Page images

(2) For the purpose of this paragraph, at the time of the initial decision to proan activity will be treated as having been vide financial support for the activity. initiated at the time at which non-Fed Where possible, contemporaneous written eral resources were first committed in evidence of that intention should be subfurtherance of that activity. The sign mitted. Such evidence may include ing of a lease for a facility to be used in correspondence, minutes of meetings of an activity, the beginning of renovation the directors of the organizations prowork on a facility already owned, and viding financial support, written recomthe hiring of personnel are examples of mendations made to the directors, and commitments that would indicate initia any other relevant material. Where tion of an activity within the meaning of documentary evidence of this type is not the paragraph.

available, the applicant should submit (3) The date of application to the Of signed statements evidencing the existfice of Economic Opportunity will be the ence of the intention, such as reports of date on which a bona fide application for

verbal understandings, agreements, or support of the activity is received in the

commitments reached at the time of the appropriate OEO regional office.

decision to provide financial support. A (c) Activities undertaken with tempo

statement will not be considered sufirary financial support. (1) When assist cient if it does no more than assert the ance is sought for the continuance or

existence of an intention or understandexpansion of an activity for which tempo ing that support for a particular activity rary non-Federal support has been

would be temporary. Statements must received, the prior level of non-Federal

relate the facts from which the existence support for the activity will not be re

of such an intention or understanding quired to be continued as a condition of

can be inferred. Federal assistance. Nevertheless, if only

(d) Impairment of a community's a portion of the previous non-Federal ability to support an activity. (1) When support was temporary, the level of other assistance is sought for the continuation non-Federal support for the activity will of an activity which has been conducted be required to be continued.

with non-Federal support in a commu(2) Support will be considered to have nity whose per capita income is less than been temporary only if the person or

$750 per annum, and such non-Federal organization providing the support in

support is to be reduced or terminated tended, at the time of the initial decision

as a reasonable consequence of an imto provide support, that the support

pairment of the community's ability to would be terminated (or reduced) after

provide such support, the prior level of a limited, defined period of time, and

non-Federal support will not be required not continued or renewed indefinitely.

to be continued as a condition of Federal Support will not be considered tempo

assistance. Continuation of non-Fedrary merely because it has been provided eral support will be required to the extent through annual, biennial, or other pe

that such support is not affected by the riodic appropriations, budgets, or grants,

impairment of the community's ability. or because the project supported has

(2) The per capita income of a combeen denominated a pilot or demonstra munity will be determined from such tion project. Examples of temporary

evidence as may be available. Data on support are a grant given with the fixed per capita incomes for 1959, as indicated intention that the grantor's support ter

by the 1960 census for counties and for minate at the end of 3 years, a commit

many other areas, may be obtained from ment of support made with the fixed

the Office of Economic Opportunity. In intention that it last only until a Federal the absence of other evidence, this cengrant is received, and a grant of $50,000

sus data will be accepted as establishing to be available until spent, made on the the present level of per capita income understanding that there would be no

for the areas for which it is available. renewal. Support will not be considered (3) A community's ability to provide to have been temporary in any case in

support will be considered to be impaired which a source of support for a limited, in any case in which the provision of supdefined period of time has replaced a port has become substantially more diffisource of support which was not tempo cult, in the recent past, as a result of rary.

decline in population, a decline in per (3) To qualify for relief under this capita income, an increase in other comparagraph, an applicant must demon munity needs, or other causes. Howstrate that the requisite intention existed ever, a community's ability to provide

support will not be considered to be im titles I and III of the EOA, other Federal paired by a decision of any person or agencies, State or local governments, and group, public or private, to discontinue private agencies, if the programs meet or reduce financial assistance to the all the following criteria: community or to any activity conducted (1) The program is administered by a in the community. The requirement CAA, a delegate agency of the CAA, or that the prior level of non-Federal sup by an agency in which the CAA has a port be continued will thus not be waived role in determining policy and program simply because a source of support is direction, withdrawn.

(2) The CAA contributes develop(4) A decision to discontinue or reduce mental or administrative services to non-Federal support for an activity will the program resulting in an expenditure be treated as a reasonable consequence of title II funds, or requiring the services of an impairment of ability to support of personnel employed under a title II only if the decision was a reasonable re program, or the use of facilities leased action to the impairment of ability, con

or obtained under a title II program. sidered without regard to the availability (3) The program is designed to serve of Economic Opportunity Act funds as an beneficiaries in the CAA's target populaalternative source of support. It will tion. not be assumed that programs for the (4) The program is directed toward benefit of the poor should be the first to

and consistent with the general objecbe sacrificed when available resources tives of mobilizing and coordinating are reduced.

community resources against the causes (5) In the event of recovery of ability and effects of poverty; in other words, to provide non-Federal support to an ac it can be considered an integral part of tivity, the Office of Economic Opportu

the community's antipoverty effort. nity may require, as a condition to con (c) Program accounts. The identifiable tinued Federal assistance, that the program units by which the CAA's and previous non-Federal support be re

CAP describe and administer the total sumed, in whole or in part.

range of CAP programs. The system is (Sec. 20, 78 Stat. 519; 42 U.S.C. 2788) [31

explained and the program accounts deFR. 4117, Mar. 9, 1966. Redesignated and

fined in OEO Instruction 6100–1, “Proamended at 33 F.R. 19180, Dec. 24, 1968] gram Account Structure," dated June 21,

1968.1 Subpart—Limitation on CAA

(d) Expenditures. Expenditures, for Administrative Costs

the purpose of preparing the AdministraAUTHORITY: The provisions of this Subpart

tive Costs Report, are considered to be: issued under sec. 244(7), 81 Stat. 708; 42

(1) All allowable disbursements (FedU.S.C. 2836.

eral and non-Federal, OEO and non

OEO) chargeable to any title II program SOURCE: The provisions of this Subpart

and any program assisted with title II appear at 34 F.R. 7854, May 17, 1969, unless otherwise noted.

funds, plus

(2) The recorded dollar value of all § 1068.3–) Applicability of this sub unpaid invoices for material received and part.

services rendered through the last date This subpart applies to all Community

of the reporting period for these Action Agencies that receive financial

programs. assistance under title II of the Economic In addition, all volunteered services and Opportunity Act.

in-kind materials used in the CAA's op

erations during the period covered by the $ 1068.3-2 Definitions.

report are considered to be expenditures (a) Title II programs. Programs that in the month utilized. “Costs” and “exa Community Action Agency has been penditures" are considered to have the authorized to conduct or direct under same definition for the purpose of pretitle II of the Economic Opportunity Act. paring the Administrative Costs Report. This includes programs authorized under (e) Trainee. Any CAA employee or sections 221, 222, 230, 231, 233, or 232 beneficiary who participates in training of the Act.

courses conducted either by or under the (b) Programs assisted with title II funds. All programs funded from sources 1 Not Aled with the Ofice of the Federal other than title II of the EOA including Register.

auspices of a CAA. In the case of em should be noted that the definition of ployees, it includes only those who fall administrative cost and total costs rewithin the poverty income classification quires that expenditures for all title I or who come within the poverty income programs and for all programs assisted classification immediately prior to em with title II funds (including those met ployment, and who are receiving training with funds from agencies other than as part of a program to increase their OEO) be included in each. employability.

(1) Operating programs. Programs ad(f) Administrative costs. Administra ministered by a CAA that provide direct tive costs include all allowable expendi benefits to program participants or benetures incurred to develop and administer ficiaries. For programs funded by OEO, title II programs and all programs as

it includes all programs under program sisted with title II funds, if the expendi accounts other than 01, 02, 03, 04, and tures cannot be directly allocated to an 87. For programs funded from other operating program or are not otherwise sources, it includes all programs that are expressly excluded by this subpart. In not primarily related to the development, particular, administrative costs include planning, administration, or evaluation all expenditures charged to program ac

of the CAA. counts 01, 02, 03, 04, and 87 and any

$ 1068.3–3 Policy. expenditures of funds received from title I or non-OEO sources that are clearly

(a) Section 244(7) of the Economic identified as administrative costs. How

Opportunity Act states that no funds ever, the following expenditures are ex

may be provided to any Community ACcluded from administrative costs even

tion Agency if its cost to develop and though incurred in programs funded

administer programs funded under title under Program Accounts 01, 02, 03, 04,

II or assisted with title II funds exceeds and 87:

15 percent of the total costs of these

programs. The Director may require NOTE: For purposes of completing the summary CAP Form 15d, these expenditures are

CAAs, as a condition to providing funds not excluded from administrative costs.

under title II of the Act, to take specific

actions to reduce their administrative (1) The personnel costs that are al costs and improve their operational locable to specific operating programs or effectiveness. to OEO program accounts other than

(b) The Director may grant a waiver 01, 02, 03, 04, and 87.

of this requirement for periods of 6 (2) Payments to any trainees, includ

months when the initial planning and ing salaries, stipends, and employer's share of fringe benefits;

developing of programs for a new or re

organized CAA has resulted in unusually (3) Salary payments to employees who fall within the poverty income classifi

high costs for these purposes during a cation. Also exclude salary payments to

program year or an on-going CAA has employees who fell within the poverty

incurred unusually high planning cost income classification immediately prior in relation to the total cost of their proto their employment by the CAA, but grams in a program year and the benefits only until the end of the first program to be realized from such planning can year in which the employees were hired. be reasonably expected to extend over These payments include the employer's additional program years. share of fringe benefits.

(c) CAAS must include all program (g) Total costs. All expenditures in costs, whether met with Federal or noncurred in developing, administering, and Federal funds (cash or in-kind contrioperating title II programs and programs butions), in determining their adminisassisted with title II funds, whether the trative expenses except for the following: costs are met with OEO or none-OEO (1) All costs incurred to conduct a funds. Total costs include administra specific operating program, such as tive costs as defined in paragraph (f) of Head Start or Legal Services, whether this section, as well as payments to funded on a program account or comtrainees and to employees formerly ponent basis. within the OEO poverty guidelines.

(2) Payments to trainees. (h) Administrative Costs Ratio. The (3) Salary payments to employees percentage obtained by dividing the total whose incomes are within the OEO POVcosts into the administrative costs. It erty guidelines. Also, salary payments to

employees whose incomes were within dress shown in paragraph H of Commuthe OEO poverty guidelines immediately nity Action Memo 44-A, "Grantee prior to being employed, but only until Monthly Financial Report," dated the end of the first program year in April 1, 1968. which the employees were hired.

§ 1068.3–5 Reporting procedures. § 1068.3–4 Requirement for two reports (a) Forms. The following forms are during each program year.

to be used in reporting administrative (a) CAA's must determine their ad costs: ministrative expenses, using the proce (1) The Administrative Costs Report dures and formats in this subpart, and (CAP Form 15d) to be submitted to OEO submit Administrative Costs Reports to with all six month and final Grantee OEO twice during each program year, Monthly Financial Reports. The data as follows:

for this report may or may not be sup(1) A report of the administrative ported by CAP Form 15e, depending on costs incurred in the first 6 months of the result of computations made in acthe program year will be submitted on cordance with paragraph (b) of this CAP Form 15d, “Administrative Costs section.

(2) Personnel Work Sheet (CAP Form Report,” when the Grantee Monthly Financial Report (CAP Form 15) for the

15e) provides a detailed format for allo

cating personnel costs to program acbasic CAA grant containing Program AC

counts or equivalent nontitle II procount 01 is submitted for the sixth

grams. It is prepared only if summary month of the program year.

CAP Form 15d shows administrative NOTE: A CAA with a program year longer costs to be in excess of 15 percent. than 12 months should submit its initial (b) Procedure. The reporting proceCAP Form 15d 6 months prior to the end dure is as follows: of its program year.

(1) Prepare a summary CAP Form (2) A report of the administrative

15d. Include all nontitle II expenditures · costs incurred during the entire program (non-OEO, titles I and III) and all

year will be submitted on CAP Form 15d title II expenditures during the reportwhen the final Grantee Monthly Finan ing period and compute an Administracial Report for the basic CAA grant con

tive Cost Ratio for the CAA as a whole. taining Program Account 01 is submitted

(2) If the ratio is 15 percent or less, for the program year. The final Grantee no further review of administrative costs Monthly Financial Report shows all ex

is required, and the summary form penditures incurred for the program

should be submitted to OEO with the apyear and is due within 90 days after the

propriate CAP Form 15 report. end of the program year.

(3) If the percentage computed in (b) In order to provide time for CAAs

subparagraph (1) of this paragraph is to analyze and, if necessary, allocate

over 15 percent, a further analysis of their administrative costs, no reports

the administrative personnel costs must will be required until the CAP Form 15

be made and reported. This analysis must reports are due for the month of Sep

also include a review of the CAA's protember 1969. That is, a CAA whose sixth

grams to identify and exclude the nonor 12th month of its program year ends

administrative costs described in g 1068.

3–3(c) (2) and (3). on August 31, 1969, must submit a CAP Form 15d with its sixth-month CAP § 1068.3–6 Source of data. Form 15 report or with its final CAP

All expenditure data on the AdminisE Form 15 report for the program year, as

trative Cost Report must be taken from i applicable. Thereafter, the schedule de

the grantee's books of account. Expendscribed in paragraph (a) of this section

itures of OEO funded programs conwill be followed.

ducted by the CAA must agree in total (c) One copy of the Administrative

with those for the same period reported Costs Report should be attached to each

on the CAP Forms 15 and 15a. Expendcopy of the monthly financial report for

itures for other programs assisted with the basic CAA grant containing Program Account 01 for the appropriate reporting 1 Not filled with the Office of the Federal period and submitted to the OEO ad Register.

title II funds must agree in total with the expenditures reported by the CAA to the agency funding these programs during the report period. § 1068.3–7 Program period to be re

ported. The Administrative Cost Report will be based on the expenditures incurred during the CAA's program year for its basic title II programs. Expenditures included in the report for other programs assisted with title II funds will be for the same period of time as the program year. This means that expenditures for these programs will be reported only for the appropriate months falling within the CAA's specific grant program year. § 1068.3–8 Maintenance of records.

(a) CAA's must retain a copy of each report required by this subpart as part of their permanent financial records. They must also retain completed copies of supporting work sheets (summary CAP Form 15d and CAP Form 15e) with each report, if these supporting forms are completed.

(b) If personnel costs are allocated among different programs in accordance with § 1068.3–5(b) (3), a written explanation must be maintained to explain the basis for classifying and allocating these costs. The explanation should also include the basis for excluding payments to trainees and poverty level employees from administrative costs. In common with other financial records, these reports must be available for examination by OEO authorized auditors, inspectors, evaluation teams, and analysts and by authorized representatives of the U.S. General Accounting Office. § 1068.3-9 Excessive administrative

costs. (a) If, after completing the analysis of administrative costs in accordance with § 1068.3–5(b) (3), the administrative costs ratio exceeds 15 percent, the CAA must submit a statement with the report explaining the reasons for the excessive rate, together with a plan of corrective action and target date for reducing the administrative costs ratio to an acceptable level. With the 6 months report, the statement should consider both the current and projected rates, for they may have a downward or upward trend during a program year.

(b) This information should be submitted to the OEO granting office that

awarded the basic CAA grant containing Program Account 01. At that time, a determination will be made as to what further computations or corrective measures are appropriate and whether a request for waiver of the 15 percent limitation should be made. The Director of the Community Action Program (for Headquarters grants) and Regional Directors (for Regional grants) or their designees will determine whether waivers should be granted based upon the criteria in this subpart and such other criteria as may have been prescribed.

(c) If a CAA with excessive administrative costs has received and is operating under a written waiver from OEO,

should submit a copy of the waiver with the report and a statement explaining the actions taken and progress made in reducing the administrative costs ratio to an acceptable level. § 1068.3–10 Availability of forms and

instructions. OEO has prepared two forms, the Administrative Costs Report (CAP Form 150) and the Personnel Work Sheet (CAP Form 15e) for use in complying with this subpart. OEO has also prepared detailed instructions for completing these forms, including standards for allocating personnel costs in accordance with § 1068.3-5(b) (3). Copies of these forms and instructions may be obtained from the CAP Program Management Division, OEO Headquarters Office, 1200 19th Street NW., Washington, D.C., and from any OEO Regional Office. Subpart-Allowability of Costs

Incurred To Borrow Funds AUTHORITY: The provisions of this Subpart Issued under sec. 602, 78 Stat. 530; 42 U.S.C. 2942.

SOURCE: The provisions of this Subpart appear at 34 F.R. 12784, Aug. 6, 1969, unless otherwise noted. § 1068.4–1 Applicability of this subpart.

This subpart applies to all programs financially assisted under Titles I, II, and III-B of the Economic Opportunity Act of 1964, as amended, if the assistance is administered by OEO. 8 1068.4-2 Policy.

(a) Normally agencies (CAAs and other grantees) receiving grants from OEO are prohibited from using grant funds to pay interest or other charges

« PreviousContinue »