construction Programs. Each Federal awarding agency shall adopt the SF-271 as the standard form to be used for requesting reimbursement for construction programs. However, a Federal awarding agency may substitute the SF-270 when the Federal awarding agency determines that it provides adequate information to meet Federal needs.

(n) The DOE may convert a recipient (5) Are not paid by the Federal Govfrom advance payment to reimburse ernment under another award, except ment whenever the recipient no longer where authorized by Federal statute to meets the criteria for advance payment be used for cost sharing or matching. specified in paragraph (b) of this sec (6) Are provided for in the approved tion. Any such conversion may be ac budget. complished only after the DOE has ad (7) Conform to other provisions of vised the recipient in writing of the this subpart, as applicable. reasons for the proposed action and has (b) Unrecovered indirect costs may be provided a period of at least 30 days included as part of cost sharing or within which the recipient may take matching corrective action or provide satisfac (c) Values for recipient contributions tory assurances of its intention to take of services and property shall be estabsuch action.

lished in accordance with the applica(0) With prior DOE approval and in ble cost principles. If DOE authorizes accordance with written DOE instruc recipients to donate buildings or land tions, a recipient may assign to a bank, for construction/facilities acquisition trust company or other financing insti projects or long-term use, the value of tution, including any Federal lending the donated property for cost sharing agency, reimbursement by Treasury or matching shall be the lesser of eicheck due from DOE under the fol ther paragraph (c)(1) or (2) of this seclowing conditions:

tion. (1) The award provides for reimburse (1) The certified value of the remainment totaling $1,000 or more;

ing life of the property recorded in the (2) The assignment covers all recipient's accounting records at the amounts payable under the award that time of donation. have not already been paid;

(2) The current fair market value. (3) Reassignment is prohibited; and However, when there is sufficient jus

(4) The assignee files a written notice tification, DOE may approve the use of of award payment assignment and a the current fair market value of the true copy of the instrument of assign donated property, even if it exceeds the ment with DOE. Any interest costs re certified value at the time of donation sulting from a loan obtained on the to the project. basis of an assignment are unallowable (d) Volunteer services furnished by charges to DOE award funds or any re professional and technical personnel, quired cost sharing.

consultants, and other skilled and un(p) Recipients shall observe the re skilled labor may be counted as cost quirements of this section in making sharing or matching if the service is an or withholding payments to subrecipi integral and necessary part of an apents except that the forms used by re proved project or program. Rates for cipients are not required to be used by volunteer services shall be consistent subrecipients when requesting ad with those paid for similar work in the vances or reimbursement.

recipient's organization. In those in

stances in which the required skills are $ 600.123 Cost sharing or matching.

not found in the recipient organization, (a) All cost sharing or matching con rates shall be consistent with those tributions, including cash and third paid for similar work in the labor marparty in-kind, shall meet all of the fol ket in which the recipient competes for lowing criteria.

the kind of services involved. In either (1) Are verifiable from the recipient's case, paid fringe benefits that are rearecords.

sonable, allowable, and allocable may (2) Are not included as contributions be included in the valuation. for any other federally-assisted project (e) When an employer other than the or program.

recipient furnishes the services of an (3) Are necessary and reasonable for employee, these services shall be valproper and efficient accomplishment of ued at the employee's regular rate of project or program objectives.

pay (plus an amount of fringe benefits (4) Are allowable under the applica that are reasonable, allowable, and alble cost principles.

locable, but exclusive of overhead

costs), provided these services are in the same skill for which the employee is normally paid.

(f) Donated supplies may include such items as office supplies, laboratory supplies or workshop and classroom supplies. Value assessed to donated supplies included in the cost sharing or matching share shall be reasonable and shall not exceed the fair market value of the property at the time of the donation.

(g) The method used for determining cost sharing or matching for donated equipment, buildings and land for which title passes to the recipient may differ according to the purpose of the award, if either paragraph (g)(1) or (2) of this section apply.

(1) If the purpose of the award is to assist the recipient in the acquisition of equipment, buildings or land, the total value of the donated property may be claimed as cost sharing or matching.

(2) If the purpose of the award is to support activities that require the use of equipment, buildings or land, normally only depreciation or use charges for equipment and buildings may be made. However, the full value of equipment or other capital assets and fair rental charges for land may be allowed, provided that DOE has approved the charges.

(h) The value of donated property shall be determined in accordance with the usual accounting policies of the recipient, with the following qualifications.

(1) The value of donated land and buildings shall not exceed its fair market value at the time of donation to the recipient as established by an independent appraiser (e.g., certified real property appraiser or General Services Administration representative) and certified by a responsible official of the recipient.

(2) The value of donated equipment shall not exceed the fair market value of equipment of the same age and condition at the time of donation.

(3) 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.

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

(i) The following requirements pertain to the recipient's supporting records for in-kind contributions from third parties.

(1) Volunteer services shall be documented and, to the extent feasible, supported by the same methods used by the recipient for its own employees.

(2) The basis for determining the valuation for personal service, material, equipment, buildings and land shall be documented.

(j) DOE shall specify in the solicitation or in the program rule, if any, any cost sharing requirement. The award document shall be specific as to whether the cost sharing is based on a minimum amount for the recipient or on a percentage of total costs.

(k) If DOE requires that a recipient provide cost sharing which is not required by statute or which exceeds a statutory minimum, DOE shall state in the program rule or solicitation the reasons for requiring such cost sharing, recommended or required levels of cost sharing, and the circumstances under which the requirement for cost sharing may be waived or adjusted during any negotiation.

(1) Whenever DOE negotiates the amount of cost sharing, DOE may take into account such factors as the use of program income (see $ 600.124), patent rights, and rights in data. Foregone fee or profit shall not be considered in establishing the extent of cost sharing. 8600.124 Program income.

(a) The standards set forth in this section shall be used to account for program income related to projects financed in whole or in part with DOE funds.

(b) Except as provided in paragraph (h) of this section, program income earned during the project period shall be retained by the recipient and, in accordance with program regulations or the terms and conditions of the award, shall be used in one or more of the following ways.

(1) Added to funds committed to the project and used to further eligible project objectives.

(2) Used to finance the non-DOE share of the project.

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