1193-103

EXHIBIT I

EXPLANATION OF INFORMATION ON LETTER OF

CREDIT

1. Issuing Agency. Name and address of CSA Headquarters.

2. Letter of Credit Number. Number assigned by the agency to identify a particular Letter of Credit.

3. Amendment Number. This will represent a change to letter of credit.

4. Agency Station Symbol. The No. 81-00-9701 is the number assigned the Treasury Department to identify CSA Letters of Credit. It will appear on all Letters of Credit issued by CSA.

5. For Agency Use. Shows grantee identification number and grant action number.

6. Effective Date. Effective date of the Letter of Credit.

7. To the Federal Reserve Bank. Location of Federal Reserve Bank serving Federal Reserve Branch Bank.

8. Branch Bank at. Location of Federal Reserve Branch serving grantee's commercial bank.

9. In Favor of. Name and address of grantee, same as shown on the signature card and the CSA Form 314, Statement of CSA Grant.

10. For Deposit Only to. Name and address of commercial bank and recipient's account. 11. Amount Authorized. This space will be left blank.'

12. Without Time Limit. This space will be left blank.1

13. Prior Authorization. This space will be left blank.1

14. This Change. The amount of increase or decrease authorized by this Letter of Credit amendment.

15. This space will be left blank.2

16. Authorized Certifying Officer. Signature of authorized CSA official.

NOTES

Item 11, "Amount Authorized," equals item 13 "Prior Authorization," plus or minus item 14, "This Change."

2 The Grant Accounting Branch, Finance and Grants Management Division, will complete Items 11, 12, 13, 14, and 15 before submitting a letter of credit to the U.S. Treasury.

(7)

(8)

Date and Signature of Authorizing Official (Recipient)

Date and Signature of Agency Certifying Officer

COMPLETION OF SIGNATURE CARDS

Following are instructions for completing the Signature Cards:

1. Letter of Credit Number. When establishing a new Letter of Credit the Finance and Grants Management Division will complete this block prior to sending the forms to the grantee for signatures. To request a change of signatures shown on a previous Form 1194, the grantee should indicate, in this block, the assigned Letter of Credit number.

2. Federal Reserve Bank. The name of the Federal Reserve Bank or branch, as the case may be, that will serve the grantee's commercial bank will be entered by the Finance and Grants Management Division.

3. Letter of Credit Issued in Favor of (Recipient). Enter full name and address of grantee organization. Include city, state and zip code. This must agree with the information on the Statement of CSA Grant (CSA Form 314). If any of the information on the CSA

Form 314 is incorrect, contact processing unit before completing the Form 1194.

4. Issued by (Federal Agency). The Community Services Administration, 1200 19th Street, NW., Washington, DC 20506; Code 8100-9701.

5. Signatures of Individuals, etc. Mark X in space to indicate "any two signatures required to sign or countersign."

6. Typed Name and Signature. Enter the typed names and signatures of at least two (and preferably more than two) individuals authorized to sign payment vouchers (Form TUS-5401) to withdraw funds from Letter of Credit. The typed names must appear exactly as the individuals sign their names.

7. Certification Block. Date and Signature of Authorized official (Recipient). Date and sign. The signature should be that of the grantee official authorized to certify that the signatures are those of persons authorized to withdraw funds from the Letter of Credit.

8. Approved. Leave this space blank for CSA use.

(6) Name and Address of Drawer. Complete name and address of grantee, including zip code, as shown on the Letter of Credit.

(7) Name and Address of Drawer's Bank. Enter name and address of the bank to which the payment voucher will be presented.

(8) Federal Reserve Bank or Branch. Enter name (city) of Federal Reserve Bank or Branch as shown on Letter of Credit.

(9) Signatures. Vouchers must be signed by two of the designated signees exactly as their signatures appear on current signature cards.

DISTRIBUTION OF PAYMENT VOUCHERS Original, duplicate and triplicate: Presented to grantee's bank for payment. The Bank will retain the original and forward the duplicate and triplicate to the Federal Reserve Bank for their records.

Quadruplicate: Retain for grantee files.

[42 FR 18034, Apr. 4, 1977, as amended at 43 FR 44532, Sept. 28, 1978]

Subpart K-Revision of Financial Plans (Reserved)

Subpart L-Grant Closeout Procedures (CSA Instruction 680012)

1050.110 References.

(1) OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations (Attachment K).

(2) FMC 74-7, Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments (Attachment L).

(3) OEO Instruction 6302-2, CAAS: Eligibility and Establishment.

lowable reimbursable costs under the grant being closed out.

(b) Within 90 calendar days after completion of a grant, the grantee shall refund any balance of unobligated cash that CSA has advanced or paid, and that is not authorized to be retained by the grantee for use in other grants or for other purposes specifically authorized in writing by CSA. A check (payable to CSA) will accompany the final financial report. (See reference (7) for procedures.)

(c) Within 60 calendar days after the completion of a grant, the grantee shall submit to the Office of Community Services (OCS) all financial, performance, and other reports required as conditions of the grant, except public grantees shall submit such required reports within 90 days of the grant's completion. (See references (7), (8), and (13) for procedures.) All audit reports must be addressed to the Office of the Inspector General, CSA/OCS, Department of Human Services, Room 548, 1200 19th Street, NW., Washington, DC 20506. All other required reports must be addressed to the Office of Community Services, Department of Health and Human Services, 1200 19th Street, NW., Washington, DC 20506. A grantee may request an extension of this deadline from the appropriate office. An extension of up to 30 days will be granted to a non-public grantee upon a showing of reasonable cause that the grantee, despite special efforts, cannot submit the required reports within 60 days. Further extensions for non-public grantees or any extensions for public grantees will be granted only in extra-ordinary circumstances.

(d) When authorized by the grant agreement, CSA shall make a settlement for any upward or downward adjustment to the Federal share of costs after these reports are received.

(e) The closeout of a grant shall not, of itself, end or otherwise affect: (1) The grantee's responsibility to account for any property acquired with Federal funds, or received from the Government, in accordance with the provisions of § 1050.130 (CSA Instruction 680015) Property Management Standards;

(2) The grantee's responsibility to account for program income in accord

ance with the provisions of §1050.40 (CSA Instruction 6800–5);

(3) The retention period for, or Federal rights of access to, grant records pursuant to §1050.20 (CSA Instruction 6800-4).

(f) In the event a final audit has not been performed prior to the closeout of the grant, CSA retains the right to recover an appropriate amount, after fully considering the recommendations on disallowed costs resulting from any subsequent audit which may be performed. (See reference (13) for CSA audit requirements.)

[42 FR 18034, Apr. 4, 1977, as amended at 47 FR 22535, May 25, 1982]

§ 1050.113 CSA implementing policies and procedures.

(a) General. Procedures for various activities to be undertaken in closeouts will be found in references (3) through (14). This subpart provides additional detail on required closeout procedures relating to audits. (See reference (13) for basic procedures.)

(b) Closeout Audits (1) Scope of Audit. (i) Within 60 days after the date of completion of a CSA grant, the grantee must submit a final audit of grant operations, except that the final audit for public grantees shall be submitted within 90 days after the grant's completion. Audit reports must be directed to the Office of the Inspector General, CSA/OCS, at the address specified in §1050.112(c). Final audits shall be conducted in accordance with the Accounting System Survey and Audit Guide, CSA Manual 2410-1, except that the scope of the audit shall be adjusted as follows:

(A) The independent auditor will not be required to render an appraisal of the grantee's accounting system and internal controls. However, he will be required to review internal accounting controls in accordance with generally accepted auditing standards to ascertain the degree of reliance he can place on them in determining the extent of his audit tests and procedures. Therefore, the audit report will normally contain no comments or recommendations relative to the grantee's accounting system or internal controls.

(B) The independent auditor should explain in his audit report that the

grantee will not continue to receive CSA funding and will not be involved in CSA programs as a grantee.

(C) The independent auditor should emphasize in his report any action required to clear the account such as recovery of any unexpended funds or disposition of grant property.

(ii) Where questions arise in regard to the audit of CSA grantees being closed out, independent auditors should contact the cognizant CSA Regional Auditor for guidance.

(2) Audit disallowances. The normal CSA audit disallowance procedures as set forth in reference (13) shall be followed for audit disallowances resulting from a final audit. Final audit disallowances can only be satisfied by cash payments to CSA when the grant in question has been or is in the process of being closed out.

[42 FR 18034, Apr. 4, 1977, as amended at 47 FR 22535, May 25, 1982]

Subpart M-Suspension and Termination Procedures (CSA Instruction 6800-13)

§ 1050.115-1 References.

(1) 45 CFR 1010 (OEO Instruction 6004-01a) Nondiscrimination in Federally-Assisted Programs of the Office of Economic Opportunity-Effectuation of title VI of the Civil Rights Act of 1964;

(2) 45 CFR 1067.2 (OEO Instruction 6730-1) Denial of Application for Refunding;

(3) 45 CFR 1050.110 (CSA Instruction 680012) Grant Closeout Procedures;

(4) 45 CFR 1069.3 (CSA Instruction 6910-1a) Travel Regulations for CSA Grantees and Delegate Agencies.

§ 1050.115-2 Definitions.

(a) Termination. The termination of a grant is the cancellation of Federal assistance, in whole or in part, under a grant at any time prior to its date of completion. The following do not constitute termination:

(1) Withdrawal of funds awarded on the basis of grantee's under estimate of the unobligated balance in a prior grant period;

(2) Failure on the part of CSA to refund a grantee or to make a continuation, extension, supplemental or other additional grant;

(3) Withdrawal of the unobligated balance as of the date of completion of

a grant pursuant to the provision of CSA Instruction 6800-12 (45 CFR 1050.110);

(4) Annulment of a grant upon determination that the grant was obtained fraudulently or was otherwise illegal or invalid from inception;

(5) Withdrawal of unobligated funds from a CAA before the date of completion of its grant as a result of opt-out or de-designation proceedings under section 210 of the Economic Opportunity Act of 1964 as amended, and OEO Instruction 6302-2.

(b) Suspension. The suspension of a grant is an action by CSA that temporarily suspends Federal assistance under the grant, pending a decision by CSA to terminate the grant.

§ 1050.115-3 Failure to comply with grant terms and conditions.

When a grantee has materially failed to comply with the terms and conditions of a grant (including all applicable CSA Instructions), CSA may suspend the grant in accordance with §1050.115-4, terminate it for cause in accordance with §1050.115-5, or take such other remedies as may be legally available and appropriate under the circumstances.

§ 1050.115-4 Suspension.

When a grantee has materially failed to comply with grant terms and conditions, CSA may suspend the grant, after giving the grantee reasonable notice and opportunity to show cause why the grant should not be suspended. Pursuant to section 604(2) of the Economic Opportunity Act as amended, CSA may summarily suspend a grant without previous notice in an emergency situation. If a grant is suspended, CSA may withhold further payments and prohibit the grantee from incurring further obligations of funds, pending corrective action by the grantee or a decision by CSA to initiate termination proceedings in accordance with §1050.115-5. CSA will allow all necessary and proper costs that the grantee could not reasonably avoid during the period of suspension, provided that they meet the provisions of the applicable Federal cost principles (for public grantees, the applicable provisions are