Page images
PDF
EPUB

understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. The term research also includes activities involving the training of individuals in research techniques where such activities utilize the Same facilities as other research and development activities and where such activities are not included in the instruction function. (ee) Small awards means a grant or cooperative agreement not exceeding the Small purchase threshold fixed at 41 U.S.C. 403(11) (currently $25,000). (ff) Subaward means an award of financial assistance in the form of money, or property in lieu of money, made under an award by a recipient to an eligible subrecipient or by a subrecipient to a lower tier subrecipient. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, but does not include procurement of goods and Services nor does it include any form of assistance which is excluded from the definition of “award” in paragraph (e) of this section. (gg) Subrecipient means the legal entity to which a Subaward is made and which is accountable to the recipient for the use of the funds provided. The term may include foreign or international organizations (such as agenCies of the United Nations) at the disCretion of the Federal awarding agenCy. (hh) Supplies means all personal property excluding equipment, intangible property, and debt instruments as defined in this section, and inventions of a contractor conceived or first actually reduced to practice in the performance of work under a funding agreement (“Subject inventions”), as defined in 37 CFR part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts, and Cooperative Agreements.” (ii) Suspension means an action by a Federal awarding agency that temporarily withdraws Federal sponsorship under an award, pending corrective action by the recipient or pending a deciSion to terminate the award by the

Federal awarding agency. Suspension of an award is a separate action from Suspension under Federal agency regulations implementing E.O.s 12549 and 12689, “Debarment and Suspension.” (jj) Termination means the cancellation of Federal sponsorship, in whole or in part, under an agreement at any time prior to the date of completion. (kk) Third party in-kind contributions means the value of non-cash contributions provided by non-Federal third parties. Third party in-kind contributions may be in the form of real property, equipment, Supplies and other expendable property, and the value of goods and services directly benefiting and Specifically identifiable to the project or program. (11) Unliquidated obligations, for finanCial reports prepared on a cash basis, means the amount of obligations inCurred by the recipient that have not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations inCurred by the recipient for which an Outlay has not been recorded. (mm) Unobligated balance means the portion of the funds authorized by the Federal awarding agency that has not been obligated by the recipient and is determined by deducting the cumulative obligations from the Cumulative funds authorized. (nn.) Unrecovered indirect cost means the difference between the amount awarded and the amount which could have been awarded under the recipient’s approved negotiated indirect cost rate. (OO) Working capital advance means a procedure whereby funds are advanced to the recipient to cover its estimated disbursement needs for a given initial period.

§ 19.3 Effect on other issuances.

For awards subject to this part, all administrative requirements of Codified program regulations, program manuals, handbooks and other non-regulatory materials which are inconsistent with the requirements of this part are superseded, except to the extent they are required by statute, or authorized in accordance with the deviations provision in $19.4.

§ 19.4 Deviations.

The Office of Management and Budget (OMB) may grant exceptions for classes of grants or recipients subject to the requirements of this part when exceptions are not prohibited by Statute. However, in the interest of maximum uniformity, exceptions from the requirements of this part shall be permitted only in unusual circumstances. Federal awarding agencies may apply more restrictive requirements to a class of recipients when approved by OMB. All requests for Class deviations shall be processed through the Assistant Secretary for Administration. Federal awarding agencies may apply less restrictive requirements when awarding Small awards, except for those requirements which are statutory, Subject to the Concurrence of the ASSistant Secretary for Administration. Exceptions on a case-by-case basis may also be made by Federal awarding agencies, with the Concurrence Of the Assistant Secretary for Administration to ensure conformance with Department of Transportation grant administration policies.

§ 19.5 Subawards.

Unless sections of this part Specifically exclude subrecipients from coverage, the provisions of this part shall be applied to subrecipients performing work under awards if Such Subrecipients are institutions of higher education, hospitals or other non-profit organizations. State and local government Subrecipients are Subject to the provisions of 49 CFR part 18, “Uniform Administrative Requirements for Grants and COOperative Agreements to State and Local Governments.”

§ 19.6 Availability of material ref

erenced in this part.

(a) Copies of Federal Transit Administration (FTA) documents identified in this part may be obtained by Calling the FTA Administrative Services DiviSion at (202) 366–4865.

(b) Copies of Federal Aviation Administration (FAA) documents identified in this part may be obtained by calling the FAA Program Guidance Branch at (202) 267–3831.

Subport B–Pre-Aword Requirements

$19.10 Purpose.

Sections 19.11 through 19.17 prescribes forms and instructions and other pre-award matters to be used in applying for Federal awards.

§ 19.11 Pre-award policies.

(a) Use of grants and cooperative agreememts, and contracts. In each instance, the Federal awarding agency shall decide on the appropriate award instrument (i.e., grant, Cooperative agreement, or contract). The Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301–08) governs the use of grantS, COOperative agreements and Contracts. A grant or cooperative agreement shall be used only when the principal purpose of a transaction is to accomplish a public purpose of support or Stimulation authorized by Federal Statute. The statutory criterion for Choosing between grants and cooperative agreements is that for the latter, “substantial involvement is expected between the executive agency and the State, local government, or other reCipient when Carrying out the activity Contemplated in the agreement.” Contracts shall be used when the principal purpose is acquisition of property or Services for the direct benefit or use of the Federal Government.

(b) Public motice and priority Setting. Federal awarding agencies shall notify the public of its intended funding priorities for discretionary grant programs, unless funding priorities are established by Federal statute.

§ 19.12 Forms for applying for Federal assistance.

(a) Federal awarding agencies shall comply with the applicable report clearance requirements of 5 CFR part 1320, “Controlling Paperwork Burdens On the Public,” with regard to all forms used by the Federal awarding agency in place of or as a Supplement to the Standard Form 424 (SF–424) SeT16S.

(b) Applicants shall use the SF–424 Series Or those forms and instructions prescribed by the Federal awarding agency.

(c) For Federal programs covered by E.O. 12372, “Intergovernmental Review of Federal Programs,” as implemented at 49 CFR part 17, Intergovernmental review of Department of Transportation programs and activities, the applicant shall complete the appropriate Sections of the SF-424 (Application for Federal Assistance) indicating whether the application was Subject to review by the State Single Point of Contact (SPOC). The name and address of the SPOC for a particular State can be obtained from the Federal awarding agency or the Catalog of Federal Domestic Assistance. The SPOC shall advise the applicant whether the program for which application is made has been Selected by that State for review.

(d) Federal awarding agencies that do not use the SF-424 form should indicate whether the application is subject to review by the State under E.O. 12372.

§ 19.13 Debarment and suspension.

Federal awarding agencies and recipients shall comply with the nonprocurement debarment and suspension rule, 49 CFR part 29, “Government wide Debarment and Suspension (Nonprocurement) and Government wide Requirements for Drug-Free Workplace

(Grants),” inplementing E.O.S 12549 and 12689, “Debarment and SuspenSion.” This rule restricts Subawards

and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs Or activities.

§ 19.14 Special award conditions.

(a) Federal awarding agencies may impose additional requirements as needed, if an applicant or recipient: (1) Has a history of poor performance, (2) Is not financially stable, (3) Has a management system that does not meet the standards prescribed in this part, (4) Has not conformed to the terms and conditions of a previous award, or (5) Is not otherwise responsible. (b) Additional requirements may Only be imposed provided that such applicant or recipient is notified in writing as to: (1) The nature of the additional requirement.S,

(2) The reason why the additional requirements are being imposed,

(3) The nature of the corrective action needed,

(4) The time allowed for completing the Corrective actions, and

(5) The method for requesting reconsideration of the additional requirementS imposed.

(c) A copy of such notices shall be sent to the Assistant Secretary for Administration. Any special conditions shall be promptly removed once the Conditions that prompted them have been corrected.

§ 19.15 Metric system of measurement.

The Metric Conversion Act, as amended by the Omnibus Trade and Competitiveness Act (15 U.S.C. 205), deClares that the metric System is the preferred measurement System for U.S. trade and commerce. The Act requires each Federal agency to establish a date or dates in consultation with the Secretary of Commerce, when the metric System of measurement will be used in the agency’s procurements, grants, and other business-related activities. Metric implementation may take longer where the use of the system is initially impractical or likely to cause significant inefficiencies in the accomplishment of federally-funded activities. Federal awarding agencies shall follow the provisions of E.O. 12770, “Metric Usage in Federal Government Programs.”

§ 19.16 Resource Conservation and Recovery Act.

Under the Act, any State agency or agency of a political Subdivision of a State which is using appropriated Federal funds must comply with Section 6002. Section 6002 requires that preference be given in procurement programs to the purchase of Specific products containing recycled materials identified in guidelines developed by the Environmental Protection Agency (EPA) (40 CFR parts 247–254). Accordingly, State and local institutions of higher education, hospitals, and nonprofit organizations that receive direct Federal awards or other Federal funds shall give preference in their procurement programs funded with Federal funds to the purchase of recycled products pursuant to the EPA guidelines.

§ 19.17 Certifications and representations.

Unless prohibited by statute or codified regulation, each Federal awarding agency is authorized and encouraged to allow recipients to Submit Certifications and representations required by statute, executive order, or regulation on an annual basis, if the recipients have ongoing and continuing relationships with the agency. Annual Certifications and representations shall be signed by responsible officials with the authority to ensure recipients’ compliance with the pertinent requirement.S.

Subpdrs C–Post-Award Requirements

FINANCIAL AND PROGRAM MANAGEMENT

§ 19.20 Purpose of financial and program management.

Sections 19.21 through 19.28 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.

§ 19.21 Standards for financial management systems.

(a) Federal awarding agencies shall require recipients to relate financial data to performance data and develop unit cost information whenever practical.

(b) 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 $19.52. If a Federal awarding agency 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 its 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 announts for each award. Whenever appropriate, financial information should be related to performance and unit COst data. (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 CMLA Treasury-State Agreements or 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 GC vernment guarantees or insures the repayment of money borrowed by the recipient, the Federal awarding agency, at its 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 Federal awarding agency may require adequate fidelity bond coverage where the recipient lacks sufficient coverage to protect the Federal Government’s interest.

179–199 O-98——6

(e) Where bonds are required in the Situations described above, 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.”

$19.22 Payment.

(a) Payment methods shall minimize the time elapsing between the transfer of funds from the United States Treasury and the issuance or redemption of checks, Warrants, or payment by other means by the recipients. Payment methods of State agencies or instrumentalities shall be consistent with Treasury-State CMIA agreements or default, procedures Codified at 31 CFR part 205. (b)(1) Recipients are to be paid in advance, provided they maintain or demonstrate the Willingness to maintain: (i) Written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient, and (ii) Financial management systems that meet the standards for fund control and accountability as established in section $19.21. (2) Cash advances to a recipient organization shall be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the recipient Organization in carrying out the purpose of the approved program or project. The timing and amount of cash advances shall be as close as is administratively feasible to the actual disbursements by the recipient organization for direct program or project costs and the proportionate share of any allowable indirect costs. (c) Whenever possible, advances shall be Consolidated to cover anticipated Cash needs for all awards made by the Federal awarding agency to the recipient. (1) Advance payment mechanisms include, but are not limited to, Treasury check and electronic funds transfer. (2) Advance payment mechanisms are subject to 31 CFR part 205. (3) Recipients shall be authorized to Submit requests for advances and reimbursements at least monthly when electronic fund transfers are not used.

(d) Requests for Treasury check adVance payment shall be submitted on SF-270, “Request for Advance or Reimbursement,” or other forms as may be authorized by OMB. This form is not to be used when Treasury check advance payments are made to the recipient automatically through the use of a predetermined payment schedule or if precluded by special Federal awarding agency instructions for electronic funds transfer. (e) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met. Federal awarding agencies may also use this method on any construction agreement, or if the major portion of the Construction project is accomplished through private market financing or Federal loans, and the Federal assistance Constitutes a minor portion of the project. (1) When the reimbursement method is used, the Federal awarding agency shall make payment within 30 days after receipt of the billing, unless the billing is improper. (2) Recipients shall be authorized to submit request for reimbursement at least monthly when electronic funds transfers are not used. (f) If a recipient cannot meet the criteria for advance payments and the Federal awarding agency has determined that reimbursement is not feasible because the recipient lacks sufficient working capital, the Federal awarding agency may provide cash on a working Capital advance basis. Under this procedure, the Federal awarding agency shall advance cash to the recipient to COver its estimated disbursement needs for an initial period generally geared to the awardee's disbursing cycle. Thereafter, the Federal awarding agency shall reimburse the recipient for its actual cash disbursements. The working capital advance method of payment shall not be used for recipients unwilling or unable to provide timely advances to their subrecipient to meet the subrecipient’s actual Cash disbursements. (g) To the extent available, recipients shall disburse funds available from repayments to and interest earned on a revolving fund, program income, rebates, refunds, contract settlements,

« PreviousContinue »