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Accrued erpenditures mean the ments may be considered as grantee or charges incurred by the grantee during subgrantee cash contributions. a given period requiring the provision Contract means (except as used in the of funds for: (1) Goods and other tan- definitions for grant and subgrant in gible property received; (2) services this section and except where qualified performed by employees, contractors, by Federal) a procurement contract subgrantees, subcontractors, and other under a grant or subgrant, and means a payees; and (3) other amounts becom- procurement subcontract under a coning owed under programs for which no tract. current services or performance is re- Cost sharing of matching means the quired, such as annuities, insurance value of the third party in-kind conclaims, and other benefit payments.

tributions and the portion of the costs Accrued income means the sum of: (1) of a federally assisted project or proEarnings during a given period from gram not borne by the Federal Governservices performed by the grantee and

ment. goods and other tangible property de

Cost-type contract means a contract or livered to purchasers, and (2) amounts

subcontract under a grant in which the becoming owed to the grantee for

contractor or subcontractor is paid on which no current services or perform

the basis of the costs it incurs, with or ance is required by the grantee.

without a fee. Acquisition cost of an item of pur

Equipment means tangible, chased equipment means the net in

nonexpendable, personal property havvoice unit price of the property includ

ing a useful life of more than one year ing the cost of modifications, attach

and an acquisition cost of $5,000 or ments, accessories, or auxiliary appa

more per unit. A grantee may use its ratus necessary to make the property

own definition of equipment provided

that such definition would at least inusable for the purpose for which it was acquired. Other charges such as the

clude all equipment defined above. cost of installation, transportation,

Expenditure report means: (1) For nontaxes, duty or protective in-transit in

construction grants, the SF-269 “Fisurance, shall be included or excluded

nancial Status Report” (or other equiv

construction from the unit acquisition cost in ac

alent report); (2) for cordance with the grantee's regular ac

grants, the SF-271 “Outlay Report and

Request for Reimbursement” (or other counting practices.

equivalent report). Administrative requirements mean

Federally recognized Indian tribal govthose matters common to grants in general, such as financial management,

ernment means the governing body or a

governmental agency of any Indian kinds and frequency of reports, and re

tribe, band, nation, or other organized tention of records. These are distin

group or community (including any guished from programmatic require

Native village as defined in section 3 of ments, which concern matters that can

the Alaska Native Claims Settlement be treated only on a program-by-pro

Act, 85 Stat 688) certified by the Secgram or grant-by-grant basis, such as

retary of the Interior as eligible for the kinds of activities that can be sup

special programs and services provided ported by grants under a particular

by him through the Bureau of Indian program.

Affairs. Awarding agency means (1) with re- Government means a State or local spect to a grant, the Federal agency, government or a federally recognized and (2) with respect to a subgrant, the Indian tribal government. party that awarded the subgrant.

Grant means an award of financial asCash contributions means the grant- sistance, including cooperative agreeee's cash outlay, including the outlay ments, in the form of money, or propof money contributed to the grantee or erty in lieu of money, by the Federal subgrantee by other public agencies Government to an eligible grantee. The and institutions, and private organiza- term does not include technical assisttions and individuals. When authorized ance which provides services instead of by Federal legislation, Federal funds money, or other assistance in the form received from other assistance agree- of revenue sharing, loans, loan guarantees, interest subsidies, insurance, or required, such as annuities, insurance direct appropriations. Also, the term claims, and other benefit payments. does not include assistance, such as a Percentage of completion method refers fellowship or other lump sum award, to a system under which payments are which the grantee is not required to ac- made for construction work according count for.

to the percentage of completion of the Grantee means the government to work, rather than to the grantee's cost which a grant is awarded and which is incurred. accountable for the use of the funds Prior approval means documentation provided. The grantee is the entire evidencing consent prior to incurring legal entity even if only a particular specific cost. For the Department of component of the entity is designated Energy, this must be signed by a Conin the grant award document.

tracting Officer. Local government means a county,

Real property means land, including municipality, city, town, township,

land improvements, structures and aplocal public authority (including any

purtenances thereto, excluding movpublic and Indian housing agency

able machinery and equipment. under the United States Housing Act of

Share, when referring to the awarding 1937) school district, special district,

agency's portion of real property, intrastate district, council of govern

equipment or supplies, means the same ments (whether or not incorporated as

percentage as the awarding agency's a nonprofit corporation under state

portion of the acquiring party's total law), any other regional or interstate

costs under the grant to which the acgovernment entity, or any agency or

quisition costs under the grant to instrumentality of a local government.

which the acquisition cost of the prop Obligations means the amounts of or

erty was charged. Only costs are to be

counted-not the value of third-party ders placed, contracts and subgrants

in-kind contributions. awarded, goods and services received,

State means any of the several States and similar transactions during a given

of the United States, the District of period that will require payment by

Columbia, the Commonwealth of Puerthe grantee during the same or a future

to Rico, any territory or possession of period.

the United States, or any agency or inOMB means the United States Office

strumentality of a State exclusive of of Management and Budget.

local governments. The term does not Outlays (expenditures) mean charges include any public and Indian housing made to the project or program. They agency under United States Housing may be reported on a cash or accrual

Act of 1937. basis. For reports prepared on a cash Subgrant means an award of financial basis, outlays are the sum of actual assistance in the form of money, or cash disbursement for direct charges property in lieu of money, made under for goods and services, the amount of a grant by a grantee to an eligible indirect expense incurred, the value of subgrantee. The term includes finanin-kind contributions applied, and the cial assistance when provided by conamount of cash advances and payments tractual legal agreement, but does not made to contractors and subgrantees. include procurement purchases, nor For reports prepared on an accrued ex- does it include any form of assistance penditure basis, outlays are the sum of which is excluded from the definition actual cash disbursements, the amount of grant in this subpart. of indirect expense incurred, the value Subgrantee means the government or of inkind contributions applied, and other legal entity to which a subgrant the new increase (or decrease) in the is awarded and which is accountable to amounts owed by the grantee for goods the grantee for the use of the funds and other property received, for serv- provided. ices performed by employees, contrac- Supplies means all tangible personal tors, subgrantees, subcontractors, and property other than “equipment” as other payees, and other amounts be- defined in this subpart. coming owed under programs for which Suspension means depending on the no current services or performance are context, either (1) temporary with

tions from the cumulative funds authorized. (53 FR 8087, Mar. 11, 1988, as amended at 53 FR 8047, Mar. 11, 1988; 54 FR 23960, June 5, 1989)

drawal of the authority to obligate grant funds pending corrective action by the grantee or subgrantee or a decision to terminate the grant, or (2) an action taken by a suspending official in accordance with agency regulations implementing E.O. 12549 to immediately exclude a person from participating in grant transactions for a period, pending completion of an investigation and such legal or debarment proceedings as may ensue.

Termination means permanent withdrawal of the authority to obligate previously-awarded grant funds before that authority would otherwise expire. It also means the voluntary relinquishment of that authority by the grantee or subgrantee. Termination does not include: (1) Withdrawal of funds awarded on the basis of the grantee's underestimate of the unobligated balance in a prior period; (2) withdrawal of the unobligated balance as of the expiration of a grant; (3) refusal to extend a grant or award additional funds, to make a competing or noncompeting continuation, renewal, extension, or supplemental award; or (4) voiding of a grant upon determination that the award was obtained fraudulently, or was otherwise illegal or invalid from inception.

Terms of a grant or subgrant mean all requirements of the grant or subgrant, whether in statute, regulations, or the award document.

Third party in-kind contributions mean property or services which benefit a federally assisted project or program and which are contributed by non-Federal third parties without charge to the grantee, or a cost-type contractor under the grant agreement.

Unliquidated obligations for reports prepared on a cash basis mean the amount of obligations incurred by the grantee that has not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations incurred by the grantee for which an outlay has not been recorded.

Unobligated balance means the portion of the funds authorized by the Federal agency that has not been obligated by the grantee and is determined by deducting the cumulative obliga

$ 600.208 Applicability.

(a) General. Sections 600.400 through 600.452 of this subpart apply to all grants and subgrants to governments, except where inconsistent with Federal statutes or with regulations authorized in accordance with the exception provision of $ 600.405, or:

(1) Grants and subgrants to State and local institutions of higher education or State and local hospitals.

(2) The block grants authorized by the Omnibus Budget Reconciliation Act of 1981 (Community Services; Preventive Health and Health Services; Alcohol, Drug Abuse, and Mental Health Services; Maternal and Child Health Services; Social Services; Low-Income Home Energy Assistance; States' Program of Community Development Block Grants for Small Cities; and Elementary and Secondary Education other than programs administered by the Secretary of Education under Title V, Subtitle D, Chapter 2, Section 583— the Secretary's discretionary grant program) and Titles I-III of the Job Training Partnership Act of 1982 and under the Public Health Services Act (Section 1921), Alcohol and Drug Abuse Treatment and Rehabilitation Block Grant and part C of Title V, Mental Health Service for the Homeless Block Grant).

(3) Entitlement grants to carry out the following programs of the Social Security Act:

(1) Aid to Needy Families with Dependent Children (Title IV-A of the Act, not including the Work Incentive Program (WIN) authorized by section 402(a)19(G); HHS grants for WIN are subject to this subpart);

(ii) Child Support Enforcement and Establishment of Paternity (Title IV-D of the Act);

(iii) Foster Care and Adoption Assistance (Title IV-E of the Act);

(iv) Aid to the Aged, Blind, and Disabled (Titles I, X, XIV, and XVI-AABD of the Act); and

(v) Medical Assistance (Medicaid) (Title XIX of the Act) not including the 8600.204 Effect on other issuances.

All other grants administration provisions of codified program regulations, program manuals, handbooks and other nonregulatory materials which are inconsistent with this subpart are superseded, except to the extent they are required by statute, or authorized in accordance with the exception provision in $ 600.405. 8 600.205 Additions and exceptions.

(a) For classes of grants and grantees subject to this subpart, Federal agencies may not impose additional administrative requirements except in codified regulations published in the FEDERAL REGISTER.

(b) Exceptions for classes of grants or grantees may be authorized only by OMB.

(c) Exceptions on a case-by-case basis and for subgrantees may be authorized by the affected Federal agencies.

(d) The DOE procedural requirements for requesting additions and exceptions are specified in $600.4. (53 FR 8087, Mar. 11, 1988, as amended at 53 FR 8047, Mar. 11, 1988)

State Medicaid Fraud Control program authorized by section 1903(a)(6)(B).

(4) Entitlement grants under the following programs of The National School Lunch Act:

(i) School Lunch (section 4 of the Act),

(ii) Commodity Assistance (section 6 of the Act),

(iii) Special Meal Assistance (section 11 of the Act),

(iv) Summer Food Service for Children (section 13 of the Act), and

(v) Child Care Food Program (section 17 of the Act).

(5) Entitlement grants under the following programs of The Child Nutrition Act of 1966:

(i) Special Milk (section 3 of the Act), and

(ii) School Breakfast (section 4 of the Act).

(6) Entitlement grants for State Administrative expenses under The Food Stamp Act of 1977 (section 16 of the Act).

(7) A grant for an experimental, pilot, or demonstration project that is also supported by a grant listed in paragraph (a)(3) of this section;

(8) Grant funds awarded under subsection 412(e) of the Immigration and Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the Refugee Education Assistance Act of 1980 (Pub. L. 96-422, 94 Stat. 1809), for cash assistance, medical assistance, and supplemental security income benefits to refugees and entrants and the administrative costs of providing the assistance and benefits;

(9) Grants to local education agencies under 20 U.S.C. 236 through 241-1(a), and 242 through 244 (portions of the Impact Aid program), except for 20 U.S.C. 238(d)(2)(c) and 240(1) (Entitlement Increase for Handicapped Children); and

(10) Payments under the Veterans Administration's State Home Per Diem Program (38 U.S.C. 641(a)).

(b) Entitlement programs. Entitlement programs enumerated above in $600.403(a) (3) through (8) are subject to subpart E. (53 FR 8045, 8087, Mar. 11, 1988, as amended at 54 FR 23960, June 5, 1989)

PRE-AWARD REQUIREMENTS 8 600.210 Forms for applying for

grants. (a) Scope. (1) This section prescribes forms and instructions to be used by governmental organizations (except hospitals and institutions of higher education operated by a government) in applying for grants. This section is not applicable, however, to formula grant programs which do not require applicants to apply for funds on a project basis.

(2) This section applies only to applications to Federal agencies for grants, and is not required to be applied by grantees in dealing with applicants for subgrants. However, grantees are encouraged to avoid more detailed or burdensome application requirements for subgrants.

(b) Authorized forms and instructions for governmental organizations. (1) In applying for grants, applicants shall only use standard application forms or those prescribed by the granting agency with the approval of OMB under the Paperwork Reduction Act of 1980.

(2) Applicants are not required to submit more than the original and two copies of preapplications or applications.

(3) Applicants must follow all appli. cable instructions that bear OMB clearance numbers. Federal agencies may specify and describe the programs, functions, or activities that will be used to plan, budget, and evaluate the work under a grant. Other supplementary instructions may be issued only with the approval of OMB to the extent required under the Paperwork Reduction Act of 1980. For any standard form, except the SF-424 facesheet, Federal agencies may shade out or instruct the applicant to disregard any line item that is not needed.

(4) When a grantee applies for additional funding (such as a continuation or supplemental award) or amends a previously submitted application, only the affected pages need be submitted. Previously submitted pages with information that is still current need not be resubmitted.

(2) Repeat the assurance language in the statutes or regulations, or

(3) Develop its own language to the extent permitted by law.

(d) Amendments. A State will amend a plan whenever necessary to reflect: (1) New or revised Federal statutes or regulations or (2) a material change in any State law, organization, policy, or State agency operation. The State will obtain approval for the amendment and its effective date but need submit for approval only the amended portions of the plan.

$600.211 State plans.

(a) Scope. The statutes for some pro grams require States to submit plans before receiving grants. Under regulations implementing Executive Order 12372, “Intergovernmental Review of Federal Programs,” States are allowed to simplify, consolidate and substitute plans. This section contains additional provisions for plans that are subject to regulations implementing the Executive order.

(b) Requirements. A State need meet only Federal administrative or programmatic requirements for a plan that are in statutes or codified regulations.

(c) Assurances. In each plan the State will include an assurance that the State shall comply with all applicable Federal statutes and regulations in effect with respect to the periods for which it receives grant funding. For this assurance and other assurances required in the plan, the State may:

(1) Cite by number the statutory or regulatory provisions requiring the assurances and affirm that it gives the assurances required by those provisions,

8 600.212 Special grant or subgrant

conditions for "high-risk" recipi.

ents. (a) A grantee or subgrantee may be considered "high risk” if an awarding agency determines that a grantee or subgrantee:

(1) Has a history of unsatisfactory performance, or

(2) Is not financially stable, or

(3) Has a management system which does not meet the management standards set forth in this subpart, or

(4) Has not conformed to terms and conditions of previous awards, or

(5) Is otherwise not responsible; and if the awarding agency determines that an award will be made, special conditions and/or restrictions shall correspond to the high risk condition and shall be included in the award.

(b) Special conditions or restrictions may include:

(1) Payment on a reimbursement basis;

(2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given funding period;

(3) Requiring additional, more detailed financial reports;

(4) Additional project monitoring;

(5) Requiring the grantee or subgrantee to obtain technical or management assistance; or

(6) Establishing additional prior ap provals.

(c) If an awarding agency decides to impose such conditions, the awarding official will notify the grantee or subgrantee as early as possible, in writing, of:

(1) The nature of the special conditions/restrictions;

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